Bankers Petroleum announces 2013 year-end reserves
232 Million Barrels of Proved plus Probable (2P) Reserves; NPV of US$2.24 billion
Average Production First Quarter to Date 19,700 bopd
CALGARY, Feb. 21, 2014 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the
"Company") (TSX: BNK, AIM: BNK) is pleased to provide the results of its
December 31, 2013, independent reserves evaluation. Evaluations were conducted
by RPS Energy Canada Ltd. (RPS) for the Patos-Marinza oilfield, Albania, and by
DeGolyer and McNaughton Canada Ltd. (D&M) for the Kuçova oilfield, Albania; and
were prepared in accordance with Canadian National Instrument 51-101 -
Standards of Disclosure for Oil and Gas Activities.
Total Company Reserves Summary
Gross Oil Reserves - Using Forecast Prices (Million barrels)
2013 2012
Patos- Total Patos- Total
Marinza Kuçova Albania Marinza Kuçova Albania %
Proved
Developed Producing 40.3 - 40.3 25.4 - 25.4 59
Developed Non-Producing 0.7 - 0.7 3.0 - 3.0 -
Undeveloped 102.3 3.4 105.7 107.6 3.4 111.0 -5
Total Proved (1P) 143.3 3.4 146.7 136.0 3.4 139.4 5
Probable 77.0 8.5 85.5 77.8 8.5 86.3 -1
Total Proved Plus Probable 220.3 11.9 232.2 213.8 11.9 225.7 3
(2P)
Possible 104.0 21.4 125.4 110.8 21.5 132.3 -5
Total Proved, Probable &
Possible (3P) 324.3 33.3 357.6 324.6 33.4 358.0 0
Patos-Marinza Contingent and Prospective Resources (MMbbls - P50)
2013 2012 %
Contingent Resource 505 534 -5
Prospective Resource 259 254 2
Total Resources 764 788 -3
Highlights
· 1P Reserves after tax value discounted at 10% increased 27% to US$1.2
billion (representing CAD$5.27 per share);
· 2P Reserves after tax value discounted at 10% increased 20% to US$2.2
billion (representing CAD$9.72 per share);
· Main drivers for the increased valuation are operational
improvements, an accelerated drilling program and lower future development
costs. Operating costs per unit have decreased with reduction in diluent usage,
treating system improvements, reduced energy consumption, and improved pump
performance;
· 2013 Company average production was 18,169 bopd for an annual total
volume of 6.6 million barrels (4.5% of total proved reserves);
· Reserves Life Index for 1P and 2P is 22 years and 35 years
respectively;
Net Present Value at 10% - After Tax Using Forecast Prices (US$ millions)
2013 2012 %
Patos- Kuçova Total Patos- Kuçova Total
Marinza Albania Marinza Albania
Proved
Developed Producing 568 - 568 372 - 372 55
Developed Non-Producing 11 - 11 44 - 44 -
Undeveloped 614 23 637 517 26 543 22
Total Proved 1,193 23 1,216 932 26 958 27
Probable 926 98 1,024 793 115 908 13
Total Proved Plus Probable 2,119 121 2,240 1,724 141 1,865 20
Possible 1,003 296 1,299 860 354 1,214 7
Total Proved, Probable &
Possible 3,122 417 3,539 2,584 495 3,079 15
Reserves Value CAD$/Share US$/bbl
10% Discounted, After Tax
1P reserves $5.27 $8.49
2P reserves $9.72 $9.77
3P reserves $15.36 $9.98
Basic shares outstanding of as of December 31, 2013, were approximately 256
million (281 million diluted).
Values are based on RPS (Patos-Marinza) and D&M (Kuçova) January 1, 2014, price
forecast tables summarized below:
Reserve Auditor Price Decks - Dated Brent
BRENT Oil Price Forecast US$/bbl
Year RPS D&M
2014 $105.20 $106.00
2015 $100.60 $101.80
2016 $95.80 $101.64
2017 $95.50 $101.51
2018 $97.40 $101.42
2019 $99.40 $101.58
2020 $101.40 $103.61
2021 $103.40 $105.68
2022 $105.40 $107.79
2023 $107.60 $109.95
2024 $109.70 $112.15
2025 +2.0% Thereafter +2.0% Thereafter
Patos-Marinza Crude Pricing
The average sales price for export sales is approximately 81% of Brent (an
increase of 2% over the 2013 average realized pricing of 79% of Brent). The
average realized sales price the Company is receiving for crude oil from the
Patos-Marinza and Kuçova oilfields is at a discount to Brent oil.
Albanian Fiscal Changes
Pursuant to the 2014 Albanian fiscal changes, these reserve reports are based
on the assumption that the Company and Government of Albania will reach
agreement on adequate offsets in recognition of the economic stabilization
provisions of the hydrocarbon agreements and that the previously exempted value
added tax will be fully reimbursed in a timely manner. Precedent for such an
offset arrangement was established during the 2008 Royalty Tax implementation.
Finding and Development Costs (F&D)
In the Patos-Marinza 2P development case, the future horizontal well count has
decreased from 1,085 to 995. The average cost per well is $1.2 million.
Total future undiscounted capital costs for Patos-Marinza and Kuçova are
projected to be US$2.2 billion, US$2.3 billion and US$2.5 billion on a 1P, 2P
and 3P basis, respectively. This represents the following F&D costs, calculated
as total future development capital divided by recoverable reserves excluding
currently developed PDP and PDNP reserves:
2013 2012
F&D Costs US$/bbl US$/bbl
1P reserves $20.45 $20.90
2P reserves $12.08 $12.27
3P reserves $7.85 $8.08
Oil Initially in Place
In Patos-Marinza, the Oil Initially in Place ("OIIP") volumes in the reserves
area remain at 2.4 billion barrels and the OIIP outside the reserves area
remains at 2.7 billion barrels in 2013.
The Kuçova OIIP resource estimate remains at 297 million barrels.
David French, President and CEO commented "The Company is very pleased to
announce an increase in our reserves on the back of a year of record production
in the field. The 2013 reserve report reflects our strategy of engineering
momentum through drilling efficient, predictable horizontal wells and enhancing
the operating margin of every barrel we produce. These new reserves reflect a
20% increase in the net present value of our 2P reserve base and reinforce the
strength of our base business - optimizing the performance of this world class
heavy-oil asset."
Operational Update
Average production for the first quarter to date was 19,700 bopd; this rate is
2% higher than the fourth quarter average production of 19,303 bopd.
The sixth drilling rig is now in country undergoing final inspection. It will
commence drilling in the first quarter of 2014.
Further details, including the February 2014 Corporate Presentation, are
available on the Company's website www.bankerspetroleum.com.
Conference Call
Bankers' Management will host a conference call on February 21, 2014 at 6:30 am
MST to discuss this reserves report. 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/1301697/1436315.
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 March 07, 2014 by dialing 1-855-859-2056 or 1-416-849-0833 and entering
access code 89045312.
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 petroleum engineer (member of APEGA) 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, 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:
David French
President and Chief Executive Officer
(403) 513-6930
Doug Urch
Executive VP, Finance and Chief Financial Officer
(403) 513-2691
Laura Bechtel
Investor Relations Analyst
(403) 513-3428
Email: investorrelations@bankerspetroleum.com
Website: www.bankerspetroleum.com
AIM NOMAD:
Canaccord Genuity Limited
Henry Fitzgerald-O'Connor
+44 0 207 523 8000
AIM BROKER:
FirstEnergy Capital LLP
Hugh Sanderson / David van Erp
+44 0 207 448 0200
(BNK.)