BNK.L Regulatory News (BNK)

BANKERS PETROLEUM LIMITED - Bankers Petroleum Operational Update

PR Newswire

London, January 7

Bankers Petroleum Operational Update for the Fourth Quarter 2012

Average Quarterly Production 16,160 bopd

CALGARY, Jan. 7, 2013 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the"Company") (TSX: BNK, AIM: BNK) is pleased to announce the following fourthquarter operational update.

PRODUCTION, SALES AND OIL PRICES

Average production for the fourth quarter was 16,163 bopd, representing a 3.5%increase from 15,616 bopd in the third quarter. While late November and earlyDecember production volumes were impacted by heavy rains, production continuedto grow steadily. Average oil production for 2012 was 15,020 bopd, 15% higherthan 2011 average production of 13,051 bopd.

Oil sales from the Patos-Marinza oilfield in Albania during the fourth quarteraveraged 16,033 bopd. Average oil sales for 2012 were 14,805 bopd, 16% higherthan 2011 sales of 12,784 bopd. Crude oil inventory on December 31st was313,000 barrels, an increase of 12,000 barrels from September 30th.

The Patos-Marinza fourth quarter average oil price was approximately US$79.12per barrel, representing 72% of the Brent oil price of US$110.02 per barrel, ascompared with the third quarter average oil price of US$79.58 per barrel (73%of Brent oil).

The average oil price for 2012 was US$79.91 per barrel (72% of Brent oil), a10% increase from US$72.84 per barrel (65% of Brent oil) for 2011.

DRILLING UPDATE

Twenty-nine (29) wells have been drilled during the fourth quarter: twenty (20)horizontal production wells, six (6) horizontal lateral re-drill wells, one (1)appraisal well and two (2) vertical core wells in the main area of thePatos-Marinza field. Nineteen (19) of the horizontal production wells have beencompleted and are on production plus an additional two (2) horizontal lateralsthat were drilled from the wellbore of the two cored wells.

A total of 128 wells were drilled in 2012: 111 horizontal production wells,seven (7) lateral re-drills, one (1) appraisal well, four (4) vertical coredelineation wells, and four (4) water disposal wells in the Patos-Marinzafield, plus one (1) exploration well in Block "F".

Four drilling rigs are currently operating at Patos-Marinza and drilling in thefield. The fifth rig was loaned to another operator in the country for an eightweek term and is anticipated to resume operations at Patos-Marinza in the nextweek.

SECONDARY AND TERTIARY RECOVERY PROGRAMS

Data gathering and analysis for secondary and enhanced recovery planningcontinued with the objective to identify the most suitable reservoir layers andareas of the field to initiate water-flood, polymer-flood and enhanced oilrecovery programs.

Two (2) water-flood patterns, one in each of the Lower Driza and Upper Marinzaformations will be initiated in 2013. A third water-flood pattern in the LowerDriza is planned for later in the year along with a polymer-flood pattern.Initial results from these initiatives are expected within 12 months fromstarting injections.

With the data collected from the first thermal pilot and additional detaileddata including special core analysis of the expanded 2012 coring program,prospect areas are being selected and data is being gathered to design a secondthermal pilot.

EXPLORATION BLOCK "F"

The second Block "F" exploration location has been selected and siteconstruction is underway. The well is expected to spud within the firstquarter.

INFRASTRUCTURE DEVELOPMENT

The Central Treatment Facility ("CTF") is being expanded with construction ofan additional 2,000 m3 crude oil sales storage tank to allow additionaloperational flexibility in the Patos-Marinza field.

Planning and construction for a new satellite facility in the north-centralarea of the field is also underway for scheduled completion in the thirdquarter of 2013. These facilities, along with additional in-field flow-lines,will improve the crude oil treating performance in the field.

Planning and application to gain preliminary approvals for the second phase ofthe crude oil sales pipeline extending 35 km from Fier to the export terminalat Vlore is underway and will continue through 2013.

KUÇOVA

Geological and engineering evaluations continue with plans to drill a verticalcore well in the second quarter of 2013. Additional horizontal productiondrilling targets are scheduled in the third quarter to further test water-floodrecovery in the Arreza Pool.

Well take-over and reactivations are also expected in the Arreza Pool in twophases, with the first set of well take-overs scheduled for the first quarterand the second tranche of wells in the third quarter of 2013.

ENVIRONMENTAL INITIATIVES

Extensive soil and groundwater assessments were completed in 2012 and it wasdetermined that impacts from historical operations are less than previousassessments.

Environmental cleanup of more than 200 older leases taken-over from Albpetrolwas completed in 2012 in conjunction with the water control program. Thisprogram continues to demonstrate improvement in oil rate and reduced water-cutsin wells and areas affected by water influx issues.

