Stream Announces 2013 Reserve Report

CALGARY, March 31, 2014 /CNW/ - Stream Oil & Gas Ltd. (TSX-V: SKO) ("Stream" or the "Company") is pleased to announce the results of its November 30, 2013, independent reserves evaluation. Evaluations were conducted by Stream's independent reserve evaluators Deloitte LLP ("Deloitte"), who previously operated as AJM Petroleum Consultants, in accordance with the provisions of National Instrument 51-101 ('NI51-101') and the Canadian Oil and Gas Evaluation Handbook ("COGEH").

Stream increased its proved plus probable reserves value, offsetting lower price forecast based on future sales and overcoming funding constraints.   In 2013, the Company continued operational activities such as oil well workovers with new artificial lift systems ("ALS"), debottlenecking surface production facilities, and preparations to drill the horizontal well in the Delvina gas/condensate field.

2013 Total Reserves Summary (Net Share to Stream)

  • Reserves in all categories are as compared to the 2012 reserve report:
    • Total proved reserves increased 24% to 20.9 MMboe as a result of the inclusion of reserves for the Gorisht-Kocul oilfield waterflood program and the expected takeover of the Ballsh-Hekal oilfield
    • Proved plus probable reserves increased 13% to 28.9 MMboe
    • Proved plus probable plus possible reserves increased 6% to 40.8 MMboe
  • Proved reserves comprise 72% of total proved plus probable reserves
  • Proved plus probable reserve life index increased to approximately 57+ years from 28+ years, based on gross average production of approximately 1,500 boed
  • Proved plus probable reserve value decreased 18%, discounted at 10% after tax

All of Stream's 2013 reserves estimates are based on conventional primary recovery methods only and do not include upside potential for the following:

  • Petroleum Agreements' provisions for neutralizing the 10% mineral tax of nearly US$20 million (before tax);
  • Gorisht-Kocul future enhanced oil recovery ("EOR") potential;
  • Ballsh-Hekal and Cakran-Mollaj oilfield infill and directional drilling or EOR potential;
  • Delvina gas field full horizontal well development potential, nor value of step-out exploration at Delvina
  • Contingent resource conversions.

"On an overall basis, our total reserves increased over 2012 amounts," said Dr. Sotirios Kapotas, President and CEO. "We're pleased to have recognized an increase in total proved and total proved plus probable categories in recognition of our progress with the waterflood at Gorisht-Kocul and the expected takeover of the Ballsh-Kocul field in 2014.  These results demonstrate the value of our assets, which will provide additional benefit as we move forward with development in 2014." 

Summary of Estimated Reserve Volumes

                                           
  2013    
  Oil   Natural Gas   NGL Total
November 30,   Gross
(MBbl)
    Net
(MBbl)
    Gross
(MMcf)
    Net
(MMcf)
    Gross
(MBbl)
    Net
(MBbl)
    Gross
(MBoe)
    Net
(MBoe)
Proved                                              
  Producing   5,775     4,571     -     -     -     -     5,775     4,571
  Non-producing   15,172     14,206     2,850     2,850     -     -     15,647     14,680
  Undeveloped   -     -     8,663     7,976     377     348     1,821     1,677
Total Proved   20,946     18,776     11,513     10,825     377     348     23,242     20,928
  Probable   4,047     4,046     17,205     17.138     974     971     7,888     7,874
Total Proved + Probable   24,993     22,822     28,717     27,963     1,350     1,319     31,130     28,801
  Possible   4,499     4,499     31,470     31,445     2,269     2,268     12,014     12,008
Total Proved + Probable + Possible   29,493     27,322     60,187     59,408     3,620     3,587     43,143     40,810
(1)      Forecast prices and costs; numbers may not add due to rounding.
(2)      Gross reserves are the total of the Company's working interest share before deduction of royalties and other government share. Net reserves are gross reserves net of royalty interests owned by others.

Net Reserves by Field (MBoe)

                                         
  2013     Nov. 30,
2012
     
                                         
    Ballsh     Cakran     Gorisht     Delvina     Total     Total      
November 30,   Net
(MBoe)
    Net
(MBoe)
    Net
(MBoe)
    Net
(MBoe)
    Net
(MBoe)
    Net
(MBoe)
    %
Proved                                        
  Producing   318         2,114     2,613          4,571     5,046     10,477     (56%)
  Non-producing             4,131                4,909                5,641                  -     14,680     -     100%
  Undeveloped   -          -     -           1,677     1,677     6,347     (74%)
Total Proved   4,449          6,549     8,254          1,677     20,928     16,823     24%
  Probable   1,552          2,432     333     3,657     7,974     8,823     (10%)
Total Proved + Probable   6,001           8,980     8,586          5,334     28,902     25,646     13%
  Possible   1,942          2,485     146     7,335     11,908     12,913     (8%)
Total Proved + Probable + Possible   7,943        11,465     8,732         12,670     40,810     38,560     6%
(1)      Forecast prices and costs; numbers may not add due to rounding.
(2)      Net reserves are gross reserves net of royalty interests owned by others.

