News Column

Stream Announces First Quarter 2014 Results

April 29, 2014

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.

         
Q1 2014 Summary of Results        
         
        Year Ended

November 30,
(US$000s, except as noted)     2014 2013
Financial        
  Revenue     7,534 9,106
  Revenue, net of mineral tax royalty     6,780 8,195
  Net operating income     2,045 3,178
  Funds from operations     7,054 6,017
  Net income (loss)     1,777 (255)
    Per share - basic & diluted     0.03 0.00
  Cash additions to property & equipment

and exploration & evaluation assets
    7,562 5,360
Operating        
  Average production (boed)        
    Gross production     1,525 1,782
    Pre-existing obligations     526 634
    Net production (Stream's share)     999 1,148
  Gross average price ($/boed)     66.17 68.26
  Netback ($/boed)     47.91 49.65
             
As at     Feb. 28, 2014Nov. 30, 2013
Cash and cash equivalents     766 1,962
Shareholders' equity     23,675 21,869
Weighted average shares outstanding - basic (#)     66,686,431 66,686,431
         

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. 

                                     
    Revised 20132013% Change
Before Tax   Discount RateDiscount Rate  
December 31 (US$000s)   0%   0%   0%   10%   0%   10%
Proved                                    
  Producing   $ 230,736   $ 117,692   $ 207,732   $ 106,994     11%     11%
  Non-producing     752,870     236,779     697,995     217,520     8%     8%
  Undeveloped     55,979     31,077     55,979     31,077     -     -
Total Proved   $1,039,586   $385,548   $961,706   $355,591     8%     8%
  Probable     448,132     160,455     446,233     160,273     -     -
Total Proved + Probable   $1,487,717   $546,003   $1,407,940   $515,863     6%     6%
  Possible     683,951     274,103     681,756     273,855     -     -
Total Proved + Probable + Possible   $2,171,669   $820,106   $2,089,695   $789,718     4%     4%


(1)  Forecast prices and costs; before income taxes; numbers may not add due to rounding.



                                     
    Revised 20132013% Change
After Tax   Discount RateDiscount Rate  
December 31 (US$000s)   0%   10%   0%   10%   0%   10%
Proved                                    
  Producing   $ 123,161   $ 67,466   $ 111,618   62,125     10%     10%
  Non-producing     373,534     119,756     345,786     110,140     8%     8%
  Undeveloped     41,331     23,946     41,331     23,946     -     -
Total Proved   $538,026   $211,167   $498,735   $196,210     8%     8%
  Probable     229,424     82,747     228,434     82,656     -     -
Total Proved + Probable   $767,450   $293,914   $727,168   $278,866     6%     6%
  Possible     336,920     132,372     335,776     132,248     -     -
Total Proved + Probable + Possible   $1,104,370   $426,286   $1,062,944   $411,114     -     -


(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.

_______________

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.


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