13 Jan 2009 13:00
Bankers Petroleum provides operational and corporate update
Exit Production Rate for 2008 was 6,960 bopd
CALGARY, Jan. 13 /CNW/ - Bankers Petroleum Ltd. is pleased to announce the following operational and corporate updates.
Production
Fourth quarter production averaged 6,563 bopd from the Patos Marinza oil field in Albania compared to third quarter production of 5,880 bopd. Net oil inventory at the end of December was approximately 90,000 barrels, an increase of 10,000 barrels from the previous quarter. The exit production rate was 6,960 bopd and represents a 31% increase from the 2007 exit production rate of 5,300 bopd. During the quarter, 11 re-activation operations of existing wells were completed with 10 wells placed on production. Six new oil wells were also drilled.
Production for 2008 averaged 5,874 bopd, generating revenue of approximately $110 million, representing an average price of $51.29 per barrel.
Patos Marinza Oil Price
Fourth quarter average oil price was approximately $29.62 per barrel (54% of the Brent oil price), 52% lower than the third quarter price of $62.08 per barrel.
Drilling Update
Eleven new vertical infill wells were drilled in 2008 with 10 oil wells currently on production and one well awaiting completion. Total production from the new wells was 320 bopd with individual well averages ranging from 15 to 75 bopd. Several of the wells are demonstrating productive capabilities beyond their existing completion configurations and will be re-equipped with larger tubing and rods in order to maximize production rates. Others, with lower production rates, will have additional pay sections perforated and commingled with existing production.
The field extension well (5012) has also been drilled and log analysis indicates 42 meters of potential net oil pay from the four main producing formations. The well is currently being tested to evaluate productivity of the different pay zones.
The first horizontal well (5013) in Patos Marinza has been successfully drilled and completed with 375 meters of lateral pay section. The well is currently producing at a rate of 120 bopd. Fluid levels in the well are high and production rates are expected to increase as the well is optimized.
Overall, the production levels from all the new wells are in line with forecast.
Ku§ova
Technical evaluations of the Ku§ova pools are advancing. This analysis indicates that there is significant evidence that the implementation of waterflood technology will increase production rates and reserves recovery. Current plans call for a first phase waterflood demonstration project involving the re-activation of a 14 well unit in the second quarter of 2009.
Liquidity
Total cash on deposit as at December 2008 was approximately $18.5 million and total debt with Raiffeisen Bank was US$28.3 million. In January 2009, the Company received approval for an increase to its existing facility to $35 million, of which $11 million continues as a three-year term loan, a new $4 million five-year term loan and a $20 million revolving operating loan facility renewable after its maturity in February 2010. To supplement the Raiffeisen facility, the Company continues to examine other proposals for reserve-based debt facilities that will be more closely aligned with the year-end 2008 reserves, when finalized in February.
Abby Badwi, President and CEO of Bankers, said:
"We had a successful re-activation and drilling program in 2008 including the first horizontal well at the Patos Marinza oil field and, despite reduced capital expenditures in the fourth quarter to cope with low oil prices, the Company was able to achieve its exit rate production guidance of approximately 7,000 bopd. We will continue to monitor oil prices and adjust our capital expenditure programs accordingly to remain within our financial capabilities."
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 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 production operations, including: that Brent oil 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 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 well 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.
Review by Qualified Person
This release was reviewed by Abdel F. (Abby) Badwi, CEO 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 geologist (member of APEGGA) with over 39 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 developing large oil and gas reserves. In Albania, Bankers operates and has the full rights to develop both the Patos Marinza and the Ku§ova heavy oil fields. 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, VP, Finance and Chief Financial Officer, (403) 513-2691, Email: investorrelations(at)bankerspetroleum.com, Website: www.bankerspetroleum.com; AIM NOMAD: Canaccord Adams Limited, Ryan Gaffney, Henry Fitzgerald-O'Connor, +44 20 7050 6500; AIM JOINT BROKERS: Canaccord Adams Limited, Ryan Gaffney, Henry Fitzgerald-O'Connor, +44 20 7050 6500; Tristone Capital Ltd., Nick Morgan, +44 20 7355 5800 (BNK. BNK)
vendor