The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from PR Newswire

Bankers Petroleum Operational Update for the First Quarter 2012

Tuesday, April 10, 2012

Bankers Petroleum Operational Update for the First Quarter 201208:00 EDT Tuesday, April 10, 2012 Block "F" Exploration Well on Ardenica Structure is Currently Drilling CALGARY, April 10, 2012 /PRNewswire/ - Bankers Petroleum Ltd. ("Bankers" or the "Company") (TSX: BNK) (AIM: BNK) is pleased to announce the following first quarter operational update. Production and Oil Prices The average first quarter 2012 production was 14,120 barrels of oil per day ("bopd"), 2% higher than the fourth quarter 2011 rate. Oil sales from the Patos-Marinza oilfield in Albania during the quarter averaged 13,280 bopd. The crude oil inventory at March 31st was 312,000 barrels, an increase of 71,000 barrels from December 31st, 2011, accounting for the minimum inventory increase with expansion of the central treatment facility in the oilfield and addition of the sales crude pipeline from the oilfield to Fier; both projects were commissioned during the quarter. The Patos-Marinza first quarter average oil price was approximately US$84.89 per barrel (representing 72% of the Brent oil price of US$118.49 per barrel), as compared with the fourth quarter average oil price of US$71.67 per barrel (66% of Brent oil). Recent negotiations for spot export crude sales, including one with a large European refiner, have been priced at 75 to 78% of Brent for 2012 volumes. Drilling and Well Reactivations Update Twenty-seven (27) wells have been drilled during the first quarter: twenty-four (24) horizontal production wells and three (3) water disposal wells. An additional water disposal well has recently finished drilling and will commence disposal operations in April.  One vertical exploration well is currently drilling on Block "F".  Twenty-two (22) of the horizontal wells have been completed and are on production. With the newly expanded water disposal capacity, the Company expects to see gradual growth in production over the next several quarters by placing on production several oil wells with high water cuts that were shut-in due to the limited water capacity and enabling higher drawn-down production to improve oil rates from several wells. Reactivation and recompletion work continued in the first quarter with seven (7) new reactivations and recompletions. Thermal Program Operations commenced at the Southern Patos cyclic steam pilot in December 2011 with injection into the first horizontal well 5201. The Company placed this well on production in January and have recovered approximately 150% of cold water equivalent injected. Optimization of the well is continuing to evaluate reservoir fluid mobility and oil quality. In addition, the Company recently started the un-steamed horizontal offset well 5202 on cold production to establish a base line production level to evaluate incremental gain from thermal operations. The thermal model has been updated with the most recent core and petrophysical data, and with the empirical data from the pilot, will be calibrated over the coming months. Exploration Block "F" The first Block "F" exploration well on the Ardenica structural prospect was spud on March 29th; it is currently drilling at a depth of 2,000 meters and is anticipated to reach total depth of 2,030 meters. Following well log evaluation for indications of hydrocarbon presence, completion and testing operations will begin in the second quarter. Infrastructure Development The first phase of the crude oil sales pipeline, which connects the Patos-Marinza oilfield to Bankers' storage and loading hub facility at Fier was completed and commenced operations in January. The expanded central treatment facility is also complete with the addition of two new treating trains and commenced operations in January, increasing the field treating capacity to 25,000 bopd. The Company drilled three water disposal wells during the quarter and finished drilling a fourth new disposal well in early April. With these additional wells and surface facilities infrastructure, the water disposal capacity has been increased from 30,000 barrels of water per day to in excess of 40,000 barrels of water per day. This capacity increase was required for ongoing drilling operations as well as the water control initiatives within the field. Kuçova Water injection into well F-38 commenced last year and two offset wells, F34 and F41, were placed on production in December. An additional injector was added in January of this year to complete the first water-flood pattern. Water-flood balancing is ongoing. Environmental initiatives The Sector III environmental remediation and reclamation project summary report was completed this quarter. Installation of 130 groundwater monitoring wells in the field area to assess shallow surface water and soil for impacts from historical operations has also been completed; final reports are expected by the third quarter. The Company has initiated the sludge treatment facility engineering and design and anticipates having equipment on the ground in the third quarter to commence larger scale waste sludge treatment in the field area. In addition, planning is underway for the high temperature thermal desorption unit pilot project to treat hydrocarbon contaminated soils. Updated Corporate Presentation For additional information on this operational update, please see the April 2012 version of the Company's corporate presentation at www.bankerspetroleum.com. Conference Call The Management of Bankers will host a conference call on April 10, 2012 at 6:45am MST 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 www.bankerspetroleum.com or by entering the following URL into your web browser http://www.newswire.ca/en/webcast/detail/952037/1019321. 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 April 24, 2012 by dialing 1-855-859-2056 or 1-416-849-0833 and entering access code 70537361. 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 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 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: <p> Abby Badwi  <br/> President and Chief Executive Officer    <br/> (403) 513-2694<br/> <br/> Doug Urch   <br/> Executive VP, Finance and Chief Financial Officer  <br/> (403) 513-2691<br/> <br/> Mark Hodgson   <br/> VP, Business Development     <br/> (403) 513-2695<br/> <br/> Email: <a href="mailto:investorrelations@bankerspetroleum.com">investorrelations@bankerspetroleum.com</a><br/> Website: <a href="http://www.bankerspetroleum.com">www.bankerspetroleum.com</a> </p> <p> <b><i>AIM NO</i></b><b><i>MAD:</i></b><br/> Canaccord Genuity Limited<br/> Henry Fitzgerald-O'Connor<br/> +44 20 7050 6500 </p> <p> <b><i>AIM JOINT BROKERS:</i></b><br/> Canaccord Genuity Limited<br/> Ryan Gaffney/ Henry Fitzgerald-O'Connor<br/> +44 20 7050 6500 </p> <p> Macquarie Capital Advisors<br/> Ben Colegrave/Paul Connolly<br/> +44 20 3037 5639 </p>