Southern Pacific Resource Corp.

Southern Pacific Resource Corp.

August 13, 2007 09:01 ET

Southern Pacific Adds Significant Acreage and Contingent Resources to Its Holdings

CALGARY, ALBERTA--(Marketwire - Aug. 13, 2007) - Southern Pacific Resource Corp. ("Southern Pacific" or the "Corporation")(TSX VENTURE:STP) is pleased to report that it has signed a purchase and sale agreement, dated August 10, 2007, to acquire an 80% interest in 81 sections (41,472 acres net to Southern Pacific) of land in the Fort McMurray area of the Athabasca Oilsands fairway. This area is very active with "SAGD" (steam assisted gravity drainage) projects in various stages of development. This land adds to the existing 80% interest in 125 sections that Southern Pacific currently holds. Southern Pacific will acquire the interest in the project for total cash consideration of $9,500,000. In addition the Corporation will pay approximately $4,000,000 in exploration costs related to the assets on behalf of its partner. Closing of the acquisition is conditional on final approval from the TSX-V Exchange.

The land was acquired from Bounty Developments Ltd., who holds greater than 10% of the issued and outstanding common shares of the Corporation; in addition Mr. Jon Clark is both an employee of Bounty Developments Ltd. and a director of the Corporation.

The lands have been evaluated by the Corporation and by Degolyer & MacNaughton Canada Ltd. ("D&M"). A contingent resource report was prepared by D&M, effective June 30, 2007, estimating the extent of the contingent reserves on the 81 sections of land. The report was prepared using assumptions and methodology guidelines outlined in the Canadian Oil and Gas Evaluation Handbook and in accordance with National Instrument 51-101.

Southern Pacific's 80% interests of the 81 sections of land were assigned contingent and prospective resources at a best estimate basis of 161.0 million barrels. Low estimate contingent resources totaled 119.8 million barrels and high estimate resources totaled 203.9 million barrels.

On July 17, 2007 the Corporation also reported probable and possible recoverable reserves on the lands at Leismer South estimated at 198.0 million barrels, 115.8 million barrels of probable recoverable reserves, with possible recoverable reserves estimated to be 82.2 million barrels.

Contingent Resources

On July 26, 2007 the Corporation reported the results of the contingent resource evaluation on its properties and now is pleased to show that it has continued to grow significantly to now include in total an 80% interest in 214 sections of lands (net 109,568 acres), all in the very prospective Athabasca Oilsands fairway. The reports for total land holdings are reported below. This table shows the 80% interest held by Southern Pacific.

Property Low Estimate Best Estimate High Estimate
(Millions of Barrels)
Leismer (36 Sections) 83.1 119.8 158.1
59 Section Parcel 217.5 286.7 356.0
38 Section Parcel 74.5 121.5 176.0
81 Section Parcel 119.8 161.0 203.9
(New) -----

Total Contingent 689.0

As the volumes reported are the result of statistical estimation, only the best estimate can be summed arithmetically. The total Low Estimate and total High Estimate would be the result of a statistical aggregation which has not been performed at this point in time.

Probable reserves are those additional reserves that are less certain to be recovered than proven reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the proven plus probable reserves.

Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is only a 10-per-cent probability that the quantities actually recovered will equal or exceed the sum of the proven plus probable plus possible reserves.

Contingent resources are those quantities of oil and gas, estimated on a given date, to be potentially recoverable from known accumulations but are not currently economic. The D&M report has categorized these resources as contingent as additional delineation drilling, development planning, project design and further regulatory applications are required.

Low-estimate contingent is considered to be a conservative estimate of the quantity that will actually be recovered from the accumulation. If probabilistic methods are used, this term reflects P90 confidence level.

Best-estimate contingent is considered to be the best estimate of the quantity that will actually be recovered from the accumulation. If probabilistic methods are used, this term is a measure of central tendency of the uncertainty distribution (P50).

High-estimate contingent is considered to be an optimistic estimate of the quantity that will actually be recovered from the accumulation. If probabilistic methods are used the term reflects a P10 confidence level.

Land Purchase

Southern Pacific is also pleased to report that they have acquired an 80% interest in an additional 8 sections of land at the August 8, 2007 Crown land sale. This increased acreage is part of the core areas that are part of the contingent resources reported above, but this additional acreage was not included in the resource figures above. As part of the acquisition announced June 1, 2007, the Corporation paid 100% of the land costs for the 80% interest.

The Corporation now holds an 80% interest in a total of 214 sections of land (109,568 net acres) in five core areas. In the near future the Corporation will release detailed information related to the exploration and development program for all core areas.

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.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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