NRStream Announces 2011 First Quarter Results
Continued Growth in Production, Revenues and Net Operating Income
CALGARY, April 28 /CNW/ - Stream Oil & Gas Ltd. (TSX-V: SKO) (the "Company") is pleased to report its financial and operating results for the quarter ended February 28, 2011.
The full text of Management's Discussion and Analysis ("MD&A") and the Company's unaudited consolidated financial statements can be found on Stream's website at
www.streamoilandgas.com and at
www.sedar.com.
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Q1 2011 Summary of Results
Three Months Ended
February 28,
(US
00s, except as noted) 2011 2010
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Financial
Revenue 2,077 1,282
Net operating income (loss) 1,242 820
Funds from (used in) operations (3,390) (603)
Income (loss) (130) 20
Per share - basic & diluted (0.00) 0.00
Additions to property, plant & equipment 3,271 843
Operating
Average production (boed) 497 288
Average price ($/boed) 40.68 38.70
Netback ($/boed) 26.66 25.18
As at Feb. 28, 2011 Nov. 30, 2010
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Cash and cash equivalents 4,537 9,493
Shareholders' equity 20,723 20,744
Weighted average shares outstanding (No.) 63,797,801 51,141,013
Q1 2011 Achievements:
- Increased average net production by 73% to 497 boed compared to 288
boed in the first quarter of 2010
- Current average net production is around 900 boed
- Improved returns:
- The average price per boe was $40.68 compared to $38.70 in 2010
- Revenue increased to $2.1 million from $1.3 million, an increase
of 62%
- The resulting netback increased to $26.66 boed as compared to
$25.18 boed in 2010
- Received final approval for the execution of the Plan of Development
for the Delvina gas field and finalized complete takeover of the
Gorisht-Kocul oilfield
- Completed exports of crude oil to Italy and continued negotiations to
obtain higher price per barrel
Subsequent to the quarter, Stream achieved the following:
- Finalized the takeover of the Delvina gas pipeline and infrastructure
in the Ballsh and Gorisht fields
- Advanced the Delvina Block gas exploration program Phase II with the
award of the 3D passive seismic contract. The resulting information
will be utilized to determine the location of the planned exploration
well
- Concluded negotiations for higher crude prices for local sales to the
ARMO refinery, increasing average crude price to just over 70% of
Brent crude
- Secured a contract with a deep workover rig for the Delvina gas field
with corresponding equipment and services to drive the 2011
production growth
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"The achievements of the first quarter of 2011 create a solid foundation for our growth during the year," said Dr. Sotirios Kapotas, President and CEO. "The additional revenue recognized from higher domestic and export sales contracts will translate into higher cash flow for our development plans. In addition to implementing primary extraction techniques to increase oil production, we're progressing with enhanced oil recovery strategies such as the waterflood pilot at Gorisht-Kocul to further increase reserves and production. These activities are expected to add to the long term benefit for our shareholders."
With the positive results of the recent reserve report and the higher crude price obtained, Management has moved quickly to negotiate a long term debt facility at preferential terms with credible institutions in order to meet its capital requirements for 2011. The Company is working to finalize this in the earliest timeframe in order to help accelerate its growth program.
Outlook
Stream's growth strategy is focused on increasing production, reserves, sales and cash flow. Production continues to increase and cash flow has improved as a result of new and revised sales contracts. The Company intends to continue to developing export opportunities, thereby proactively managing in-country sales risks. Production is forecast to increase significantly in 2011 with the Cakran-Mollaj and Gorisht-Kocul workover programs. Management's plan for 2011 is to focus on high growth, low risk production increases utilizing improved oil recovery methods. These methods include improved artificial lift, integrated reservoir management and production optimization combined with the deployment of incremental oil recovery techniques, development of its gas resources and the further definition of identified enhanced oil recovery ("EOR") opportunities.
Through 2011, the Company will continue additional takeovers in the Ballsh-Hekal field, enabling further production growth, as well as carrying out technical planning for the future deployment of the Gorisht waterflood commercial project and EOR testing for the Cakran-Mollaj, Ballsh-Hekal and Gorisht-Kocul oilfields. Going forward, Stream will continue to focus its technical personnel on further defining its resource potential, including selecting the appropriate recovery mechanisms to test in the 2011 fiscal year.
Management expects to continue to achieve substantial production increases in 2011, with the objective of exiting 2011 at between 2,250 - 2,600 boed average net production. This reflects a near doubling of production for the year and significantly expands Stream's work programs to encompass both well reactivations/interventions and EOR projects. The execution of the Company's growth program, negotiation of longer term export contracts and strengthening of its financial resources is expected to result in additional value to Stream and its shareholders.
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