CALGARY, Feb. 19, 2013 /CNW/ - Stream Oil & Gas Ltd. (TSX-V: SKO)
("Stream" or the "Company") is pleased to announce that it has signed a
gas sales agreement (the "Agreement") to sell gas production from its
Delvina field to Thermo Energy Albania Shpk ("Thermo Energy"). Thermo
Energy intends to develop and build a 24 megawatt ("MW") thermal power
plant in Delvina, Albania, utilize Stream's gas production and sell the
generated electricity to KESH (an Albanian power company) and other
clients. The Agreement is key to Stream's plans to develop the
potential of its substantial gas resource, which is expected to result
in future growth in production and reserves.
The Agreement provides for the delivery of sufficient gas to power the
24 MW facility at 100% capacity. The initial start-up unit of 2.2 MW
of the plant will require approximately 0.5 MMcf/d of gas from Stream,
increasing to 6.5 MMcf/d when the plant is fully operational. Gas
delivery is expected to commence in the second quarter of 2013. The
Agreement has a term of one year, at which time the parties will meet
to negotiate a longer term agreement based on market pricing and
corresponding quantities. Stream will receive US$8.90/mcf for its gas
in the first year; once the Agreement is extended, the new price will
be negotiated based on European indexed natural gas prices.
Stream currently has the capacity to produce approximately 2.5 MMcf/d
from its Delvina field from two vertical wells, Delvina 12 and 4. In
order to increase productive capacity to 6.5 MMcf/d, detailed
preparations for the drilling of the first horizontal well continues
with the commencement of field activities expected in 2013. The Delvina
field is estimated to hold approximately 184 BCF, with another 431 BCF
from the adjacent structures, of gas initially-in-place ("GIIP")
according to Stream's 2011 independent resource evaluation report.
"The signing of this agreement is a major step forward in the
development of the Delvina field," said Dr. Sotirios Kapotas, President
and Chief Executive Officer. "In addition to providing benefit to
Stream in terms of revenue and justifying the drilling of the
horizontal well, the construction of the plant will assist in creating
in-country electricity generation for Albania and its people."
This is the first natural gas fired thermal power plant to be
constructed in Albania. The local Ministry of Environment welcomes
green power and the stable delivery of electrical power to the country.
With a growing demand for power, Albania currently relies on
approximately 95% of its electricity from existing hydropower plants
with additional power imported to balance the country's power demand
and backup production during dry and drought periods. As a result,
Albania is extremely dependent on externally generated power and
experiences blackouts or loss of power from time to time.
Stream's activities in Delvina are expected to provide significant
reserve additions for the Company as reserves and resources are
converted to proved and probable reserves. With this conversion
Management anticipates growth in production and cash flow resulting in
increased shareholder value.
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 Stream's
results and status of its Delvina project. 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.
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 any portion of the resources will be discovered. If
discovered, 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
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
James Hodgson, Chief Financial Officer P: (403) 531-2358