BNK.L Regulatory News (BNK)

27 Jun 2006 14:25

Bankers Petroleum Advances Palo Duro to Next Stage with Fracture Stimulations Increased Exploratory Drilling on U.S. Acreage CALGARY, June 27 /CNW/ - Bankers Petroleum Ltd. (TSX: BNK, AIM: BNK) ispleased to announce that it is proceeding with the next stage of itsexploration program at Palo Duro, Texas, with several fracture stimulationsplanned for the third quarter of 2006. The Company's objective for its U.S.assets is to test concepts and define how sustainable domestic production canbe developed by the end of the year on three of its four projects. The Company's U.S. strategy for 2006 is focused on the acceleration ofits exploration drilling program, incorporating activities on the recentlyacquired Vintage acreage. In the Palo Duro basin, Bankers is continuing itstechnical analysis while advancing to the testing phase of the program. Toaccess the potential of the newly acquired acreage, the Company is initiatingan exploration drilling program in two highly prospective areas in Oklahoma,targeting primarily the Woodford shale, and in its upstate New York project byfracture stimulating two previously drilled wells in the Trenton Black RiverShale, which will be followed by the drilling of a further three wells in thisarea. "We are happy with the progress we've made and what we've learned on allof our U.S. assets," said Wolf Regener, U.S. Executive Vice President. "InTexas, we're moving forward with the next step in the exploration of the PaloDuro basin - starting fracture stimulations of our wells. This will allow usto further define the potential scope and size of the basin. At the same time,we're moving forward on the projects we acquired from Vintage in other shalebasins where we can capitalize on the ongoing work and preliminary goodresults achieved by other operators." Palo Duro Basin, Texas Bankers expects to finish drilling the third well in its exploratoryprogram, Stansell No. 1, in the next week. At that time, the data will beforwarded to Schlumberger so that it can be added to the 3-D earth model.Results from the Jones No. 1 well, based on calculations undertaken bySchlumberger from the logs run in the well, indicate 56 billion cubic feet ofgas-in place per section from the Bend shale interval and 33 billion cubicfeet of gas-in place per section for the Wolfcamp shale interval. Bankersintends to schedule a fracture stimulation for the Jones No. 1 well early inthe fourth quarter after all data has been analysed. In the third quarter of 2006, the Company has scheduled two fracturestimulations for the Misener No. 1 well. The first is a small stimulation ofthe Granite Wash Sands in the lower Bend group early in the quarter. TwoGranite Wash Sands were previously perforated in this well, which producedabout 15 barrels a day of oil, some gas and decreasing amounts of water duringa five day test. The primary fracture stimulation for the well has been planned in thequarter to target the Bend shale interval. Preliminary analysis has shown thatthe Bend shale is very highly naturally fractured in the Misener No. 1 well,which Bankers anticipates will help the productivity of the well. The lack ofa water formation below the Bend shale combined with the highly fracturedshale is very encouraging for the potential success of this well. At the same time, Bankers plans to re-enter the existing Cogdell No. 1-1well in order to evaluate the well and restimulate the previously producingintervals. This well had a significant reported short-term test flow ratebefore being shut in and then being damaged by the commingling of water from apreviously tested deeper interval after a mechanical failure occurred. TheCompany's review of this well showed that the primary Bend shale target wasnot perforated and therefore warrants testing. Development of the 3-D earth model of the Palo Duro basin is beingaccelerated with the additional technical data obtained through the Vintageacquisition. The additional core and test data from two additional Palo Durowells, the Echols 2 No. 1 and Burleson Ranch No. 1, has allowed the reductionof the number of wells required to complete the first stage of scientificanalysis. This model will assist Bankers in developing completions strategiesas well as optimizing future production in the basin. Bankers is anticipatingdrilling further delineation wells and possibly drilling horizontal wellsafter the 3-D earth model and results from the stimulations have beenanalysed. The data from the Vintage wells highlights the need for additionaldetailed mineralogy analysis, which is currently being undertaken. This isimportant as an understanding of the chemistry is crucial prior tocommencement of further shale stimulation attempts. With the Echols 2 No. 1well, certain undesirable precipitates were recovered during the flow backfollowing the fracture stimulation performed by Vintage, indicating theoccurrence of an adverse chemical reaction in the reservoir. The BurlesonRanch No. 1 well experienced damage that management believes may have beencreated by the use of acid in the fracture stimulation. The Company isevaluating remedial options for these wells, but has not committed to anyplans for them at this time. Woodford and Caney Shales, Oklahoma Capitalizing on the 24,000 net acres acquired in Oklahoma, the Company istargeting two distinct plays: one in Johnson and Carter Counties and thesecond in Hughes County. Bankers has selected a preliminary location withineach area with drilling to be initiated in the next few months, subject toequipment and service availability. The first well is expected to be theNickel Hill No. 1-26, located in Carter County. The Woodford shales have been proven productive in the vicinity ofBankers acreage through previous drilling. To date, several