The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from Marketwire

Southern Pacific Resource Corp. Announces Proposed Private Offering of Senior Secured Second Lien Notes and Update on Production at STP-McKay

Friday, January 11, 2013

Southern Pacific Resource Corp. Announces Proposed Private Offering of Senior Secured Second Lien Notes and Update on Production at STP-McKay11:55 EST Friday, January 11, 2013CALGARY, ALBERTA--(Marketwire - Jan. 11, 2013) - NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATESSouthern Pacific Resource Corp. ("Southern Pacific" or the "Company") (TSX:STP) announces that it intends to issue, on a private placement basis, up to C$300 million in aggregate principal amount of senior secured second lien notes, if terms and conditions appear favourable. Southern Pacific may issue the notes in connection with this private placement offering or in future offerings from time to time. In conjunction with the notes offering, the Company contemplates that it may enter into a senior secured first lien revolving credit facility with a syndicate of financial institutions if terms and conditions appear favourable. Timing, size, terms and completion of these transactions are subject to market conditions and other factors.Southern Pacific intends to use the net proceeds from the private placement to retire its debt obligations under its existing US$272.2 million second lien term loan facility (including a prepayment penalty of US$2.7 million) and for general corporate purposes.[Southern Pacific is also pleased to announce that bitumen production at the STP-McKay Thermal Project, located 45 km northwest of Fort McMurray, continues to increase. For the first seven days of January this year, the estimated average bitumen production rate was approximately 1,620 barrels per day (bbl/d), up 35% from December's average rate of approximately 1,200 bbl/d. As the Company has previously stated, it is expected to take 12 to 18 months from first oil production, which occurred in mid- October 2012, for total rates to approach the 12,000 bbl/d design capacity at STP-McKay.This news release does not constitute an offer an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of, the securities mentioned herein in any jurisdiction in which such an offer, solicitation, or sale would be unlawful. The securities mentioned herein have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or the securities laws of any other jurisdiction, and may not be offered or sold in the United States absent registration under, or an applicable exemption from registration requirements of, the U.S. Securities Act.. The notes will be offered and sold in Canada, on a private placement basis pursuant to available prospectus exemptions. The notes may be offered in the United States only to "qualified institutional buyers" (as defined in Rule 144A ("Rule 144A") under the U.S. Securities Act) in reliance on Rule 144A under the U.S. Securities Act and outside the United States in reliance on Regulation S under the U.S. Securities Act.About Southern PacificSouthern Pacific is engaged in the exploration, development and production of in-situ thermal heavy oil and bitumen production in the Athabasca oil sands of Alberta and in Senlac, Saskatchewan. Southern Pacific trades on the TSX under the symbol "STP".Reader Advisory:This news release contains forward-looking information that involves various risks, uncertainties and other factors. All information other than statements of historical fact is forward-looking information. The use of any of the words "anticipate," "plan," "continue," "estimate," "expect," "may," "will," "project," "should," "believe," "predict," "pursue" and "potential" and similar expressions are intended to identify forward-looking information. The forward-looking information is not historical fact, but rather is based on the Company's current plans, objectives, goals, strategies, estimates, assumptions and projections about the Company's industry, business and future financial results. This information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. No assurance can be given that these expectations will prove to be correct and such forward-looking information included in this news release should not be unduly relied upon. This information speaks only as of the date of this news release. In particular, this news release contains forward-looking information including but not limited to the issuance of senior secured second lien notes by Southern Pacific, the use of proceeds therefrom, the establishment of a senior secured first lien revolving credit facility, and the use of proceeds therefrom. Such forward-looking information is based on certain assumptions and analysis made by Southern Pacific in light of its experience and perception of current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances. However, whether actual results, performance or achievements will conform to Southern Pacific's expectations and predictions is subject to market conditions and a number of known and unknown risks and uncertainties which could cause actual results to differ materially from Southern Pacific's expectations. Such factors may include the failure to successfully market the notes or negotiate the credit facility, failure to satisfy certain conditions in connection with the issuance of the notes or the credit facility. Other factors which could materially affect such forward-looking information are described in the risk factors in the Company's most recent annual information form that is available on SEDAR at The forward-looking statements included in this news release are expressly qualified by this cautionary statement. Southern Pacific does not undertake any obligation to publicly update or revise any forward-looking statements except as required by applicable securities laws.FOR FURTHER INFORMATION PLEASE CONTACT: Contact Information: Southern Pacific Resource Corp.Byron LutesPresident & CEO403-269-1529blutes@shpacific.comSouthern Pacific Resource Corp.Howard