Bankers
Petroleum Operational Update for the Second Quarter 2015
Average Quarterly Production 20,045 bopd
CALGARY,
July 14, 2015 /CNW/ - Bankers
Petroleum Ltd. (Bankers or the Company) (TSX: BNK, AIM: BNK) is
pleased to announce the Company's second quarter operational
update.
Production
Average production from the Patos-Marinza and Kuçova oilfields
in Albania for the second quarter
of 2015 was 20,045 barrels of oil per day (bopd), an increase of
1.4% compared to the first quarter 2015 average of 19,767 bopd.
The Bubullima reservoir continues to exceed expectations, with
four (4) producing wells averaging 220 bopd at an 85% water cut,
over the last thirty days of the quarter. The average API of the
Bubullima production is 15 – 17 degrees, helping to further offset
diluent costs. The production history of these four (4) wells
ranges from four months to over two years, with minimal decline
rates to date. Bankers has one (1) additional well to be tied-in
pending the completion of sour treating facilities in Q3 and plans
to drill up to three (3) additional Bubullima wells in the second
half of 2015.
Sales and Oil
Prices
Oil sales during the quarter averaged 19,599 bopd, 3.4% lower
than the previous quarter average of 20,283 bopd. Crude oil
inventory at June 30, 2015, was
307,000 barrels, up from 270,000 barrels at March 31, 2015.
The Patos-Marinza second quarter average oil price was
approximately $47.98 per barrel
(representing 77% of the Brent oil price of $61.92 per barrel), as compared with the first
quarter average oil price of $39.66
per barrel (representing 74% of the Brent oil price of $53.94 per barrel). Sales to the export market
during the second quarter of 2015 represented 78% of total sales,
at an average export price of 80% of the Brent oil price. Domestic
sales were lower in the quarter as Bankers targets the seasonally
higher demand of the export market.
For the six months ended June 30,
2015, average oil sales were 19,899 bopd compared to 20,036
bopd for the first six months of 2014. The six month average oil
price was approximately $43.74 per
barrel (representing 75% of the Brent oil price of $57.95 per barrel) as compared to $87.00 per barrel (representing 80% of the Brent
oil price of $108.93 per barrel) for
the first six months of 2014.
Bankers realized $9.9 million
(representing $5.53 per barrel)
during the second quarter in proceeds from corporate hedge
proceeds. Additionally, Bankers received $1.4 million (representing $0.76 per barrel) in legacy accounts receivable
realization as part of its domestic sales program.
For the six months ended June 30,
2015, Bankers realized $24.0
million (representing $6.66
per barrel) in proceeds from corporate hedge proceeds.
Additionally, Bankers received $4.9
million (representing $1.37
per barrel) in legacy accounts receivable realization as part of
its domestic sales program.
Bankers has hedged 6,000 bopd at a Brent price of $80.00 per barrel for 2015. The remaining 2015
hedge program at June 30, 2015 is
valued at $21.3 million.
Drilling
Update
Bankers drilled a total of twelve (12) wells in the second
quarter: ten horizontal producers (10), one (1) water disposal
well, and one (1) suspended well following the release incident at
the beginning of the quarter. Five (5) of the producing wells are
on production, the remaining five (5) will be placed on production
early in the third quarter following the completion of drilling on
the same well pad.
In the second half of 2015, Bankers plans to drill the remaining
twenty-six (26) of the total sixty (60) wells planned in 2015,
including one (1) multilateral and one (1) Kuçova well. As
previously reported, Bankers reduced its active rig count to two
(2) in February in response to decreased commodity prices.
Secondary Recovery
Program
The twenty-six (26) polymer and five (5) water flood patterns
operational in the Patos-Marinza oilfield at the end of the second
quarter 2015 continue to meet or exceed model expectations,
producing an incremental 2,390 bopd in the month of June, 12% of
Bankers total production.
In Q2, Bankers converted seven (7) additional wells to
injectors: 6 polymer flood and 1 water flood. As of June 30, 2015, four (4) of these wells are
currently injecting with the remaining three (3) wells expected to
begin injection early in the third quarter, pending facilities
tie-in. The Company continues to be strongly encouraged by the
results to date and Bankers plans to convert an additional eleven
(11) to sixteen (16) patterns in the second half of the year.
Infrastructure
Development
Bankers infrastructure projects in the second quarter continued
to focus on margin expansion with construction of the northern
gathering system. This construction is nearly complete and will be
commissioned in the third quarter following the completion of the
associated increase in the inlet capacity at the Satellite 3
treating facility. Construction on the west gathering system,
previously delayed due to the commodity price environment, has now
commenced along with the expansion of the inlet facilities at Pad D
for which equipment is now being sourced and procured. This project
has been re-initiated to accommodate sour production from the
Bubullima and to further reduce trucking and operating costs.
The installation of vapor recovery units at Pad H and Pad D
commenced late in the second quarter and are expected to be
commissioned late in the third quarter. These projects target a
reduction in energy costs by utilizing produced gas to create
electricity thereby reducing the need for external fuel
sources.
The majority of the equipment associated with the polymer
secondary recovery program arrived in country during the second
quarter and installation is now underway in conjunction with the
remaining planned conversions in 2015. These facilities expansions
will allow for up to 28 additional conversions.
Updated Corporate
Presentation
For additional information on this Operational Update, please
see the Company's July 2015 corporate
presentation at http://www.bankerspetroleum.com/.
Conference
Call
The Management of Bankers will host a conference call on
July 14, 2015 at 6:30 am MDT (8:30 am
EDT, 1:30 pm BST). 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://event.on24.com/r.htm?e=1012079&s=1&k=B257788B21D0C55917AF1B0A95DF12B1.
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 July 28,
2015 by dialing 1-855-859-2056 or 1-416-849-0833 and
entering access code 66915093.
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, Wei Loon
Yap, +44 0 207 523 8000; AIM BROKER: FirstEnergy Capital LLP,
Hugh Sanderson / David van Erp, +44 0 207 448 0200