Additional Horizontal Wells Underway to Further Increase Production
CALGARY, Oct. 24 /CNW/ - Bankers Petroleum Ltd. (TSX: BNK, AIM: BNK) is
pleased to provide an operational update for its United States exploration
program. In Oklahoma, the Company began selling natural gas and liquids from
the Nickel Hill No.1-26 and Greenway 35-1H wells in the last month. Additional
horizontal wells are in the process of being tested and drilled in the Ardmore
basin to further increase production and sales prior to year-end.
"We're very pleased with the progress we've achieved in the Ardmore basin
in Oklahoma," said Wolf Regener, President, Bankers Petroleum (US) Inc. "The
Woodford shale looks to be proving itself to be a significant play for the
Company, generating good exploration results from the first two horizontal
wells drilled on our acreage. Our success has led to us reaching an important
milestone in our US exploration strategy: first natural gas production and
sales. We expect to be able to continue to improve upon the economics and
success of future wells as is quite common in shale plays. We are quite
hopeful that we will soon be able to move our Ardmore basin acreage into a
development phase in 2008 while we continue to define the potential of the
Palo Duro basin."
Ardmore Basin, Oklahoma
The Company's first horizontal Woodford shale well, the Greenway 35-1H
well, had an initial production rate of approximately 2.2 mmcfe/d(1). This
production, combined with that of the vertical Nickel Hill No.1-26 well, which
is currently producing approximately 900 mcfe/d, has been tied-into a
gathering system and is being sold through the newly constructed facilities.
The Company's respective working interests in these wells are 46 and 75
Bankers successfully drilled, completed and fracture stimulated the WLC
17-1H well in which it has a 38 percent working interest. Analysis of the
vertical pilot hole drilled prior to drilling the horizontal portion of this
well indicated a 325 foot thick Woodford shale section that compares
favourably with the other wells drilled in the area. The well is currently
flowing back after fracture stimulation, having recovered about 59 percent of
fracture fluid, and is producing at approximately 2.1 mmcfe/d of natural gas
and liquids. In addition, Bankers just completed drilling and has run casing
in the horizontal portion of the Brock 9-1H well. The drilling rig is moving
to the next well to be drilled on Bankers acreage in this project, the Brock
4-1H well. The results from these initial wells will assist Bankers in
creating a commercial development program for 2008.
As Bankers progresses with its drilling program, costs are decreasing
significantly from well-to-well. For example, total drilling and completion
costs were reduced by approximately 45 percent for the shallower WLC 17-1H
well and are estimated to be reduced by approximately 35 percent for the
deeper Brock 9-1 well as compared to the Greenway 35-1H well. It is estimated
that this will positively impact the economics for Bankers' shale gas
development. Bankers is estimating that its drilling costs will be between
$2.6 to $3.4 million per well in a development scenario, depending on the
depth of the individual horizontal well. In addition, as more is learned about
the reservoir, Bankers anticipates that it may also be able to increase the
productivity of the wells by fine tuning its fracture stimulation techniques.
Palo Duro Basin, Texas
In Palo Duro, Bankers is progressing with its exploration program in what
it considers the core area of the basin, which the Company believes has the
best potential productive Bend shale and Granite Wash Sands over its acreage
The Company is in the process of drilling the horizontal leg of the
Cogdell No.64-1 well in the Atoka A, Granite Wash Sand formation, where
fracture stimulation of the original vertical wellbore generated encouraging
results of approximately 325 Mcf/d. Early results during drilling indicate
good natural gas shows from the sand. The well is anticipated to be finished
drilling within the next two weeks.
The Black 4No.1 well targeted what was perceived to be a more thermally
mature portion of the basin. Initial results have had limited natural gas
flows from some sand intervals; the well is currently shut-in for pressure
build-up tests. A fracture stimulation of the Bend shale interval is being
planned that incorporates new techniques recommended by CoreLabs.
A basin-wide core study is in the final stages of being completed by
CoreLabs that incorporates all core, log, fracture and production data from
all previous wells drilled that Bankers has access to. The analysis of the
cores taken in the Palo Duro basin wells has confirmed that the rocks contain
substantial volumes of gas and have some unique rock properties that may
require different stimulation/completion techniques than those commonly used
in other shale basins. Bankers believes that the application of these
techniques, together with focusing on the more thermally mature portion of the
basin, will positively affect future production rates from the Bend shale
formation. Additional tests are currently being done on the whole cores from
the Burleson Ranch well to further clarify the findings and to determine
fracture fluid incompatibilities that may have caused some of the previous
Bankers' near-term goals for the Palo Duro basin are: to improve on prior
results from the previously drilled vertical wells, which will also show
repeatability; and to utilize horizontal wells to attempt to dramatically
increase production rates over vertical well rates. Further exploration and
development activities will be influenced by the results of these wells.
Q3 Conference Call:
A conference call to discuss the third quarter results will be held
Friday, November 9 at 9:00 a.m. MDT, 11:00 a.m. EDT, 4:00 p.m. BDT. To
participate in the conference call, please dial 1-800-594-3615 or
1-416-644-3426 approximately 10 minutes prior to the call. A live and archived
audio webcast of the conference call will also be available on Bankers'
website at www.bankerspetroleum.com.
Caution Regarding Forward-looking Information
Information in this news release respecting planned work programs on the
Company's US properties and anticipated results of such programs constitutes
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 natural gas is a speculative business that involves a
high degree of risk. Few wells that are drilled are ultimately developed
commercially. There is no assurance that expenditures made by the Company on
its US properties will result in discovery of commercial qualities of natural
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.
Review by Qualified Person
This operations update was reviewed by Richard Wadsworth, President 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 with over 14 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 opportunities in unconventional petroleum
assets. Bankers holds interests in four prospects in the Northern and Central
regions of the United States, where it is currently pursuing the exploration
of shale and tight gas sand plays. It also operates in the Patos-Marinza
oilfield in Albania pursuant to a license agreement, producing heavy oil.
Bankers shares are traded on the Toronto Stock Exchange and the AIM Market in
London, England under the ticker symbol BNK.
(1) mcfe/d is calculated as daily production of gas in thousand cubic
feet (mcf) at standard conditions plus daily liquid production volume
in barrels (bbl) converted to mcf at a ratio of 1 bbl equal to 10
mcf, which is based on the approximate pricing ratio of the gas and
For further information:
For further information: Susan J. Soprovich, VP, Investor Relations and
Corporate Governance, Ph: (403) 513-2681, Email:
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NOMAD: Ryan Gaffney, +44 20 7050 6777