Bankers Petroleum Operational Update for the Fourth Quarter 2012
Average Quarterly Production 16,160 bopd
CALGARY, Jan. 7, 2013 /PRNewswire/ – Bankers Petroleum Ltd. (“Bankers” or the
“Company”) (TSX: BNK, AIM: BNK) is pleased to announce the following
fourth quarter operational update.
PRODUCTION, SALES AND OIL PRICES
Average production for the fourth quarter was 16,163 bopd, representing
a 3.5% increase from 15,616 bopd in the third quarter. While late
November and early December production volumes were impacted by heavy
rains, production continued to grow steadily. Average oil production
for 2012 was 15,020 bopd, 15% higher than 2011 average production of
13,051 bopd.
Oil sales from the Patos-Marinza oilfield in Albania during the fourth
quarter averaged 16,033 bopd. Average oil sales for 2012 were 14,805
bopd, 16% higher than 2011 sales of 12,784 bopd. Crude oil inventory on
December 31(st )was 313,000 barrels, an increase of 12,000 barrels from September 30(th).
The Patos-Marinza fourth quarter average oil price was approximately
US$79.12 per barrel, representing 72% of the Brent oil price of
US$110.02 per barrel, as compared with the third quarter average oil
price of US$79.58 per barrel (73% of Brent oil).
The average oil price for 2012 was US$79.91 per barrel (72% of Brent
oil), a 10% increase from US$72.84 per barrel (65% of Brent oil) for
2011.
DRILLING UPDATE
Twenty-nine (29) wells have been drilled during the fourth quarter:
twenty (20) horizontal production wells, six (6) horizontal lateral
re-drill wells, one (1) appraisal well and two (2) vertical core wells
in the main area of the Patos-Marinza field. Nineteen (19) of the
horizontal production wells have been completed and are on production
plus an additional two (2) horizontal laterals that were drilled from
the wellbore of the two cored wells.
A total of 128 wells were drilled in 2012: 111 horizontal production
wells, seven (7) lateral re-drills, one (1) appraisal well, four (4)
vertical core delineation wells, and four (4) water disposal wells in
the Patos-Marinza field, plus one (1) exploration well in Block “F”.
Four drilling rigs are currently operating at Patos-Marinza and drilling
in the field. The fifth rig was loaned to another operator in the
country for an eight week term and is anticipated to resume operations
at Patos-Marinza in the next week.
SECONDARY AND TERTIARY RECOVERY PROGRAMS
Data gathering and analysis for secondary and enhanced recovery planning
continued with the objective to identify the most suitable reservoir
layers and areas of the field to initiate water-flood, polymer-flood
and enhanced oil recovery programs.
Two (2) water-flood patterns, one in each of the Lower Driza and Upper
Marinza formations will be initiated in 2013. A third water-flood
pattern in the Lower Driza is planned for later in the year along with
a polymer-flood pattern. Initial results from these initiatives are
expected within 12 months from starting injections.
With the data collected from the first thermal pilot and additional
detailed data including special core analysis of the expanded 2012
coring program, prospect areas are being selected and data is being
gathered to design a second thermal pilot.
EXPLORATION BLOCK “F”
The second Block “F” exploration location has been selected and site
construction is underway. The well is expected to spud within the first
quarter. .
INFRASTRUCTURE DEVELOPMENT
The Central Treatment Facility (“CTF”) is being expanded with
construction of an additional 2,000 m(3) crude oil sales storage tank to allow additional operational
flexibility in the Patos-Marinza field.
Planning and construction for a new satellite facility in the
north-central area of the field is also underway for scheduled
completion in the third quarter of 2013. These facilities, along with
additional in-field flow-lines, will improve the crude oil treating
performance in the field.
Planning and application to gain preliminary approvals for the second
phase of the crude oil sales pipeline extending 35 km from Fier to the
export terminal at Vlore is underway and will continue through 2013.
KUÇOVA
Geological and engineering evaluations continue with plans to drill a
vertical core well in the second quarter of 2013. Additional horizontal
production drilling targets are scheduled in the third quarter to
further test water-flood recovery in the Arreza Pool.
Well take-over and reactivations are also expected in the Arreza Pool in
two phases, with the first set of well take-overs scheduled for the
first quarter and the second tranche of wells in the third quarter of
2013.
ENVIRONMENTAL INITIATIVES
Extensive soil and groundwater assessments were completed in 2012 and it
was determined that impacts from historical operations are less than
previous assessments.
Environmental cleanup of more than 200 older leases taken-over from
Albpetrol was completed in 2012 in conjunction with the water control
program. This program continues to demonstrate improvement in oil rate
and reduced water-cuts in wells and areas affected by water influx
issues.
