Albania Oil & Gas Projects
The Company’s current objective is to grow production by focusing on the development of existing assets in Albania. Management plans to use enhanced recovery techniques for carbonate reservoirs such as the radial jet developed in Alberta for the foothills projects. The Company is preparing to develop the Delvina gas field with infill drilling and will use the gas for power generation.
Under its Petroleum Agreements with Albania’s National Petroleum Agency (“AKBN”) and with Albpetrol, the Albanian State Exploration and Production Company, Stream is in the process of evaluating and redeveloping its three onshore heavy oil producing fields (Cakran-Mollaj, Ballsh-Hekal and Gorisht-Kocul) and one onshore producing gas field (Delvina). A well rehabilitation program is ongoing with a scope to understand well behavior and define appropriate methods to enhance and increase crude oil production.
The first phase of each of the Agreements was an evaluation period: 18 months for each of the oil fields and 24 months for the gas field. Stream received a six-month extension, to September 30, 2009 for submission of its development plans for its four properties.
To earn its rights under the Agreements, Stream was required to spend a total US$4.8 million. Stream exceeded its expenditure commitments and spent about $6.8 million in qualifying expenditures by the end of 2008.
Stream’s 2009 work program, was approved by the Albanian Ministry of Natural Resources (AKBN). Management is also discussing a number of local alliances to maximize value.
Through the license agreements for each property, Stream is entitled to a share of current baseline productions and 100% of all incremental production, subject to royalties of between 2% and 6%. Stream has the right to take-over the operations of all wells in these fields and redevelop and produce the remaining reserves.
Albania has a long history of oil and gas operations however the civil unrest that followed the collapse of communism in the early 90s resulted in delays to previously planned restoration and enhancement of production. Now with restored economic stability, high level government support for oil and gas enhancement projects, a skilled and low-cost work force, availability of basic oil field services, supplies and material, and proximity to refining capacity and established markets, Stream is well positioned to develop its projects, located in one of Europe’s largest on shore oil producing regions.