Fully Funded US$247 Million Capital Program in Albania
CALGARY, Dec. 10, 2012 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the
"Company") (TSX: BNK, AIM: BNK) is pleased to announce its 2013 capital
program of US$247 million, to be fully funded with funds generated from
operations. This represents a record annual activity level and takes
Bankers cumulative capital investment in Albania to over $1 billion.
The budget has been approved by the Company's Board of Directors and
submitted to the Albanian authorities for their approval.
The 2013 capital program will focus on major development activities at
the Patos-Marinza oilfield including production and reserves growth
through new horizontal and vertical drilling, reactivation and workover
of existing wells and implementation of water and polymer flood
programs. The Company will also direct capital towards associated field
infrastructure and progression of our thermal program.
The 2013 work plan will include expansion of the waterflood program and
new drilling at the Kuçova oilfield as well as exploration drilling in
Abby Badwi, President & CEO commented, "Our 2013 capital budget is
designed to deliver sustainable production growth and to implement the
Company's long term objectives of increasing reserves through primary,
secondary and tertiary recovery methods. We will constantly review our
projects' economic returns and prevailing oil prices to allow for
flexibility to expand or contract our capital programs to remain funded
from our cash flow."
Drilling and Reactivation Capital
With five drilling rigs and a budget of $159 million, the Company
intends to drill a total of 110 to 120 wells, primarily horizontal
production wells, along with horizontal lateral re-drills, vertical
delineation, core wells, and water-injection wells. Approximately 70%
to 80% of drilling activities will focus on production growth and 20%
to 30% of the wells will target new reserves through delineation of
zones and areas, both within and outside the field where no reserves
have been booked to date. Reactivation and workover of old vertical
wells will continue and the $7 million costs associated with these
activities are included in the drilling budget.
Water and Polymer Flood Program
The 2013 budget includes $10 million for implementation of three
waterflood and one polymer flood patterns, which will be expanded in
2014 and beyond to offset field declines and increase recovery of the
oil in place.
Facilities and Infrastructure
There will be $68 million in capital allocated to facilities and
infrastructure activities, including:
construction of additional satellite treatment facilities;
planning for our second leg of the crude oil pipeline, 35 kilometre
route that will connect the central Fier hub loading facility to the
Vlore Port export terminal;
expanded remediation program targeting over 200 old vertical wells;
expansion of water disposal capabilities with two to three new water
disposal wells; and
continuation of environmental remediation and social initiatives.
Thermal Pilot Project
Coring programs and simulation studies will continue throughout the year
to determine the best location and zone for the next thermal pilot,
which could lead to future development of the field's large contingent
and prospective resources. Cost estimates for these activities are
included in the 2013 capital program.
Patos-Marinza Field Study and Production Optimization
The Company recently expanded the scope of its current master service
agreement with Weatherford International, one of the world's largest
oilfield services provider, to provide integrated solutions for its
various activities at Patos-Marinza including but not limited to,
artificial lift optimization, well construction design and in-depth
reservoir geo-mechanics review and modeling.
Weatherford's technical experts will be assigned to the project and, in
cooperation with Bankers' technical team, are expected to enhance our
operational practices and determine the best technology required to
improve oil recovery.
The multi-faceted study will be completed in three phases over several
quarters. The first phase focusing on production optimization
recommendations will be available for implementation during the first
quarter of 2013.
Cost estimates for this project are included in the 2013 capital
An additional $7 million will be directed towards the Kuçova oilfield
with focus on expanding the waterflood pilot project, drilling three
new wells and, developing localized infrastructure including gathering
lines to a centralized oil treating facility.
BLOCK F EXPLORATION BLOCK
One exploration well is planned for 2013 in Block F and comprises the
majority of the $3 million capital expenditure.
CAPITAL PROGRAM FUNDING
Utilizing a $103 Brent oil price forecast ($105 for Q1/Q2 and $100 for
Q3/Q4) and average price realization of 80% of Brent for Patos-Marinza
crude, Bankers expects to fully fund the 2013 capital program with
funds generated from operations.
With this capital program Bankers expects to achieve 10% to 15% annual
growth from its 2012 average production while continuing to focus
capital on reserves growth initiatives.
CHANGE TO AIM BROKER
FirstEnergy Capital LLP has been appointed to act as the Company's
Broker for the London AIM Exchange effective January 1, 2013.
FirstEnergy is a leading energy-focused bank, providing full-service
energy investment banking operations.
Canaccord Genuity will continue to act exclusively as our Nominated
Advisor (NOMAD) to Bankers Petroleum Ltd.
UPDATED CORPORATE PRESENTATION
For additional information on this operational update, please see the
December 2012 version of the Company's corporate presentation at www.bankerspetroleum.com.
Management of Bankers will host a conference call on December 10, 2012
at 7:00 am MST to discuss the 2013 Capital Budget. 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 http://www.bankerspetroleum.com or by entering the following URL into your web browser http://www.newswire.ca/en/webcast/detail/1084587/1181537. 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 December 24, 2012 by dialing 1-855-859- 2056 or
1-416-849-0833 and entering access code 78994621.
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
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
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
Review by Qualified Person
This release was reviewed by Suneel Gupta, Executive Vice President and
COO 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 petroleum engineer (member of APEGGA) with
over 20 years' experience in domestic and international oil and gas
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.
For further information:
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+44 20 7023 8000
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