The Company has initiated design and construction of a commercial scale
sludge treatment operation to help reclaim oil from the sludge on old
leases in the production area as part of on-going lease clean-up
activities.
FINANCIAL UPDATE
The Company continues discussions with the European Bank for
Reconstruction and Development (EBRD) and the International Finance
Corporation (IFC), its reserve-based lenders, for an increase to its
existing $110 million credit facility. Based on the 2011 year-end
independent reserves evaluation, the underlying valuation of the proved
reserve basis increased over 275% on a 10% discounted net present value
basis since the 2008 year-end reserves, upon which the existing 2009
credit facility is based.
In the interim, the Company has now received approval from the banks to
defer the scheduled October 2013 repayment to January 2014. At December
31, 2012, Bankers had drawn $86 million on this facility.
UPDATED CORPORATE PRESENTATION
For additional information on this operational update, please see the
January 2013 version of the Company’s corporate presentation at www.bankerspetroleum.com.
CONFERENCE CALL
The Management of Bankers will host a conference call on January 7, 2013
at 7:00am MST to discuss this Operational Update. Following
Management’s presentation, there will be a question and answer session
for analysts and investors.
To participate in the conference call, please contact the conference
operator ten minutes prior to the call at 1-888-231-8191 or
1-647-427-7450. A live audio web cast of the conference call will also
be available on Bankers website at www.bankerspetroleum.com or by entering the following URL into your web browser http://www.newswire.ca/en/webcast/detail/1095065/1193007. The web cast will be archived two hours after the presentation on the
website, and posted on the website for 90 days. A replay of the call
will be available until January 21, 2013 by dialing 1-855-859-2056 or
1-416-849-0833 and entering access code 86031796.
Caution Regarding Forward-looking Information
Information in this news release respecting matters such as the expected
future production levels from wells, future prices and netback, work
plans, anticipated total oil recovery of the Patos-Marinza and Kuçova
oilfields constitute forward-looking information. Statements containing
forward-looking information express, as at the date of this news
release, the Company’s plans, estimates, forecasts, projections,
expectations, or beliefs as to future events or results and are
believed to be reasonable based on information currently available to
the Company.
Exploration for oil is a speculative business that involves a high
degree of risk. The Company’s expectations for its Albanian operations
and plans are subject to a number of risks in addition to those
inherent in oil production operations, including: that Brent oil prices
could fall resulting in reduced returns and a change in the economics
of the project; availability of financing; delays associated with
equipment procurement, equipment failure and the lack of suitably
qualified personnel; the inherent uncertainty in the estimation of
reserves; exports from Albania being disrupted due to unplanned
disruptions; and changes in the political or economic environment.
Production and netback forecasts are based on a number of assumptions
including that the rate and cost of well takeovers, well reactivations
and well recompletions of the past will continue and success rates will
be similar to those rates experienced for previous well
recompletions/reactivations/development; that further wells taken over
and recompleted will produce at rates similar to the average rate of
production achieved from wells recompletions/reactivations/development
in the past; continued availability of the necessary equipment,
personnel and financial resources to sustain the Company’s planned work
program; continued political and economic stability in Albania; the
existence of reserves as expected; the continued release by Albpetrol
of areas and wells pursuant to the Plan of Development and Addendum;
the absence of unplanned disruptions; the ability of the Company to
successfully drill new wells and bring production to market; and
general risks inherent in oil and gas operations.
Forward-looking statements and information are based on assumptions that
financing, equipment and personnel will be available when required and
on reasonable terms, none of which are assured and are subject to a
number of other risks and uncertainties described under “Risk Factors”
in the Company’s Annual Information Form and Management’s Discussion
and Analysis, which are available on SEDAR under the Company’s profile
at www.sedar.com.
There can be no assurance that forward-looking statements will prove to
be accurate. Actual results and future events could differ materially
from those anticipated in such statements. Readers should not place
undue reliance on forward-looking information and forward looking
statements.
Review by Qualified Person
This release was reviewed by Suneel Gupta, Executive Vice President and
Chief Operating Officer of Bankers Petroleum Ltd., who is a “qualified
person” under the rules and policies of AIM in his role with the
Company and due to his training as a professional engineer (member of
APEGGA) with over 20 years experience in domestic and international oil
and gas operations.
About Bankers Petroleum Ltd.
Bankers Petroleum Ltd. is a Canadian-based oil and gas exploration and
production company focused on developing large oil and gas reserves. In
Albania, Bankers operates and has the full rights to develop the
Patos-Marinza heavy oilfield and has a 100% interest in the Kuçova
oilfield, and a 100% interest in Exploration Block “F”. Bankers’ shares
are traded on the Toronto Stock Exchange and the AIM Market in London,
England under the stock symbol BNK.
SOURCE Bankers Petroleum Ltd.
