August 31, 2011 / 2:48 PM / 7 years ago

Southern Pacific Resource trims cost of STP-McKay project

Aug 31 (Reuters) - Canada’s Southern Pacific Resource Corp has trimmed the cost of its STP-McKay thermal project in Alberta, pushing up the company’s shares by as much as 6 percent in heavy trade.

The oil-sands operator now expects the project’s capital costs to be C$415-C$440 million ($423.3-$448.8 million), down from an initial estimate of C$450 million.

The company said the first steam to the steam-assisted gravity drainage wells (SAGD) should occur on schedule in the second quarter of 2012.

The STP-McKay project, located in Fort McMurray in Alberta, has a design capacity to process about 12,000 barrels per day of bitumen when completed. Southern Pacific’s producing asset, the STP-Senlac thermal project, is in southwest Saskatchewan.

Shares of the Calgary, Alberta-based company last traded up 6 percent at C$1.38 on Wednesday on the Toronto Stock Exchange. The stock was among the most actively traded, with more than 1 million shares changing hands. ($1 = 0.981 Canadian Dollars) (Reporting by Abhiram Nandakumar in Bangalore, Editing by Ian Geoghegan)

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