Southern Pacific Reports Cash Flow of $46.9 Million for the Year Ended June 30, 2012

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES


Southern Pacific Resource Corp. ("Southern Pacific" or the "Company") (TSX:STP)
is pleased to announce its financial and operational results for the year ended
June 30, 2012.


2012 FISCAL HIGHLIGHTS:



--  Completed construction of Phase 1 of the STP-McKay Thermal Project
    ("STP-McKay Phase 1"). The total project construction was completed at a
    cost of $468 million, only 4% over the original budget. Steam began
    circulating to the first well pad on July 1, 2012 and the second well
    pad on July 13, 2012 with oil production expected in the fourth quarter
    of calendar 2012; 
    
--  Increased proven and probable reserves ("2P") by 38% to 249 million
    barrels from 181 million barrels primarily due to the filing of the
    application for the STP McKay Phase 1 Expansion and Phase 2; 
    
--  Reported a reclassification of 15.4 million barrels of proved,
    undeveloped reserves ("PUD") to proved developed producing ("PDP)
    reserves, increasing PDP reserves by 600% as a result of commencing
    steaming operations on the first 12 steam assisted gravity drainage
    ("SAGD") well pairs at STP-McKay; 
    
--  Finalized terms of a rail marketing arrangement for STP-McKay Phase 1
    volumes which secures access to markets for the project's bitumen
    product and should also significantly increase its plant gate netback; 
    
--  Announced a 6,000 barrel per day ("bbl/day") expansion plan for its STP
    Phase 1 ("STP-McKay Phase 1 Expansion"), which would give the project a
    total nominal capacity of 18,000 bbl/day. This will allow the Company to
    accelerate its production growth forecast; 
    
--  Averaged overall production from STP-Senlac of 3,639 bbl/day for the
    year; and 
    
--  Achieved cash from operating activities before changes in non-cash
    working capital of $46.9 million for the year. 
    

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(thousands, except per share and                                            
 per boe amounts)                                  2012                 2011
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Petroleum revenue, net of                                                   
 royalties                             $         71,750     $         77,349
Cash from operating activities                                              
 before changes in non-                                                     
cash working capital                   $         46,906     $         51,872
 Per share - basic                     $           0.14     $           0.16
 Per share - diluted                   $           0.14     $           0.15
Net income                             $         11,150     $         14,887
 Per share basic and diluted           $           0.03     $           0.04
Total assets                           $        916,826     $        878,887
Net capital expenditures               $        338,563     $        282,252
Total long-term debt                   $        400,040     $        379,148
Average product prices ($ per boe)     $          63.41     $          60.17
Operating netback ($ per boe)(1)       $          41.93     $          39.27
Weighted average common shares                                              
 outstanding                                                                
 basic                                          340,179              331,902
 diluted                                        346,002              338,834
Production                                                                  
 Heavy oil (bbl/day)                              3,639                4,230
 Natural gas (mcf/day)                               52                  221
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Total (boe/day)                                   3,648                4,267
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(1) Operating netback is a non-GAAP measure defined as petroleum and natural
 gas sales less royalties and less operating costs.                         



Southern Pacific has filed its Annual Consolidated Financial Statements and
Management Discussion and Analysis for the year ended June 30, 2012. Southern
Pacific has also filed its Form 51-101F1 - Statement of Reserves Data and Other
Oil and Gas Information, Form 51-101F2 - Report on Reserves Data by Independent
Qualified Reserves Evaluator, and Form 51-101F3 - Report of Management and
Directors on Oil and Gas Disclosure, under National Instrument 51-101 Standards
of Disclosure for Oil and Gas Activities. The oil and gas information is
included in the Annual Information Form filed by Southern Pacific. Such filings
can be accessed electronically on SEDAR at www.sedar.com. Copies are also
available on the Company's website at www.shpacific.com.


