203 Million Barrels of Proved plus Probable
(2P) Reserves including 11.3 Million Barrels of EOR
Reserves;
NPV of US$1.8
billion
CALGARY, March 2, 2015 /CNW/ - Bankers Petroleum Ltd.
("Bankers" or the "Company") (TSX: BNK, AIM: BNK) announces the
results of its December 31, 2014,
independent reserves evaluation. Evaluations were conducted by RPS
Energy Canada Ltd. (RPS) for the Patos-Marinza oilfield,
Albania, and by DeGolyer and
McNaughton Canada Ltd. (D&M) for the Kuçova oilfield,
Albania; and were prepared in
accordance with Canadian National Instrument 51-101 – Standards of
Disclosure for Oil and Gas Activities.
David French, President and CEO
commented "This 2014 Reserves update marks an important strategic
transition for Bankers. First, we are pleased with the
recognition of our Enhanced Oil Recovery (EOR) program with initial
EOR Proved Developed Producing (PDP) and Proved Undeveloped (PUD)
reserve bookings. We see EOR as an integral part of our future
growth. The 76 patterns booked this year represent less than
one-fifth of our current opportunity set at the floodable viscosity
ranges in our field. Second, we have experienced modest
communication at 100 metre spacing in our core development
area. While this temporarily impacts our primary-only
reserves per well, it will be the right answer for commercial EOR
development and subsequent bookings. Lastly, the shallower
depths and higher viscosities of our southern non-core area appear
commercially challenged at the current oil price. We will
continue to solve for the right technical solution to access these
areas, such as the multilateral test last year. On balance,
our ongoing efforts to reduce operating expenses and capital
development, validate the potential for EOR, and solve the
challenges of our heaviest sands to set us up well for the
future."
Overview
- First time booking of EOR reserve volumes in Patos-Marinza
oilfield at 2.0, 8.6, 11.3 and 13.4 million barrels on a PDP,
Proved (1P), Proved plus Probable (2P), and Proved Probable plus
Possible (3P) basis, respectively;
- 1P Reserves decreased 15% to 125.0 million barrels with after
tax value discounted at 10% down 40% to US$734 million (representing CAD$3.49 per share);
- 2P Reserves decreased 12% to 203.3 million barrels with after
tax value discounted at 10% down 20% to US$1.8 billion
(representing CAD$8.57 per
share);
- Reserve volume increases resulted from additional future
development in the core areas of the Patos-Marinza field following
improved rate and recovery performance from the polymer and
water-flood EOR patterns implemented, including horizontal drilling
on reduced spacing (100 metre) and between 20 to 30 injector
conversions per year over the next two years;
- Reserves volume decreases are largely attributed to deferred
development in extension areas of the oilfield where commercial
viability is less at current oil prices, secondary pressure support
is not planned near term and production techniques are being tested
for improved recovery in higher viscosity and lower temperature
areas, including the Gorani and southern Driza reservoirs;
- Main drivers for the decreased valuation are the lower price
forecast, revised development activity to focus on core areas of
the oilfield and technical revisions to reflect well performance in
200 metre and reduced spacing development in core and extension
areas;
- 2014 Company average production was 20,687 bopd for an annual
total volume of 7.6 million barrels (6% of total proved
reserves);
- Reserves Life Index for 1P and 2P is 17 years and 27 years,
respectively.
Total Company Reserves Summary
Gross Oil Reserves – Using Forecast Prices (Million
barrels)
|
|
|
|
|
|
|
2014
|
|
2013
|
|
|
|
Patos-
Marinza
|
Kuçova
|
Total
Albania
|
|
Patos-
Marinza
|
Kuçova
|
Total
Albania
|
|
%
|
Proved
|
|
|
|
|
|
|
|
|
|
|
Developed
Producing
|
36.3
|
0.1
|
36.4
|
|
40.3
|
-
|
40.3
|
|
-10
|
|
Developed
Non-Producing
|
-
|
0.1
|
0.1
|
|
0.7
|
-
|
0.7
|
|
-83
|
|
Undeveloped
|
86.0
|
2.6
|
88.5
|
|
102.3
|
3.4
|
105.7
|
|
-16
|
Total Proved
(1P)
|
122.3
|
2.8
|
125.0
|
|
143.3
|
3.4
|
146.7
|
|
-15
|
Probable
|
69.1
|
9.2
|
78.3
|
|
77.0
|
8.5
|
85.5
|
|
-8
|
Total Proved Plus
Probable (2P)
|
191.4
|
12.0
|
203.3
|
|
220.3
|
11.9
|
232.2
|
|
-12
|
Possible
|
81.0
|
15.5
|
96.9
|
|
104.0
|
