Southern Pacific Resource Corp · OTC:STPJF
Southern Pacific Resource — Investor Presentation (October 2010)
22 slides from Southern Pacific Resource's investor presentation, October 2010
Slide 1: October, 2010 Update
October, 2010 Update TSX: STP
Slide 2: 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 3: The Southern Pacific Strategy
The Southern Pacific Strategy FOCUSED: We are a bitumen/heavy oil developer and producer. DRILLED PRODUCTION: Our bitumen and heavy oil will be recovered using horizontal wells and steam; the footprint is similar to conventional oil, not mining. INDEPENDENT: We control and operate 90% of our l
Slide 4: Recent News
Recent News Sept. 27, 2010 - Announced proposed acquisition of North Peace Energy Corp. Sept. 23, 2010 - Announced road construction to STP-McKay is underway Sept. 22, 2010 Released year end financials which included record cash flow of $35.8 million Aug. 19, 2010 – Released year end (June 30th) res
Slide 5: Overview
Overview Shares outstanding - Basic (September 30, 2010) 322.8 million Shares outstanding - Fully diluted (September 30, 2010) 344.5 million Recent price (Close on Sept. 30, 2010) $1.23 Market capitalization – Basic (September 30, 2010) $397.0 million Bank debt @ September 30, 2010 ($55 million oper
Slide 6: Strategic Assets
Strategic Assets • Alberta: 301 sections (155,776 net acres) of oil sands leases with 81% average working interest • Saskatchewan: 6 mo. average of 4,250 barrels per day (bbl/d) of operated heavy oil STP McKay Project TSX: STP 6
Slide 7: North Peace Energy – Why?
North Peace Energy – Why? • Significant Resource has been discovered – Over 2.1 billion barrels of discovered resource – 105 million barrels of P50 contingent economic resources • Pilot Project built and operational – Has not had adequate testing to date – STP has a short term plan to continue testi
Slide 8: STP-Senlac Thermal Project - Saskatchewan
STP-Senlac Thermal Project - Saskatchewan • 6,500 bbl/d thermal oil treating capacity • 3 steam generators capable of producing 9,900 bbl/d of dry steam • Pipeline connected to oil shipping and diluent return pipelines Oil sands • +14 MMbbl oil produced to date ALBERTA • Remaining Reserves : Senlac
Slide 9: STP-Senlac Development Plan Layout
STP-Senlac Development Plan Layout • Up to 17 additional phases (2 SAGD pairs per phase) have been planned • Target is to keep plant full between 4,000 – 5,000 bbl/d oil for the next 10 to 15 years Existing Wells Phase G Infill Wells (spudded June 2010) Phase H SAGD (spud Oct. 2010) TSX: STP 9
Slide 10: Senlac - Recent Daily Production History
Senlac - Recent Daily Production History 6,000 Infill 2 Added 1 Infill down 5,000 for workover Planned outage Outage due for Infill 1 Added to Sask Transformer G1 pump Power replacement failure 4,000 bbl/d 3,000 2,000 1,000 - 01-Jul 08-Jul 15-Jul 22-Jul 29-Jul 05-Aug 12-Aug 19-Aug 26-Aug 02-Sep 09-S
Slide 11: STP-Senlac Actual Netbacks (Jan/10-June/10 Average)
STP-Senlac Actual Netbacks (Jan/10-June/10 Average) $90.00 $80.00 10.66 1.55 $70.00 10.16 Lloyd Differential to WTI $60.00 4.73 Qual/Transp. Adjustment 5.85 Diluent Cost $50.00 ($C/bbl) 9.28 OPEX - Non-fuel $40.00 OPEX - Fuel & Power $30.00 Royalties 38.77 Operating Netback $20.00 $10.00 $0.00 $US 7
Slide 12: STP-McKay Thermal Project - Alberta
