Southern Pacific Resource Corp STPJF

RE:RE:In the event of a sale

[freedom45]

ahhhh, the good ole days Written by Deborah on October 19, 2009 — Last week, emerging player Southern Pacific Resource Corp. announced it had purchased a producing steam assisted gravity drainage (SAGD) asset in Saskatchewan. As was widely suspected, it turns out Southern Pacific now owns one of the longest-running SAGD projects in existence–Senlac–formerly owned by EnCana. EnCana put the property up for sale last year. The acquisition is set to close on November 2, with a price tag of about $90 million. I think this is an exciting development, which significantly advances the position of Southern Pacific Resource Corp. operationally as well as optically. It shows commitment to progressing in the oilsands, and a recognition of the long-term view such a commitment requires. Senlac has been producing since 1997, and has an estimated 15 years left to go. It currently produces about 6,000 barrels per day. The company plans to use cashflow from Senlac to advance its proposed STP-McKay project in Alberta’s Athabasca region, fund this winter’s exploration core hold programs, as well as the next Senlac development phase. But in addition to money, this acquisition will obviously provide additional SAGD operating experience, and what emerging player could say no to that? Watch for upcoming coverage of Southern Pacific Resource Corp. in Oilsands Review.