Southern Pacific Resource Corp · OTC:STPJF
Southern Pacific Resource — Investor Presentation (December 2012)
28 slides from Southern Pacific Resource's investor presentation, December 2012
Slide 1: Full Steam Ahead
Full Steam Ahead December 2012
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 87% 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 (Nov. 30, 2012) Trading Symbol TSX: STP Shares Outstanding - basic 397 Shares Outstanding - fully diluted 425 Insider Ownership - fully diluted 4% Average Daily Trading Volume (last 6 mo avg.) 1.4 million Market Capitalization $516 million 6.00% Convertible Debentures (Nov
Slide 4: STP Reserves and Resources
STP Reserves and Resources (effective June 30, 2012) 344 350 • Consistent growth in all reserve categories over the past 3 years 300 249 • All reserves are split between 250 STP-Senlac and STP-McKay 2009 • Before tax net present value MMbbl 200 2010 (discounted @10%): 120 2011 150 o 1P = $1.0 B 2012
Slide 5: Strategic Assets
Strategic Assets • Alberta: 402 sections of oil sands leases with 87% average working interest (224,312 net acres) • Saskatchewan: Average of ~3,500 barrels per day (bbl/d) of 100% working interest heavy oil Refer to slide 26 and 27 for cautionary statements about forward-looking information. 5
Slide 6: STP-Senlac Thermal Project
STP-Senlac Thermal Project Phase K drilling in Q4-2012 Phases L through AA are future phases of drilling • 100% STP owned and operated for 3 years • Average 2012 Production Rate approx. 3,500 bbl/d • Average SOR = 2.5 • Experienced operations personnel • One pad of 2-3 SAGD well pairs drilled per ye
Slide 7: STP-Senlac: Strong and Steady Cash Flow
STP-Senlac: Strong and Steady Cash Flow $25 $200 $180 $20 $160 $140 $15 $120 Cumulative Millions Millions $100 $10 $80 $60 $5 $40 $20 $0 $0 2009-Q4 2010-Q1 2010-Q2 2010-Q3 2010-Q4 2011-Q1 2011-Q2 2011-Q3 2011-Q4 2012-Q1 2012-Q2 2012-Q3 (Reflects period since STP purchased Senlac) • Average net opera
Slide 8: STP-Senlac: Strong Netbacks
STP-Senlac: Strong Netbacks $120.00 $100.00 $80.00 Heavy Diff 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 $37.78 $0.00 2009-Q4 2010-Q1 2010-Q2 2010-Q3 2010-Q4
Slide 9: STP-McKay Thermal Project
STP-McKay Thermal Project • 45 km NW Ft. McMurray • 10.5 section project area • 100% STP working interest • Phase 1 Design: • 12,000 bbl/d oil • +37,400 bbl/d steam STP Lands • Phase 1 Expansion (6,000 bbl/d) Suncor MacKay and Phase 2 (18,000 bbl/d) are in SAGD Project application process (Analog) S
Slide 10: STP-McKay: First Oil Sales Attained
STP-McKay: First Oil Sales Attained • First steam to well pairs commenced July 1st • Circulation (Warm Up) Phase ~ 3 ½ to 4 months • First Oil sales occurred October 24th • Production ramp up is now underway Refer to slide 26 and 27 for cautionary statements about forward-looking information. 10
Slide 11: STP-McKay: Central Process Facility
STP-McKay: Central Process Facility • Facility is running very well • On Time Load Factor since July 1, 2012 is greater than 99% • Generating all electrical power through 2 cogens, a 3rd on standby • Entire water system (treatment, recycle, steam generation) is up and running • Emulsion treating and
Slide 12: STP-McKay: Production Ramp-Up
STP-McKay: Production Ramp-Up 1,000 900 800 Circulation Phase Ramp Up Phase Average Monthly Bitumen Estimate (bbl/d) 700 600 500 400 300 200 100 0 Jul Aug Sep Oct Nov Rates should grow to permitted capacity (12,000 bbl/d) in 12-18 months from October 2012 Refer to slide 26 and 27 for cautionary stat
Slide 13: STP-McKay: U.S. Gulf Coast by Rail Market Strategy
STP-McKay: U.S. Gulf Coast by Rail Market Strategy • 5 year deal starting Jan. 1, 2013 • 4,500 km by rail • Terminals in Lynton, AB, and Natchez, MS • Reduces diluent requirements • Improved netbacks • Secure access to market Refer to slide 26 and 27 for cautionary statements about forward-looking i
Slide 14: Dilbit Marketing Update
Dilbit Marketing Update $140.00 Historical Relationship between Crude Markers (November 2011 - October 2012) $130.00 $130.00 $120.00 $120.00 WTI, Brent ($US/bbl) $110.00 R² = 0.4399 R² = 0.8935 $US/bbl $100.00 $110.00 $90.00 $100.00 $80.00 $90.00 $70.00 $60.00 $80.00 $50.00 $70.00 $70.00 $90.00 $110
Slide 15: STP's Rail Marketing: Estimated Netback Analysis
