11 May 2007 07:00
Bankers Petroleum discovers second successful natural gas well in U.S. and provides update on U.S. & Albania activities
Capturing Additional Upside in Albania & Proving Natural Gas in the U.S.
CALGARY, May 10 /CNW/ - Bankers Petroleum Ltd. is pleased to provide an operational update for its United States exploration program and activities to capture additional resources in Albania. The Company achieved its second successful natural gas well in the U.S. in addition to continuing the process of further development of its assets.
"We see significant resource development potential in our two assets," said Richard Wadsworth, President. "This will come from accessing the potential of the shale basins in the U.S., activities beyond primary recovery techniques in Albania, and upstream/downstream integration strategies. I'm confident that we will deliver results this year in the U.S. and meet our growth plans for Albania, thus laying the groundwork for additional value for the Company and its shareholders."
United States
In the United States, Bankers is progressing with its exploration and evaluation programs in all four areas, moving towards first natural gas production and a commercial development program in 2007.
In Palo Duro, Texas, the fracture stimulation of the vertical Cogdell No.64-1 well generated encouraging results of approximately 325 Mcf/d from a Granite Wash Sand. In the second quarter, the shale interval in this same well will be fracture stimulated and a second vertical well will be drilled. The second well will be drilled underbalanced, using air, and will target both the Granite Wash Sands and the Bend shale formation to show repeatability over a larger area. Further evaluation of larger fracture stimulations in the Granite Wash Sands in vertical wells along with the planning of horizontal wells is underway.
"We are extremely encouraged by the production rate from such a small stimulation on the Codgell No.64-1," said Wolf Regener, President, Bankers Petroleum (US) Inc. "Our recent results in the U.S. show that the science is starting to pay off. We are hopeful that larger stimulations and horizontal wells can generate higher initial production rates as has been demonstrated in other successful tight gas sand and shale projects."
In Oklahoma, the Company is currently drilling its first horizontal Woodford shale well in Carter County, the Greenway No. 35-1H well, which is an offset to the Nickel Hill No.1-26 discovery well. The Greenway No. 35-1H well is expected to be completed in the second quarter. Along with a partner, Bankers is also acquiring a 115 square mile, 3D seismic survey in Carter and Johnston Counties to aid in the development of its acreage there. Bankers is also planning on drilling its second horizontal Woodford shale well in this project in Johnston County approximately 10 miles from the first two wells.
In Hughes County, Oklahoma, Bankers is planning on drilling a horizontal well to test the Woodford shale by the end of the third quarter after finishing an updated geologic/engineering study on its results and that of other operators in the area. Recently, the Lake Holdenville No.35-1 well was fracture stimulated with disappointing results. Bankers believes that the treatment did not effectively stimulate the shale. However, an offsetting vertical Woodford Shale well, approximately two and a half miles away from the No.35-1, had an initial production rate of 330 Mcf/d after stimulation, providing the confirmation of gas productivity required to justify a follow-up horizontal well.
In New York, Bankers is fracture stimulating and testing two existing wells in the Trenton formation in the second quarter, the K High and B Everhart wells. The B Everhart well initially produced at an unstimulated flow rate of 300 Mcf/d before declining to around 15 Mcf/d nine months later. Also in the second quarter, Bankers expects to secure a rig to complete the drilling of three wells to the targeted Trenton/Black River formations. Two of the wells have previously been drilled to an intermediate casing point above the targeted intervals.
Additional geologic and geophysical work is underway for the Black Warrior Basin Project in Mississippi and Alabama. This work will provide information to bring this project into the stage to potentially drill wells in 2008.
Further exploration and development activities in the United States will be influenced by the results of all of these wells.
Albania
Bankers is expected to commence its cyclic steaming pilot project in Albania in the third quarter of 2007. The majority of the required equipment is in country, and the Company is in the process of discussions with Albpetrol to take-over two well bores which meet the technical requirements for thermal steam injection. Bankers intends to undertake several cycles of steam, before expanding the pilot to include newly drilled wells on a pattern for steam flooding in 2008. The two well pilot project is expected to cost approximately $2.0 million with results expected during the fourth quarter of 2007.
Further studies and engineering to pursue potential integration, secondary waterflood development, horizontal wells and an expanded EOR pilot project that will be undertaken during 2008 is underway. Bankers is looking to these initiatives as a means of significantly increasing production and reservoir recovery in the Patos Marinza oilfield.
The Albanian government recently announced the privatization of ARMO, which is the state owned joint-stock company established in April 1999 upon separation of the former integrated state-owned monopoly. Headquartered in Fier, ARMO is the only refiner in Albania, a key wholesaler and one of the main retailers of refined products in the Albanian market. ARMO's market share in the retail sector is currently estimated at 20%.
Bankers continues to review possible integration aspects of ARMO. Integration would provide benefits as the Company increases heavy oil production and looks to integrate enhanced recovery techniques in the future.
Caution Regarding Forward-looking Information
Information in this news release respecting planned work programs on the Company's US properties and anticipated results of such programs, possible outcomes of the ARMO privatization, and 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; the disposition of the ARMO asset by the Albanian government in the assumed timeline; availability of financing in the amounts and time frame required; the absence of unplanned disruptions; the ability of the Company to bring production to market; and general risks inherent in oil and gas operations. In addition, there can be no assurance that the Company will submit a bid, qualify or be the successful bidder in the ARMO privatization process.
Exploration for natural gas is a speculative business that involves a high degree of risk. Few 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 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.
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 gas 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 and Corporate Governance, Ph: (403) 513-2681, Email: investorrelations(at)bankerspetroleum.com, Website: www.bankerspetroleum.com (BNK.)
BANKERS PETROLEUM LIMITED