Current production rate exceeds 13,500 bopd
CALGARY, April 7 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the "Company") (TSX: BNK, AIM: BNK) is pleased to announce the following operational update:
Production and Oil Price
Oil sales from the Patos-Marinza oilfield in Albania during the first quarter averaged 11,894 bopd compared to fourth quarter sales of 10,424 bopd, an increase of 14%. Average production for the first quarter was 12,147 bopd and oil inventory on March 31, 2011 was approximately 168,000 barrels. Current production is 13,550 bopd. Gross sales achieved record levels for March, averaging 15,247 bopd.
The Patos-Marinza first quarter average oil price was US$68.06 per barrel (representing 65% of the Brent oil price) an increase of 28%, compared to the fourth quarter's average oil price of US$53.12 per barrel (61% of Brent).
Drilling Update
Sixteen (16) horizontal wells have been drilled during the first quarter. Thirteen (13) of these wells have been completed and are on production, two (2) drilled late in March will be placed on production this month, and one (1) drilled early in the quarter has water encroachment concerns that are being mitigated with continuing water control activities. Production rates from the last thirteen (13) horizontal wells drilled is averaging 175 bopd per well with strong initial production from the Driza (D1) sands averaging in excess of 200 bopd per well. Average production for all horizontal wells is 130 bopd per well at the end of the first quarter.
The fourth drilling rig is expected to arrive in Albania later this month and scheduled to commence drilling in May 2011. With strong oil prices, the Company is also sourcing a fifth drilling rig and expects to have one available in the fourth quarter of 2011. The additional rig capacity will support the Company's strategic drilling objectives of wells targeted for production growth and other wells planned for reserves expansion, the thermal pilot and for exploration and water disposal drilling.
Well Reactivations
Reactivation and recompletion work resumed in the first quarter with eight (8) wells on production. Current production from these wells is 250 bopd and improving.
With the recent Company announcement to acquire the remaining 140 active Albpetrol wells and sole operatorship of the Patos-Marinza oilfield, Bankers will have a larger inventory of reactivation candidates for the 2011 capital program and for the following few years.
The current production split is 7,700 bopd from new horizontal wells and 5,850 bopd from the original reactivated vertical wells. Ongoing reactivated production from the old vertical wells is offsetting primary production declines and maintaining the old vertical wells base production. Primary production growth is forecast to be achieved from the new horizontal wells drilling program.
Thermal Program & Exploration Block "F"
Road access and site construction plans are underway for the drilling and thermal facilities project. All necessary materials and equipment are in country. Drilling of the one (1) delineation and two (2) thermal wells will commence in May and first steam injection is scheduled for July 2011.
Seismic reprocessing and interpretation on Block "F" is progressing and drilling of the first gas exploration well is expected in the third quarter. Several structural and stratigraphic prospects have been identified.
Infrastructure Development
Construction of 80,000 barrels of additional storage at the Petrolifera Terminal at the Port of Vlore is now complete and fully operational. Bankers' total port storage capacity from three tanks is 160,000 barrels and the Company will now be able to handle export shipments of up to 25,000 metric tonnes in a single cargo.
Construction on the first phase of the crude oil sales pipeline, which connects the Patos-Marinza oilfield to the storage and loading Fier Hub facility, is progressing and the project is scheduled for third quarter 2011 completion.
Construction of the third and fourth oil treating train expansion of the Central Treatment Facility (CTF) has commenced. The addition of the new processing facilities should be completed by the fourth quarter 2011 and the expanded CTF will be able to handle over 25,000 bopd of net oil production.
Construction of a bridge over the Seman River in the northern area of the Patos-Marinza oilfield has commenced with completion expected in the third quarter of 2011, in time to begin a larger drilling and re-activation program in the higher productivity area north of the river.
Kuçova
The Plan of Development (PoD) for the field has been approved by the Albanian authorities. The PoD has a 25 year term plus Company elected extensions for further development and production of the field. Activity has commenced as part of the approved 2011 work program on the first group of wells with re-completion of two production wells, one water source well and the conversion of one water injection well. Water injection is expected to commence during the second quarter.
Environmental Initiatives
The pilot remediation project in Sector 3, initiated by Bankers to promote the most effective clean-up of legacy oil spills within the field, is progressing with strong initial results. The mechanical plant is treating approximately 7 cubic meters per day of contaminated solids and residues from contaminated sites. The liquid product generated is further processed to recover some sales quality crude, while the solids generated are transferred to the thermal desorption plant, yielding approximately 1000 kg per day of clean material. Well-sites cleaned with this process are generating little waste that is transferred to the ecology pits and is a more sustainable approach for future legacy waste handling. A bio-remediation test process is also underway.
Bankers is pleased to announce the appointment of Mr. Robert Carss as corporate Health, Safety, Social, and Environment (HSSE) Director. Mr. Carss brings 24 years of experience in Canada and internationally in the field of Health, Safety and Environmental stewardship.
For additional information, please see an updated version of the Company's corporate presentation on www.bankerspetroleum.com
Conference Call
The Management of Bankers will host a conference call on April 7, 2011 at 8:00am MDT to discuss this Operations 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/viewEvent.cgi?eventID=3471600.
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 April 21, 2011 by dialing 1-800-642-1687 or 1-416-849-0833 and entering access code 57829799.
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 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 40 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.
