Southern Pacific Resource Corp.

Southern Pacific Resource Corp.

June 26, 2008 09:01 ET

Independent Resource Report Confirms Significant Project Area on Southern Pacific Lands

CALGARY, ALBERTA--(Marketwire - June 26, 2008) - Southern Pacific Resource Corp. ("Southern Pacific" or the "Corporation") (TSX VENTURE:STP) is pleased to announce that an independent evaluation of the Corporation's oil sands leases in Athabasca has confirmed the identification of two significant project areas at McKay and Long Lake.

McDaniel and Associates (McDaniel) of Calgary has provided the Corporation with an estimate of the Contingent Resource within the McMurray formation on its lands. Based on the estimate, Southern Pacific has been able to confirm its first significant project area at McKay. McDaniel was contracted by Southern Pacific to complete an estimate of the Discovered Petroleum Initially In Place (PIIP) and determine what portion of the Discovered PIIP is currently recognized as Contingent Resource. This is McDaniel's first year estimating Southern Pacific's bitumen resources. Southern Pacific was pleased with McDaniel's methodology and thoroughness to ensure the reliability and credibility of the report.

McDaniel has now completed the determination of Southern Pacific's Contingent Resource. McDaniel's report on the Corporation's Discovered PIIP is expected to be completed by the end of July. Until then, Southern Pacific's management has provided what it believes to be a conservative estimate. The following table summarizes Southern Pacific's net resources on a pro-forma basis, which includes the acquisition of Rochester Energy Corp. (Rochester) announced on May 29, 2008.

Southern Pacific Net Resources (MMbbl)

as per McDaniel & Associates
Property Discovered Contingent(2)
PIIP(1) Low Best High
McKay 367.5 41.0 60.7 87.9
Long Lake(3) 235.1 40.0 54.6 76.9
Hangingstone 85.5 8.2 14.5 25.0
Leismer(4) 95.2 4.6 12.0 25.9
Kirby 10.0 0.0 0.0 0.0
Total 793.2 93.8 141.8 215.7

(1) - Currently a Management Estimate, McDaniel will complete their estimate
by July 31, 2008
(2) - Discovered PIIP resource not recognized as Contingent are classified
as Unrecoverable
(3) - Long Lake Volumes represent a pro-forma consolidation of Southern
Pacific and Rochester lands
(4) - Contingent volumes at Leismer are further classified as Sub-Economic,
the remaining Contingent volumes in this table are further classified
as Economic.

In order for McDaniel to classify resources as Contingent, the resource must meet a rigorous set of screening criteria, including the following:

- One well per section minimum spacing

- Net continuous bitumen pay greater than 8 m (high), 10 m (best) and 12 m (low)

- Sufficient porosity, permeability and oil saturation within the reservoir to be technically recoverable using existing accepted recovery techniques. McDaniel has identified Steam Assisted Gravity Drainage (SAGD) as the intended method of recovery.

- An economic screening to determine which Contingent resources are economic and which are not at current pricing.

Because of the methodology employed by McDaniel for 2008, this year's resources evaluation cannot be compared to the evaluation conducted in 2007. The 2007 resource booking incorporated a probabilistic method of estimation over the entire acreage position, while McDaniel uses a deterministic method using defined data points. Contingent Resource is assigned where well density is no less than one well per section. Using the criteria above, Contingent Resource has now been assigned to only 9% of Southern Pacific's total acreage position using the high case areal extent of the accumulations found to date. This leaves significant amounts of Southern Pacific's land base from which to further add Discovered and Contingent Resources through the Corporation's future exploration and delineation programs.

Based on Southern Pacific's past winter's drilling program and McDaniel's resource report, the Corporation is working on the preparation of an application for a gross 10,000 barrels per day (bbl/d) SAGD project at McKay. This application is planned to be submitted at the conclusion of next winter's drilling season. McDaniel's "best" or mid-range estimate of Contingent Resource supports an 8,300 bbl/d economic SAGD project. The "high" or top tier estimate supports a 13,000 bbl/d project. Southern Pacific believes with further delineation of the Corporation's McKay lands next winter, there should be sufficient resource for an expansion to 20,000 bbl/d. The major outstanding "contingency" left at McKay within the project area is the submission of an application for a project to Alberta's Energy Resources Conservation Board (ERCB) and confirmation of no major deficiencies within that application. In order to submit the application to the ERCB, Southern Pacific plans to increase the drilling density within the project area to eight wells per section from the existing four wells per section, conduct a 3D seismic survey over the project area, and complete all the necessary environmental, consultative and engineering planning. Southern Pacific has adequate working capital on hand to complete this work by the end of the first quarter of 2009. The project team is engaged and work is well underway. Southern Pacific anticipates being able to book Probable reserves at McKay in 2009.

McDaniel's resource report also confirms the potential of the Long Lake property, where significant Contingent Resource was discovered over the past year. The recent transaction with Rochester Energy adds to the resource picture at Long Lake and substantiates a 7,300 bbl/d SAGD project as a "best" case scenario (10,000 bbl/d is the "High" case scenario). The winter delineation program at Long Lake is being modeled after the work program last winter at McKay, which will allow Southern Pacific to advance a project to an ERCB application for Long Lake the following year, one year behind McKay.

Contingent Resource was also assigned to Hangingstone and Leismer, however, the resource at Leismer is currently classified as 'Sub-Economic' as the Contingent volume fell short of the critical mass required under McDaniel's economic screening criteria Hangingstone looks very promising for its first year of drilling as Economic Contingent Resources were assigned to this block. Southern Pacific remains optimistic about further economic resources in both of these areas as additional well delineation occurs. Plans for further step-out wells to add Contingent Resources in each of these areas are currently being made for next winter.

With no corehole drilling to date on either block, Southern Pacific's Kirby and MacKenzie blocks total 33 sections of exploration upside. Discovered or Contingent Resource cannot be assigned until wells are drilled. Southern Pacific has selected locations at Kirby based on its seismic program last year. A winter seismic program at MacKenzie is being prepared.

For additional information, please visit Southern Pacific's website at for an updated corporate presentation. The presentation includes detail on the properties, economics and finances as the Corporation moves along its path to cash flow.

Safe Harbour

Statements in this press release may contain forward-looking information including expectations of future operations, operating costs, commodity prices, administrative costs, commodity price risk management activity, acquisitions and dispositions, capital spending, access to credit facilities, income and oil taxes, regulatory changes, and other components of cash flow and earnings. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the company. These risks include, but are not limited to, the risks associated with the oil and gas industry, commodity prices and exchange rate changes. Industry related risks could include, but are not limited to, operational risks in exploration, development and production, delays or changes in plans, risks associated to the uncertainty of reserve estimates, health and safety risks and the uncertainty of estimates and projections of production, costs and expenses. The reader is cautioned not to place undue reliance on this forward-looking information.

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