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.