Southern Pacific Resource Corp.

TSX : STP


Southern Pacific Resource Corp.

January 25, 2013 13:28 ET

Southern Pacific Resource Corp. Announces Closing of Senior Secured Second Lien Notes Offering and New Credit Facility

CALGARY, ALBERTA--(Marketwire - Jan. 25, 2013) -

NOT FOR DISSEMINATION IN THE UNITED STATES

Southern Pacific Resource Corp. ("Southern Pacific" or the "Company") (TSX:STP) is pleased to announce the closing of its previously announced offering of Senior Secured Second Lien Notes (the "Notes"). Southern Pacific has issued $260 million Senior Secured Second Lien Notes at par, which will bear interest at a rate of 8.75% per annum and will mature five years from the date of issue. The Notes were offered in each of the Provinces of Canada and in the United States on a private placement basis through a syndicate of underwriters led by TD Securities Inc., RBC Capital Markets Inc., Credit Suisse Securities (Canada), Inc. and BMO Nesbitt Burns Inc.

Southern Pacific has used the net proceeds from the private placement, together with cash on hand, to retire its debt obligations under its existing US$272.2 million second lien term loan facility. In addition to a lower interest rate and the removal of potentially restrictive covenants, Southern Pacific has the ability to add an additional $140 million of second lien debt, subject to first lien approval, if the Company elects to do so in the future.

Concurrently, the Company has also closed a $75 million senior secured first lien revolving credit facility with a syndicate of financial institutions, representing a 150% increase over the Company's previous $30 million revolver, and providing additional financial liquidity to the Company. As previously stated, the new revolving credit facility includes provisions to increase the borrowing base as the Company expands with the removal of restrictive performance covenants. The new revolving credit facility is expected to initially bear interest at a rate of approximately 4.25%.

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 Pacific

Southern 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 future interest rates on the revolving facility. 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 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 www.sedar.com. 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.

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