25 Oct 2007 07:00
Bankers Petroleum completes construction of thermal steam project in Albania
Export Shipments Significantly Increase Revenue and Cash Flow
CALGARY, Oct. 24 /CNW/ - Bankers Petroleum Ltd. is pleased to announce that the construction of its thermal steam project has been completed in Albania and testing and steam injection has commenced. The objective of these tests is twofold: to learn the reservoir response in relation to the Company's modelling, and to implement the steaming techniques under field conditions. The completion of tests is expected to lead to a pilot project with newly drilled wells on a pattern for cyclic steam injection in late 2008 and subsequent steam flooding.
"This is an important first step in our drive beyond primary recovery techniques towards capturing additional reserves and production," said Richard Wadsworth, President. "Every one percent additional recovery on this 2.0 billion barrel OOIP resource will be important in terms of volumes and value to the Company and our shareholders."
In September, Bankers commenced sales to a third export refinery, providing increased revenue and cash flows. Bankers has continued to improve upon the export price of the Albanian crude, which has significantly increased netback and offset the impact of lower than anticipated production growth. Construction of the central treatment facility was completed in October, providing additional storage and treatment ability for the Company's heavy oil. It will assist in streamlining the treatment and transportation process.
Production from the Patos Marinza oilfield averaged 5,000 bopd in September. While new production has been brought on stream as anticipated through ongoing well re-completions, unexpected decreases have resulted in production remaining flat over the past quarter. This is believed to be due to several factors that are mainly external to reservoir performance including: the previously announced water disposal constraints; unanticipated serious mechanical wellbore and isolation failures; increased water production coming from shallower and deeper water bearing zones; and a shortage of rig workover capacity and specialised well servicing equipment.
As a result, Bankers does not anticipate it will be able to meet its 2007 average and exit production targets. The Company expects slower growth in the fourth quarter and will not provide new guidance until the situation is further analysed over the coming months.
Bankers is reviewing these factors in depth and undertaking several initiatives to address the concerns, including:
- Adding water disposal capacity in November through the deepening of several disposal wells; - Improving its workover capabilities; - Increasing service rig availability: a fourth service rig will be arriving in October and a fifth is scheduled for December, which will assist in accelerating well workovers; - Reviewing its strategy around well re-completion practices; and - Considering an infill drilling program in 2008.
While the existing production challenges are a concern and will require more time and resources to correct, it is believed that the difference between actual and target production may be re-captured through implementation of the activities iterated above.
Q3 Conference Call:
A conference call to discuss the third quarter results will be held Friday, November 9 at 9:00 a.m. MDT, 11:00 a.m. EDT, 4:00 p.m. BDT. To participate in the conference call, please dial 1-800-594-3615 or 1-416-644-3426 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.
Caution Regarding Forward-looking Information
Information in this news release respecting potential recoveries and outcomes from its plans for its Albanian operations 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.
Oil recovery costs and plans, as well as acquisition opportunities, are based on a number of assumptions including that success rates will be similar to those rates experienced in similar enhanced oil recovery projects; 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 required in these projects; availability of financing in the amounts and time frame required; If Brent oil prices fall, reduced returns and a change in the economics of the project could result; exports from Albania are not disrupted due to unforseen events; the absence of unplanned disruptions; the ability of the Company to 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.
Review by Qualified Person
This operations update was reviewed by Richard Wadsworth, President 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 engineer with over 14 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 opportunities in unconventional petroleum assets. Bankers holds interests in four prospects in the Northern and Central regions of the United States, where it is currently pursuing the exploration of shale and tight gas sand plays. It also operates in the Patos-Marinza oilfield in Albania pursuant to a license agreement, producing heavy oil. Bankers shares are traded on the Toronto Stock Exchange and the AIM Market in London, England under the ticker symbol BNK.
For further information: Susan J. Soprovich, VP, Investor Relations andCorporate Governance, Ph: (403) 513-2681, Email:investorrelations(at)bankerspetroleum.com, Website: www.bankerspetroleum.com;AIM NOMAD: Ryan Gaffney, +44 20 7050 6777(BNK. BNK)
BANKERS PETROLEUM LIMITED