OUTLOOK

Fiscal 2012 was Southern Pacific's busiest year in its history. The successful
completion of the STP-McKay Thermal Project marks the end of a five year
development plan that began with securing the lands, discovering the resource,
preparing an application, completing the approval process and then constructing
the project. However, this is only the beginning. Southern Pacific is now in the
process of implementing its long term operations program at STP-McKay and is
continuing to advance on its next planned projects.


In the near term, Southern Pacific is expecting major growth to its production
profile. From first steam, which was achieved on July 1, 2012, the Company
expects to ramp up the STP-McKay volumes through the next fiscal year, aiming
towards the nominal plant capacity of 12,000 bbl/day. This production base,
coupled with the STP-Senlac Thermal Project, should open up new opportunities
for Southern Pacific.


On September 10, 2012, Southern Pacific entered into an agreement with a
syndicate of underwriters to sell, on a bought deal basis 51.7 million common
shares of the Company at a price of $1.45 per common share, for gross proceeds
of approximately $75 million plus an over-allotment option of up 7.8 million
common shares at the same price. Southern Pacific intends to use the proceeds
from this offering to strengthen the Company's balance sheet while it ramps up
the STP-McKay project. The offering is expected to close on or about September
28, 2012.


STP-Senlac

At the STP-Senlac Thermal Project, operations have been running consistently
through all of calendar 2012 with the plant averaging a 99.2% on-time load
factor over that period. Production averaged 3,639 bbl/day in fiscal 2012, with
production currently averaging approximately 3,100 bbl/day. Phase J was brought
on stream in January 2012, resulting in peak field rates of about 4,500 bbl/day
in February. Since then, the field production has been declining normally as it
does in between new phases.


In preparation for Phase K, the Company recently completed the drilling of a
strat well. That well confirmed a better than prognosis 15 m thick oil zone in
Phase K. The first well of Phase K should spud in mid-October, with production
anticipated in February 2013. Regulatory approval for the drilling of Phase K
was delayed by approximately three months due to recently introduced
Saskatchewan regulations, which now require an environmental review of enhanced
oil recovery scheme amendments. The new regulatory process has now been
incorporated into the Company's development planning cycle and regulatory delays
on future phases of development are not anticipated.


STP-McKay Phase 1 Operational Update

Operations continue to progress well at the STP-McKay Thermal Project as the
steam circulation period advances on all of its first 12 SAGD well pairs. The
first pad of six well pairs commenced steaming on July 1, 2012, with the second
pad of six well pairs following on July 13, 2012. To date, the plant has been
running consistently, delivering all steam requirements to the wellbores at a
99% on-time load factor. The wells are warming up in a manner that indicates
good conformance along the horizontal sections. It is anticipated the wells will
need three to four months of steam circulation before being placed into
production. Southern Pacific expects production to begin in the fourth quarter
of 2012. The project was completed at a total cost of $468 million.


The Company finalized its marketing arrangements on June 27, 2012. Under this
arrangement, Southern Pacific expects to significantly increase its plant gate
bitumen netback using rail transportation that reduces diluent costs, and offers
access to Brent-based pricing as opposed to selling its bitumen into a pipeline
that offers access to West Texas Intermediate (WTI) based pricing.


Southern Pacific's bitumen volumes will be trucked approximately 60 km from the
STP-McKay plant gate to Lynton, Alta., a CN rail terminal located immediately
south of Fort McMurray. From Lynton, volumes will be transferred into rail cars
and shipped approximately 4,500 km over CN's network and a short-line rail
partner to a terminal in Natchez, Miss. The bitumen will then be transferred to
barges that will deliver the product as feedstock to refineries on the Gulf
Coast.


There are a number of significant benefits to this rail-based solution for
Southern Pacific. Diluent cost savings are a key driver for this arrangement.
Diluent savings are achieved on two fronts. The amount of process diluent
required at the plant site will be significantly lower than what is required to
meet pipeline specifications. By transporting bitumen via CN, Southern Pacific
will only require process diluent to blend with its bitumen, thus lowering the
total diluent requirements by approximately 33%. Secondly, Southern Pacific has
the opportunity to backhaul lower priced diluent from the Gulf Coast utilizing
its empty return rail cars.


