CALGARY,
April 29, 2014 /CNW/ - Stream Oil
& Gas Ltd. (TSX-V: SKO) (the "Company") is pleased to report
its financial and operating results for the three months ended
February 28, 2014.
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Q1 2014 Summary of Results |
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Year Ended
November 30, |
(US$000s, except as noted) |
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2014 |
2013 |
Financial |
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Revenue |
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7,534 |
9,106 |
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Revenue, net of mineral tax
royalty |
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6,780 |
8,195 |
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Net operating income |
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2,045 |
3,178 |
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Funds from operations |
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7,054 |
6,017 |
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Net income (loss) |
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1,777 |
(255) |
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Per share - basic & diluted |
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0.03 |
0.00 |
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Cash additions to property &
equipment
and exploration & evaluation assets |
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7,562 |
5,360 |
Operating |
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Average production (boed) |
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Gross production |
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1,525 |
1,782 |
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Pre-existing obligations |
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526 |
634 |
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Net production (Stream's share) |
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999 |
1,148 |
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Gross average price ($/boed) |
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66.17 |
68.26 |
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Netback ($/boed) |
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47.91 |
49.65 |
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As at |
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Feb. 28,
2014 |
Nov. 30, 2013 |
Cash and cash equivalents |
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766 |
1,962 |
Shareholders' equity |
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23,675 |
21,869 |
Weighted average shares outstanding -
basic (#) |
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66,686,431 |
66,686,431 |
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In the first quarter of 2014, Stream focused on
natural gas development at Delvina while working to stabilize and
grow production in the oilfields. The first horizontal well
(D34H1) was spud in the Delvina gas field subsequent to the
quarter.
First Quarter Highlights:
- Net average production decreased to 999 boed compared to 1,148
boed in 2013.
- Gross revenue decreased by 17% to $7.5
million compared to $9.1
million for the first quarter of 2013 (net $6.8 million in 2014 compared to $8.2 million).
- Net operating income decreased by 36% to $2.0 million from $3.2
million.
- The Company realized net income of $1.8
million compared to a net loss of $0.3 million in 2013 due to slightly lower
overall expenses, higher foreign exchange gains and reductions in
deferred income tax expense quarter-over-quarter.
- The rig, ancillary services and goods for drilling the D34H1
gas well arrived at Delvina.
Subsequent to the Quarter
- The D34H1 well was spud in the Delvina gas field during
April 2014.
- The Company arranged a bridge loan of Cdn$5.0 million.
- Received confirmation for takeover of the Ballsh-Hekal
oilfield; Stream commenced procedures for the transfer of remaining
assets.
- Ian Baron resigned as a Director
of the Board of Directors effective April
11, 2014.
- Restructured obligations with key vendors, allowing deferred
payment terms.
Outlook
In 2014, Stream's Management is focused on
re-engaging in production growth at its oilfields and adding new
production through its gas field activities. Stream's
plans for 2014 include the following activities:
- Cakran-Mollaj: Repair jet pump systems and
install procured hydraulic long lift RRP systems; pilot ASP
to reduce water production while commencing alternate water
disposal, thus eliminating infield re-injection. Combined,
these are expected to return the field to prior demonstrated
production levels;
- Gorisht-Kocul: Continue waterflood
expansion along with recompletions with PCPs and hydraulic RRP lift
systems;
- Ballsh-Hekal: Takeover the remainder of the
field, re-validate primary targets and recomplete with PCPs;
- Delvina: Finalize drilling, completion and
testing of the horizontal well, effectively bringing on sustained
production and delivering increased volumes to the third-party's
thermo project. Subsequently, commence drilling of the
exploration well in step out structures;
- Complete 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 storage facilities to enable larger export cargos with
the intent of increasing sales price.
2013 Reserves Revision
Stream announces revisions to its November 30, 2013, independent reserves
evaluation as filed on SEDAR on March 31,
2014. Errors in the original reserve report due to an
incorrect oil price forecast as reported by Deloitte LLP, Stream's
reserve evaluator, affected the Company's Net Present Values as
shown in the table below.
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Revised
2013 |
2013 |
% Change |
Before Tax |
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Discount
Rate |
Discount
Rate |
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December 31
(US$000s) |
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0% |
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0% |
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0% |
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10% |
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0% |
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10% |
Proved |
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Producing |
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$ |
230,736 |
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$ |
117,692 |
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$ |
207,732 |
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$ |
106,994 |
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11% |
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11% |
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Non-producing |
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752,870 |
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236,779 |
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697,995 |
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217,520 |
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8% |
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8% |
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Undeveloped |
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55,979 |
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31,077 |
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55,979 |
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31,077 |
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- |
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Total Proved |
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$ |
1,039,586 |
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$ |
385,548 |
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$ |
961,706 |
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$ |
355,591 |
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8% |
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8% |
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Probable |
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448,132 |
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160,455 |
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446,233 |
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160,273 |
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- |
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Total Proved + Probable |
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$ |
1,487,717 |
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$ |
546,003 |
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$ |
1,407,940 |
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$ |
515,863 |
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6% |
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6% |
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Possible |
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683,951 |
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274,103 |
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681,756 |
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273,855 |
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- |
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Total Proved + Probable + Possible |
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$ |
2,171,669 |
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$ |
820,106 |
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$ |
2,089,695 |
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$ |
789,718 |
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4% |
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4% |
(1) Forecast prices and costs; before income taxes;
numbers may not add due to rounding.
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Revised
2013 |
2013 |
% Change |
After Tax |
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Discount
Rate |
Discount
Rate |
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December 31 (US$000s) |
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0% |
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10% |
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0% |
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10% |
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0% |
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10% |
Proved |
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Producing |
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$ |
123,161 |
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$ |
67,466 |
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$ |
111,618 |
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$ |
62,125 |
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10% |
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10% |
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Non-producing |
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373,534 |
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119,756 |
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345,786 |
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110,140 |
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8% |
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8% |
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Undeveloped |
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41,331 |
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23,946 |
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41,331 |
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23,946 |
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- |
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Total Proved |
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$ |
538,026 |
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$ |
211,167 |
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$ |
498,735 |
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$ |
196,210 |
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8% |
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8% |
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Probable |
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229,424 |
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82,747 |
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228,434 |
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82,656 |
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- |
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Total Proved + Probable |
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$ |
767,450 |
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$ |
293,914 |
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$ |
727,168 |
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$ |
278,866 |
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6% |
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6% |
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Possible |
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336,920 |
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132,372 |
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335,776 |
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132,248 |
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- |
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Total Proved + Probable + Possible |
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$ |
1,104,370 |
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$ |
426,286 |
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$ |
1,062,944 |
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$ |
411,114 |
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- |
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(1) Forecast prices and costs; after income taxes;
numbers may not add due to rounding.
Stream's reserve data is subject to and should
be read in conjunction with the entire Form 51-101F1 - Statement of
Reserves Data and Other Oil and Gas Information. The Form 51-101F1,
Form 51-101F2 - Report of Independent Qualified Reserves Evaluator
and Form 51-101F3 - Report of Management and Directors on Oil and
Gas Disclosure have been filed with Canadian securities regulators
and can be accessed electronically on Stream's website or on the
SEDAR website at www.sedar.com.
Additional Information
Stream has filed its Consolidated Financial
Statements for the three months ended February 28, 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.
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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 first quarter
results, outlook for 2014 and net present value of its reserves.
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 in
such 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.