9 Mar 2011 13:00
BANKERS PETROLEUM ANNOUNCES 2010 RESERVES REPORT
Proved Reserves Increase by 30% and Proved plus Probable by 11%
Original Oil in Place Increase by 30%
CALGARY, March 9 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the "Company") is pleased to provide the results of its December 31, 2010 independent reserves evaluation and reports the sixth consecutive year of reserves additions since Company inception in 2004.
Evaluations were conducted by RPS Energy Canada Ltd. ("RPS") for the Patos-Marinza oilfield, Albania and by DeGolyer and McNaughton Canada Ltd. ("D& M") for the Ku§ova oilfield, Albania and were prepared in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities.
Total Albania Reserves Summary
- Proved reserves ("1P") of 120 million barrels (30% increase from December 31, 2009) representing over eleven times production replacement - Proved plus probable reserves ("2P") of 238 million barrels (11% increase from December 31, 2009) - Proved, probable and possible reserves ("3P") of 427 million barrels (1% increase from December 31, 2009) - Mean original oil in place resource estimate ("OOIP") of 7.8 billion barrels (30% increase from December 31, 2009) - 2010 production was approximately 3.5 million barrels
Patos-Marinza Field
- 1P reserves increased 30% to 117 million barrels of oil from 90 million barrels at December 31, 2009 - 2P reserves increased 11% to 226 million barrels (December 31, 2009 - 203 million barrels) - 3P reserves increased 1% to 395 million barrels (December 31, 2009 - 390 million barrels) - Original oil in place estimate (P50) increased 32% to 7.5 billion barrels (December 31, 2009 - 5.7 billion barrels) - All of Patos-Marinza's 2010 recoverable reserves estimates are from primary recovery methods only
The 2010 reserves growth is primarily attributable to the expansion of the Company's horizontal drilling program in new areas of the field and new zones within the field area. This is reflected in the upgrade of 2P and 3P reserves into 1P and 2P reserves category, respectively, and the expansion of 3P reserves and oil in place.
Patos-Marinza Contingent and Prospective Resources
RPS has also updated the Contingent and Prospective Resource oil estimates for the Patos-Marinza oilfield as at December 31, 2010. Contingent and Prospective resources are based on thermal development technologies to be applied to the Gorani and Driza formations and secondary water flood methods proposed for the Marinza formation and expansion of the development areas, primarily to the west of the current development.
The thermal pilot first steam injection is scheduled for the third quarter of 2011. There are no current water flood plans for the field.
Contingent resource for 2010 is 1.2 billion barrels, compared to 838 million barrels in 2009
Prospective resource for 2010 is 568 million barrels, compared to 384 million barrels in 2009
Ku§ova Field
There were no activities or Company production from the field in 2010; field reserves remain unchanged. Early stage development has begun with road-building and lease clearing.
- 1P reserves 3 million barrels - 2P reserves 11 million barrels - 3P reserves 32 million barrels - Mean original oil in place resource estimate remains unchanged at 297 million barrels
Total Net Present Value of Total Albania Reserves (After Tax, discounted at 10%)
- 1P reserves US$949 million - 2P reserves US$1.97 billion - 3P reserves US$3.55 billion - Values are based on RPS (Patos-Marinza) and D&M (Ku§ova) January 1, 2011 price forecast tables summarized below - Basic shares outstanding of as of December 31, 2010 were approximately 245 million
Finding and Development Costs ("F&D")
With successful results from the Company's horizontal drilling activities in the northern part of Patos-Marinza oilfield, the Company is expanding the horizontal drilling program into the central, southern and western part of the field. Also, due to casing failures in old vertical wells, replacement of old vertical wells with new horizontal wells has been added to the capital program. Accordingly, in the 2P development case, the number of well re-activations has been reduced to 310 wells and new horizontal wells have increased from 260 wells in the previous year's projected capital program to 624 wells in 2011 and beyond.
