Stream Announces 2012 Annual Results

On Apr 1, 2013

Stream Oil & Gas report on 28 March its financial and operating results for the year ended November 30, 2012.
2012 Highlights:
– Average net production increased by 42% to 1,159 net boed compared to 814 net boed in 2011.
- Realized price increased by 8% to $67.33 per boe from $62.11 per boe in 2011.
- Revenue increased by 95% to $28.7 million compared to $14.7 million for 2011.
- Net operating income increased by 110% to $18.3 million from $8.7 million.
- Net income decreased to $2.0 million from $2.8 million in 2011.
- Executed a $20 million facility with Raiffeisen Bank Albania in the first quarter.
- Received government confirmation for Company’s takeover of the oil and gas inter-field pipelines, enabling further development and future deployment of enhanced oil recovery (“EOR”) programs.
- Acquired a gas reinjection compressor for the Delvina gas/condensate field to allow near future gas and liquid/condensate production alternatives.
Consistent with International Financial Reporting Standards, the Company booked a deferred income tax expense of $8,896,000 related its Albanian operations during the fourth quarter of 2012. The 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:
- Average net production was 1,259 net boed compared to 800 net boed in the fourth quarter 2011.
- Realized average net crude price was $68.76 per barrel, a 2% increase over $67.50 per barrel in the same period 2011.
- Increased revenue by 68% to $7.8 million for the fourth quarter of 2012 compared to $4.7 million for the corresponding period in 2011.
- Net income decreased to a loss of $8.7 million from a profit of $3.2 million in 2011.
- Completed work on the installation of an additional six jet pump units at the Cakran-Mollaj oilfield, targeting increasing individual well production to approximately 100 bbls/d.
- Continued the Gorisht-Kocul waterflood commercial pilot projects.
Activities Subsequent to Year-End:
- Stream executed a gas sales contract with Thermo Energy for the purchase of up to 6.5 MMcf/d natural gas from the Delvina gas field, which will be used in the generation of electricity in Albania.
Outlook
Stream’s growth strategy is focused on increasing production, reserves, sales and cash flow through the effective development of its Albanian assets. At the same time, the Company is concentrating on developing incremental reserve value opportunities from tertiary development through EOR in the oilfields and exploration of the sister structures adjacent to its producing Delvina field.
Stream’s 2013 work plan incorporates two key elements: a) continued production growth; and b) developing local operating capability. Management is committed to execute its 2013 growth program, subject to the availability of resources and services, which includes activities as follows:
- During the first quarter of 2013, Stream continued its focus on rehabilitating ALS surface production equipment to return to peak production capability, while rehabilitating power/pipeline infrastructure to support production volumes;
- During the second quarter of 2013, Stream plans to add additional expatriate personnel in order to improve operations reliability and control, maximizing and stabilizing production volumes. Central treating and incremental storage facilities will also be improved to allow uninterrupted production;
- In the Cakran-Mollaj oilfield, three additional jet pumps and eight new reactivations with RRP systems will be commissioned. In addition, central treating facility conversion to continuous operation is expected to be completed;
- In the Gorisht-Kocul oilfield, twelve PCP systems interventions, twenty RRP interventions and twelve new reactivations with RRP systems are planned to be commissioned in 2013. The Company also expects to complete central treating facility conversion to continuous operation, and augment facilities for the incremental water treating and recycling. Commencing near year end, Stream plans to expand the existing waterflood commercial pilots into commercial projects;
- Stream anticipates finalizing the takeover of the Ballsh-Hekal oilfield and plans to commence the field campaign, including twenty well reactivations, and twenty eight RRP and PCP interventions. At the same time, the Company expects to integrate the Ballsh-Hekal treatment facility into the Cakran-Mollaj central facilities;
- In the Delvina gas/condensate field, Stream expects to complete the tie-in of gas supply to the power generator in the second quarter, commencing partial monetization of Stream’s 2.5 MMcf/d gas capacity.
Management expects to commence drilling of the first horizontal well and expanding the field facilities in time to accept increased production;
- In the Delvina block, the MT/gravity surveys will conclude during the year, assisting with locating the exploration well potential drilling sites. The Company will complete preparations for future drilling; and
- Continue the field development geoscience program to reconfirm the previously identified EOR exploitation opportunities and impact future potential resource conversion, which is currently not captured in Stream’s reserve reports.
Taking into consideration factors impacting production in 2012, Management resolved to focus on improving systems reliability, resolving operational resources constraints and improving exploitation of existing infrastructure during the first half of 2013. As a result, the Company plans the aggressive execution of its 2013 oilfield work programs to commence mid-year. Stream anticipates that this work program will be completed within 2013 as services and equipment are staged to allow efficient execution. The execution of the Company’s growth program, continued development of long-term export contracts and strengthening of financial resources is expected to result in additional value to Stream and its shareholders.

energjia.al, 01.04.2013