Stream Announces 2012 Reserve Report

Proved plus Probable Value Increase Offsets Lower Price Deck

CALGARY, April 1, 2013 /CNW/ - Stream Oil & Gas Ltd. (TSX-V: SKO) ("Stream" or the "Company") is pleased to announce the results of its November 30, 2012, independent reserves evaluation. Evaluations were conducted by Stream's independent reserve evaluators Deloitte LLP ("Deloitte"), who previously operated as AJM Petroleum Consultants, in accordance with the provisions of National Instrument 51-101 ('NI51-101') and the Canadian Oil and Gas Evaluation Handbook ("COGEH").

Stream increased its proved plus probable reserves value, offsetting lower price forecast based on future sales and overcoming funding constraints.   Stream focused its 2012 activities on advancing oil well workovers with new artificial lift systems, debottlenecking surface production facilities, and preparing to drill the horizontal well in the Delvina gas/condensate field.

2012 Total Reserves Summary (Net Share to Stream)

• Reserves remained consistent with the 2012 interim reserve report amounts (effective March 31, 2012):
• Total proved reserves marginally decreased to 16.8 MMboe as a result of rescheduling field programs
• Proved plus probable reserves increased to 25.6 MMboe as result of better performance
• Proved plus probable plus possible reserves increased to 38.6 MMboe
• Proved reserves comprise 66% of total proved plus probable reserves
• Proved reserve life index ("RLI") is approximately 18+ years and proved plus probable RLI is 28+ years, based on gross average production of approximately 2,500 boed
• Proved plus probable reserve value increased 5%, discounted at 10% after tax

All of Stream's 2012 reserves estimates are based on conventional primary recovery methods only and do not include upside potential for the following:

• Petroleum Agreements' provisions for neutralizing the 10% mineral tax of nearly US$20 million (before tax);
• Gorisht-Kocul oilfield waterflood program or future enhanced oil recovery ("EOR") potential;
• Ballsh-Hekal and Cakran-Mollaj oilfield infill and directional drilling or EOR potential;
• Delvina gas field full horizontal well development potential, nor value of step-out exploration at Delvina
• Contingent resource conversions.

"We're pleased with the results of our reserves evaluation," said Dr. Sotirios Kapotas, President and CEO. "The reserves evaluation demonstrates the value of our assets, which we are focused on production as we advance with our 2013 development plans. The development of the Delvina field and exploration activities in the step-out Delvina block acreage present significant potential growth for the Company, increasing production and capturing additional reserves.  The recent agreement completed with a power generator enables Stream to progress with Delvina development."

Summary of Estimated Reserve Volumes

			2012
			Oil					Natural Gas				NGL				Total
November 30,			Gross (MBbl)			Net (MBbl)		Gross (MMcf)		Net (MMcf)		Gross (MBbl)		Net (MBbl)		Gross (MBoe)		Net (MBoe)
Proved
	Producing		12,983.7			10,476.7		-		-		-		-		12,983.7		10,476.7
	Non-producing		-			-		-		-		-		-		-		-
	Undeveloped		4,394.4			4,380.4		10,524.2		9,752.2		373.7		341.1		6,522.2		6,346.8
Total Proved			17,378.1			14,857.0		10,524.2		9,752.2		373.7		341.1		19,505.9		16,823.4
	Probable		5,093.6			5,080.1		16,859.2		16,772.7		950.8		947.2		8,854.3		8,822.7
Total Proved + Probable			22,471.7			19,937.1		27,383.4		26,524.9		1,324.6		1,288.2		28,360.1		25,646.1
	Possible		5,091.3			5,076.7		32,132.6		32,106.5		2,486.7		2,485.6		12,933.4		12,913.4
Total Proved + Probable + Possible			27,563.0			25,013.8		59,515.9		58,631.4		3,811.2		3,773.8		41,293.5		38,559.5

(1)	Forecast prices and costs; numbers may not add due to rounding.
(2)	Gross reserves are the total of the Company's working interest share before deduction of royalties and other government share. Net reserves are gross reserves net of royalty interests owned by others.

Net Reserves by Field (MBoe)

			2012											March 31, 2012
			Ballsh		Cakran		Gorisht		Delvina		Total			Total
November 30,			Net (MBoe)		Net (MBoe)		Net (MBoe)		Net (MBoe)		Net (MBoe)			Net (MBoe)		%
Proved
	Producing		2,729.0		3,106.1		4,641.6		-		10,476.7			9,674.1		8%
	Non-producing		-		-		-		-		-			-		-
	Undeveloped		1,795.9		1,195.0		1,710.8		1,645.0		6,346.8			7,302.8		(13%)
Total Proved			4,525.0		4,301.1		6,352.4		1,645.0		16,823.4			16,976.9		(1%)
	Probable		1,773.3		2,596.7		890.6		3,562.0		8,822.7			7,806.0		13%
Total Proved + Probable			6,298.3		6,897.7		7,243.0		5,207.1		25,646.1			24,782.8		3%
	Possible		2,333.5		1,883.9		989.8		7,706.2		12,913.4			13,108.4		(1%)
Total Proved + Probable + Possible			8,631.8		8,781.7		8,232.8		12,913.2		38,559.5			37,891.2		2%

(1)	Forecast prices and costs; numbers may not add due to rounding.
(2)	Net reserves are gross reserves net of royalty interests owned by others.

