Exit Production Rate for 2008 was 6,960 bopd
CALGARY, Jan. 13 /CNW/ - Bankers Petroleum Ltd. (TSX: BNK, AIM: BNK) is
pleased to announce the following operational and corporate updates.
Fourth quarter production averaged 6,563 bopd from the Patos Marinza oil
field in Albania compared to third quarter production of 5,880 bopd. Net oil
inventory at the end of December was approximately 90,000 barrels, an increase
of 10,000 barrels from the previous quarter. The exit production rate was
6,960 bopd and represents a 31% increase from the 2007 exit production rate of
5,300 bopd. During the quarter, 11 re-activation operations of existing wells
were completed with 10 wells placed on production. Six new oil wells were also
Production for 2008 averaged 5,874 bopd, generating revenue of
approximately $110 million, representing an average price of $51.29 per
Patos Marinza Oil Price
Fourth quarter average oil price was approximately $29.62 per barrel (54%
of the Brent oil price), 52% lower than the third quarter price of $62.08 per
Eleven new vertical infill wells were drilled in 2008 with 10 oil wells
currently on production and one well awaiting completion. Total production
from the new wells was 320 bopd with individual well averages ranging from 15
to 75 bopd. Several of the wells are demonstrating productive capabilities
beyond their existing completion configurations and will be re-equipped with
larger tubing and rods in order to maximize production rates. Others, with
lower production rates, will have additional pay sections perforated and
commingled with existing production.
The field extension well (5012) has also been drilled and log analysis
indicates 42 meters of potential net oil pay from the four main producing
formations. The well is currently being tested to evaluate productivity of the
different pay zones.
The first horizontal well (5013) in Patos Marinza has been successfully
drilled and completed with 375 meters of lateral pay section. The well is
currently producing at a rate of 120 bopd. Fluid levels in the well are high
and production rates are expected to increase as the well is optimized.
Overall, the production levels from all the new wells are in line with
Technical evaluations of the Kuçova pools are advancing. This analysis
indicates that there is significant evidence that the implementation of
waterflood technology will increase production rates and reserves recovery.
Current plans call for a first phase waterflood demonstration project
involving the re-activation of a 14 well unit in the second quarter of 2009.
Total cash on deposit as at December 2008 was approximately $18.5 million
and total debt with Raiffeisen Bank was US$28.3 million. In January 2009, the
Company received approval for an increase to its existing facility to $35
million, of which $11 million continues as a three-year term loan, a new $4
million five-year term loan and a $20 million revolving operating loan
facility renewable after its maturity in February 2010. To supplement the
Raiffeisen facility, the Company continues to examine other proposals for
reserve-based debt facilities that will be more closely aligned with the
year-end 2008 reserves, when finalized in February.
Abby Badwi, President and CEO of Bankers, said:
"We had a successful re-activation and drilling program in 2008 including
the first horizontal well at the Patos Marinza oil field and, despite reduced
capital expenditures in the fourth quarter to cope with low oil prices, the
Company was able to achieve its exit rate production guidance of approximately
7,000 bopd. We will continue to monitor oil prices and adjust our capital
expenditure programs accordingly to remain within our financial capabilities."
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 oil fields
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 well 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; approval of the Addendum to the Plan of
Development; 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 Abdel F. (Abby) Badwi, CEO 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 geologist (member of APEGGA) with over 39 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 both the Patos
Marinza and the Kuçova heavy oil fields. Bankers' shares are traded on the
Toronto Stock Exchange and the AIM Market in London, England under the stock
For further information:
For further information: Abby Badwi, President and Chief Executive
Officer, (403) 513-2694; Doug Urch, VP, Finance and Chief Financial Officer,
(403) 513-2691, Email: firstname.lastname@example.org, Website:
www.bankerspetroleum.com; AIM NOMAD: Canaccord Adams Limited, Ryan Gaffney,
Henry Fitzgerald-O'Connor, +44 20 7050 6500; AIM JOINT BROKERS: Canaccord
Adams Limited, Ryan Gaffney, Henry Fitzgerald-O'Connor, +44 20 7050 6500;
Tristone Capital Ltd., Nick Morgan, +44 20 7355 5800