Agreement Provides Funds for 2013 Capital Program CALGARY, April 24, 2013 /CNW/ - Stream Oil & Gas Ltd.(SOGAF) ("Stream" or the "Company") is pleased to announce that it has signed a prepayment agreement for crude sales (the "Prepayment Agreement") to provide oil production from its Albanian oilfields to Trafigura Pte Ltd. ("Trafigura"). Trafigura has agreed on the disbursement of a first tranche in an amount of USD$7.0 million to prepay part of the purchase price of oil sales under the Prepayment Agreement. The Prepayment Agreement is a crucial step for Stream's 2013 development plans, providing additional capital required to expand production of the Cakran-Mollaj, Gorisht-Kocul, Ballsh-Hekal and Delvina field projects.
Management anticipates receiving the first USD$7.0 million prepayment by May 1, 2013 and further draws periodically up to a total of USD$20.0 million. The prepayments will be discharged by Stream's delivery of crude oil to Trafigura in accordance with and at the times and in the quantities as set out the crude sales contract between the two companies. The obligation related to the total amount received by Stream must be discharged by August 31, 2015. Commencing October 31, 2013, the Company is required to begin repayment of any amounts received as of that date.
The crude sales contract has a term of three years at which time it may be extended upon written agreement by both parties.
"We're extremely pleased with this agreement," said Dr. Sotirios Kapotas, President and Chief Executive Officer. "Stream has a strong relationship with Trafigura as an existing customer, which allows us to access international markets and receive improved oil prices compared to in-country sales. The prepayment funds are expected to provide the additional capital above available cash flow that is needed for us to successfully implement our 2013 development growth plans."
Stream's 2013 activities are focused on oilfield development, improving Albanian operating capability and Delvina gas field exploration. Successful implementation is expected to provide growth in production and cash flow as well as significant reserve additions as reserves and resources are converted to proved and probable reserves. With funding secured, Management plans an aggressive execution of its 2013 oilfield work programs to commence mid-year, the results of which are expected to increase company and shareholder value.
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Some lucky guesser was scooping up shares today.