Bankers Petroleum Ltd. Split Albanian and U.S. Operations by 24hgold

Re: News Releases - Wednesday, May 14, 2008
Title: Bankers Petroleum to Split Albanian and U.S. Operations

Transaction Designed to Enhance Shareholder Value by Creating Two Separate Companies having Exposure to Significant Potential Upside

Not for distribution to United States newswire services or for dissemination in the United States

CALGARY, May 14, 2008 - The Board of Directors of Bankers Petroleum Ltd. (TSX: BNK, AIM: BNK) has unanimously approved a proposal to split Bankers into two separate public companies. One company will have a continued focus on heavy oil in Albania and the other company will be a North American shale gas resource company.

With the recent success in Oklahoma, the Company has determined that the timing is right for Bankers' U.S. assets to be restructured into a separate newly-formed public entity, BNK Petroleum Inc. ("BNKUS"). This transaction is designed to enhance shareholder value by creating two separate companies, which have exposure to significant upside potential. The proposed corporate reorganization will be completed by way of a plan of arrangement pursuant to the Business Corporations Act (British Columbia) (the "Plan") and will require the approval of Bankers' shareholders.

"The two asset bases have different risk profiles and typically appeal to different types of investors, both geographically and sectorally," said Bob Cross, Chairman. "Overall value will be enhanced by allowing each company to develop its own shareholder base through the execution of distinct business plans. We now have experienced stand-alone management teams that are delivering on their business objectives."

Pursuant to the Plan, Bankers' shareholders will receive shares of BNK-US on a basis that is proportional to their interest in Bankers. Every Bankers shareholder will receive one share in BNK-US for every 10 common shares held in Bankers, as at the record date to be set for early July. With respect to outstanding Bankers' common share purchase warrants, their respective exercise price will be reduced in accordance with the terms of the applicable common share purchase warrant indenture by an amount on a per share basis to reflect the fair market value of the U.S. assets that are being spun into BNK. All such warrants, as adjusted, will remain exercisable only into common shares of Bankers. In the event a warrant holder wishes to participate in the Plan and receive common shares of BNK, a warrant holder will need to exercise his warrants prior to the effective date of the Plan to acquire Bankers common shares. Such acquired Bankers common shares will participate in the Plan on the same basis as all other Bankers common shares.

Strategic Rationale

Through the execution of the Plan, Bankers' shareholders will realize the value of the Company's existing assets through continued ownership in a growing and successful oil and gas company with significant heavy oil properties in Albania, while retaining the upside potential associated with Bankers' U.S. shale gas assets through ownership in the new public company, BNK-US. The new company will be run by Bankers' existing U.S. management team. The transaction is expected to offer shareholders a number of significant benefits which include:

A clear mandate to allow each company to pursue its own business plan and to achieve its own strategic goals;
Appropriate public market ratings for these two distinct asset bases;
Greater corporate clarity and transparency;
Continued exposure to each companies' potential upside and additional growth opportunities; and
Experienced management teams with expertise in each company's asset base.

"The restructuring will allow Bankers' management team to focus its efforts and financial resources on developing the 2.5 billion barrels of original-oil-in-place in the Patos Marinza and Kucova oil fields, as well as exploring additional oil and gas investment opportunities in Albania," said Abby Badwi, Chief Executive officer. "Bankers is in a strong financial position to fund its three-year $370.0 million capital program from existing working capital, cash flow and available credit facilities."

BNK-US Highlights

BNK-US's principal asset is its interest in the Tishomingo gas field in the Ardmore Basin in Oklahoma. The following table summarizes the key attributes of BNK-US's interest in the Tishomingo field:

Tishomingo Gas Field
Operations
	Currently producing wells¹	4
	Current net production (mcfepd)^{2, 3}	~2,100
	Natural gas % of current production	~46%
	Undeveloped land position (net acres)	12,000
	Average working interest	47%

Gross Working Interest Reserves^2,4
	PDP reserves, 5 wells (Bcfe)	6.4
	Proven reserves (Bcfe)	19.2
	Proven plus probable reserves (Bcfe)	57.2
	Proven, probable and possible reserves (Bcfe)	76.5

