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Press release from PR Newswire

Bankers Petroleum Operational Update For The Third Quarter 2011

Monday, October 03, 2011

Bankers Petroleum Operational Update For The Third Quarter 201118:21 EDT Monday, October 03, 2011 Current production rate 14,250 bopd CALGARY, Oct. 3, 2011 /PRNewswire/ - Bankers Petroleum Ltd. ("Bankers" or the "Company") (TSX: BNK) (AIM: BNK) is pleased to announce the following operational update: Production and Oil Prices Oil sales from the Patos-Marinza oilfield in Albania during the third quarter averaged 13,667 bopd compared to second quarter sales of 12,152 bopd, an increase of 12%.  Oil inventory on September 30th was 201,000 barrels, a decrease of 38,000 barrels from June 30th. Average production for the third quarter was 13,232 bopd representing a 2% increase from 12,973 bopd in the second quarter. Current production is 14,250 bopd, 8% higher than the second quarter's exit rate. The Patos-Marinza third quarter average oil price was approximately US$74.55 per barrel (representing 66% of the Brent oil price of US$113.46 per barrel), a decrease of 4% compared to the second quarter's average oil price of US$77.03 per barrel (66% of Brent oil). With the current differential between Brent and West Texas International oil (WTI), Patos-Marinza crude is presently priced at approximately 86% of WTI. For the nine months ended September 30, 2011 oil sales were 12,578 bopd ($73.30 per barrel) as compared to 9,318 bopd ($46.95 per barrel) for the comparable 2010 period. 2012 Crude Sales Agreements The Company is also pleased to report several Patos-Marinza crude oil sales agreements for 2012. Three new export market agreements have been priced at an average of 72.5% of the Dated Brent oil benchmark. ARMO, the Albanian refinery, agreed to purchase Patos-Marinza crude in 2012 for an average price of 66% of Brent, which is approximately the same netback value as the export market due to lower transport and port fee costs. The 2012 pricing agreements represent an average 7% increase over the 2011 Patos-Marinza oil price. Drilling Update and Well Reactivations Twenty-one (21) wells have been drilled during the third quarter, sixteen (16) horizontal production wells, a vertical cored delineation well, two (2) thermal horizontal wells, and two (2) water disposal wells.  Fourteen (14) of the horizontal production wells have been completed and are on production with two (2) awaiting completion. Average production from eighty-eight (88) producing horizontal wells in the field is 100 bopd per well at the end of the third quarter.  This includes the early period decline and operations change to limit the peak rate of the horizontal wells to achieve stabilized production as well as the low rate producing wells that were previously excluded due to water intrusion and poor mechanical drill concerns. The first Driza 1 (D1) horizontal step-out well in the western extension (Area 3) of the field has been drilled, and is currently on production at a rate in excess of 200 bopd. Several follow-up locations are planned for this area in the fourth quarter of this year where limited D1 reserves have been booked to-date.  Production from five (5) Lower Gorani horizontal wells continues at an average of 120 bopd per well.  Follow-up locations are planned in the Upper and Middle Gorani formations in the last quarter of this year which will contribute to additional recoverable reserves from this formation. The fifth drilling rig is expected to arrive in Albania in November 2011 and spud its first well before the end of the month. Reactivation and recompletion work continued in the third quarter with nineteen (19) wells reactivated, ten (10) of which are on production and averaging 30 bopd per well.  Well reactivation success north of the Seman river in the Kalmi area confirms good high productivity from vertical wells in this area where the Company is planning to commence drilling numerous horizontal wells later this year and beyond after completion of the new bridge across the river. Thermal Program & Exploration Block "F" Drilling of a cored vertical delineation well and two thermal cyclic steam horizontal wells of the thermal pilot program have been completed during the quarter. Completion and equipping of the thermal wells will occur in late October and construction of the steam generation and thermal production facilities are in progress with completion targeted by early November. The first steam injection cycle is estimated to start in mid November 2011. Drilling the first of several gas exploration wells on Block