Southern Pacific Resource (STPJ.F) Stock Analysis & Winston Score

Southern Pacific Resource Corp. was a Canadian oil sands company based in Alberta, Canada. It focused on extracting heavy crude oil from oil sands deposits using a process called Steam-Assisted Gravity Drainage, or SAGD. Oil sands are a mixture of sand, water, clay, and thick oil called bitumen, and the company's main customers were oil refineries that process heavy crude. The company earned revenue by selling bitumen and upgraded crude oil to energy buyers, operating entirely within Alberta's Athabasca oil sands region. Southern Pacific was a small, development-stage producer, which meant it was still building out its operations rather than generating large, steady profits. The biggest risk the company faced was the high cost of SAGD operations combined with volatile oil prices — when oil prices dropped, the economics of oil sands extraction became very difficult, which ultimately contributed to the company filing for creditor protection in 2015.