Reserve Value (Before Tax @ 10%)^{2,4, 5}
	PDP reserves, 5 wells (US$ million)	$13.4
	Proven reserves (US$ million)	$30.4
	Proven plus probable reserves (US$ million)	$91.0
	Proven, probable and possible reserves (US$ million)	$127.6

Key Assumptions of MHA Reserve Report
	Effective date of reserve report	December 31, 2007
	Original gas in place per section (Bcfe)⁶	47.3
	Assumed well spacing (acres)	640
	Additional wells drilled in 2008	30
	Total capital required in 2008 (US$ million)	$45.8

Notes:

In addition to the four producing wells, there is one well waiting on for pipeline connection in June 2008 and another commercial discovery which is currently recovering fracture fluids.
Production and reserve estimates are based on a mcf to boe conversion factor of 6:1.
Net production as of today is 1,200 mcfe/d; toal in talbe includes Dunn 2-1H well.
BNK-US's reserves were evaluated by MHA Petroleum Consultants and have been prepared in accordance with the Canadian Oil and Gas Evaluation Handbook (COGEH) reserve definitions and National Instrument 51-101 with an effective date of December 31, 2007.
Reserve values are before tax numbers based on a discount rate of 10% and on the following Henry Hub natural gas price assumptions (US$/mmbtu) for the years 2008 to 2017: $7.56, $8.27, $8.74, $8.75, $8.66, $8.83, $9.01, $9.19, $9.37 and $9.56.
Based on the Median Monte Carlo realizations, OGIP volumes ranged from 40 to 120 bcf/section from SCAL data and 200 to 300 bcf from Schlumberger data.

"Our team is doing an incredible job in carrying out the 2008 drilling program on the Tishomingo field, which I believe will create great value for all BNK-US shareholders," said Wolf Regener, President of BNK-US. "Our 2008 program consists of drilling one well for every 640 acres of land and we are optimistic that it will ultimately be proven that additional wells can be drilled in each section, recovering more of this large resource and leading to a further increase in the value of this property. The separation also allows our experienced team to pursue other projects that we feel certain will lead to further shareholder value in the future."

BNK-US also holds a 100% interest in 85,000 acres in the Black Warrior basin and 52% to 73% working interests in 260,000 gross acres in the Palo Duro basin in Texas as well as a 100% working interest in 19,000 gross acres in the Appalachian basin in upstate New York. Management estimates the value of the BNK-US's undeveloped lands at US$10 million.

BNK-US's management and Board of Directors will consist of the following:

Robert Cross, Director
Ford Nicholson, Director
Victor Redekop, Director
Eric Brown, Director
Wolf Regener, President & Chief Executive Officer
C. S. (Juneyt) Tirmandi, Chief Financial Officer
Rick Pawluk, Corporate Secretary

It is anticipated that Bankers will initially provide credit support through a bank guarantee of up to $23.0 million to allow BNK-US to fund its remaining drilling program of US$30.0 million for 2008. Bankers' credit support is anticipated to cease once BNK-US replaces this bank guarantee through future debt, equity or a possible rights offering, or internally generated cash flow.

US Operational Update

The development of the Tishomingo gas field in Oklahoma is progressing rapidly. In addition to successfully completing four horizontal Woodford shale wells, which had average initial gross production rates of around 2.0 mmcfe/d each. The Company spud six new horizontal wells since the beginning of 2008 and currently has five rigs drilling wells. The Dunn 2-1H well was drilled and cased, and was fracture stimulated in the second quarter. It is still flowing back fracture fluid and has an initial production rate of about 2.7 mcf/day along with about 90 bopd on a three-day test. The Barnes 6-1H well was drilled to depth in April and is now undergoing some shallow casing repair work when a casing failure occurred after the first fracture stage was stimulated. The fracture stimulation of the rest of the well is anticipated for late in the second quarter. The pilot hole of the Barnes 7-1H well was drilled to gather more reservoir data; currently, the horizontal leg of the well is being drilled. In the second quarter, Bankers has also spud three additional wells: the Sapp 11-1H, the Sapp 3-1H and the Bice 20-1H.

