Southern Pacific Resources Corp. (TSX:T.STP, Stock Forum) has taken the first major step towards producing bitumen at its wholly-owned STP-McKay Thermal Project, about 45-kilometres northwest of Fort McMurray, Alberta.
Bitumen is extracted by injecting steam into the oil sands to thin the heavy bitumen and enable it to flow to the surface through wellbores.
In May 2009, the company submitted an application for a 12,000 barrel per day (bbl/d) facility to Alberta's regulatory bodies, which was subsequently approved in October 2010.
According to the press release, first steam represents the completion of the construction, commissioning and start-up STP-McKay, the company's first major bitumen project. Steam will now be circulated through the SAGD wellbores for a period of three to four months, after which bitumen production is scheduled to begin.
Southern Pacific discovered the STP-McKay Thermal Project through exploration during the winter of 2007/08.
Southern Pacific is engaged in the exploration, development and production of in-situ thermal heavy oil and bitumen production in the Athabasca oil sands of Alberta and in Senlac, Saskatchewan.
On Tuesday, Southern Pacific was trading for $1.36 a share. The company has a market cap of $464.2 million, based on $341.3 million shares outstanding. The 52-week high and low is $1.92 and $0.87 respectively.