The total proved reserve base is comprised of 90% oil and 10% natural gas.  Stream's gross and net reserves for 2012 remained consistent with the 2012 interim reserve report amounts. Additions based on reservoir production performance factors replaced production on a proved and proved plus probable basis.

Net Present Value of Reserves

At November 30, 2012, future net revenue from Stream's reserves decreased 1% from the March 31, 2012 interim report on a total proved basis but increased 5% on a total proved and probable basis, discounted at 10% after tax.  While the decrease is attributed to the rescheduling of Delvina and oilfields activities, the increase in valuation is primarily due to additional economic recovery as result of improved production performance, which also offset the reduction in price deck.

				2012						2011						% Change
Before Tax				Discount Rate						Discount Rate
December 31 (US$000s)				0%			10%			0%			10%			0%			10%
Proved
	Producing		$	585,606		$	266,662		$	531,631		$	250,051			10%			7%
	Non-producing			-			-			-			-			-			-
	Undeveloped			239,087			100,940			268,731			120,619			(11%)			(16%)
Total Proved			$	824,693		$	367,602		$	800,362		$	370,670			3%			(1%)
	Probable			533,027			185,022			456,561			156,107			17%			19%
Total Proved + Probable			$	1,357,720		$	552,623		$	1,256,924		$	526,777			8%			5%
	Possible			819,157			298,773			805,527			289,121			2%			3%
Total Proved + Probable + Possible			$	2,176,878		$	851,397		$	2,062,451		$	815,898			6%			4%

(1)	Forecast prices and costs; before income taxes; numbers may not add due to rounding.

			2012						2011						% Change
After Tax			Discount Rate						Discount Rate
December 31 (US$000s)			0%			10%			0%			10%			0%			10%
Proved
	Producing	$	295,122		$	141,114		$	274,585		$	133,487			7%			6%
	Non-producing		-			-			-			-			-			-
	Undeveloped		123,356			54,345			139,428			62,953			(12%)			(14%)
Total Proved		$	418,478		$	195,459		$	414,013		$	196,440			1%			-
	Probable		269,622			92,786			221,628			71,560			22%			30%
Total Proved + Probable		$	688,100		$	288,245		$	635,640		$	268,000			8%			8%
	Possible		374,713			125,933			389,838			131,927			(4%)			(5%)
Total Proved + Probable + Possible		$	1,062,813		$	414,178		$	1,022,478		$	399,927			4%			4%

(1)	Forecast prices and costs; after income taxes; numbers may not add due to rounding.

Future net revenues are calculated based upon estimated revenues less royalties and operating costs.  The net present value should not be considered the current market value of Stream's reserves or the costs that would be incurred to obtain equivalent reserves.

The reserve values are based on the table of prices below. Oil prices are the equivalent price of Brent Oil discounted for quality based on regional market conditions. Gas prices are based on the contract applicable. Currently, Stream's average sales price for domestic and export sales are approximately 70% of Brent on a consolidated basis.

Price Forecast as at September 30, 2012

			Brent Oil			70% of			Natural Gas(1)
			UK			Brent UK
			($US/bbl)			($US/bbl)			($US/mcf)
2012			110.00			77.00			9.70
2013			107.10			74.97			9.89
2014			104.05			72.84			10.09
2015			106.10			74.27			10.29
2016			108.25			75.78			10.50
2017			110.40			77.28			10.71
2018			112.60			78.82			10.92
2019			114.85			80.40			11.14
2020			117.15			82.01			11.37
2021			119.50			83.65			11.59
2022			121.90			85.33			11.82
Remaining			+ 2.0%			+2.0%			+2.0%

(1)	Gas pricing based on historical trends and contracted prices provided by Stream.
(2)	Deloitte condensate price forecast at 100% of Brent Oil.

The Company is not aware of any information pending from the date of this release to the effective date that would materially affect the valuation results. Stream's Reserve Committee and Board of Directors have approved the Reserve Report.

Stream's reserve data is subject to and should be read in conjunction with the entire Form 51-101F1 - Statement of Reserves Data and Other Oil and Gas Information. The Form 51-101F1, Form 51-101F2 - Report of Independent Qualified Reserves Evaluator and Form 51-101F3 - Report of Management and Directors on Oil and Gas Disclosure have been filed with Canadian securities regulators and can be accessed electronically on Stream's website or on the SEDAR website at www.sedar.com.

Forward-Looking Statements

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 status of its reserve volumes and net present value of its reserves as at November 30, 2012. 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 reflects 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 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.

 

 

 

 

 

SOURCE Stream Oil & Gas Ltd.

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