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Southern Pacific’s oil sands hopes bolstered
Little-known Southern Pacific Resource Corp. is the latest oil sands minnow to disclose whale-sized resources.
The company said an independent evaluation by engineers McDaniel and Associates, based on drilling last winter, points to 3.6 billion barrels of discovered bitumen in place, a huge leap forward from a June 26 management estimate of 793 million barrels, although there is no calculation of how much oil is recoverable.
Southern Pacific Chief Executive Officer Dave Antony said the company had tried to be “very conservative” in developing its own estimate and was “quite surprised” with the professional assessment.
The company has a 38,000-acre lease which it believes can come onstream at 10,000 barrels per day. The McDaniel report assigned discovered resources of 1.1 billion barrels to that lease.
Capital help needed Canaccord Adams analyst Richard Wyman said, like many oil sands juniors, Southern Pacific, which has C$22 million in working capital, is not “quite mature enough to get (its lease) to project status,” and will need help raising the capital.
Over the past two years, Southern Pacific has acquired an 80 percent working interest in about 220,000 acres of Athabasca leases in northeastern Alberta, mainly buying into properties held by privately owned Bounty Developments.
In the 2007-08 winter drilling season it completed seismic programs and 70 core hole tests.
Antony said more seismic is scheduled for the upcoming winter and a project application should be submitted to Alberta regulators in the second quarter of 2009, with the first steam being injected by early 2011.
—Gary Park
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