Southern Pacific Resource Corp · OTC:STPJF
Southern Pacific Resource — Shareholder Meeting (November 2011)
27 slides from Southern Pacific Resource's shareholder meeting presentation, Nov 24, 2011
Slide 1: 2011 Annual General Meeting
2011 Annual General Meeting November 24th, 2011
Slide 2: Reader's Advisory
Reader's Advisory Forward-looking Statements: References to "contingent resources" or "resources" in this presentation do not constitute, and should be distinguished All statements other than statements of historical fact may be forward-looking statements. These statements relate to from, references
Slide 3: The Southern Pacific Strategy
The Southern Pacific Strategy FOCUSED: We develop and produce bitumen and heavy oil using horizontal wells and steam. INDEPENDENT: We control and operate 90% of our lands, allowing us to develop at a pace that fits our objectives. DEMONSTRATED EXECUTION: Solid operations & construction experti
Slide 4: STP Overview
STP Overview Trading symbol TSX:STP Shares outstanding - basic 340 million Shares outstanding - fully diluted 364 million Average daily trading volume (Last 6 mo avg.) 1.2 million Market capitalization (Oct. 31, 2011) $498 million Working capital estimate (Sept. 30 2011) $185 million Total corporate
Slide 5: Fiscal 2011: Milestones of Achievement
Fiscal 2011: Milestones of Achievement • STP-McKay Phase 1: – Received regulatory approval – Increased 1P reserves by 1,670% – Completed financing – Commenced construction – Substantially hired operations management team • STP-Senlac: – Maintained production and cash flow at record levels • STP-Red
Slide 6: Strategic Land Position
Strategic Land Position • Alberta: 436 sections (242,176 net acres) of oil sands leases with 87% average working interest • Saskatchewan: 12 month average of ~4,300 barrels per day (bbl/d) of 100% working interest heavy oil 6
Slide 7: STP-Senlac Thermal Project
STP-Senlac Thermal Project (drilling) • 4,000 - 5,000 bbl/d for the next 10 -15 years • Best in class SOR of 2.0 – 2.2 • Experienced operations personnel 7 Refer to slide 2 for cautionary statements about forward-looking information.
Slide 8: STP-Senlac: Historical Production
STP-Senlac: Historical Production 7,000 STP Operates Senlac 6,000 Quarterly Average Production Rate (bbl/d) 5,000 Optimal plant throughput range 4,000 3,000 2,000 1,000 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 PHASE A B C D E F G H J K - AA • STP's
Slide 9: STP-McKay Phase 1: Project Overview
STP-McKay Phase 1: Project Overview • 45 km NW Ft. McMurray • 10.5 section project area • 100% STP working interest • Regulatory approvals in place • Phase 1 construction fully underway • Phase 1 Design: • 12,000 bbl/d oil Future Phase 1 Well pads • 33,600 bbl/d steam 12 SAGD well pairs: successfull
Slide 10: STP-McKay Phase 1: Construction Update Central Process Facility
STP-McKay Phase 1: Construction Update Central Process Facility Steam Generators – on site and being assembled • Over 4,100 of 5,300 piles have been set Cogen – major components placed, assembly underway • Electrical work has commenced • Largest pieces are now on site Tank Farm: 6 of 7 tanks erected
Slide 11: STP-McKay Phase 1: Construction Update Well Pads
STP-McKay Phase 1: Construction Update Well Pads Service rig completing slant SAGD wells • 12 SAGD well pairs + 1 HZ CSS well successfully drilled, completions underway • Piling at pads nearly complete • Surface facilities on 1st pad will commence construction in November SAGD Wellheads ready from i
Slide 12: STP-McKay Phase 1: Construction Update Camps and Infrastructure
STP-McKay Phase 1: Construction Update Camps and Infrastructure Service rig completing slant SAGD wells 300 person operations camp – to be removed after start -up • 29 km all season access road complete • 14 km 8” natural gas fuel pipeline complete • Over 57% of permanent operations staff positions
Slide 13: STP-McKay Phase 1: Spending Update
STP-McKay Phase 1: Spending Update • Capital forecast reduced $10 million to $440 million • This includes ~ $15 million of Spend breakdown as of Sept. 30th, 2011 unbudgeted scope changes Incurred - including Committed - Fixed, Reimbursable, $216.9 $103.0 – Additional 40,000 bbl dilbit storage tank –
Slide 14: STP-McKay Phase 1: Timeline to Production
