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 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.