Agreement Provides Funds for 2013 Capital Program
CALGARY, April 24, 2013 /CNW/ - Stream Oil & Gas Ltd. (TSX-V: SKO) ("Stream" or the "Company") is pleased to announce that it has signed a prepayment agreement for crude sales (the "Prepayment Agreement") to provide oil production from its Albanian oilfields to Trafigura Pte Ltd. ("Trafigura"). Trafigura has agreed on the disbursement of a first tranche in an amount of USD$7.0 million to prepay part of the purchase price of oil sales under the Prepayment Agreement. The Prepayment Agreement is a crucial step for Stream's 2013 development plans, providing additional capital required to expand production of the Cakran-Mollaj, Gorisht-Kocul, Ballsh-Hekal and Delvina field projects.
Management anticipates receiving the first USD$7.0 million prepayment by May 1, 2013 and further draws periodically up to a total of USD$20.0 million. The prepayments will be discharged by Stream's delivery of crude oil to Trafigura in accordance with and at the times and in the quantities as set out the crude sales contract between the two companies. The obligation related to the total amount received by Stream must be discharged by August 31, 2015. Commencing October 31, 2013, the Company is required to begin repayment of any amounts received as of that date.
The crude sales contract has a term of three years at which time it may be extended upon written agreement by both parties.
"We're extremely pleased with this agreement," said Dr. Sotirios Kapotas, President and Chief Executive Officer. "Stream has a strong relationship with Trafigura as an existing customer, which allows us to access international markets and receive improved oil prices compared to in-country sales. The prepayment funds are expected to provide the additional capital above available cash flow that is needed for us to successfully implement our 2013 development growth plans."
Stream's 2013 activities are focused on oilfield development, improving Albanian operating capability and Delvina gas field exploration. Successful implementation is expected to provide growth in production and cash flow as well as significant reserve additions as reserves and resources are converted to proved and probable reserves. With funding secured, Management plans an aggressive execution of its 2013 oilfield work programs to commence mid-year, the results of which are expected to increase company and 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 agreement with Trafigura and expected 2013 plans. 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.
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