Southern Pacific Resource Corp · OTC:STPJF
Southern Pacific Resource — Investor Presentation (June 2014)
27 slides from Southern Pacific Resource's investor presentation, June 2014
Slide 1: Pursuing the Prize June 2014
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Slide 2: 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 100% of our production and 89% of our lands, allowing us to develop at a pace that fits our objectives. DEMONSTRATED EXECUTION: We have solid oper
Slide 3: STP Overview
STP OVERVIEW Common Shares* Trading Symbol TSX:STP Shares Outstanding – basic and fully diluted 398 million Insider Ownership – fully diluted ~4% Average Daily Trading Volume (last 6 month average) 2.8 million Market Capitalization $82 million 6.00% Convertible Debentures Trading Symbol TSX:STP.DB P
Slide 4: Strategic Assets
STRATEGIC ASSETS Alberta: 366 sections (321 net) of oil sands leases with 89% average working interest • STP-McKay Thermal Project: • Existing capacity 12,000 bbl/d SAGD facility (@ SOR of 3.1) • Expansion capacity of an additional 24,000 bbl/d (in regulatory approval process) Saskatchewan: 3 sectio
Slide 5: Southern Pacific: Corporate History
SOUTHERN PACIFIC: Corporate History STP-McKay SAGD STP-McKay facility STP completes First three ICD STP-McKay bitumen deposit construction innovative rail configurations deployed first steam discovered commences marketing agreement at STP-McKay STP acquires remaining STP-McKay SAGD STP-McKay STP ann
Slide 6: STP Reserves and Resources (Effective June 30, 2013)
STP RESERVES AND RESOURCES (EFFECTIVE JUNE 30, 2013) 400.0 383 • Consistent growth in all reserve categories over the past 3 years 350.0 276 300.0 • Reserves are assigned only to STP-Senlac and Liquids (mmbbl) 2009 250.0 2010 STP-McKay 200.0 2011 • Before tax net present value (discounted @10%): 150
Slide 7: STP-Senlac Thermal Project
STP-SENLAC THERMAL PROJECT • 100% STP owned and operated for over 4 years • Experienced Operations staff • 11-12o API oil • One pad of 2-3 SAGD well pairs has been drilled every year since STP took over operations • Favorable Saskatchewan regulatory regime Refer to cautionary statements about forwar
Slide 8: STP-Senlac: Production History
STP-SENLAC: PRODUCTION HISTORY 3,500 3,000 2,500 Oil (bbl/d) 2,000 1,500 1,000 500 0 Mar-14 Jul-13 Oct-13 Jan-14 Jun-13 Feb-14 Sep-13 Dec-13 Nov-13 May-13 Apr-13 Aug-13 Refer to cautionary statements about forward-looking information at the end of the presentation. Volumes and field estimates are su
Slide 9: STP-Senlac Strong Netbacks
STP-SENLAC STRONG NETBACKS $140.00 $120.00 $100.00 Heavy Diff $80.00 Quality/Trans. Diluent $60.00 Royalties Fuel & Power $40.00 Fixed Opex Operating Netback WTI ($C/bbl) $20.00 $41.62 $41.27 $36.63 $37.40 $37.94 $37.45 $48.34 $38.61 $52.13 $46.14 $36.10 $37.94 $34.75 $23.36 $42.75 $53.53 $29.13 $64
Slide 10: STP-McKay Thermal Project
STP-MCKAY THERMAL PROJECT • 100% STP working interest • Phase 1 Design (in operation): • 12,000 bbl/d oil + 37,400 bbl/d steam • Long lease tenure remaining (first expiry 2025) • Phase 1 Expansion (pending regulatory approval) • Additional 6,000 bbl/d oil + 13,000 bbl/d steam • Phase 2 (pending regu
Slide 11: STP-McKay: Central Process Facility
STP-MCKAY: CENTRAL PROCESS FACILITY • Facility continues to run well • Phase 1: 12,000 bbl/d oil treating, 37,400 bbl/d steam generation • On Stream Factor since July 1, 2012 is greater than 99% • Generating all electrical power through 2 cogeneration units with a 3rd on standby • Entire water syste
Slide 12: SAGD Start-up Phases
SAGD START-UP PHASES Circulation Circulation Semi-SAGD SAGD mainly conductive heat, communication steam injection in top steam injection in steam is circulated established well (convective heat), top well, bottom through wellbore, but between injector steam circulation in well placed on not forcibly
Slide 13: Inflow Control Devices
INFLOW CONTROL DEVICES • Inflow Control Device (ICD) have been developed by a number of service companies to improve wellbore conformance • Purpose is to control steam short circuits in HZ wellbore by restricting flow while allowing other sections to flow with higher pressure drop • Two of these con
Slide 14: STP-McKay: Downspacing SAGD Program
