In an operational update, Southern Pacific Resource Corp. announced total company production, including bitumen production from STP-McKay and heavy oil from STP-Senlac, averaged 4,483 bbls per day for the month of July, representing a 3% increase from the prior month and an 8% increase over May 2013. Average bitumen production for July at McKay was 1,357 bbls per day, a 14% increase over the previous month.

On July 8, the company received approval from the Alberta Energy Regulator to proceed with the high pressure steam stimulation (HPSS) treatment on the remaining five well pairs on Pad 101. The well pair 1P3 had an HPSS treatment initiated July 9 that was completed July 19. The well was allowed to cool for several days and was placed onstream in late July.

Although early, the initial results from the HPSS on this well pair look encouraging, Southern Pacific said, with preliminary test results showing a 60% increase in total fluid production (compared to the previous month's average fluid rate) and oil cuts averaging about 20%. The pair will now need to be produced for several weeks to clean out the stimulation fluid (condensed steam) and develop steam chambers in newly conformed sections along the well pair length. The next treatment on well pair 1P4 is underway.

The remaining three HPSS treatments are anticipated to be completed in the coming months. Meanwhile, Senlac heavy oil production averaged 3,126 bbls per day for the month of July. The third SAGD well pair, K3, was brought on production July 12 but had to be taken down at the end of July as a result of an electric submersible pump failure.