Bankers Petroleum Operational Update for the Third Quarter 2014
Six Percent Production Growth and Record Number of Wells Drilled in the Third
Quarter
CALGARY, Oct. 6, 2014 /CNW/ - Bankers Petroleum Ltd. (Bankers or the Company)
(TSX: BNK, AIM: BNK) is pleased to announce the Company's third quarter
operational update.
Production, Sales and Oil Prices
Average production from the Patos-Marinza oilfield in Albania for the third
quarter of 2014 was 21,865 barrels of oil per day (bopd), 6.0% higher than
20,630 bopd in the second quarter of 2014.
Record high oil sales during the quarter averaged 22,003 bopd, 1.7% higher than
the previous quarter average of 21,627 bopd. On a year to date basis for the
first three quarters of 2014, the sales averaged 20,701 bopd, 13.9% higher than
the average sales in 2013. Crude oil inventory at September 30, 2014, decreased
3.2% to 342,500 barrels, 11,500 barrels lower than 354,000 barrels at June 30,
2014.
The Patos-Marinza third quarter average oil price was approximately $78.66 per
barrel (representing 77% of the Brent oil price of $101.85 per barrel), as
compared with the second quarter average oil price of $86.68 per barrel
(representing 79% of the Brent oil price of $109.63 per barrel). Crude sales to
the export market during the third quarter made up the majority at 72% of the
total sales (net of in-kind royalties) at an average export pricing of 80% of
the Brent oil price.
Renewal of delivery of crude oil to the domestic refinery on a temporary basis
In August, Bankers commenced delivery of crude oil to the domestic refiner,
ARMO, under new ownership and management. The temporary contract enables the
restart of the refinery to test the commercial viability of the refinery
system. Bankers agreed to sell on a monthly basis not to exceed 6 months to an
affiliate of ARMO at 73% of Brent (FOB Vlore equivalent) plus $40/tonne or
approximately $6/bbl recovery against an existing accounts receivable balance.
All sales are fully secured by letters of credit. More information on the
impact of these repayments will be available with the third quarter financials.
No determination has been made on volumes to be available for domestic use in
2015. The Company is in the process of reviewing its sales contracts for the
2015 calendar year and volume commitments for next year will be determined over
the next few months.
Drilling Update
A record forty-five (45) wells were drilled and rig released during the third
quarter in the main area of the Patos-Marinza oilfield: forty-four (44)
horizontal production wells and the Company's first multi-lateral well.
Thirty-five (35) of these wells were completed and are on production with the
remaining ten (10) to be placed on production in October pending drilling rig
move off the pad, well completions and facilities tie-in.
Initial Multi-Lateral Well Results
Bankers drilled its first pilot multi-lateral well with dual legs into the
Gorani formation in August and placed the well on initial clean-up and
evaluation on August 24th. The well has been tested for over 30 days reaching
an average rate of more than 200 bopd.
The Company is very encouraged by the early-stage performance of the dual
laterals and will continue to produce the well on extended test and evaluate
the mechanical integrity and lateral accessibility over the next few months.
This adds another tool to our drilling program, which will enable us to target
locations with heavy oil mobility concerns and thinner pay zones to expand our
development and improve recovery at good capital efficiency. Additional
multi-lateral equipment is being procured for 2015.
Secondary Recovery Program
The polymer flood and water flood patterns in the Patos Marinza oilfield
continue to perform better than expected and deliver positive response from the
eighteen (18) polymer and three (3) water flood patterns installed at the end
of the third quarter. Reservoir pressure and production response are rising and
above current projection models with injection performance achieving target
rates indicative of good reservoir conformance.
Nine (9) wells were converted to polymer injection in the third quarter. Three
(3) injectors expanded the Lower Driza patterns in the southern region of the
main field and six (6) injectors were installed in a new area in the central
region of the main field where the reservoir and fluid properties are amenable
to polymer flooding with thick pay zones. This completes the conversion program
planned for this year ahead of schedule.
To-date, Bankers has implemented three (3) water flood injectors in the Upper
Marinza zone (M0 reservoir sand) in the central region, twelve (12) polymer
flood injectors in Lower Driza zones spread evenly between the D5, D4, and D3
reservoir sands in the southern region, and six (6) polymer injectors spread
evenly in the three Lower Driza zones in the central region of the main Patos
Marinza field.
The Company is very encouraged by the potential of polymer flooding additional
patterns in Patos Marinza and are moving forward with procuring dry polymer
chemical, mixing equipment and pumping skids to support further expansion of
the program in 2015.
Infrastructure Development
In the third quarter, thirty (30) wells were electrified in the northern and
central areas of the Patos-Marinza oilfield in accordance with our strategy to
reduce energy costs. The electrification program will be accelerated in the
fourth quarter with plans to electrify sixty (60) to seventy-five (75)
additional wells.
Emulsion gathering projects in the northern and western areas of the main field
are progressing with engineering plans completed and equipment ordered. Both
projects are on track to be completed in the first half of 2015 and will
significantly reduce the in-field trucked volumes and reduce operating costs
over the next year.
Bankers remains focused on key infrastructure projects aimed at reducing costs
and optimizing operations including the gas gathering system, new inventory
storage yard, emulsion treating, and sour treatment facilities.
Updated Corporate Presentation
For additional information on this Operational Update please see the Company's
October 2014 corporate presentation at www.bankerspetroleum.com.
Conference Call
The Management of Bankers will host a conference call on October 6, 2014, 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
www.bankerspetroleum.com or by entering the following URL into your web
browser, http://www.newswire.ca/en/webcast/detail/1416110/1572802.
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 December 10, 2014 by dialing 1-855-859-2056 or 1-416-849-0833 and
entering access code 10317494.
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. BNK)