vertical wellshave been drilled in nearby fields into what appear to be naturally fracturedWoodford shale intervals, yielding results of average cumulative productionfrom the Woodford only completions of around 0.8 bcf per well in one field and1.2 bcf per well in another. It should be noted that Bankers acreage issituated less than two miles away from one of these fields in the Johnson andCarter County play. Bankers is also planning on drilling a well in HughesCounty, exploiting early success from other operators in the County which havereported high initial production rates from horizontal wells. With increased activity levels by other operators in the area, theCompany anticipates that it will be well positioned to participate in severalother wells in Oklahoma. Bankers has made a number of elections to participatein other wells with the majority of interests averaging below 10%. These wellswill test various conventional and unconventional targets, including coal bedmethane. Trenton Black River and Utica Shales, New York Bankers plans to immediately pursue the fracture stimulation of twoexisting wells in this play. One of the wells had an initial, 30-day un-stimulated flow rate of approximately 300 mcf/d, which declined to a 30 daystabilized rates of approximately 15 mcf/d after 9 months of production,shortly after which it was shut in for logging. The Company also plans to drill three new wells into the Trenton BlackRiver and Utica shales in upstate New York by year-end. The wells are expectedto be shallow with target horizons ranging from 1,000 to 3,000 feet andprovide the Company with the right to earn a 70% working interest in the twoexisting well bores and another 24,000 net acres, which is in addition to theapproximately 19,000 acres already owned. Black Warrior Basin, Mississippi and Alabama The Company holds approximately 95,000 net acres in the Black Warriorbasin across the Lowndes and Noxubee Counties in Mississippi, and the Pickensand Sumter Counties of Alabama. Three initial locations targeting thePottsville tight sands and the Floyd shale have been selected. These wells aredesigned to test both structural and basin centered gas play concepts. Thesewells won't likely be drilled until 2007 due to the area's longer term leaseexpiries. --------------------------------------------- About Bankers Petroleum Ltd. Bankers Petroleum Ltd. is a Canadian-based oil and gas exploration andproduction company focused on opportunities in unconventional petroleumassets. Bankers holds interests in four prospects in the Northern and Centralregions of the United States, where it is currently pursuing the explorationof shale gas plays. It also operates in the Patos-Marinza oilfield in Albaniapursuant to a license agreement, producing heavy oil. Bankers shares aretraded on the Toronto Stock Exchange and the AIM Market in London, Englandunder the ticker symbol BNK. Caution Regarding Forward-looking Information Certain information in this news release respecting the Company and theCompany's properties constitutes forward-looking information. Such forward-looking information includes, but is not limited to, statements regarding thetiming of the Company's planned exploration and work programs and management'sbelief as to the potential of certain properties. We caution that forward-looking statements involve a number of risks and uncertainties, and there canbe no assurance that such statements will prove to be accurate. Therefore,actual results and future events could differ materially from thoseanticipated in such statements. Forward-looking statements express, as at thedate of this news release, the Company's plans, estimates, forecasts,projections, expectations, or beliefs as to future events or results and theCompany does not intend, and does not assume any obligation to, update theseforward-looking statements. In certain cases, forward-looking statements canbe identified by the use of words such as "strategy", "plans", "expects" or"does not expect", "is expected", "budget", "scheduled", "estimates","intends", "anticipates" or "does not anticipate", "believes", or variationsof such words and phrases or statements that certain actions, events orresults "may", "could", "would", "might" or "will be taken", "occur" or "beachieved". Statements including forward-looking information involve known andunknown risks, uncertainties and other factors which may cause the actualresults of the Company and its operations to be materially different fromestimated costs or results expressed or implied by such forward-lookingstatements. Such factors include, among others, general risks anduncertainties associated with exploration, petroleum operations and risksassociated with equipment procurement and equipment failure as well as thosedescribed under "Risk Factors" in the Company's Annual Information Form and ineach of the Company's management's discussion and analysis filed with theSecurities Commissions of the provinces of British Columbia, Alberta, andOntario, which are available on SEDAR at www.sedar.com. Although the Companyhas attempted to take into account important factors that could cause actualcosts or results to differ materially, there may be other factors that causecosts of the Company's program or results not to be as anticipated, estimatedor intended. There can be no assurance that such statements will prove to beaccurate as actual results and future events could differ materially fromthose anticipated in such statements. Accordingly, readers should not placeundue reliance on forward-looking information. For further information: Susan J. Soprovich, VP, Investor Relations andCorporate Governance, (403) 541-5313, Email:investorrelations(at)bankerspetroleum.com, Website: www.bankerspetroleum.com (BNK. BNK.WT.)ENDBANKERS PETROLEUM LIMITED