Another important driver for securing this marketing arrangement is the security
of access to the world's largest market for heavy crude. Given recent regulatory
delays around additional pipeline capacity to accommodate growing bitumen
volumes from Alberta, the Company has now secured direct and immediate access
into the Gulf Coast market. Because of these access issues, the Gulf Coast
market for heavy crude currently trades at a premium to WTI, whereas
Alberta-based blended bitumen and diluent ("dilbit") products arriving by
pipeline into the Cushing, Okla., region of the U.S. are experiencing
significant pricing discounts due to capacity constraints.


The rail and terminal arrangements described above have an average term of five
years, with options for extension and expansion related to Southern Pacific's
STP-McKay Phase 1 Expansion and Phase 2 plans. Expansion opportunities being
discussed include the construction of a pipeline system to the CN Lynton
terminal or building a rail spur to the STP-McKay plant site. Either option
would remove the trucking component and further reduce diluent costs. While the
Gulf Coast is the initial target market, the details within the arrangement
provide Southern Pacific with the flexibility to deliver its bitumen to other
North American markets or to export terminals along the west coast.


STP-McKay Phase 1 Expansion and Phase 2 Update

On May 10, 2012, Southern Pacific announced plans to expand STP-McKay to a
design capacity of 18,000 bbl/day. The expansion is anticipated to significantly
reduce future overall capital costs in the entire project and accelerate the
Company's production growth forecast. Southern Pacific's internal technical team
identified a unique opportunity to expand the existing STP-McKay Phase 1 central
process facilities by as much as 50% (6,000 bbl/day of bitumen based on a
steam-oil ratio ("SOR") of 2.8) at an estimated cost of approximately $25,000
per barrel of designed capacity, or $150 million, including additional well
pairs. The entire expansion should fit comfortably within the existing Phase 1
central process facility site, making this expansion both cost effective and
environmentally responsible.


Southern Pacific continues to work on the regulatory approval process for the
Phase 1 Expansion and Phase 2 of STP-McKay. Throughout the summer, the Company
has been preparing its responses to the first round of Supplementary Information
Requests (SIRs) requested by the Alberta regulators. The responses should be
completed by mid September, which should keep the approval process on track for
approval by the fourth quarter of 2013.


Southern Pacific Year End Reserves

In a report prepared by GLJ Petroleum Consultants ("GLJ"), the Company's
independent reserves evaluator, effective June 30, 2012 (the "GLJ Report"),
Proved Developing and Producing ("PDP") reserves increased by more than 600%
from the previous estimate dated June 30, 2011. The increase in PDP reserves is
directly attributable to the STP-McKay Thermal Project becoming operational.
There has also been a 38% increase in the Corporation's Proven plus Probable
("2P") reserves over the past fiscal year. This increase reflects revisions
arising from the application submission for the Phase 1 Expansion and Phase 2 at
the STP-McKay Thermal Project. Combined, a total nominal design capacity of
36,000 bbl/d of bitumen has been utilized to reflect the development plans for
the 2P reserves category.


Of note, despite having produced approximately 1.3 million barrels, the
STP-Senlac Thermal Project's remaining Total Proved ("1P") and 2P remaining
reserves were increased with 0.9 and 0.5 million barrels of technical revisions
in each category respectively. The increases reflect the strong performance of
the project that have met or exceeded previous evaluations' performance
predictions. Listed below is a summary of the Corporations reserves and
effective June 30, 2012. The Corporation's contingent resources volumes remained
relatively unchanged and are available for review in the Corporation's Annual
Information Form, which has been filed concurrent with this release.




