Results from Well Workovers Quadruple Gas Production
CALGARY, April 30, 2012 /CNW/ - Stream Oil & Gas Ltd. (TSX-V: SKO) ("Stream" or the "Company") is pleased to provide an update on its Delvina project, composed of the Delvina field and Delvina Block.
The Delvina field is estimated to hold approximately 184 BCF of gas initially-in-place ("GIIP") according to Stream's 2010 independent reserve report. In late 2011, interventions of the two existing vertical wells were completed with acid fracturing of Delvina 12 and injectivity testing of Delvina 4 for future liquids production. Delvina 12 commenced flowback testing in January 2012, and was subsequently shut in for pressure build-up. As a result of the workovers, production flow rates for the Delvina 12 well increased substantially as summarized below:
Flow rate* (Mcf/d)
|Albpetrol (pre Stream takeover)||300|
|Pre workover @ 450PSI||620|
|Post workover @ 1,200PSI||2,500|
|Post workover @ 450PSI||3,000**|
|* Gas production only as natural gas liquids under evaluation; pre-workover liquids rate was 47 bbl/MMcf|
|** Production is extrapolated|
|Reservoir Pressure Stabilization (Post Production Shut-in)||Duration (hrs)|
|Pre workover @ 2,770PSI||360|
|Post workover @ 3,770PSI||13|
|Post workover @ 3,870PSI||170|
The Delvina 12 well produced over 100 MMcf in 45 days without decline in productivity during testing. Seismic monitoring indicated a fracture distance that was over four times initial estimates at approximately 3,600 feet, indicating greater contact with the reservoir. Additional pressure growth post stabilization suggests continuing energy contribution from the reservoir beyond the initial fracture results.
Stream's initial development plan for the Delvina field includes nine horizontal wells to develop approximately 60 BCF of gas plus liquids. The application of horizontal wells typically results in 2.5 to 3.0 time production multiples from that of vertical wells. Initial results lead Management to believe that fewer wells and less capital will be required to complete the proposed development plan. Alternatively, Stream can expand its development program with increased market demand. Detailed preparations for the drilling of the first horizontal well continues with the commencement of field activities scheduled for the fourth quarter of 2012.
Delvina facilities rehabilitation continues in preparation for increased liquids production subsequent to the drilling of the horizontal well, allowing Stream to capture Brent pricing and significantly increase revenue. These activities are expected to provide production for future markets including power generation, oilfield enhanced oil recovery utilization and industrial consumers.
The Delvina Block holds additional prospects that are estimated to constitute over 400 BCF of GIIP as per the 2010 independent reserves report. Initiated in 2010, Phase II of the exploration program continues with the interpretation of incremental passive seismic data. Detailed planning is underway for 2013 field activities, including further geological work to identify the location for a possible exploration well.
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 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 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 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.
For further information:
Dr. Sotirios Kapotas President & Chief Executive Officer
P: (403) 531-2358
James Hodgson, Chief Financial Officer
P: (403) 531-2358