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Re: News Releases - Thursday, November 13, 2008
Bankers Petroleum Announces Third Quarter Financial and
Operational Results And Provides Ku�ova Reserves and Budget
Updates
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CALGARY, November 13, 2008 - Bankers Petroleum Ltd. (TSX: BNK, AIM:
BNK) achieved record production and net income and significantly
improved its revenues and funds from operations during the period ended
September 30, 2008:
- Average production was 5,880 bopd compared to 4,753 bopd for the same
period in 2007 an increase of 24%. Production at the end of September
2008 was approximately 6,200 bopd and current production exceeds 6,600
bopd.
- Net income was $4.9 million ($0.026 per share) during the quarter,
compared to a net income of $572,000 ($0.004 per share) for the same
period in 2007.
- Funds from continuing operations were $14.8 million, an increase of
130% from $6.4 million for the three months ended September 30, 2007.
For the comparable nine month periods in 2008 and 2007, funds from
operations totalled $41.4 million and $14.7 million, respectively.
- An independent evaluation of the Ku�ova oil field estimates Bankers
share of reserves to be 8.6 million barrels of proved plus probable
reserves and 33.6 million barrels of proved, probable and possible
reserves.
- With recent sharp declines in oil prices, Bankers has chosen a
measured reduction of its capital expenditure program in 2009 with an
objective to remain self-funding from cash flow, cash on hand and
available credit facilities.
PATOS MARINZA
Revenue from the third quarter was $33.5 million ($62.08 per barrel) as
compared to $16.2 million ($37.14 per barrel) for the same period in
2007.
Net operating income (netbacks) for the three months ended September
30, 2008 increased to $16.3 million ($30.79 per barrel) from $8.7
million ($19.93 per barrel) in the corresponding 2007 quarter, an
increase of 87%.
Bankers initiated its vertical infill drilling program on June 21, 2008
to evaluate the different producing horizons and undrilled spacing
units in the field. Seven successful oil wells have been drilled as of
September 30, 2008. The initial production rates from these wells have
been between 15 and 45 bopd per well from four different zones and it
is expected that production rates from each individual well will
continue to increase. Overall the production levels from the new wells
are in line with forecast. Since the end of the third quarter an
additional three vertical oil wells have been drilled and will shortly
be completed and put on production. Current average production from the
new wells is between 15 and 60 bopd.
The drilling program is continuing with the rig currently drilling the
11th vertical location following which the rig will be mobilized to
drill the first ever horizontal well in Albania in the Patos Marinza
oil field.
The well re-activation and re-completion program continued concurrently
in the third quarter and into the fourth quarter with good results. The
recent re-completion and workover initiatives have demonstrated
improved productivity from the wells and have contributed to the
production increase.
KU�OVA
An independent reserves evaluation to define the reserves and
production potential of the Ku�ova oil field, compliant with National
Instrument 51-101 with an effective date of September 30, 2008 has now
been completed. The following table represents a summary of the Ku�ova
oil field reserves:
Forecast Price and Costs
--------------------------------------------
Oil Bef Tax Bef Tax Aft Tax Aft Tax
UnDisc Disc.10% UnDisc Disc.10%
(Mbbl) ($000) ($000) ($000) ($000)
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Proved Undeveloped 1,518 30,406 14,583 20,137 9,294
Probable 7,042 278,209 122,265 162,622 71,291
Total Proved Plus Probable 8,560 308,615 136,848 182,759 80,585
Possible 25,067 1,122,460 337,416 652,337 164,163
Total Proved, Probable & 33,627 1,431,075 474,264 835,096 244,748
Possible
2009 CAPITAL BUDGET
With recent sharp declines in oil prices, Bankers has decided to slow
down its capital expenditure program in 2009 with an objective to
remain self funding from cash flow, cash on hand and available credit
facilities. Strategic allocation of the work program and budget is
designed to prove additional recoverable reserves at the Patos Marinza
and Ku�ova oil fields and still achieve an appropriate growth in
production.
The revised capital program for 2009 includes the following:
- Reactivation and recompletion of existing wells:
- Drilling of vertical and horizontal wells including three field
delineation wells and one exploration well;
A waterflood program;
- A cyclic thermal steam pilot project; and,
- Field evaluation program at Ku�ova.
Capital investment is estimated to be $60 million and is intended to
achieve a forecast exit production rate for 2009 of 9,000 bopd. The
budget for 2010 remains unchanged however the exit production target
has been adjusted to 14,000 bopd to reflect the reduced investment in
2009. Bankers corporate presentation will be updated and posted on its
website next week.
To implement this slow down, the Company terminated its recently
awarded contract for an additional drilling rig and three service rigs,
and will maintain its existing drilling rig and service rig agreements
for 2009. Bankers will consider adding additional equipment when
warranted.
LIQUIDITY
At September 30, 2008, Bankers had working capital of $17.5 million
(including cash of $32.2 million). A total of $27.6 million was drawn
on the facility at September 30, 2008. The Company is examining
proposals for an additional expansion to its credit facility. The
additional funds will be provided under a reserve-based facility and
will be utilized to reaccelerate the capital spending program when
favourable oil prices and economic returns would support such
initiatives.
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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 Ku�ova 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 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;
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 Ku�ova heavy oil fields. Bankers' shares are
traded on the Toronto Stock Exchange and the AIM Market in London,
England under the stock symbol BNK.
- 30 -
For further information, contact:
Abby Badwi President and Chief Executive Officer (403) 513-2694
Doug Urch VP, Finance and Chief Financial Officer (403) 513-2691
Email: investorrelations@bankerspetroleum.com
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
Click to view the entire news release in PDF:
http://www.bankerspete.com/i/pdf/2008-11-13_NR.pdf
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Copyright (c) 2008 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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