Southern Pacific Net Reserves and NPV effective June 30, 2012 Summary at    
 June 30, 2012 and Variance (%) to June 30, 2011                            
                                                                            
                              Net         Before Tax Net Present Value (Cdn 
                         Reserves                                 $ million)
                                  ------------------------------------------
                           (MMbbl)          @ 8%         @ 10%         @ 12%
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Proved Producing (PDP)  18.1  605%  $  378  325%  $  355  308%  $  335  294%
Total Proved (1P)      120.4    0%  $1,201   34%  $1,015   40%  $  874   45%
Proved + Probable                                                           
 Reserves (2P)         248.9   38%  $2,009   45%  $1,593   44%  $1,274   39%
Proved + Probable +                                                         
 Possible (3P)         343.5   65%  $2,688   55%  $2,095   51%  $1,661   45%
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Estimated values may not represent fair market value.                       



About Southern Pacific

Southern Pacific Resource Corp. is engaged in the exploration, development and
production of in-situ thermal heavy oil and bitumen production in the Athabasca
oil sands of Alberta and in Senlac, Saskatchewan. Southern Pacific trades on the
TSX under the symbol "STP."


The Corporation's Annual General and Special Meeting of shareholders will be
held in Calgary, Alberta on November 22, 2012 at 2:30 pm at the Conference
Centre, Bow Valley Square.


Or visit our website at: www.shpacific.com.

Advisory

This news release contains certain "forward-looking information" within the
meaning of such statements under applicable securities law including estimates
as to: future production, operations, operating costs, commodity prices,
administrative costs, commodity price risk management activity, acquisitions and
dispositions, capital spending, access to credit facilities, income and oil
taxes, regulatory changes, and other components of cash flow and earnings
anticipated discovery of commercial volumes of bitumen, the timeline for the
achievement of anticipated exploration, anticipated results from the current
drilling program and, subject to regulatory approval and commercial factors, the
commencement or approval of any SAGD project.


Forward-looking information is frequently characterized by words such as "plan",
"expect", "project", "intend", "believe", "anticipate", "estimate", "may",
"will", "potential", "proposed" and other similar words, or statements that
certain events or conditions "may" or "will" occur. These statements are only
predictions. Forward-looking information is based on the opinions and estimates
of management at the date the statements are made, and are subject to a variety
of risks and uncertainties and other factors that could cause actual events or
results to differ materially from those projected in the forward-looking
statements. These factors include, but are not limited to the inherent risks
involved in the exploration and development of conventional oil and gas
properties and of oil sands properties, difficulties or delays in start-up
operations, the uncertainties involved in interpreting drilling results and
other geological data, fluctuating oil prices, the possibility of unanticipated
costs and expenses, uncertainties relating to the availability and costs of
financing needed in the future and other factors including unforeseen delays. As
an oil sands enterprise in the development stage, with some conventional
production Southern Pacific faces risks including those associated with
exploration, development, start-up, approvals and the continuing ability to
access sufficient capital from external sources if required. Actual timelines
associated may vary from those anticipated in this news release and such
variations may be material. Industry related risks could include, but are not
limited to, operational risks in exploration, development and production, delays
or changes in plans, risks associated to the uncertainty of reserve estimates,
health and safety risks and the uncertainty of estimates and projections of
production, costs and expenses. For a description of the risks and uncertainties
facing Southern Pacific and its business and affairs, readers should refer to
Southern Pacific's most recent Annual Information Form. Southern Pacific
undertakes no obligation to update forward-looking statements if circumstances
or management's estimates or opinions should change, unless required by law.


This press release contains reference to contingent resources. The definition of
contingent resources is set forth below. The contingencies which currently
prevent the classification of the resource as a reserve include factors such as
economic, legal, environmental, political, and regulatory matters or a lack of
markets.


