CALGARY, Nov. 4, 2013 /CNW/ - Stream Oil & Gas Ltd.
(TSX-V: SKO) ("Stream" or the "Company") responds to rumours as
presented by various Albanian media sources and provides an update
on the 10% mineral royalty tax neutralization.
It has come to Management's attention that a
local Albanian TV channel recently asserted claims that several
companies have been noncompliant in meeting their obligations
regarding concessions in Albania. In addition, they stated that
Albpetrol has commenced procedures to break the Petroleum
Agreements ("PAs") with Stream as result of Stream's failure to
provide its share of pre-existing production ("PEP"). These
claims are without merit and have no basis in fact.
Subsequent to entering into the PAs with Stream, the Albanian government
levied a new 10% mineral royalty tax ("MRT") in 2008. Under the
terms of PAs, any new financial burdens, including new mineral
taxes, are to be immediately neutralized by amendments to
the PAs. As previously
disclosed, the amount owed to the Company in neutralization totals
approximately US$60.0 million. Stream
has the right for equitable set off to recoup the taxes
levied. Since outset, Stream has provided the PEP share to
Albpetrol and paid the mineral royalty tax to the Albanian
Government. To conclude the long outstanding MRT
neutralization issue, Albpetrol and Stream jointly presented
amendments to PAs to the Albanian Government, which included, in
part, Stream's recovery of its past payments through withholding
and monetizing Albpetrol's PEP. Thereafter, Stream and
Albpetrol commenced execution of these amendments as demonstrated
by Albpetrol in its refusal to take its PEP. Failure to take their
production would have resulted in shut-in production for Stream had
it not been disposed of by the Company.
The Company has made and continues to apply its
best efforts to have these amendments ratified.
"Recent discussions with the Ministry
representatives have indicated that the Government is not
contemplating any actions against Stream, nor has the Ministry any
grounds for such claims," said Dr. Sotirios
Kapotas, President and Chief Executive Officer. "We
recently submitted our 2014 work plan and budget, and we will
continue to work with the Ministry and Albpetrol to resolve any
outstanding issues."
Stream's operations are routinely audited by the
representatives of Ministry of Energy, Albpetrol and the Ministry
of Finance, each of whom have concluded that the Company has met
its obligations and there are no issues with performance.
Stream has, and will continue to abide by the PAs.
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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 facts concerning the 10% royalty
tax and Albpetrol's pre-existing production. 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.