The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from CNW Group

Bankers Petroleum Announces 2012 Capital Budget and Work Program

Tuesday, December 20, 2011

Bankers Petroleum Announces 2012 Capital Budget and Work Program08:00 EST Tuesday, December 20, 2011US$215 Million Capital Expenditures in Albania CALGARY, Dec. 20, 2011 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the "Company") (TSX: BNK, AIM: BNK) is pleased to announce its 2012 capital program of US$215 million. The 2012 capital program will focus on major development activities at the Patos-Marinza oilfield to include production and reserves growth drilling, reactivation and workover of existing wells, associated field infrastructure and progression of the thermal program. The capital program will also include expansion of the waterflood program at the Kuçova oilfield and exploration drilling on Block F acreage in Albania.PATOS-MARINZA FIELDDrilling and Reactivation CapitalWith five drilling rigs and a drilling budget of $131 million, the Company intends to drill a total of 100 horizontal and vertical wells. Drilling activities will share a balanced focus between production growth and targeting new reserves through delineation of zones and areas both within the field itself, and also other potential oil accumulations within the concession area where no reserves have been booked to date. Reactivation of old vertical wells will continue with an $18 million budget to reactivate up to 60 wells in 2012.With this drilling and reactivation program the Company expects to achieve 30% year-over-year growth from its 2011 production average and expects significant reserves growth by the end of 2012.Base CapitalThe $45 million base capital program will include:Facilities/Infrastructure: Construction of additional satellite treatment facilities along with planning for phase 2 pipeline construction connecting the Fier Central Hub loading facility to the Vlore Port Terminal (35 kms).Water Control/Disposal: Expanded and pro-active program focused on remediation of over 200 old well bores to alleviate future water intrusion concerns in new drilling development areas. In addition, the Company will also be expanding water disposal capabilities with new injector wells.Environmental Stewardship: Continue with environmental remediation and social initiatives.Thermal Pilot ProjectSteam injection has commenced into the first horizontal pilot well. The $4 million thermal pilot capital allocation will be spent on energy sources for steam generation and monitoring the two horizontal cyclical steam pilot wells throughout the year.KUÇOVA FIELDThe $12 million dollar capital program for the Kuçova oilfield will be focused on expanding the waterflood pilot project into the Ciflik and Arreza pools as well as developing localized infrastructure including gathering lines to a central oil treating facility.BLOCK F EXPLORATION BLOCKTwo exploration wells are planned for 2012 in Block F and comprise the majority of the $5 million dollar capital expenditure in the block for the year.CAPITAL PROGRAM FUNDINGUtilizing a $90 Brent price deck, Bankers expects to fully fund the 2012 capital program with funds generated from operations. In the event of lower pricing, the Company can utilize its cash resources and available credit facilities.Caution Regarding Forward-looking InformationInformation 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 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 PersonThis 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.For further information: Abby Badwi           President and Chief Executive Officer             (403) 513-2694 Doug Urch            Executive VP, Finance and Chief Financial Officer           (403) 513-2691 Mark Hodgson            VP, Business Development              (403) 513-2695 Email: Website: AIM NOMAD and AIM JOINT BROKER: Canaccord Genuity Limited Ryan Gaffney/ Henry Fitzgerald-O'Connor +44 20 7050 6500 AIM JOINT BROKER: Macquarie Capital Advisors Ben Colegrave/Paul Connolly +44 20 3037 5639