STP’s Rail Marketing: Estimated Netback Analysis Historical Bitumen Pricing of Alberta vs. USGC (STP-McKay Plant Gate Netbacks) $70.00 $60.00 $50.00 ($C/bbl) $40.00 $30.00 $20.00 $10.00 $0.00 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Natchez/WCS Netback Diff ($C/bbl bit) WCS (Alberta) Netback
Slide 16: STP-McKay Growth: Phases and Layout
STP-McKay Growth: Phases 1 and 2 Layout (circa 2016) Well pads Phase 2 18,000 bbl/d Phase 1 + SOR = 3.5 Expansion 18,000 bbl/d SOR = 2.8 Continuous pay fairway • 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 very high
Slide 17: STP-McKay Phase 1 Expansion: Plot Plan
STP-McKay Phase 1 Expansion: Plot Plan Additional equipment can all be situated on original plant site, minimizing overall footprint Expanded Boiler Expanded Water Additional Steam Feed Water Treatment Generation Additional Cogeneration Refer to slide 26 and 27 for cautionary statements about forwar
Slide 18: STP-McKay Phase 1 Expansion: Capital Cost
STP-McKay Phase 1 Expansion: Capital Cost Cost per design Capital Budget barrel ($ million) ($/bbl) Phase 1 Expansion (6,000 bbl/d) $150* $25,000 • costs include inflation escalation & 6 (~ 36% less than original construction) additional SAGD well pairs Phase 1 Existing (12,000 bbl/d) $468 $39,000 •
Slide 19: STP-McKay Phase 1 Expansion and Phase 2 Schedule
STP-McKay Phase 1 Expansion and Phase 2 Schedule Application Approval Phase 1 Expansion Engineering & Procurement Construction First Steam First Oil 6,000 bbl/d Engineering & Procurement Phase 2 Construction First Steam First Oil 18,000 bbl/d Jan, 2012 Jan, 2013 Jan, 2014 Jan, 2015 Jan, 2016 Jan, 20
Slide 20: Existing Projects = Defined Growth
Existing Projects = Defined Growth • Forecast represents real projects that are on production, being constructed or in the application process • First oil forecasts: • STP-McKay Phase 1: Q4 2012 (12-18 months to full capacity) • STP-McKay Phase 1 Expansion: Q4 2014 • STP-McKay Phase 2: Q2 2017 45,00
Slide 21: STP-McKay: Future Upside
STP-McKay: Future Upside STP-McKay • 100% working interest Potential Thermal Project Expansion area in 59 sections (environmental boundary background work underway) • STP has full-time operations in this area Phase 1 • Other operators in area currently in application preparation or waiting Phase 2 f
Slide 22: STP's Upside: Additional Oil Sands Leases
STP’s Upside: Additional Oil Sands Leases Anzac Hangingstone 14 coreholes 29 coreholes 2D seismic, ERT 2D seismic 56 Sections 66 Sections Leismer Red Earth Ells 29 coreholes CSS Pilot Project 15 coreholes 2D & 3D seismic (currently shut-in) 2D seismic 36 Sections 135 Sections 50 Sections These lease
Slide 23: Summary of STP's Recent Financing Activities
Summary of STP’s Recent Financing Activities $275 million USD STP-McKay 2nd lien term loan construction STP-McKay ramp up STP-Senlac and approval of purchase $173 million STP-McKay STP-McKay Phase 1 Expansion $108.4 million convertible `First Steam` `First Oil` and Phase 2 equity debentures $50 mill
Slide 24: Net Asset Value Estimate
Net Asset Value Estimate ($ million) NPV @ 10% NPV @ 8% NPV of Proved Plus Probable Reserves, BT discounted (249 mmboe) $ 1,593 $ 2,009 (1) NPV of Best Estimate Contingent Resources, BT discounted (525 mmboe) $ 959 $ 1,696 (1) September 30, 2012 bank debt, net of cash and working capital ($ 225) ($
Slide 25: Fiscal 2013: An Exciting Year Ahead
Fiscal 2013: An Exciting Year Ahead • Only new SAGD Project starting up in Alberta for 2012 STP-McKay Thermal • Continued ramp up of wells throughout the year Project • Continue to streamline plant efficiency • Start up operations and logistics for rail marketing arrangement • Continue to deliver st
Slide 26: Reader's Advisory
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 27: Reader's Advisory (continued)
Reader's Advisory (continued) Forward-looking Statements: 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 28: Contact Information
Southern Pacific Resource Corp. For more information: Suite 1700, 205 - 5th Ave. SW Byron Lutes, President & CEO Calgary, AB T2P 2V7 blutes@shpacific.com Phone: 403-269-5243 Fax: 403-269-5273 Ron Clarke, COO Email: info@shpacific.com rclarke@shpacific.com www.shpacific.com Howard Bolinger, CFO TSX:S
Southern Pacific Resource — Investor Presentation (December 2012) on 6ix