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.

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Southern Pacific Resource Corp > Devastating

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Comment by nikeherculeson Jan 22, 2015 12:31pm

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Post# 23351778

RE:RE:RE:RE:RE:RE:Devastating

@bambus

Slide over to page 5 of the latest MD&A for the netbacks. At a price of $82/barrel the operating netback is only 12 bucks. At today's price of 46 bucks, STP is losing $30+ per barrel pumped. The dropping production from Senlac should negate any currency gain.

"With the stay of proceedings pursuant to the Initial Order, the Company does have sufficient liquidity for the period ending through the date of the expiration of the Initial Order"

With a -$30/barrel operating netback, STP is saying they've got enough cash to make it to Feb 20th.

Even if STP was handed $51 million to drill the infills, it would still take 18 months to steam in a sunny day scenario. Not good while bleeding 30 bucks a barrel or approx $2.7 million per month just keeping the status quo. That's not even factoring in interest payments (now suspended) or admin.

Note Africa Oil (AOI) opened a new basin today and the stock barely budged. One of the wells in the original basin tested @ 10,000 bbls/day free flowing, and they can't even get anyone to give them money. There's even a chinese pipeline being built nearby and AOI has no debt. Capital markets are shut.

Given the timelines and capital markets, STP and STP.DB are likely worthless. There was plenty of time and warning to salvage something - even Pandora's $60 bucks.

As an exercise, run the same analysis on COS. It's pretty straightforward.

If you're a gambler, I think we're at or near the bottom. OPEC has stopped talking the price down and are now doing the opposite. $46/barrel is doing enough damage. I'd wait until we hear from Saudi's Ali al-Naimi before stepping back into oil. It he stops badmouthing oil then the bottom is in.

https://www.cnbc.com/id/102359805#.

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