BNK-US is implementing its development plan for the field, which entails drilling 30 gross wells in 2008 at a capital cost of approximately US$45.0 million.

A gathering system was installed to connect the Brock wells to the processing facility, which was completed in late March. Bankers is waiting on larger three-stage compressors to optimize production, which are expected to be operational in late May. The first compressor is onsite now and being installed.

Completion of the Plan is subject to various conditions, including the receipt of all regulatory, shareholder and Court approvals. The shareholders of Bankers will be asked to approve the Plan at its Annual General and Special Meeting to be held on June 27, 2008, with closing to occur shortly thereafter. Further details will be contained in an information circular that is expected to be mailed to Bankers' shareholders in early June.

Financial Advisor:

Canaccord Capital Corporation has been engaged as financial advisor to the Board of Directors of Bankers to determine, among other things, the fairness of the transaction from a financial point of view, to the shareholders of Bankers.

Conference Call:

A conference call to discuss the separation of the U.S. assets will be held Wednesday, May 14 at 9:00 a.m. MDT, 11:00 a.m. EDT, 4:00 p.m. BDT. To participate in the conference call, please dial 1-800-814-3911 or 1-416-915-5762 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. Shortly after the call, an audio archive will be posted on the website for 90 days.

An archived recording of the call with be available shortly after the completion of the call by dialling 1-416-640-1917 or 1-877-289-8525 and entering pass code 21272150.

Caution Regarding Forward-looking Information

Information in this news release respecting the expected future production levels, future prices and netback, work plans, anticipated total oil recovery of the Patos Marinza oil field and the Tishomingo gas field in Oklahoma, U.S., the proposed plan of arrangement for the U.S. assets, and potential opportunities 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 oil and natural gas is a speculative business that involves a high degree of risk. Few shale natural gas 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. 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; delays associated with equipment procurement, equipment failure and the lack of suitably qualified personnel; the inherent uncertainty in 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 and well recompletions of the past will continue and success rates will be similar to those rates experienced for previous well recompletions/development; that further wells taken over and recompleted will produce at rates similar to the average rate of production achieved from wells recompleted/redeveloped 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.

Oil equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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 oil field and has a 50% interest in the Kucova oil field. It also holds an average 50% interest in the Tishomingo gas field in Oklahoma and varied interests in three other areas in the Northern and Central regions of the United States, where it is currently pursuing the exploration, development and production of shale and tight sand gas plays. 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:
Abby Badwi Chief Executive Officer (403) 513-2694
Doug Urch VP, Finance and Chief Financial Officer (403) 513-2691
Susan J. Soprovich VP, Investor Relations and Corporate Governance (403) 513-2681
Email: investorrelations@bankerspetroleum.com
Website: www.bankerspetroleum.com

AIM JOINT NOMAD:
Canaccord Adams Limited Tristone Capital Ltd.
Ryan Gaffney/ Henry Fitzgerald-O'Connor Nick Morgan
+44 20 7050 6500 +44 20 7355 5800

The Toronto Stock Exchange has not reviewed, nor does it accept responsibility for the adequacy or accuracy of this release.

The BNK-US Shares to be issued pursuant to the Plan have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, for the account or benefit of, U.S. Persons absent U.S. registration or an applicable exemption from the U.S. registration requirements. This press release does not constitute an offer to sell or the solicitation of an offer to purchase securities in the United States.

This news release is not for dissemination in the United States or to any United States news services. Any failure to comply with this restriction may constitute a violation of U.S. securities laws.

Click here to view Complete News release in PDF:

Associated File: http://www.bankerspete.com/i/pdf/2008-05-14_NR.pdf: 53 KB in size, approx. 11 seconds to download at 56.6Kbps

Copyright © 2008 BANKERS PETROLEUM LTD. (BNK.H) All rights reserved. For more information visit our website at http://www.bankerspete.com/ or send email to info@bankerspetroleum.com ..
Message sent on Wed May 14, 2008 at 6:04:18 AM Pacific Time

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