STP-MCKAY: Downspacing SAGD Program • The most cost effective method to fill the plant is to drill additional SAGD well pairs within the existing pads • This accelerates rate and recovery, and minimizes additional capital infrastructure • 50 metre spacing on downspaced SAGD pairs on Pads 101 and 102
Slide 15: STP-McKay – Production History
STP-MCKAY – PRODUCTION HISTORY 2,500 2,000 Bitumen (bbl/d) 1,500 1,000 500 First Steam 0 Sep-12 Dec-12 Sep-13 Dec-13 Feb-13 Mar-13 Jun-13 Feb-14 Mar-14 Jul-12 Jan-13 Jul-13 Jan-14 Oct-12 Oct-13 Nov-13 Nov-12 May-13 Aug-12 Apr-13 Aug-13 Refer to cautionary statements about forward-looking information
Slide 16: STP-McKay: Phases 1 and 2 Layout (Circa 2017)
STP-MCKAY: Phases 1 And 2 Layout (Circa 2017) • STP-McKay Phases 1 and 2 will have very similar facilities, each with 18,000 bbl/d capacity • Lower SOR on west side because of lower proportion of bio-turbated facies Phase 1 Well Pads Phase 2 Well Pads Phase 1 + Phase 2 Expansion 18,000 bbl/d 18,000
Slide 17: STP-McKay Phase Expansion and Phase Timing
STP-MCKAY PHASE 1 EXPANSION AND PHASE 2 TIMING Phase 1 Expansion Phase 2 • Timing for Phase 2 is based on utilizing one SAGD drilling rig working year round Refer to cautionary statements about forward-looking information at the end of the presentation. Most notably the following risks on forward lo
Slide 18: STP-McKay U.S. Gulf Coast Rail Market Strategy
STP-MCKAY U.S. GULF COAST RAIL MARKET STRATEGY • 5 year deal started Jan. 1, 2013 • 4,500 km by rail • Terminals in Lynton, AB, and Natchez, MS • Reduces diluent requirements • Improved netbacks • Secure access to market • Access to US Gulf Coast sourced diluent • Subleasing reduces annual fixed cos
Slide 19: STP-Senlac Marketing
STP-SENLAC MARKETING • In order to access higher netback U.S. markets, STP trucks a portion of its STP- Senlac heavy oil to local rail sales points • Recently deployed STP rail cars to improve netbacks and negotiated improved unit rate ($/m3) for trucking operations • In March 2014 66% of volumes wa
Slide 20: A Look Ahead
A LOOK AHEAD • STP has currently installed 3 ICD configurations at STP-McKay. Assuming continued improved performance and clarity on STP’s strategic alternatives process, STP plans to install additional ICD configurations into more well pairs over the next 3 months. • On December 11, 2013, STP annou
Slide 21: Appendix
APPENDIX
Slide 22: STP's Upside: Additional Oil Sands Leases
STP’S UPSIDE: ADDITIONAL OIL SANDS LEASES STP has interests in several additional oil sands leases offering significant future in-situ oil sands development potential; 444 MMboe Best Estimate Contingent Resources assigned 22
Slide 23: Experienced Management
EXPERIENCED MANAGEMENT Years in the Name Title industry Experience Byron Lutes President and CEO 26 • 12 years in senior management positions • Former VP, Operations at Mancal, VP, Engineering at Hunt Oil and Newport • Held various management positions at both Newport and Suncor including an on-site
Slide 24: Board of Directors
BOARD OF DIRECTORS Name Title Experience David Antony Chairman • 15 years of experience assisting companies in structuring transactions, accessing capital and corporate governance • Currently also a director of Blackhawk Resource Corp., Northsea Energy Inc., Iron Tank Resources Corp. and Paramax Res
Slide 25: Reader's Advisory: Forward-Looking Statements
READER’S ADVISORY: FORWARD-LOOKING STATEMENTS All statements other than statements of historical fact may be forward-looking statements. These statements relate to future events or Southern Pacific Resource Corp.’s (the “Company”) future performance. Forward-looking statements are often, but not alw
Slide 26: Reader's Advisory: Forward-Looking Statements (Continued)
READER’S ADVISORY: FORWARD-LOOKING STATEMENTS (CONTINUED) NON-GAAP MEASURE This Presentation includes references to certain financial measures, as described below, which do not have standardized meanings prescribed by IFRS. Because this measure is commonly used in the oil and gas industry, the Corpo
Slide 27: Contact
CONTACT For more information: Southern Pacific Resource Corp. Byron Lutes, President & CEO blutes@shpacific.com Suite 1700, 205 - 5th Ave. SW Calgary, AB T2P 2V7 Phone: 403-269-5243 Fax: 403-269-5273 Ron Clarke, COO rclarke@shpacific.com Email: ir@shpacific.com Howard Bolinger, CFO hbolinger@shpacif
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