Bankers Petroleum
operational update for the fourth quarter 2015
CALGARY, Jan. 7, 2016 /CNW/ - Bankers Petroleum Ltd.
(Bankers or the Company) (TSX: BNK, AIM: BNK) is pleased to
announce the Company's fourth quarter operational update.
Production
Bankers achieved a fourth quarter 2015 production average of
18,137 bopd. The 2015 annual production average is 19,384 bopd,
compared to average production of 20,690 bopd in 2014.
Following up the performance of the polymer flood program, a
large number of injector conversions to expand the polymer flood
project were completed in the fourth quarter bringing some
production off-line temporarily until response is seen in the
offset producers over the coming months in 2016.
As previously announced, Albania experienced significant rainfall and
flash flooding early in the fourth quarter which impacted
production by approximately 1,000 bopd for a two week period. As
Bankers continued to optimize its new gathering and treating
systems including the tie-in of sour production from the Bubullima,
the Company elected to shut-in specific wells to manage the sour
fluid at the central treating facility. Bankers is working to
optimize its treating process and modify existing facilities
throughout the first half of 2016 to accommodate Bubullima
production.
Due to continued downward pressure on oil prices towards the end
of 2015, the Company continued to evaluate the economic return of
all wells resulting in additional shut-in production of marginal
producers in accordance with the current economic environment.
Sales and Oil
Prices
In 2015, oil sales averaged 19,546 bopd, compared to the annual
average sales of 20,678 bopd in 2014. During the fourth quarter,
oil sales averaged 18,561 bopd, compared to the previous quarter
average of 19,730 bopd. Crude oil inventory at December 31, 2015 decreased to 258,000 barrels
compared to 297,000 barrels at September 30,
2015.
The fourth quarter average oil price was approximately
$33.62 per barrel (representing 77%
of the Brent oil price of $43.69 per
barrel), as compared with the third quarter average oil price of
$39.50 per barrel (representing 79%
of the Brent oil price of $50.26 per
barrel). Sales to the export market during the fourth quarter 2015
represented 91% of total sales, at an average export price of 77%
of the Brent oil price. The majority of the volumes were sold to
the export market in the fourth quarter to capture higher realized
prices and consistent off-take during the winter months.
Bankers 2015 hedge program covered 6,000 bopd and generated
proceeds of approximately $60 million
being reflective of the difference between the $80 per barrel and the actual monthly Brent
price. For 2016, Bankers placed 4,000 bopd under costless collar
contracts with an average floor of $54.31/bbl and an average ceiling of $57.29/bbl (all prices are referenced to Dated
Brent), current estimated value of $20
million.
Drilling
Update
In 2015, Bankers drilled a total of sixty-one (61) horizontal
wells, utilizing two drilling rigs. In the fourth quarter, fourteen
(14) wells were drilled and rig released: nine (9) horizontal
wells, one (1) multi-lateral horizontal well, three (3) lateral
re-drills and one (1) water disposal well.
Due to continued uncertainty of oil prices headed into 2016,
Bankers has elected to defer drilling activity until pricing
improves in order to protect the strength of the Company's balance
sheet. The two drilling rigs that were utilized throughout 2015
have been temporarily suspended as of the end of December. Drilling
activity will resume as pricing improves; the rigs have been racked
in country and remain available to resume activity on short
notice.
Enhanced Oil
Recovery (EOR) Program
The polymer flood and water flood patterns in the Patos-Marinza
oilfield continue to perform at or better than model expectations
from the forty-eight (48) polymer and five (5) water flood patterns
implemented by the end of the fourth quarter 2015, inclusive of the
thirty (30) converted wells to injection in 2015. Nineteen (19)
additional wells were converted to polymer injection in the fourth
quarter, three (3) of which were accelerated from the 2016 program
to be completed for the end of 2015.
The Company replaced three (3) lateral horizontal legs that were
identified to have corrosion concerns in the liners. The production
performance of the new laterals is exceeding prior levels and the
re-placement with corrosion resistant liners was implemented
successfully. This is believed to be isolated to a small area of
the field and similar indications of corrosion are not evident on
other producing wells currently.
The Company continues to be strongly encouraged by the results
to date and plans to prioritize the EOR program in 2016 with
sixteen (16) planned conversions throughout the year.
Infrastructure
Development
In the fourth quarter, Bankers focused on the completion of
projects to continue to capture cost savings headed into 2016. The
west emulsion pipeline system is near completion and will be
brought on in a phased approach throughout the first half of 2016
as inlet vessels are installed at Pad D. Bankers also worked on the
installation of the vapour recovery units at Pad D and Pad H,
expected to be commissioned early in the first quarter.
Infrastructure associated with the EOR program was set-up and
commissioned to support the nineteen (19) conversions completed in
the quarter.
Updated Corporate
Presentation
For additional information on this Operational Update please see
the Company's January 2016 corporate
presentation on the Company's website,
www.bankerspetroleum.com.
Conference
Call
Management of Bankers will host a conference call on
January 7, 2016, 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://event.on24.com/r.htm?e=1082182&s=1&k=EE6BF9B5C96AE8769BBAEC28FA1B1C08.
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,
2016 by dialing 1-855-859-2056 or 1-416-849-0833 and
entering access code 67460330.
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.
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