Southern Pacific Clinches Saxony Acquisition
Southern Pacific has announced the completion of its previously announced acquisition of Saxony Petroleum Inc. ("Saxony"), a private Alberta-based oil and gas company. At the meeting of Saxony shareholders held April 29, 2009, 100% of the securities voted at the meeting were cast in favor of the transaction.
As part of the transaction, Southern Pacific will acquire all of the outstanding shares of Saxony on the basis of 0.8302 common shares of Southern Pacific for each common share of Saxony, for a total issuance of 14 million common shares of Southern Pacific. After the transaction, Southern Pacific will have 121,611,182 common shares outstanding.
The acquisition of Saxony adds approximately 145 barrels of oil equivalent per day (boe/d) to Southern Pacific's conventional production. The new production is weighted about 75% to sweet natural gas and the remainder to oil and natural gas liquids. When added to the conventional volumes acquired through the recent acquisition of Rochester Energy Corp., Southern Pacific expects its current production to be approximately 180 boe/d. Southern Pacific now holds more than 45,000 net acres of undeveloped land targeting conventional production in Sutton, Sawn Lake, Brazeau and Adams in west-central Alberta.
Southern Pacific believes the Transaction strategically complements its primary business objective, namely the development and exploitation of its 269 gross sections (225 net sections) of oil sands leases in the Athabasca fairway. The Saxony assets provide Southern Pacific with additional cash flow and opportunities without any increase in general and administrative expense.
As well, the Corporation is pleased to announce that Mr. Byron Lutes, Southern Pacific's President, has accepted an enhanced role as President and Chief Executive Officer ("CEO") and a seat on the Board of Directors. Mr. Lutes joined the Corporation in January 2008 as President and has been a major contributor to the success and progression of the Corporation, in particular in relation to the development of Southern Pacific's first oil sands project, a 12,000 bbl/d steam assisted gravity drainage (SAGD) project called STP-McKay. Mr. Dave Antony, who previously served as CEO, will continue to be Chairman of the Board, allowing him to focus his activities on pursuing the capital markets and financing options necessary to complete the development of the Corporation's STP-McKay Project.
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