Southern Pacific Signs One-Year Gulf Coast Marketing Deal And Provides An Operational Update

abarrelfull wrote on 13 Mar 2013 07:04
Tags: canada n-america southern-pacific upstream

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Southern Pacific Resource Corp. (“Southern Pacific” or the “Company”) (TSX:STP) is pleased to announce that it has executed a one-year oil marketing deal effective April 1, 2013, that will provide U.S. Gulf Coast pricing for its bitumen product that is being shipped under the Company’s rail transportation arrangements. This deal with a major U.S. Gulf Coast refiner will have pricing based off the Maya benchmark, a widely traded heavy crude with similar properties to Southern Pacific’s diluted bitumen. With this deal now in place, Southern Pacific has successfully secured firm transportation and sales of its product into the U.S. Gulf Coast and has secured a profitable route through a serious shortage of crude oil export transportation capacity out of the province of Alberta. Based on the next 12 months’ futures pricing the Company expects to receive significantly enhanced plant gate bitumen netback of approximately $48.00/bbl, which is about $19.00/bbl higher than the forecast intra-Alberta markets currently available.

Southern Pacific is in the process of adding significant production growth throughout fiscal 2013 and 2014. The Company expects to ramp up the STP-McKay Thermal Project Phase 1 volumes through the remainder of this and the next fiscal year, with production expected to reach nominal plant capacity of 12,000 barrels of bitumen per day (“bbl/d”) in fiscal 2014. This production base, coupled with the new wells being added at STP-Senlac, Southern
Pacific’s thermal project in Saskatchewan, should open up new opportunities as the Company utilizes its cash flow to finance continued growth. As production ramps up, Southern Pacific plans to provide monthly operational updates to its shareholders.

An updated corporate presentation is also available on Southern Pacific’s website: www.shpacific.com.

• Southern Pacific Signs One-Year Gulf Coast Marketing Deal And Provides An Operational Update

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