F is scheduled for December 2011. This multi well program will test several discrete structural and stratigraphic targets over the next 12 to 16 months. Infrastructure Development Construction on the first phase of the crude oil sales pipeline, which connects the Patos-Marinza oilfield to Bankers' storage and loading hub facility at Fier, is complete. Operations at the storage and truck loading terminal at the Fier Hub is scheduled to commence in November. Social and environmental impact assessments for the second phase of the pipeline, from Fier to the export terminal at Vlore, are underway for 2013 construction. Construction of the Central Treatment Facility (CTF) expansion is progressing and on schedule for completion in December 2011. The Seman River Bridge, in the northern area of the Patos-Marinza oilfield, is progressing with completion expected in December 2011. Kuçova Water injection, pressure and fluid level observations are being monitored at the Kuçova oil field. Water injection into well F-38 commenced in May; current injection is exceeding forecast and two offset wells are exhibiting rising fluid level and pressure in the wellbores indicating positive initial water flood pressure response.  The two wells will be equipped to commence production operations by year-end. Environmental Initiatives The pilot remediation project in Sector 3 is now complete with surface clean-up of old infrastructure and removal of legacy oil spills.  This area can now showcase the results and the impact of remediation efforts in portions of the field and the surrounding communities. Analysts and Investors Field Visit Bankers is organizing a field visit on October 31, 2011 for analysts and institutional investors to view the completion and progress of all of its capital projects at the Patos-Marinza oilfield. For additional information on this operational update, please see the October 2011 version of the Company's corporate presentation at Conference Call The Management of Bankers will host a conference call on October 4, 2011 at 6:45am MDT to discuss this Operations Update. Following Management's presentation, there will be a question and answer session for analysts and investors. To participate in the conference call, please contact the conference operator ten minutes prior to the call at 1-888-231-8191 or 1-647-427-7450.  A live audio web cast of the conference call will also be available on Bankers website at or by entering the following URL into your web browser The web cast will be archived two hours after the presentation on the website, and posted on the website for 90 days. A replay of the call will be available until October 18, 2011 by dialing 1-800-642-1687 or 1-416-849-0833 and entering access code 15629656. 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 Kuçova oilfields 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 wells 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; 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 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 Suneel Gupta, Executive Vice President and Chief Operating Officer 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 engineer (member of APEGGA) with over 20 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 the Patos-Marinza heavy oilfield and has a 100% interest in the Kuçova oilfield, and a 100% interest in Exploration Block "F". Bankers' shares are traded on the Toronto Stock Exchange and the AIM Market in London, England under the stock symbol BNK. SOURCE Bankers Petroleum Ltd.For further information: <table valign="top" border="0"> <tr> <td> Abby Badwi   </td> <td> President and Chief Executive Officer     </td> <td> (403) 513-2694 </td> </tr> <tr> <td> Doug Urch    </td> <td> Executive VP, Finance and Chief Financial Officer   </td> <td> (403) 513-2691 </td> </tr> <tr> <td> Mark Hodgson    </td> <td> VP, Business Development      </td> <td> (403) 513-2695 </td> </tr> <tr> <td colspan="3"> Email: <a href=""></a> </td> </tr> <tr> <td colspan="3"> Website: <a href=""></a> </td> </tr> <tr> <td colspan="3">   </td> </tr> <tr> <td colspan="3"> <b><i>AIM NOMAD an</i></b><b><i>d AIM JO</i></b><b><i>INT </i></b><b><i>BROKER</i></b><b><i>:</i></b> </td> </tr> <tr> <td colspan="3"> Canaccord Genuity Limited </td> </tr> <tr> <td colspan="3"> Ryan Gaffney/ Henry Fitzgerald-O'Connor </td> </tr> <tr> <td colspan="3"> +44 20 7050 6500 </td> </tr> <tr> <td colspan="3">   </td> </tr> <tr> <td colspan="3"> <b><i>AIM J</i></b><b><i>OINT BROKER:</i></b><br/> Macquarie Capital Advisors<br/> Ben Colegrave/Paul Connolly<br/> +44 20 3037 5639 </td> </tr> </table> <p>   </p>