onsdag 27 oktober 2010

The Company That’s Shaping Up To Be the Next Big Player in the Oil Sands

Scott McLeod is a Geologist with 4 years of experience. His experience includes conventional prospecting of offshore plays in the North Sea and Mackenzie Beaufort to gas and oil resource plays of the Central Alberta Cretaceous and Jurassic to the conventional reef and tight gas plays of the Devonian and Triassic of NE BC. (Email: Scott.A.McLeod@gmail.com)

With a green light from government this week — along with new property acquisitions —Southern Pacific Resources (STP – TSX) is primed to make a big move in the Canadian Oil Sands.

Before I dive in, here’s a quick snapshot:

Company Profile

Shares Outstanding: 322.8 MM (Fully diluted)

Recent Price: $1.38 (Oct 18th Close)

Market Capitalization: $445.5MM

Land: 155,775 (net) Acres of Oil Sands Leases

Current production: 4440 bbls/d (STP does produce gas but mostly for fuel ~ 1mmcf/d)

Hedging: 1500 bbl/d @ $70USD and $90USD for calendar 2010

Southern Pacific is a Canadian listed Heavy Oil (pure play) Company exploiting oil from two major properties in the Canadian heavy oil and oil Sands: Senlac and McKay. These properties have the potential to increase production to greater than 25,000 bbls/d. That’s a 500% increase. STP purchased the Senlac property from EnCana in early 2009 when oil was trading at $30/bbl and the world looked quite bleak. With the continuous rise of the price of oil and a modest rebound in the equity markets, shareholders in STP have done quite well.

The big news driving the stock this week was government approval for STP to begin developing their main asset, the STP-McKay SAGD project (Steam Assisted Gravity Drainage – see Wikipedia explanation here: http://en.wikipedia.org/wiki/SAGD), which the company plans to grow into a 12,000 bbl/d production asset.

http://oilandgas-investments.com/latest-reports/investing-in-southern-pacific-resources-stock/

http://oilandgas-investments.com/latest-reports/investing-in-southern-pacific-resources-pt-2/

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