There are numerous uncertainties inherent in estimating quantities of Contingent
Resources and future net revenues to be derived therefrom, including factors
beyond the Company's control. The reserves, resources and estimated future net
cash flow from the Company's properties have been independently evaluated by
GLJ. These evaluations include a number of assumptions relating to factors such
as initial production rates, production decline rates, ultimate recovery of
reserves and resources, timing and amount of capital expenditures, marketability
of production, future prices of blended bitumen, crude oil and natural gas,
operating costs, well abandonment and salvage values, royalties and other
government levies that may be imposed over the producing life of the reserves
and resources. These assumptions were based on prices in use at the date the
relevant evaluations were prepared, and many of these assumptions are subject to
change and are beyond the Company's control. Actual production and cash flow
derived therefrom will vary from these evaluations, and such variations could be
material. Estimates with respect to reserves and resources that may be developed
and produced in the future are often based upon volumetric calculations,
probabilistic methods and upon analogy to similar types of reserves and
resources, rather than upon actual production history. Estimates based on these
methods generally are less reliable than those based on actual production
history. Subsequent evaluation of the same reserves based upon production
history will result in variations, which may be material, in the estimated
reserves or resources.


Reserve and resource estimates may require revision based on actual production
experience. Such figures have been determined based upon assumed commodity
prices and operating costs. Market price fluctuations of crude oil and natural
gas prices may render uneconomic the recovery of certain grades of bitumen. The
present value of estimated future net revenue referred to herein should not be
construed as the fair market value of estimated bitumen, crude oil and natural
gas reserves and bitumen resources attributable to the Company's properties. The
estimated discounted future revenue from reserves are based upon price and cost
estimates which may vary from actual prices and costs and such variance could be
material. Actual future net revenue will also be affected by factors such as the
amount and timing of actual production, supply and demand for bitumen, crude oil
and natural gas, curtailments or increases in consumption by purchasers and
changes in governmental regulations or taxation.


References to Contingent Resources do not constitute, and should be
distinguished from, references to reserves. Reserves are estimated remaining
quantities of oil and natural gas and related substances anticipated to be
recoverable from known accumulations, as of a given date, based on the analysis
of drilling, geological, geophysical, and engineering data; the use of
established technology; and specified economic conditions, which are generally
accepted as being reasonable. Contingent Resources are those quantities of
petroleum estimated, as of a given date, to be potentially recoverable from
known accumulations using established technology or technology under
development, but which are not currently considered to be commercially
recoverable due to one or more contingencies. Not all technically feasible
development plans will be commercial. The commercial viability of a development
project is dependent on the forecast of fiscal conditions over the life of the
project. For Contingent Resources the risk component relating to the likelihood
that an accumulation will be commercially developed is referred to as the
"chance of development." Not all exploration projects will result in
discoveries. The chance that an exploration project will result in the discovery
of petroleum is referred to as the "chance of discovery." Thus, for an
undiscovered accumulation the chance of commerciality is the product of two risk
components - the chance of discovery and the chance of development.


The reader is cautioned not to place undue reliance on this forward-looking
information.


Definitions

"Barrels of oil equivalent" (boe) maybe misleading, particularly if used in
isolation. A boe conversion of 6 mcf to 1 barrel of oil is based on an energy
equivalency conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the wellhead.


"Operating netback" is a non-GAAP measure defined as petroleum and natural gas
sales less royalties and less operating and transportation costs.


"Contingent Resources" means those quantities of petroleum estimated, as of a
given date, to be potentially recoverable from known accumulations using
established technology or technology under development, but which are not
currently considered to be commercially recoverable due to one or more
contingencies. Contingencies may include factors such as economic, legal,
environmental, political, and regulatory matters or a lack of markets. It is
also appropriate to classify as contingent resources the estimated discovered
recoverable quantities


 "Probable reserves" means those additional reserves that are less certain to be
recovered than proved reserves. It is equally likely that the actual remaining
quantities recovered will be greater or less than the sum of the estimated
Proved plus Probable reserves.


"Possible reserves" means those additional reserves that are less certain to be
recovered than probable reserves. It is unlikely that the actual remaining
quantities recovered will exceed the sum of the estimated Proved plus Probable
plus Possible reserves. There is a 10% probability that the quantities actually
recovered will equal or exceed the sum of proved plus probable plus possible
reserves.


"Proved reserves" means those reserves that can be estimated with a high degree
of certainty to be recoverable. It is likely that the actual remaining
quantities recovered will exceed the estimated Proved reserves.