STP-McKay Phase 1: Timeline to Production Road Construction ERCB Project Approval Plant & Pad Site SAGD Drilling Facility Construction Mechanical Completion Commissioning Steam Circulation Current First Oil Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 2011 2012 Refer to slide 2 for cautionary statements about
Slide 15: Senlac and McKay Phase 1: Production Profile
Senlac and McKay Phase 1: Production Profile • „First Oil‟ for Phase 1 expected in calendar Q3-2012 • Ramp up expected to take 6-12 months • 2 week turnaround expected within first 12-18 months of operation 18,000 16,000 14,000 12,000 10,000 bbl/d 8,000 6,000 4,000 2,000 0 2011 2013 2015 2017 2019 2
Slide 16: STP-McKay: Phases 1 and 2 Layout (circa 2014)
STP-McKay: Phases 1 and 2 Layout (circa 2014) Well pads Phase 1 Phase 2 Continuous pay fairway • STP-McKay Phase 2 is being designed to add 24,000 bbl/d of bitumen processing capacity, bringing the total to 36,000 bbl/d Refer to slide 2 for cautionary statements about forward-looking information. 16
Slide 17: STP-McKay Phase 2: Construction Strategy
STP-McKay Phase 2: Construction Strategy • Southern Pacific plans to stagger the construction of Phase 2 in two integrated 12,000 bbl/d pieces • Provides maximum Phase 2B flexibility both Highlighted in red operationally and financially • Application has been submitted on November 10th, 2011 Phase 2
Slide 18: STP-McKay Phase 2: Post Application Value Change
STP-McKay Phase 2: Post Application Value Change • Upon successful application submission for Phase 2 expansion, management expects a significant revision to the 2P reserve category • 2P reserves production profile will be accelerated and is estimated to increase before tax NPV10% by more than $450
Slide 19: STP-McKay: Full Bitumen Exploitation Plan
STP-McKay: Full Bitumen Exploitation Plan Conduction and cyclic steam SAGD injector SAGD producer Infill horizontal well 19
Slide 20: Southern Pacific's Existing Project Growth Plan
Southern Pacific’s Existing Project Growth Plan • Forecast represents real projects that are on production, being constructed or in the application process • Timing of STP-McKay Phase 2 represents two stages of growth, designed for optimal operating and financing flexibility 40,000 35,000 30,000 25,
Slide 21: STP-McKay: Future Upside
STP-McKay: Future Upside • 100% working interest STP-McKay Potential Phase 3 Thermal Expansion area Project (environmental boundary background work in 59 sections underway) • Will have full-time Phase 1 operations in this area in 2012 • Other operators in Phase 2 area currently in application Under-
Slide 22: STP-Red Earth Thermal Project: Pilot Testing Underway
STP-Red Earth Thermal Project: Pilot Testing Underway Pilot Project 6 miles • 135 sections (100% WI) 1,000 bbl/d thermal facility • Existing 1,000 bbl/d thermal project • 105 MMbbl of P50 contingent resource • Pilot project started up in June 2011 • 3 wells currently being steamed and tested • Evalu
Slide 23: STP's Upside: Additional Oil Sands Leases
STP’s Upside: Additional Oil Sands Leases Hangingstone 29 coreholes 2D seismic 66 Sections Anzac 14 coreholes These exploration blocks 2D seismic, ERT represent significant upside 75 Sections potential for future in-situ oil sands projects Ells 15 coreholes 2D seismic Leismer & Kirby 50 Sections 29
Slide 24: Net Asset Value: Solidifying as Proven Assets Grow
Net Asset Value: Solidifying as Proven Assets Grow Jan. 1 20111 June 30 20111 Unrisked NAV Unrisked NAV Total Proved Reserves2 $254 $726 Probable Reserves2 $660 $383 Best Estimate (P50) Contingent Resources2 $970 $1,768 Stock Option Proceeds $30 $30 Working Capital $453 $260 Sub-total $2,367 million
Slide 25: 2012: What's next for STP?
2012: What’s next for STP? • Execution of STP-McKay Thermal Project – Construction on time and on budget will be primary focus of 2011/12 – 2012 will be focused on bringing production on line • STP-McKay Phase 2 – Expedite approval of application within regulatory agencies • Development Plan for STP
Slide 26: Thank You
Thank You • Staff • Board of Directors • Company Consultants • Manufacturers and Suppliers at Senlac and McKay • Investment Banks • Shareholders 26
Slide 27: Contact Information
Contact Information Suite 1700, 205 - 5th Ave. SW Calgary, AB T2P 2V7 Phone: 403-269-5243 Fax: 403-269-5273 Email: info@shpacific.com www.shpacific.com TSX:STP For more information: Byron Lutes, President & CEO Ron Clarke, COO Howard Bolinger, CFO blutes@shpacific.com rclarke@shpacific.com hbolinger
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