CALGARY, July 30, 2014 /CNW/ - Stream Oil & Gas Ltd. (TSX-V: SKO) (the
"Company") is pleased to report its financial and operating results for
the three and six months ended May 31, 2014.
Q2 2014 Summary of Results
($US000s, except as noted) | Three Months Ended | Six Months Ended |
May 31, | May 31, |
2014 |
2013
| 2014 |
2013
|
Financial |
|
|
|
|
Revenue
|
8,565
|
10,272
|
16,098
|
19,377
|
Revenue, net of mineral tax royalty
|
8,174
|
9,244
|
14,954
|
17,440
|
Net operating income
|
5,519
|
6,941
|
9,794
|
12,152
|
Funds from (used in) operations
|
3,980
|
5,027
|
11,034
|
11,044
|
Net income (loss)
|
1,174
|
441
|
2,951
|
186
|
Per share - basic & diluted
|
0.02
|
0.01
|
0.04
|
0.00
|
Cash additions to property &
equipment and exploration &
evaluation assets
|
4,851
|
3,935
|
12,413
|
9,295
|
Operating |
|
|
|
|
Average production (boed):
|
|
|
|
|
Gross production
|
1,522
|
1,607
|
1,523
|
1,693
|
Albpetrol share
|
548
|
604
|
561
|
619
|
Net production (Stream's share)
|
973
|
1,003
|
954
|
1,074
|
Gross price ($/boed)
|
71.09
|
71.43
|
72.21
|
73.44
|
Netback ($/boed)
|
47.52
|
48.48
|
46.52
|
47.74
|
As at |
|
| 31-May-14 |
30-Nov-13
|
Cash
|
|
|
110
|
1,962
|
Shareholders' equity
|
|
|
24,992
|
21,869
|
Weighted average shares
outstanding - basic (#)
|
|
|
66,887,801
|
66,686,431
|
During the three and six months ended May 31, 2014, the Company focused
its resources on stabilizing production in its oilfields, advancing
drilling of its gas field, addressing its funding constraints and
finalizing the amending agreements for the royalty neutralization with
Albpetrol.
The Company was able to sustain its gross oilfield production at 1522
bpd gross, while acquiring comprehensive understanding of weaknesses in
its existing operating practices including field instrumentation
constraints, focusing to understand suboptimum utilization of the
installed equipment. The discrete knowledge gained during the
operating practices audit, provides the Company the basis for further
production operations improvements. Following the repairs and
improvement of select equipment, constrained to date by capital
availability, the Company will be able to continue its oilfields
production growth, leveraging the recently observed production levels
exceeding 1,200 bpd net, continuing towards the prior demonstrated
2,400 boed net levels.
The Company commenced drilling its first horizontal well in its Delvina
gas field, spudding in April 2014. Reaching the depth of approximately
750m, following casing and cementing, the Company elected to
temporarily suspend drilling, to re-examine to-date execution and
incorporate any new information prior to recommencing. Fabrication of
speciality equipment required for the intervention of the existing
vertical well to clear a tubing obstruction, is nearly complete,
enabling field execution in early August. The vertical well has prior
demonstrated to produce in excess of 2,500 MCFD with 50 bbl/MMCF of
condensate.
Concurrent with advances in its fields, accounting for the capital
constraints, Company's management committed considerable efforts
towards improving its balance sheet, including pursuing additional
capital by way of equity, debt and farm out considerations. The
Company continues its corporate development and fundraising focus,
expecting to enable the completion of the 2014 program as prior
contemplated.
Jointly with its partner Albpetrol (national oil company), the Company
continued to finalize the amending agreements for the neutralization of
the royalty tax including the elimination of the related share
production share obligation resulting from the temporary reversal of
the March 2013 agreement. The agreements have been finalized and have
been submitted for final approval and ratification.
Second Quarter Highlights:
-
Gross production remained stable at 1,522 boed in the three months ended
May 31, 2014
-
As a result of lower sales volumes, gross revenue decreased by 17% to
$8.6 million compared to $10.3 million for the corresponding period in
2013 (net $8.2 million in 2014 compared to $9.3 million)
-
The Company paid $700,000 to Albpetrol in service of the outstanding oil
production share liability
Subsequent to the Quarter
-
The Company paid $4,000,000 to Albpetrol in service of the outstanding
oil production share liability
-
In support of its significant efforts focused on improving its working
capital, working with its lenders, the Company received deferrals of
payments of the bank and prepayment facilities
Outlook
Management's recent refocus to production growth at its oilfields, to
get back to previous demonstrated production levels, will be leveraged
once more capital is available to drive further liquids growth in
addition to production from the gas field activities. Plans for the
balance of 2014 include the following activities:
-
Management will continue its efforts on initiatives to address liquidity
concerns;
-
Cakran-Mollaj: Maximize the jet pump systems' productivity by
revisiting a well by well planning and production management, including
revision and deployment of updated operating practices. Install the
recently received in country six hydraulic long lift RRP systems, focus
on reduction of water production and evaluate alternate water
disposals, eliminating infield re-injection to reduce water
production. The objective is to return the field to prior demonstrated
production levels and then focus to bring more wells online to continue
the production growth;
-
Gorisht-Kocul: Continue waterflood infrastructure expansion along with
recompletions with PCPs and hydraulic RRP lift systems;
-
Ballsh-Hekal: Finalize the takeover of the remainder of the field,
re-validate primary targets and commence recompletion with PCPs;
-
Delvina: Once drilling of D34H1 is completed and tested, supply
increased gas volumes to Thermo's power project and monetize the
condensate production.
