Southern Pacific Resource Corp. announced that it has executed a one-year oil marketing deal effective April 1, 2013, that will provide U.S. Gulf Coast pricing for its bitumen product that is being shipped under the company's rail transportation arrangements. This deal with a major U.S. Gulf Coast refiner will have pricing based off the Maya benchmark, a widely traded heavy crude with similar properties to Southern Pacific's diluted bitumen. With this deal now in place, Southern Pacific has successfully secured firm transportation and sales of its product into the U.S. Gulf Coast and has secured a profitable route through a serious shortage of crude oil export transportation capacity out of the province of Alberta. Based on the next 12 months' futures pricing the company expects to receive significantly enhanced plant gate bitumen netback of approximately $48.00/bbl, which is about $19.00/bbl higher than the forecast intra-Alberta markets currently available.

The company is in the process of adding significant production growth throughout fiscal 2013 and 2014. The company expects to ramp up the STP-McKay Thermal Project Phase 1 volumes through the remainder of this and the next fiscal year, with production expected to reach nominal plant capacity of 12,000 barrels of bitumen per day in fiscal 2014. This production base, coupled with the new wells being added at STP-Senlac, the company's thermal project in Saskatchewan, should open up new opportunities as the company utilizes its cash flow to finance continued growth. As production ramps up, the company plans to provide monthly operational updates to its shareholders. STP-McKay Thermal Project: Estimated bitumen production at STP-McKay averaged 1,300 bbl/d for the month of February with daily peaks of 1,650 bbl/d and lows of 900 bbl/d. The month-over-month production average was lower by approximately 200 bbl/d, primarily due to operational adjustments that included restricting the producer well rates in order to increase sub-cool in the reservoir and adjusting the reservoir operating pressure. These adjustments are part of the overall reservoir management program and are aimed at optimizing long term rates and recovery, as well as protecting wellbore integrity. The company is pleased with the performance of the four most mature well pairs. Conformance along these wellbores continues to improve and sub-cool levels have stabilized at acceptable levels. These wells accounted for approximately 73% of the total field production in February and provide Management with confidence in the less mature wells to produce similar results as additional conformance is achieved and complete steam assisted gravity drainage ('SAGD') conversions occur. A well pair that required a liner patch in January has been successfully repaired and placed back on production after a period of circulation reheating. It did not contribute appreciably to February's production and will be producing at a restricted rate until additional wellbore conformance is achieved to avoid a repeat failure. To date, eight of the 12 well pairs have been converted to SAGD production. Some of these well pairs have been and will continue to be returned to circulation for brief periods in order to further develop steam chamber conformance. The remaining four well pairs are at various stages of circulation and will be converted to full SAGD operation when Southern Pacific's technical staff deem appropriate. Although these four well pairs are taking longer to convert to SAGD than originally modeled, the geologic and reservoir characteristics between all 12 well pairs are of similar quality, as evidenced by extensive corehole delineation, with no appreciable differences between the wells that have converted and those that have not. Thus, with just over four months of production history to date, the company believes that these four wells are taking longer to convert primarily as a result of the individual well pair configurations. Three of the well pairs that have yet to be converted were drilled with a wider average separation between the injector and producer as compared to some of the more mature well pairs in the project. The company has completed an exploration core hole program on its McKay lands. The program focused on delineating lands to the north of the company's current project and involved the drilling of 10 core holes. The company is pleased with the results and cost of this program. The overall cost of the project is estimated at $3.7 million, about 20% below its original estimate. The core hole results will be included within the company's next annual independent reserves review, scheduled to be completed in July 2013. STP-Senlac Thermal Project: Production at Senlac for the month of February averaged approximately 2,500 bbl/d. This rate has held stable for several months even though no additional well pairs have been brought on stream over that period. The start up of Pad K was initiated in January with circulation steaming in the first well pair, and permanent surface facilities were completed on March 4th. The first of three well pairs was placed on production on March 9th, with the next well pair scheduled for an April start up and the final pair should start in early May. Phase K is expected to provide a significant increase to the company's base production.