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