Average Quarterly Production 16,160 bopd
CALGARY, Jan. 7, 2013 /CNW/ - 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 31st was 313,000 barrels, an increase of 12,000 barrels from September 30th.
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 m3 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.
For further information:
Abby Badwi
President and Chief Executive Officer
(403) 513-2694
Doug Urch
Executive VP, Finance and Chief Financial Officer
(403) 513-2691
Mark Hodgson
VP, Business Development
(403) 513-2695
Email: investorrelations@bankerspetroleum.com
Website: www.bankerspetroleum.com
AIM NOMAD:
Canaccord Genuity Limited
Henry Fitzgerald-O'Connor
+44 0 207 523 8000
AIM BROKER:
FirstEnergy Capital LLP
Hugh Sanderson / David van Erp
+44 0 207 448 0200