The total proved reserve base is comprised of 91% oil and 9% natural gas.  Stream's total gross and net reserves for 2013 increased over 2012 interim reserve report amounts with changes within the proved and probable categories. Additions based on reservoir production performance factors replaced production on a proved and proved plus probable basis.

Net Present Value of Reserves

At November 30, 2013, future net revenue from Stream's reserves decreased 3% from the March 31, 2012 interim report on a total proved basis and 7% on a total proved and probable basis, discounted at 10% after tax.  The main contributing factor to the decrease was lower forecast commodity prices.

  2013   2012   % Change
Before Tax Discount Rate   Discount Rate          
December 31 (US$000s)   0%     10%     0%     10%     0%     10%
Proved                                  
  Producing $      207,732   $     106,994   $     585,606   $   266,662     (65%)     (60%)
  Non-producing             697,995                    217,520     -     -     100%     100%
  Undeveloped      55,979        31,077     239,087     100,940     (77%)     (69%)
Total Proved $      961,706   $     355,591   $     824,693   $   367,602     17%     (3%)
  Probable         446,233         160,273     533,027     185,022     (16%)     (13%)
Total Proved + Probable $   1,407,940   $     515,863   $ 1,357,720   $   552,623     4%     (7%)
  Possible         681,756         273,855     819,157     298,773     (17%)     (8%)
Total Proved + Probable + Possible $   2,089,695   $     789,718   $ 2,176,878   $   851,397     (4%)     (7%)
(1)  Forecast prices and costs; before income taxes; numbers may not add due to rounding.

  2013 2012 % Change
After Tax Discount Rate Discount Rate          
December 31 (US$000s) 0%   10%   0%   10%   0%   10%
Proved          
  Producing   $  111,618   $   62,125   $    295,122   $    141,114     (63%)     (60%)
  Non-producing                  345,786               110,140     -     -     100%     100%
  Undeveloped          41,331      23,946     123,356     54,345     (66%)     (56%)
Total Proved    $   498,735   $ 196,210   $    418,478   $    195,459     12%     -
  Probable        228,434          82,656     269,622     92,786     (15%)     (11%)
Total Proved + Probable    $   727,168   $   278,866   $    688,100   $    288,245     6%     (3%)
  Possible           335,776       132,248     374,713     125,933     (10%)     5%
Total Proved + Probable + Possible   $ 1,062,944   $   411,114   $ 1,062,813   $    414,178     -     (1%)
(1)  Forecast prices and costs; after income taxes; numbers may not add due to rounding.

Future net revenues are calculated based upon estimated revenues less royalties and operating costs.  The net present value should not be considered the current market value of Stream's reserves or the costs that would be incurred to obtain equivalent reserves.

The reserve values are based on the table of prices below. Oil prices are the equivalent price of Brent Oil discounted for quality based on regional market conditions. Gas prices are based on the contract applicable. Currently, Stream's average sales price for domestic and export sales are approximately 80% of Brent on a consolidated basis.

Price Forecast as at September 30, 2013

      Brent Oil     80% of     Natural Gas(1)
      UK     Brent UK      
      ($US/bbl)     ($US/bbl)     ($US/mcf)
2014     $ 105.06     $ 84.05     $ 9.70
2015     $ 98.86     $ 79.09     $ 9.89
2016     $ 98.70     $ 78.96     $ 10.09
2017     $ 100.66     $ 80.53     $ 10.29
2018     $ 99.36     $ 79.49     $ 10.50
2019     $ 101.36     $ 81.09     $ 10.71
2020     $ 103.40     $ 82.72     $ 10.92
2021     $ 105.46     $ 84.37     $ 11.14
2022     $ 107.57     $ 86.06     $ 11.37
2023     $ 109.72     $ 87.78     $ 11.59
2024     $ 111.91     $ 89.53     $ 11.82
Remaining     + 2.0%     +2.0%     +2.0%
(1)      Gas pricing based on historical trends and contracted prices provided by Stream.
(2)      Deloitte condensate price forecast at 100% of Brent Oil.

The Company is not aware of any information pending from the date of this release to the effective date that would materially affect the valuation results. Stream's Reserve Committee and Board of Directors have approved the Reserve Report.

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.

_______________

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 status of its reserve volumes and net present value of its reserves as at November 30, 2013. 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 reflects 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.

Contingent resources disclosed herein represent those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations, using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. There is no certainty that it will be commercially viable to produce any portion of the resources.

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.

For further information:

Contact Information
Dr. Sotirios Kapotas President & Chief Executive Officer   P: (403) 531-2358
Susan J. Soprovich, Interim Corporate Secretary   P: (403) 874-2903

Email info@streamoilandgas.com
Website: www.streamoilandgas.com