Southern Pacific Continues With Winter Core Hole Program
Southern Pacific Resource Corp. reported that its winter core program is continuing with 6 rigs running on 4 of the Corporation's prospect areas. In total, Southern Pacific has completed a total of 48 core holes and is very encouraged by the results to date.
At McKay, Southern Pacific has drilled a total of 23 core holes to date on its 59 section block. The focus of these core holes has been on a six section block where a significant accumulation of bitumen was discovered as previously announced on January 25, 2008. Since the initial discovery, 13 additional core holes have been drilled and another 5 more are planned into the McKay North project area before spring break-up. Southern Pacific credits its technical management staff for having the logistical planning in place prior to the drilling season to enable the Corporation the flexibility to adjust its program to more fully delineate this exciting discovery. Southern Pacific believes its appraisal of the resource on this block of land will be sufficient to proceed with the initial scoping and planning of a commercial SAGD project in the range of 15,000 - 20,000 bbl/d.
Southern Pacific is also very pleased to announce a second discovery in McKay, located 5 miles south of the McKay North project area. McKay South has 3 core holes drilled into the bitumen accumulation to date, and again, utilizing STP's incorporated flexibility on its drilling plans, an additional four core holes will be drilled to further delineate this resource before the end of this year's winter drilling season. Results from the McKay South will be incorporated into the planning process with the project at McKay North.
In total, 17 core holes have been drilled into the two McKay project areas this winter. Of these, 16 have encountered gross bitumen zones between 26 and 30 meters thick, and continuous net bitumen zones between 12 and 27 meters thick. The other core hole came in with less, 8 net meters of pay. The zone porosity ranges from 30% to 35%. In addition, the core holes did not show any evidence of gas or water thief zones that could technically impair SAGD viability. The seismic, logs, core and bitumen from this block are still being analyzed and interpreted as more data is collected, and will be the basis for an updated resource report which will be prepared by McDaniel and Associates. Interpreted seismic data from the 212 km 2D survey at McKay River, which was completed in the fall of 2007, was the basis for the selection of the locations for the core holes that have been drilled this winter.
The remainder of the exploration and delineation program is proceeding as planned, with a total of 25 core holes drilled to date on the Corporation's Long Lake, Leismer and Hangingstone properties. In particular, at Hangingstone, where he Corporation holds 62 contiguous sections, areas of interest have shown gross bitumen zones between 15 and 30 meters thick and net continuous bitumen zones between 8 and 15 meters thick. Drilling is continuing and the areas of interest will be more fully evaluated as the drilling locations have been adjusted to better delineate any potential project areas.
At Leismer, a 3D seismic program was shot in January 2008, over the area that was successfully drilled last year. This data has now been interpreted and is being utilized to drill the last phase of core holes in Leismer for this winter.
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