-
Continue the evaluation and early preparations for the drilling of
infill wells in the oilfields, leveraging the deviated/horizontal
drilling approach to access more of the reservoir; and
-
Increase port storage facilities to enable larger export cargos with the
objective of increasing sales price through decreasing unit transport
costs and leveraging increased sales volume
Additional Information
Stream has filed its Consolidated Financial Statements for the three
months ended May 31, 2014, and its related Management's Discussion and
Analysis with Canadian securities regulatory authorities. Copies of
these documents may be obtained via www.sedar.com or the Company's website, www.streamoilandgas.com
Forward-Looking Statements
Information in this news release respecting matters such as plans of
development or exploration, reserves estimates, production estimates
and targets, development costs, work programs and budgets constitute
forward-looking information (collectively, "forward-looking
statements") under the meaning of applicable securities laws, including
Canadian Securities Administrators' National Instrument 51-102
Continuous Disclosure Obligations. Such forward-looking information is
based on certain assumptions, including the availability of funds for
capital expenditures necessary to construct the infrastructure required
for future development, a favorable political and economic operating
environment, a consistent rate of well re- completions and costs,
success rates, production performance and build-up periods for well
re-completions that are consistent with or an improvement over
historical levels.
The forward-looking statements contained herein are made as of the date
of this release solely for the purpose of generally disclosing Stream's
2014 second quarter results and outlook for 2014. Investors are
cautioned that these forward-looking statements are neither promises
nor guarantees, and are subject to risks and uncertainties that may
cause future results to differ materially from those expected. Such
forward-looking information reflect management's current beliefs and
are based on assumptions made by and information currently available to
the Company, and involves known and unknown risks, uncertainties and
other factors which may cause the actual costs and results of the
Company and its operations to be materially different from estimated
costs or results expressed or implied by such forward-looking
statements. Such factors include, among others political and economic
risks associated with foreign operations, general risks inherent in
petroleum operations, risks associated with equipment procurement and
equipment failure, availability of qualified personnel, risks
associated with transportation, currency and exchange rate fluctuations
and other general risks inherent in oil and gas operations.
Although the Company has attempted to take into account important
factors that could cause actual costs or results to differ materially,
there may be other factors that cause costs and timing of the Company's
program or results not to be as anticipated, estimated or intended.
There can be no assurance that such statements will prove to be
accurate as actual results and future events could differ materially
from those anticipated insuch statements. Accordingly, readers should not place undue reliance on
forward-looking information. These forward-looking statements are made
as of the date hereof and the Company does not assume any obligation to
update or revise them to reflect new events or circumstances except as
required under applicable securities legislation.
Use of Boe Equivalents
The oil and gas industry commonly expresses production and reserve
volumes on a barrel of oil equivalent (Boe) basis whereby natural gas
volumes are converted at the ratio of six thousand cubic feet of
natural gas to one barrel of oil. Boe may be misleading particularly if
used in isolation. A Boe conversion ratio of 6 Mcf: 1 Bbl is based on
an energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the wellhead.
About Stream Oil & Gas Ltd.
Stream Oil & Gas Ltd. is a Canadian-based emerging oil and gas
production, development and exploration company focused on the
re-activation and re-development of three oilfields and a
gas/condensate field in Albania. The Company's strategy is to use
proven technology, incremental and enhanced oil recovery techniques to
significantly increase production and reserves.
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
SOURCE Stream Oil & Gas Ltd.
<p> </p> <p> Dr. Sotirios Kapotas President & Chief Executive Officer <br/> P: (403) 531-2358 </p> <p> Susan J. Soprovich, Interim Corporate Secretary <br/> P: (403) 874-2903 </p> <p> Email <a href="mailto:info@streamoilandgas.com">info@streamoilandgas.com</a><br/> Website: <a href="http://www.streamoilandgas.com/">www.streamoilandgas.com</a> </p>