Southern Pacific Resource Corp. provided an operational update with respect to the company's STP-McKay and STP-Senlac Thermal projects. STP-McKay Thermal project: March production averaged approximately 1,000 barrels of bitumen per day (bbl/d).

Month-over-month production volumes were lower as a result of downtime from previously planned maintenance and from deliberate production restrictions on several steam-assisted gravity drainage (SAGD) well pairs. Daily volumes ranged from lows of 650 bbl/d while maintenance operations were conducted to highs of 1,300 bbl/d as wells were placed back into production. Production restrictions were put in place through most of March on some of the well pairs in order to continue developing steam chamber conformance while protecting wellbore integrity.

The company expects these well pairs to be placed back into full SAGD production through April and May, as these adjustments were part of the overall reservoir management program aimed at optimizing long term rates and recovery. Planned maintenance that was conducted in March included a routine inspection and clean out of both pads' test and group separators, in addition to the replacement of failed thermocouple strings on four separate well pairs. To date, eight of the 12 well pairs have been converted to SAGD production.

In the latter part of March an additional well pair was converted to full-time SAGD, bringing the total to five well pairs on full-time SAGD production. Of the remaining seven wells, three SAGD well pairs are periodically returned to circulation (semi-SAGD) and four wells remain in the steam circulation phase. As the company has previously stated, it is expected to take up to 18 months from first oil production, which commenced in mid-October 2012, for total rates to approach the 12,000 bbl/d design capacity.

STP-Senlac Thermal project: Production at STP-Senlac averaged approximately 2,800 bbl/d for March, up approximately 15% from the prior month. The start-up of Pad K was initiated in January with circulation steaming in the first well pair. Permanent surface facilities were completed on March 4, 2013.

The first of three well pairs was placed on production on March 9, 2013, with the next well pair scheduled for a mid-April start-up and the final well pair expected to start in June as capacity becomes available. The next planned phase of SAGD well pairs is expected to spud this fall following regulatory approval and be on production early 2014.