Southern Pacific Resource Corp.
TSX VENTURE : STP

Southern Pacific Resource Corp.

October 19, 2006 16:53 ET

Southern Pacific Update on Acquisition of Oil Sands Assets

CALGARY, ALBERTA--(CCNMatthews - Oct. 19, 2006) - Southern Pacific Resource Corp. ("Southern Pacific") (TSX VENTURE:STP) announced on September 28, 2006, that it had signed a definitive purchase and sale agreement with Bounty Developments Ltd.; an Alberta based private company owned solely by William Clark, ("Bounty") to acquire 80% of Bounty's interest in its Leismer South Oil Sands Assets. Bounty and Southern Pacific will become joint venture partners for the development of the Leismer South Oil Sands Assets.

Lands Being Acquired

Under the agreement, Southern Pacific is acquiring 80% of Bounty's interest in 25 contiguous sections of 100% owned lands in Townships 75 - 76, which is approximately 120 kms south of Fort McMurray, representing 16,000 acres.

The total consideration paid will be $8,752,235. The consideration to be paid includes a cash payment of $5,752,235 and the issuance of 6,000,000 Southern Pacific shares with a deemed value of $3,000,000 ("Proposed Transaction"). Southern Pacific and Bounty deal at arm's length with each other. The Proposed Transaction is expected to close on or about November 17, 2006.

Private Placement

Southern Pacific continues to work towards completing the previously announced private placement. Southern Pacific intends to issue up to 20,000,000 subscription receipts to be offered at $0.50 per subscription receipt. Each subscription receipt will automatically be exercised into a unit of Southern Pacific upon completion of the Proposed Transaction. Each unit will consist of one common share of Southern Pacific and one half common share purchase warrant. Each warrant will entitle the holder thereof to purchase one common share at any time for a period of 12 months following the closing date at a price of $0.75 per common share. In the event the Proposed Transaction is not completed by November 30, 2006, the subscription receipts entitle the holder a return of their subscription price without penalty or interest. The proceeds of the private placement will be used for payment of a portion of the purchase price, completion of evaluation and development drilling, seismic, and for general working capital purposes. Southern Pacific will pay a commission of cash in relation to this placement. The private placement will close concurrently with the closing of the acquisition.

Sponsorship Exemption

Southern Pacific has been granted an exemption of sponsorship for the proposed transaction from the TSX-V.

Resumption of Trading

It is expected that the shares of Southern Pacific will resume trading after the opening on October 20, 2006.

Approvals and Conditions

The Proposed Transaction is subject to both shareholder approval and regulatory acceptance under the policies of the TSX Venture Exchange.

Cautionary Statements

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, TSX Venture Exchange acceptance. The Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Combination will be completed as proposed, or at all.

Investors are cautioned that any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Southern Pacific should be considered highly speculative.

The TSX Venture Exchange has in no way passed on the merits of the Proposed Transaction and has neither approved of disapproved the contents of this press release.

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

Contact Information