STP-McKay Thermal Project - Alberta Syncrude Suncor MacKay In- Situ Project AOSC & PetroChina STP Lands CNPC Suncor • 45 km NW Ft. McMurray • 10.5 section project area • 100% STP working interest STP-McKay Project • 12,000 bbl/d design Exploitable • STP operated Bitumen Trend • Steam-oil ratio = 2.8
Slide 13: STP-McKay – Fall Construction Plans Underway
STP-McKay – Fall Construction Plans Underway Suncor McKay Road Winter road construction (50% WI) access 8.9 km road Under construction (100% WI) 20 km access road Plant Site TSX: STP 13
Slide 14: STP-McKay: Total Project Capital Cost Estimate
STP-McKay: Total Project Capital Cost Estimate Item Cost Estimate (C$ million) Road construction $34.1 Civil work (plant, pads & camp) $35.6 Drill and complete 12 SAGD pairs $35.4 Well pad facilities $35.4 Main SAGD facility $148.7 Supporting infrastructure $68.4 Cogeneration $25.8 Fuel gas pipeline
Slide 15: STP-McKay: Project Spend Profile
STP-McKay: Project Spend Profile $40 $400 Monthly Cash Cumulative Cash $35 $350 Cumulative Capital ($ million) $30 $300 Monthly Cash ($ millions) $25 $250 Commissioning $20 (Oct '11) $200 Civil Construction (Sep '10) $15 $150 Long Lead Orders (June ‘10) $10 $100 Detailed Engineering (Nov '09) $5 $50
Slide 16: McKay New Project Areas
McKay New Project Areas STP has identified enough bitumen resources to accommodate an additional 24,000 bbl/d, bringing the total planned McKay capacity to 36,000 bbl/d New Facility Potential Locations Preliminary environmental work and project planning to begin in Q2- 2010, continuing into a detail
Slide 17: Hedging Program
Hedging Program • Oil Oil Collars Exchange Rate Lock Calendar Volume Price Volume Rate Year (bbl/d) ($US/bbl) (bbl/d) ($CDN/$US) 2010 rem. 1,500 $70.00 x $90.00 750 $1.0605 2011 1,500 $70.00 x $100.00 750 $1.062 • Gas Purchases for Steam Generation Fuel Gas Purchases Calendar AECO Price Year Volume
Slide 18: Additional Oil Sands Leases to Explore
Additional Oil Sands Leases to Explore Anzac 14 coreholes 2D seismic, ERT Hangingstone 75 Sections 29 coreholes 2D seismic 66 Sections Ells 15 coreholes Leismer & Kirby 2D seismic 29 coreholes 50 Sections 2D & 3D seismic 51 Sections TSX: STP 18
Slide 19: 18-Month Southern Pacific Capital Forecast
18-Month Southern Pacific Capital Forecast (July 2010 to December 2011, STP-McKay Start up) STP-McKay $45 $380 McKay Contingency STP-Senlac Use of Capital $20 Exploration New Project Work (Total of $505 million) $10 $15 Interest & Fees $35 Source of Capital Corporate EBITDA $90 Net Cash on Hand (Tot
Slide 20: Corporate Cash Flow - Base Case Model
Corporate Cash Flow - Base Case Model (STP-Senlac and STP-McKay Only) $400 Before Tax NPV@10% = $711 million $300 $200 $170 million/yr $100 $ million $0 2010 2015 2020 2025 2030 2035 -$100 -$200 Debt/Planned EBITDA = 1.8 X -$300 Assumes no additional equity is raised -$400 CAPITAL EBITDA TOTAL CORPO
Slide 21: Corporate Strategy
Corporate Strategy • STP-Senlac provides a foundation for growth – Operations and cash flow – Allows STP to retain experienced staff in the field and office – Access to technology and field-tested facility designs • STP-McKay will be our first greenfields project – 12,000 bbl/d gross capacity – 4th
Slide 22: Contact Information
Contact Information Suite 430, 550 – 6 Avenue SW Calgary, AB T2P 0S2 Phone: 403-269-5243 Fax: 403-269-5273 Email: info@shpacific.com www.shpacific.com TSX:STP For more information: Byron Lutes, President & CEO Jeff Barefoot, VP Resource Howard Bolinger, CFO blutes@shpacific.com Development hbolinger
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