16 Dec 2010 13:00
BANKERS PETROLEUM ANNOUNCES ITS 2011 CAPITAL BUDGET AND WORK PROGRAM
Capital Expenditures in Albania to exceed US$210 Million
CALGARY, Dec. 16 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the "Company") is pleased to announce its 2011 capital program of US$215 million, an increase of 40% over its 2010 capital program. The 2011 capital program will focus on major development activities at the Patos-Marinza oilfield along with expenditures at the Ku§ova oilfield and the newly acquired Block F exploration acreage, in Albania.
---------------------------------------------------------- 2011 Production COST Additions WORK PROGRAM US$000'S (bopd) ------------ ---------------------------------------------------------- PATOS MARINZA ------------- Horizontal Wells 91,000 8,000 Well Reactivations 25,000 2,000 Vertical Wells 12,000 Base Capital Facilities Infrastructure 10,000 Pipeline Infrastructure 21,000 Well Workovers 14,000 Water Control/Disposal 12,000 Environmental Stewardship 12,000 Geology & Geophysics 3,000 Thermal Pilot Project 10,000 ---------------------------------------------------------- KU‡OVA ------ Well Testing and Waterflood Pilot 2,000 ---------------------------------------------------------- BLOCK F ------- Seismic & Drilling 3,000 ---------------------------------------------------------- TOTAL 215,000 10,000 ---------------------------------------------------------- --------------------------------------------- PRODUCTION BOPD ---------- ---- --------------------------------------------- 2010 Exit Rate 12,000 --------------------------------------------- New Production 10,000 --------------------------------------------- Base Decline (~15%) 2,000 --------------------------------------------- 2011 Exit Rate 20,000 ---------------------------------------------
Horizontal Wells
2011 production additions from the horizontal program assume 60 successful wells will be drilled with an average production rate of 135 bopd. The majority of these wells will be drilled in the Northern section of the field.
Well Reactivations
Production from well reactivations assumes 60-70 successful wells, each with a six month production ramp up period into a peak production plateau of 35 bopd. The volume increases from well reactivations in 2011 offsets the 15% decline from the base production over the course of the year.
Vertical Wells
The vertical drilling program will be focused on delineation of the oilfield beyond its current boundaries and exploit new zones within the field.
Base Capital
- Facility Infrastructure: will see the completion of two projects, the expansion of the Central Treating Facility "CTF" and the construction of a bridge over the Semen river connecting field operations between the northern and southern part of the field. The bridge will also improve local communities accessibility in the area. - Pipeline Infrastructure: Construction of phase 1 of the pipeline (12 kms) connecting the field to the Fier Central Hub loading facility will commence in the first quarter and is expected to be completed by the end of the second quarter, coincident with construction of the Central Hub Facility. - Well Workovers: This program continues to support the drilling and reactivation programs through follow up maintenance and recompletions. - Water Control/Disposal: Work continues on the remediation of water intrusion caused by old well bores within the field. In addition, the Company will also be expanding water disposal capabilities with new injector wells. - Environmental Stewardship: 2011 will see the completion of the Sector 3 remediation trials and other environmental remediation and social initiatives. - Geology & Geophysics: Continuing work on geophysical and geological interpretation of the Patos-Marinza field in the southern portion of the field and the Bubullima area to the north. Additional technical analysis include: core studies, reservoir performance studies and evaluation of thermal applications beyond the horizontal cyclic steam pilot project.
Thermal Pilot Project
2011 will be a milestone year for thermal development of the Patos-Marinza oilfiled. Bankers will drill 2 vertical delineation wells and 2 horizontal wells designed for high pressure and temperature steam injection, including installation of a 25,000 BTU steam generator and production facilities. Fabrication of the major thermal equipment and steam generator is now complete and in transit to Albania. The first steam cycle is scheduled for May 2011
Ku§ova
Approval was received November 17th, 2010 from Albania's Council of Ministers for the amendments to the Ku§ova Petroleum Agreement. Revisions included the scope of work for a waterflood evaluation program and extending the evaluation period on the Ku§ova project. Field activity is set to commence in the first quarter and will include conversion of 1 well to water injection with 3 to 4 wells re-equipped for a production test to commence the waterflood pilot in a small group of wells.
Block F
Geophysical data reprocessing and interpretation is continuing. The Company anticipates drilling two exploration wells on the block during 2011 with the first test well projected to spud early in the third quarter. Approval was received November 17th, 2010 from Albania's Council of Ministers for the Block F Petroleum Agreement.
DRILLING AND SERVICE RIGS
In addition to the fourth drilling rig scheduled to commence drilling in the second quarter of 2011, the Company would like to announce the signing of an additional 2 service rigs that will arrive in Albania in the first quarter. This takes the Company's drilling rig count to 4 and the service rig count to 10 which will accommodate the capacity needed to fully execute the 2011 program.
LIQUIDITY
Bankers expects to fully fund the 2011 capital program from funds generated from operations, supplemented with a portion of its cash resources on hand. This will continue to leave the full US$110 million of credit facilities available.
FLOODING AND PRODUCTION UPDATE
The Company is pleased to announce that it has been able to fully restore all shut-in production due to the recent flooding and that the one drilling rig which was temporarily offline due to flood damage, has now been placed back into operation. The Company's current production is 11,400 bopd.
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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 and gas 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 and gas production operations, including: that commodity 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 new wells, 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.
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: 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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