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Share Name | Share Symbol | Market | Type |
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TSXV:SKO | TSX Venture | Common Stock |
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CALGARY, March 31, 2014 /CNW/ - Stream Oil & Gas Ltd. (TSX-V: SKO) (the "Company") is pleased to report its financial and operating results for the year ended November 30, 2013.
2013 Summary of Results
Three Months Ended November 30, |
Year Ended November 30, |
|||||
(US$000s, except as noted) | 2013 | 2012* | 2013 | 2012* | ||
Financial | ||||||
Revenue | 9,292 | 8,646 | 35,880 | 31,881 | ||
Revenue, net of mineral tax royalty | 8,364 | 7,781 | 32,292 | 28,677 | ||
Net operating income (loss) | 6,453 | 2,586 | 22,984 | 20,366 | ||
Funds from (used in) operations | (2,849) | 4,566 | 14,309 | 13,339 | ||
Net income (loss) | (7,393) | (2,229) | (5,495) | 1,975 | ||
Per share - basic & diluted | (0.12) | (0.03) | (0.08) | 0.03 | ||
Additions to property & equipment | (6,645) | 5,974 | 15,399 | 29,953 | ||
Operating | ||||||
Average production (boed) | ||||||
Gross production | 1,454 | 1,684 | 1,610 | 1,706 | ||
Pre-existing obligations | 574 | 641 | 601 | 687 | ||
Net production (Stream's share) | 880 | 1,043 | 1,009 | 1,019 | ||
Gross average price ($/boed) | 74.63 | 76.40 | 73.68 | 74.81 | ||
Netback ($/boed) | 52.88 | 48.66 | 50.52 | 50.02 | ||
As at | Nov. 30, 2013 | Nov. 30, 2012 | ||||
Cash and cash equivalents | 1,962 | 1,147 | ||||
Shareholders' equity | 21,869 | 26,946 | ||||
Weighted average shares outstanding - basic (#) | 66,686,431 | 66,503,921 | ||||
* Restated to reflect deferred income tax |
The Company had to deal with a challenging business environment in 2013 related to the newly elected government in Albania. As part of this change, the newly elected government, including Albpetrol Sh.A. ("Albpetrol") and the Albanian National Agency for Natural Resources ("AKBN"), had a transition period that resulted in delays in resolving key matters related to tax neutralization and the transfer of the Ballsh-Hekal oilfield to Stream. In late 2013, the new Albanian government confirmed its support for the Company and has agreed to resolve the outstanding matters in an expeditious manner, including commencing immediate procedures for the transfer of the balance of the Ballsh-Hekal oilfield to Stream.
During the transition period to the newly elected Government, Stream continued its production operations in the Cakran-Mollaj, Gorisht-Kocul and Ballsh-Hekal fields. Concurrently, Stream finalized its preparations for the Delvina gas field development horizontal drilling, which commenced drilling activities in March 2014. In anticipation of the takeover of the remainder of Ballsh-Hekal field, Stream optimized its detailed plans for takeover and outstanding matters related to infrastructure assets, leveraging lessons learnt from prior field takeovers. Stream also completed upgrades of the export facilities at Petrolifera in Vlore, enabling it to handle larger cargos. This will allow the Company to realize higher net revenues in the mid-future.
In March 2013, Stream and Albpetrol finalized the amending agreements for the neutralization of the mineral royalty tax, which was imposed and payable by Stream since 2008. Neutralization is expected to be achieved by a combination of reducing Stream's future pre-existing production payments to Albpetrol, providing Albpetrol's share of pre-existing production volumes to the Company (valued at approximately $11.4 million) and the turnover of infrastructure assets. Neutralization is mandated by the stabilization provisions within the original concession agreements for Stream's fields. Submitted to the Ministry of Environment, Technology and Energy ("METE"), the amended agreements did not receive final ratification since the government suspended significant decision making in support of the effective governance framework imposed on Albania by the European Union ("EU") in light of Albania's imminent entry into EU.
Subsequent to November 30, 2013, the government engaged with Stream to negotiate obligations between Stream and Albpetrol regarding outstanding oil royalties and oil delivered in excess. The final agreement resulted in Stream recording a net liability of $11.4 million at November 30, 2013. To significantly offset this obligation, Stream had negotiated a settlement with Albpetrol in March 2013 to reduce this liability by royalty mineral tax paid, which at November 30, 2013 was $9.4 million. This agreement is awaiting amendments and final ratification.
They have committed to finalize all amendments within 2014, including timely adjustments to the temporary reversal of the implementation of the March 2013 amending agreements as agreed upon previously by Albpetrol (see 'Operational Update', 'Liquidity and Capital Resources' and 'Outlook' sections in the Company's 2013 Management's Discussion and Analysis).
Mid-2013 also saw the ownership change of the local ARMO refining corporation to an international conglomerate, where METE continues to be a 15% shareholder. As part of the amending agreements noted above, Stream is released from the mandatory supply of Delvina gas to ARMO. This enables the Company to monetize its gas through thermal power generation. With the expected unplugging of the Delvina 12 well combined with discharge of the ARMO provision by Albpetrol/METE, Stream's consumer, Thermo Energy, will be able to commence sustained generation operations, and thus, monetization of the Company's gas. The installed power generation facility was commissioned and tested using the Delvina 4 well gas supply.
2013 Highlights:
Consistent with International Financial Reporting Standards, the Company booked a deferred income tax expense of $3,878,000 related to its Albanian operations during the fiscal year ended November 30, 2013. This expense is a result of the Company's utilization of its cost recovery pools due to increased production and an increase in net income before tax in Albania. The amount does not represent actual income taxes owed, but is derived by the resulting difference between the carrying values of property and equipment in comparison to available tax cost pools.
Fourth Quarter Highlights:
Subsequent to Year-End
Outlook
Subsequent to the deferral of development activities while awaiting the outcome of the transition of the Albania Government, Stream is focused on re-engaging in production growth in 2014, as demonstrated by its continuing reserves value despite lower commodities forecast. Stream's plans for 2014 include the following activities:
Stream is also evaluating the extension of the services of the drilling rig active in Delvina, in order to commence infill drilling in the Cakran-Mollaj and Ballsh-Hekal fields.
With the positive collaboration from the Albanian Government, including Albpetrol and AKBN, Management anticipates to conclude, ratify and execute the Stream/Albpetrol amending agreements within 2014.
Management is of the opinion that the Company will be able to focus its primary efforts on development activities going forward. Stream expects that periphery items previously consuming Management's attention will no longer inhibit its efforts, specifically: finalizing its long outstanding amending agreements; confirming positive collaboration with the newly elected Albanian Government; stability of Albania's business environment realized from the full confirmation of the elected party (in prior dispute for nearly four years); and Albania's adherence to the increased governance framework imposed by EU as part of its recommendation for Albania's candidate status.
Additional Information
Stream has filed its audited Consolidated Financial Statements for the year ended November 30, 2013, and its related Management's Discussion and Analysis with Canadian securities regulatory authorities. Copies of these documents may be obtained via www.sedar.com or the Company's website, www.streamoilandgas.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 2013 annual results and outlook for 2014. 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.
Copyright 2014 Canada NewsWire
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