Future undiscounted capital costs for Patos-Marinza and Ku§ova are now projected to be US$1.5 billion, US$1.2 billion and US$1.0 billion on a 3P, 2P and 1P basis, respectively. This represents the following F&D costs:
- 1P reserves US$10.06 per barrel - 2P reserves US$5.80 per barrel - 3P reserves US$3.85 per barrel
Gross Oil Reserves - Using Forecast Prices (MMbbls)
-------------------------- ----------------- 2010 2009 -------------------------- Patos- Total Total Marinza Ku§ova Albania Albania % ------------------------------------------------------- ----------------- Proved Developed Producing 17.3 - 17.3 22.9 -24 Developed Non-Producing - - - - - Undeveloped 99.7 3.2 102.9 69.9 47 -------------------------- ----------------- Total Proved 117.0 3.2 120.2 92.8 30 Probable 109.2 8.2 117.4 121.1 -3 -------------------------- ----------------- Total Proved Plus Probable 226.2 11.4 237.6 213.9 11 Possible 168.4 20.6 189.0 208.4 -9 -------------------------- ----------------- Total Proved, Probable & Possible 394.6 32.0 426.6 422.3 1 ------------------------------------------------------- -----------------
Net Present Value at 10% - After Tax Using Forecast Prices ($ millions)
-------------------------- ----------------- 2010 2009 -------------------------- Patos- Total Total Marinza Ku§ova Albania Albania % ------------------------------------------------------- ----------------- Proved Developed Producing 220 - 220 149 48 Developed Non-Producing - - - - - Undeveloped 710 19 729 377 93 -------------------------- ----------------- Total Proved 930 19 949 526 80 Probable 904 115 1,019 993 3 -------------------------- ----------------- Total Proved Plus Probable 1,834 134 1,968 1,519 30 Possible 1,278 306 1,584 1,514 5 -------------------------- ----------------- Total Proved, Probable & Possible 3,112 440 3,552 3,033 17 ------------------------------------------------------- -----------------
Patos-Marinza Contingent and Prospective Resource (MMbbls)
---------------------- 2010 2009 % --------------------------------------------------------- Contingent Resource 1,200 838 43 --------------------------------------------------------- Prospective Resource 568 384 48 --------------------------------------------------------- Total Resources 1,768 1,222 45 ---------------------------------------------------------
Reserve Auditor Price Decks - Dated Brent
--------------------------------------- BRENT Oil Price Forecast US$/bbl --------------------------------------- Year RPS D&M --------------------------------------- 2011 $90.00 $91.00 --------------------------------------- 2012 $89.50 $91.78 --------------------------------------- 2013 $89.10 $92.64 --------------------------------------- 2014 $89.25 $94.57 --------------------------------------- 2015 $91.00 $97.58 --------------------------------------- 2016 $93.20 $99.58 --------------------------------------- 2017 $95.30 $101.61 --------------------------------------- 2018 $97.30 $103.68 --------------------------------------- 2019 $99.40 $105.79 --------------------------------------- 2020 $101.58 $107.95 --------------------------------------- 2021 $103.61 $110.15 --------------------------------------- 2022 $105.68 $112.39 --------------------------------------- 2023 $107.80 +2.0% Thereafter ---------------------------------------
Field gate prices the Company is receiving in Albania are currently at a discount to Brent:
- Patos-Marinza field gate price is approximately 65% of Brent;
- Ku§ova field gate price is approximately 70% of Brent
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 March 9, 2011 at 7: 30am MST to discuss this reserves report. 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(equal sign)3434640
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 March 23, 2011 by dialing 1-800-642-1687 or 1-416-849-0833 and entering access code 50341069.
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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 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 Ku§ova 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.
For further information: 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(at)bankerspetroleum.com, Website: www.bankerspetroleum.com; AIM NOMAD: Canaccord Genuity Limited, Ryan Gaffney, Henry Fitzgerald-O'Connor, +44 20 7050 6500; AIM JOINT BROKERS: Canaccord Genuity Limited, Ryan Gaffney, Henry Fitzgerald-O'Connor, +44 20 7050 6500; Macquarie Capital Advisors, Ben Colegrave, Paul Connolly, +44 20 3037 5639
(BNK.)
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