Southern Pacific Resource Corp · OTC:STPJF
Southern Pacific Resource — Investor Presentation (July 2011)
26 slides from Southern Pacific Resource's investor presentation, July 2011
Slide 1: Corporate Presentation July 2011
Corporate Presentation July 2011 TSX: STP
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 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: Overview
Overview Shares outstanding - basic 339 million Shares outstanding - fully diluted 359 million Recent price (Close on May 24th, 2011) $1.46 Market capitalization - (May 24thth, 2011) $495 million Working Capital (Mar. 31st , 2011) $345 million Long Term Debt (Mar. 31st , 2011) $375 million Insider o
Slide 5: Experienced Management Team
Experienced Management Team Years in the Name Title industry Experience Byron Lutes President and CEO [25] • VP, Operations with Mancal Energy Inc. • VP, Engineering at Hunt Oil Company and Newport Petroleum Corporation • Various engineering and marketing roles at Suncor Energy Ron Clarke COO [27] •
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 4,250 barrels per day (bbl/d) of operated heavy oil 6
Slide 7: STP-Senlac Thermal Project
STP-Senlac Thermal Project • 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 – Steam Generator B Replacement
STP-Senlac – Steam Generator B Replacement • Since acquisition of Senlac, it was known that one steam generator needed replacement • Field staff located suitable generator on a website „classified ad‟ • Was purchased for $90,000 – Had never been fired, needed some refurbishment • Installed in June a
Slide 9: STP-Senlac – Solid Production
STP-Senlac – Solid Production • July 1, 2010 to May 31, 2011 average - 4,215 bbl/d • Phase H (2 SAGD well pairs) brought on production April 1st, 2011 • Phase J (3 SAGD well pairs) expected to be drilled and available for production by November 2011 6,000 Prod. Phase H on Average stream 5,000 4,000
Slide 10: STP-Senlac - Strong Netbacks
STP-Senlac - Strong Netbacks Actual from Nov. 3, 2009 Apr. 30, 2011 $90.00 $80.00 13.70 2.73 $70.00 9.89 Lloyd Differential to WTI $60.00 4.46 Qual/Transp. Adjustment 5.43 Diluent Cost ($C/bbl) $50.00 9.43 OPEX - Non-fuel $40.00 OPEX - Fuel & Power Royalties $30.00 Operating Netback 39.12 $20.00 $10
Slide 11: STP-McKay Thermal Project
STP-McKay Thermal Project • 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: Suncor MacKay • 12,000 bbl/d oil STP Lands SAGD Project • 33,600 bbl/d steam (Analog) STP-McKay Thermal Pr
Slide 12: STP-McKay Phase 1 – Construction Update
STP-McKay Phase 1 – Construction Update • Road: Initial build 95% complete, will be completed on time and within budget • Central Process Facility: Initial earthworks 95% complete, on time and within budget, pile driving has begun, about 30% complete, tank construction initiated • Work camp: 300 per
Slide 13: 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 Commissioning Mechanical Completion Steam Circulation Current Well Ramp Up Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13
Slide 14: Senlac and McKay Phase 1: Production Profile
Senlac and McKay Phase 1: Production Profile 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 2021 2023 2025 2027 2029 2031 STP-Senlac STP-McKay Phase 1 14 Refer to slide 2 for cautionary statements about forward-looking information.
Slide 15: Corporate Cash Flow - Base Case Model
Corporate Cash Flow - Base Case Model (STP-Senlac and STP-McKay Phase 1 Only) $500 5 $400 $300 3 $200 $100 1 Debt/EBITDA $ million $0 2011 2016 2021 2026 2031 -$100 -1 -$200 -$300 -3 Simple model assumes cash sweep to pay down debt is first priority -$400 -$500 -5 CAPITAL EBITDA TOTAL CORPORATE DEBT
Slide 16: STP-McKay: High Quality Resource Base
STP-McKay: High Quality Resource Base • Total of 43 coreholes (31 drilled this past winter) on Phase 2 project area • High quality bitumen pay encountered on all wells: • No lean zones • No shale barriers • Continuous and exploitable McMurray and Wabiskaw oil sands deposits 17-22 m exploitable pay t
Slide 17: STP-McKay: Phases 1 and 2 Layout (2014)
STP-McKay: Phases 1 and 2 Layout (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 17 Refer to slide 2 for cautionary statements about forward-looking information.
Slide 18: Phase 2: Construction Strategy
Phase 2: Construction Strategy • Southern Pacific plans to stagger the construction of Phase 2 in two integrated 12,000 bbl/d pieces Phase 2B Highlighted in red • FEED Study Engineering underway, expect completion by the fall of 2011 • Provides maximum flexibility both Phase 2A +Pre-build for Phase
Slide 19: STP-McKay Phase 2A: Timeline to Production
STP-McKay Phase 2A: Timeline to Production Environmental Work Corehole Drilling Application Preparation Approval Process ERCB Project Approval Construction Commissioning Steam Circulation Current First Oil Jul-10 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Phase 2B is expected to be 1 to 2 years behind Phase
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: Wabiskaw Bitumen: Additional Resource at McKay
Wabiskaw Bitumen: Additional Resource at McKay Clearwater • Wabiskaw zone lies directly above McMurray over Shale most of McKay Phase 1 and 2 (Caprock) • Approximately 200 mmbbl of OBIP (management est.) • Recovery mechanism planned: • Combination of cyclic steam stimulation (CSS) Wabiskaw and condu
Slide 22: STP-McKay: Full Bitumen Exploitation Plan
STP-McKay: Full Bitumen Exploitation Plan Conduction and cyclic steam SAGD injector SAGD producer Infill horizontal well 22
Slide 23: STP-Red Earth Thermal Project
STP-Red Earth Thermal Project • 135 sections • Existing 1,000 bbl/d thermal project • 105 MMbbl of P50 contingent resource Pilot Project • Pilot project started up in June 2011 • Evaluate through summer and make recommendations in fall 6 miles STP 100% WI oil sands leases 23 Refer to slide 2 for a d
Slide 24: 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 75 Sections 66 Sections Plans are underway to commence a significant exploration program on these blocks next winter Ells 15 coreholes Leismer & Kirby 2D seismic 29 coreholes 50 Sections
Slide 25: 2011: What's next for STP?
2011: What’s next for STP? • Execution of STP-McKay Thermal Project – Construction on time and on budget will be primary focus of 2011 • Preparation of STP-McKay Phase 2 – Expect to submit an application in the fall of 2011 • Development Plan for STP-Red Earth – Test in June 2011 using existing pilo
Slide 26: 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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