Southern Pacific Submits Application for Bitumen Project in Alberta

Southern Pacific submitted an application to the Alberta Energy Resources Conservation Board (ERCB) and Alberta Environment for the development of its first 12,000 barrel per day bitumen project, utilizing proven in-situ steam assisted gravity drainage (SAGD) technology.

Submission of this application is believed to be the final step before contingent resources on the Corporation's STP-McKay project can be reclassified as Probable and Possible reserves. The project application is a complete and encompassing document that addresses all of the necessary and stringent requirements that must be met prior to approval of a commercial project of this size.

The STP-McKay project is located approximately 45 km northwest of Fort McMurray. Southern Pacific discovered the STP-McKay project area two winters ago with the drilling of 32 core holes on its McKay block. The core holes provided an excellent understanding of the area's bitumen resource and allowed the Corporation to begin making development plans for the project. Over the past 18 months, the Corporation has prudently spent capital and collected the necessary data to complete the requirements for the project application. These requirements include:

  • Drilled 40 assessment wells within the project area, of which 33 have been cored and fully analyzed
  • Engineering design basis memorandum for all facilities
  • Detailed cap rock study
  • Several environmental studies
  • Civil engineering planning including a road and facilities sites
  • SAGD well pair design
  • Reservoir simulation studies
  • Water source studies, including the drilling and testing of sufficient water supply
  • Meaningful and inclusive stakeholder consultation

Southern Pacific is currently having its McKay asset evaluated by McDaniel and Associates. The Corporation expects the process to result in the assignment of Probable and Possible reserves from within the project area when the evaluation is completed by the end of the Corporation's fiscal year on June 30, 2009.


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