Southern Pacific Resource Corp STPJF

Energy Oil & Gas E&P

Southern Pacific Resource Corp. is a Canada-based company, which is engaged in the thermal production of heavy oil in Senlac, Saskatchewan on a property known as STP-Senlac, and thermal production of bitumen on a property located in the Athabasca region of Alberta known as STP-McKay, as well as exploration for and development of in-situ oil sands in the Athabasca region of Alberta. Its STP-McKay property consists of oil sands leases totaling approximately 37,760 acres. The Company’s operations also include Anzac, Hangingstone and Ells. The Company’s STP-McKay property is located approximately 45 kilometers northwest Ft. McMurray. The Anzac project covers approximately 117 kilometers of two-dimensional (2D) seismic. The Company owns 80% interest in Hangingstone project. The Ells project covers approximately 164 kilometers of two-dimensional (2D) seismic.

GREY:STPJF - Post by User

Southern Pacific Resource Corp

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Comment by PeakOilBoyon Jan 23, 2013 11:30pm

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Post# 20881525

RE: adam---debs

Just to be clear. When the stock was at $2 the 2.15 option becomes more valuable so the bond will trade above par. As the stock pulls back from the conversion price the value of the option declines. It's not just a straight line. If you have ever traded options you might be familiar. If I pay $1 today to buy a stock at $10 six months from now that currently trades at $7. If we move forward 2 months and the stock trades at 8.50 the value of my option will be worth something more than $1 because I'm getting closer to the 10 strike and stil have 4 monts to go. Convertible bonds have this option characteristic built in. It makes sense that when a company issues high yield secured debt that the out of the money unsecured convertible bond would trade at a lower dollar price and hence a higher yield than the bond senior to it. Because it becomes a straight unsecured high yield bond when the option is so far out of the money

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