The Company has initiated design and construction of a commercial scale sludgetreatment operation to help reclaim oil from the sludge on old leases in theproduction area as part of on-going lease clean-up activities.

FINANCIAL UPDATE

The Company continues discussions with the European Bank for Reconstruction andDevelopment (EBRD) and the International Finance Corporation (IFC), itsreserve-based lenders, for an increase to its existing $110 million creditfacility. Based on the 2011 year-end independent reserves evaluation, theunderlying valuation of the proved reserve basis increased over 275% on a 10%discounted net present value basis since the 2008 year-end reserves, upon whichthe existing 2009 credit facility is based.

In the interim, the Company has now received approval from the banks to deferthe scheduled October 2013 repayment to January 2014. At December 31, 2012,Bankers had drawn $86 million on this facility.

UPDATED CORPORATE PRESENTATION

For additional information on this operational update, please see the January2013 version of the Company's corporate presentation at www.bankerspetroleum.com.

CONFERENCE CALL

The Management of Bankers will host a conference call on January 7, 2013 at 7:00am MST to discuss this Operational Update. Following Management'spresentation, there will be a question and answer session for analysts andinvestors.

To participate in the conference call, please contact the conference operatorten minutes prior to the call at 1-888-231-8191 or 1-647-427-7450. A live audioweb 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 browserhttp://www.newswire.ca/en/webcast/detail/1095065/1193007. The web cast will bearchived two hours after the presentation on the website, and posted on thewebsite for 90 days. A replay of the call will be available until January 21,2013 by dialing 1-855-859-2056 or 1-416-849-0833 and entering access code86031796.

Caution Regarding Forward-looking Information

Information in this news release respecting matters such as the expected futureproduction levels from wells, future prices and netback, work plans,anticipated total oil recovery of the Patos-Marinza and Kuçova oilfieldsconstitute forward-looking information. Statements containing forward-lookinginformation express, as at the date of this news release, the Company's plans,estimates, forecasts, projections, expectations, or beliefs as to future eventsor results and are believed to be reasonable based on information currentlyavailable to the Company.

Exploration for oil is a speculative business that involves a high degree ofrisk. The Company's expectations for its Albanian operations and plans aresubject to a number of risks in addition to those inherent in oil productionoperations, including: that Brent oil prices could fall resulting in reducedreturns and a change in the economics of the project; availability offinancing; delays associated with equipment procurement, equipment failure andthe lack of suitably qualified personnel; the inherent uncertainty in theestimation of reserves; exports from Albania being disrupted due to unplanneddisruptions; and changes in the political or economic environment.

Production and netback forecasts are based on a number of assumptions includingthat the rate and cost of well takeovers, well reactivations and wellrecompletions of the past will continue and success rates will be similar tothose rates experienced for previous well recompletions/reactivations/development; that further wells taken over and recompleted will produce atrates similar to the average rate of production achieved from wellsrecompletions/reactivations/development in the past; continued availability ofthe necessary equipment, personnel and financial resources to sustain theCompany's planned work program; continued political and economic stability inAlbania; the existence of reserves as expected; the continued release byAlbpetrol of areas and wells pursuant to the Plan of Development and Addendum;the absence of unplanned disruptions; the ability of the Company tosuccessfully drill new wells and bring production to market; and general risksinherent in oil and gas operations.

Forward-looking statements and information are based on assumptions thatfinancing, equipment and personnel will be available when required and onreasonable terms, none of which are assured and are subject to a number ofother risks and uncertainties described under "Risk Factors" in the Company'sAnnual Information Form and Management's Discussion and Analysis, which areavailable on SEDAR under the Company's profile at www.sedar.com.

There can be no assurance that forward-looking statements will prove to beaccurate. Actual results and future events could differ materially from thoseanticipated in such statements. Readers should not place undue reliance onforward-looking information and forward looking statements.

Review by Qualified Person

This release was reviewed by Suneel Gupta, Executive Vice President and ChiefOperating Officer of Bankers Petroleum Ltd., who is a "qualified person" underthe rules and policies of AIM in his role with the Company and due to histraining as a professional engineer (member of APEGGA) with over 20 yearsexperience in domestic and international oil and gas operations.

About Bankers Petroleum Ltd.

Bankers Petroleum Ltd. is a Canadian-based oil and gas exploration andproduction company focused on developing large oil and gas reserves. InAlbania, Bankers operates and has the full rights to develop the Patos-Marinzaheavy oilfield and has a 100% interest in the Kuçova oilfield, and a 100%interest in Exploration Block "F". Bankers' shares are traded on the TorontoStock Exchange and the AIM Market in London, England under the stock symbolBNK.

SOURCE: Bankers Petroleum Ltd.

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