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 the PAs.
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 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 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.
For further information:
Dr. Sotirios Kapotas President & Chief Executive Officer P: (403) 531-2358
Susan J. Soprovich, Interim Corporate Secretary P: (403) 874-2903
Email [email protected]