Bankers Petroleum Operational Update for the First Quarter 2015
Average Quarterly Production 19,767 bopd
CALGARY, April 7, 2015 /CNW/ - Bankers Petroleum Ltd. (Bankers or the Company)
(TSX: BNK, AIM: BNK) is pleased to announce the Company's first quarter
operational update.
Production
Average production from the Patos-Marinza and Kuçova oilfields in Albania for
the first quarter of 2015 (Q1) was 19,767 barrels of oil per day (bopd), 2.7%
less than 20,324 bopd in the fourth quarter of 2014 (Q4).
Bankers drilled two (2) wells in the Bubullima reservoir sands in the Patos
Marinza field during Q1 with positive results. The 30 day average production
rate from the wells is approximately 200 bopd per well at 75% watercut and 16
degrees API lighter quality oil. The Company plans to drill two to three
additional Bubullima wells in 2015 utilizing recent 3D seismic data for
prospect evaluation.
As previously disclosed, several high-water cut wells were shut-in to
accommodate temporary reduced water handling capacity in Q4. Additionally, in
early February, Albania experienced severe flooding that caused Bankers to
shut-in 81 wells in the northern and central area of the Patos-Marinza oilfield
due to limited surface access. Full water handling capacity resumed in early
February and by mid-month shut-in wells were brought back on line and have
largely returned to previous production rates after a period of clean-up and
optimization.
On April 1st, the Company experienced a non-routine surface release of carbon
dioxide (CO2) gas during drilling operations and activated its Emergency
Response Plan (ERP). Control of the well was established shortly thereafter
and returned to normal well operations with no injuries reported. Bankers is
currently coordinating with authorities regarding the release. According to
David French, President and CEO "We are working closely with government
agencies and local Prefect and Commune representatives to recover from this
disruption to the lives of the villagers of Marinza. Some of our employees
live and work in this same community. Efforts to further review the incident
are ongoing, although our highest priority is assisting the residents in
restoring their day-to-day activities."
Sales and Oil Prices
Oil sales during the quarter averaged 20,284 bopd, 1.6% lower than the previous
quarter average of 20,619 bopd. Crude oil inventory at March 31, 2015, was
270,000 barrels, down from 315,500 barrels at December 31, 2014.
The Patos-Marinza first quarter average oil price was approximately $39.65 per
barrel (representing 73% of the average Brent oil price of $53.97 per barrel),
as compared with the fourth quarter average oil price of $57.31 per barrel
(representing 75% of the average Brent oil price of $76.27 per barrel). Export
sales during Q1 represented 47% of total sales, at an average export price of
77% of Brent.
Bankers realized $14.1 million (representing $7.76 per barrel) during Q1 in
proceeds from corporate hedges. The Company has hedged 6,000 bopd at a Brent
price of $80 per barrel for 2015. Additionally, Bankers received $3.6 million
(representing $1.96 per barrel) in legacy accounts receivable realization as
part of its domestic sales program.
Drilling Update
Twenty-one (21) wells were drilled during the first quarter in the main area of
the Patos-Marinza oilfield: twenty (20) horizontal production wells and one (1)
lateral re-drill. As of March 31st, seventeen (17) of these wells were on
production, and the remaining four (4) waiting on completion. Bankers reduced
its active rig count from three (3) to two (2) in February in response to
decreased commodity prices.
Enhanced Oil Recovery (EOR) Program
The polymer and water flood patterns in the Patos-Marinza oilfield continue to
perform to model expectations from the nineteen (19) polymer and four (4) water
flood patterns installed by year end 2014. Reservoir pressure and production
response are positive with good reservoir flood conformance.
In Q1, Bankers converted four (4) additional wells to injectors. As of March
31st, two (2) wells were on-line injecting with the remaining two (2) wells
expected to begin injection by mid-April. The Company continues to be strongly
encouraged by the results to date and plans to move forward with 20 to 25
additional conversions in 2015.
Infrastructure Development
Bankers infrastructure projects in the first quarter continued to focus on
operating cost structure improvements. Completion and commencement in February
of the water disposal pipeline from the central and satellite facilities to the
sandstone disposal area significantly reduces in-field fluid trucking. Also
during Q1, construction continued in full swing on the northern gathering
system with completion projected in the third quarter of 2015. This will
enable additional transportation cost savings and allow gathered gas to further
offset diesel energy usage.
Updated Corporate Presentation
For additional information on this Operational Update, please see the Company's
April 2015 corporate presentation at http://www.bankerspetroleum.com/.
Conference Call
The Management of Bankers will host a conference call on April 7, 2015, at 6:30
am MDT to discuss this Operational 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 http://www.bankerspetroleum.com/ or by entering the following URL into your
web browser, http://www.newswire.ca/en/webcast/detail/1509253/1682457
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 22, 2014 by dialing 1-855-859-2056 or 1-416-849-0833 and entering
access code 17653223.
------------
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 http://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.
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