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Bankers Petroleum Achieves First Natural Gas Production And Sales
From The Woodford Shale In Oklahoma
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Additional Horizontal Wells Underway to Further Increase Production
CALGARY, October 24, 2007 -- 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 #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/d1.
This production, combined with that of the vertical Nickel Hill #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 percent.
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
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 liquids.
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 holdings.
The Company is in the process of drilling the horizontal leg of the
Cogdell #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 4#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 performance issues.
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 gas.
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.
For further information, contact:
Susan J. Soprovich
VP, Investor Relations and Corporate Governance
Ph: (403) 513-2681
Email: investorrelations@bankerspetroleum.com
Website: www.bankerspetroleum.com
AIM NOMAD:
Ryan Gaffney
+44 20 7050 6777
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Copyright (c) 2007 BANKERS PETROLEUM LTD. (BNK.H) All rights reserved.
For more information visit our website at http://www.bankerspete.com/
or send mailto:info@bankerspetroleum.com
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