Bankers Petroleum Operational Update for the Fourth Quarter 2013
Average Quarterly Production 19,300 bopd
CALGARY, Jan. 7, 2014 /CNW/ - Bankers Petroleum Ltd. (Bankers or the Company)
(TSX: BNK) (AIM: BNK) is pleased to announce the Company's fourth quarter
operational update.
Production, Sales and Oil Prices
Average production from the Patos-Marinza oilfield in Albania for the fourth
quarter of 2013 was 19,303 barrels of oil per day (bopd), 4.1% higher than
18,541 bopd in the third quarter. Average oil production for 2013 was 18,169
bopd, 21% higher than 2012 average production of 15,020 bopd.
Oil sales during the quarter averaged 19,710 bopd, 7.5% higher than the
previous quarter average of 18,332 bopd. The crude oil inventory at December
31, 2013 was 311,000 barrels, 38,000 barrels lower than 349,000 barrels at
September 30, 2013.
The Patos-Marinza fourth quarter average oil price was approximately $85.71 per
barrel (representing 78% of the Brent oil price of $109.27 per barrel), as
compared with the third quarter average oil price of $86.96 per barrel
(representing 79% of the Brent oil price of $110.37 per barrel).
The 2013 average oil sales were 18,173 bopd ($85.41 per barrel), an increase of
23% from 14,808 bopd ($79.73 per barrel) in 2012.
Drilling Update
Forty (40) horizontal wells were drilled and rig released during the fourth
quarter in the main area of the Patos-Marinza oilfield: thirty-seven (37)
horizontal production wells and three (3) horizontal lateral re-drills.
Thirty-three (33) of these wells were completed and are on production, and the
remaining seven (7) will be placed on production in January pending drilling
rig move off the pad, well completion, and facilities build. This brings the
total number of wells drilled in 2013 to 146.
The Company continues to develop the field through pad drilling of multiple
zones within the core area of the Patos-Marina oilfield. Five (5) rigs are
currently drilling with the sixth rig expected to begin drilling in the first
quarter.
Secondary and Tertiary Recovery Program
The Company continues to monitor and expand upon its water flood and polymer
flood patterns, with initial production response in the Lower Driza (D5
reservoir sand) expected in the first half of 2014, as the first two polymer
injectors commenced in this zone early last year. Performance of injection has
been maintained at target rates with no premature breakthrough of fluids to
offset producers, which is indicative of good reservoir conformance. Reservoir
pressure is rising and is following current projection models.
In 2013, Bankers implemented three (3) water flood injectors in the Upper
Marinza and five (5) polymer flood injectors in three (3) separate Lower Driza
(D5, D4, and D3 reservoir sands) in the southern part of the core Patos-Marinza
field. The Company plans to convert up to eight (8) additional wells for
polymer and water injection in the first half of 2014.
Infrastructure Development
In the fourth quarter of 2013, the Company completed maintenance turnaround of
major treating facilities including two (2) trains of the central treating
facility, as well as one satellite facility. Several cascade tank systems on
individual well pads have been completed and both a new sludge handling and
satellite treating facility are in the final stages of construction and will
commence operation in the first quarter.
Through ongoing optimization of the treating process, the Company has
significantly reduced the diluent blend from 13% of gross sales volume in Q4
2012 down to 8.5% in Q4 2013 and has improved the sales specification of the
crude oil.
In the coming year, Bankers will remain focused on key infrastructure projects
aimed at reducing cost and optimizing operations, including field
electrification, flow-lines, sour treatment facilities, tank construction and
additional cascade systems.
Government of Albania Fiscal Changes for 2014
The Parliament of Albania approved the State Budget presented by the Albanian
Government on December 28, 2013. Included in the fiscal changes are tax law
related amendments that pertain to hydrocarbon operations.
The Government of Albania has implemented effective January 1, 2014, removal of
exemptions on the Value Added Tax (VAT) of 20% on goods and services related to
the extraction of hydrocarbons. The legislation provides that this VAT will be
fully reimbursed on a timely basis to the companies by the Albanian Government.
The fiscal changes also include potential implementation of Excise Tax on
imported petroleum products effective April 1, 2014 for companies operating in
the hydrocarbon sector, which were previously exempt. The Albanian Government
has elected to take the next three months to consult with industry members to
understand the potential impact of the Excise Tax on all parties.
"The Company is currently in discussions with officials of the Government of
Albania to fully assess the implications of this new legislation and to reach
an agreement on financial offsets which we are entitled to under our production
agreements. We anticipate these changes will have minimal impact on our ongoing
business and plan to move forward with our 2014 capital plan as previously
reported. We look forward to another successful year and continued robust
investment in Albania" commented David French, President and Chief Executive
Officer of Bankers Petroleum.
Updated Corporate Presentation
For additional information on this Operational Update, please see the Company's
January 2014 corporate presentation at www.bankerspetroleum.com.
Conference Call
The Management of Bankers will host a conference call on January 7, 2014, at 6:
30 am MST 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/1285463/1418203.
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 January 21, 2014 by dialing 1-855-859-2056 or 1-416-849-0833 and entering
access code 30638772.
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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