21.4
|
125.4
|
|
-23
|
Total Proved,
Probable & Possible (3P)
|
272.8
|
27.5
|
300.3
|
|
324.3
|
33.3
|
357.6
|
|
-16
|
|
|
|
|
|
|
|
|
|
|
Patos-Marinza Contingent and Prospective Resources
(Million barrels – P50 Probability Level)
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
2013
|
|
|
%
|
Contingent
Resource
|
|
|
512
|
|
|
505
|
|
|
1
|
Prospective
Resource
|
|
|
315
|
|
|
259
|
|
|
22
|
|
|
|
|
|
|
|
|
|
|
Net Present Value at 10% - After Tax Using Forecast Prices
(US$ millions)
|
|
|
|
|
|
|
2014
|
|
2013
|
|
%
|
|
Patos-
Marinza
|
Kuçova
|
Total
Albania
|
|
Patos-
Marinza
|
Kuçova
|
Total
Albania
|
|
|
Proved
|
|
|
|
|
|
|
|
|
|
|
Developed
Producing
|
388
|
1
|
389
|
|
568
|
-
|
568
|
|
-32
|
|
Developed
Non-Producing
|
-
|
1
|
1
|
|
11
|
-
|
11
|
|
-89
|
|
Undeveloped
|
327
|
17
|
344
|
|
614
|
23
|
637
|
|
-46
|
Total
Proved
|
715
|
19
|
734
|
|
1,193
|
23
|
1,216
|
|
-40
|
Probable
|
968
|
100
|
1,068
|
|
926
|
98
|
1,024
|
|
4
|
Total Proved Plus
Probable
|
1,683
|
119
|
1,802
|
|
2,119
|
121
|
2,240
|
|
-20
|
Possible
|
846
|
197
|
1,043
|
|
1,003
|
296
|
1,299
|
|
-20
|
Total Proved,
Probable & Possible
|
2,529
|
316
|
2,845
|
|
3,122
|
417
|
3,539
|
|
-20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
Reserves Value
10% Discounted, After Tax
|
|
|
CAD$/Share
|
|
US$/bbl
|
|
CAD$/Share
|
|
US$/bbl
|
|
1P
reserves
|
|
|
$3.49
|
|
$5.87
|
|
$5.27
|
|
$8.29
|
|
2P
reserves
|
|
|
$8.57
|
|
$8.86
|
|
$9.72
|
|
$9.65
|
|
3P
reserves
|
|
|
$13.54
|
|
$9.47
|
|
$15.36
|
|
$9.90
|
|
|
|
|
|
|
|
|
Basic shares outstanding as of December
31, 2014, were approximately 261 million (285 million
diluted).
Values are based on RPS (Patos-Marinza) and D&M (Kuçova)
January 1, 2015, price forecast
tables summarized below:
Reserves Evaluator Price Decks – Dated Brent
BRENT Oil Price
Forecast US$/bbl
|
Year
|
RPS
|
D&M
|
2015
|
70.03
|
69.00
|
2016
|
74.64
|
75.40
|
2017
|
79.50
|
82.03
|
2018
|
84.50
|
88.90
|
2019
|
89.50
|
96.01
|
2020
|
93.85
|
97.85
|
2021
|
95.72
|
99.72
|
2022
|
97.64
|
101.64
|
2023
|
99.59
|
103.59
|
2024
|
101.58
|
105.58
|
2025
|
103.61
|
107.61
|
2026
|
+2.0%
Thereafter
|
+2.0%
Thereafter
|
Finding and Development Costs (F&D)
The future development capital has decreased with deferral of
activity in the extension areas of the Patos-Marinza
oilfield. The resulting future horizontal well count has
decreased from 995 to 882 in the 2P development case and from 984
to 870 in the 1P and 1,082 to 999 in the 3P cases. In 2014,
Bankers drilled 157 new horizontal production wells in
Patos-Marinza.
Total future undiscounted capital costs for Patos-Marinza and
Kuçova are projected to be US$2.0
billion, US$2.1 billion and
US$2.4 billion on a 1P, 2P and 3P
basis, respectively. This represents a 14%, 13% and 11%
decrease in future capital on a 1P, 2P, and 3P basis compared to
the previous year. The F&D costs, calculated as total
future development capital divided by recoverable reserves
excluding currently developed PDP and Proved Developed
Non-Producing (PDNP) reserves, are summarized in the table
below:
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
2013
|
F&D
Costs
|
|
|
|
US$/bbl
|
|
|
US$/bbl
|
1P
reserves
|
|
|
|
$22.57
|
|
|
$20.45
|
2P
reserves
|
|
|
|
$12.69
|
|
|
$12.08
|
3P
reserves
|
|
|
|
$8.95
|
|
|
$7.85
|
|
|
|
|
|
|
|
|
Oil Initially in Place
In Patos-Marinza, the Oil Initially in Place ("OIIP") volumes in
the reserves area remain essentially the same at 2.3 billion
barrels and the OIIP outside the reserves area at 2.8 billion
barrels in 2014.
The Kuçova OIIP resource estimate remains at 297 million
barrels.
Operational Update
The last ten day average production was 20,750 bopd, 2% higher
than the fourth quarter of 2014 average. All wells that had
been temporarily shut-in due to limited surface access during the
flooding are now returned to production. These wells continue
to be optimized and as they clean-up, are expected to resume
previous rates throughout the remainder of the first quarter.
As previously announced, Bankers has now reduced its drilling
activity to two drilling rigs.
Further details, including the March
2015 Corporate Presentation, are available on the Company's
website www.bankerspetroleum.com.
Conference Call
Bankers' Management will host a conference call on March 2, 2015 at 6:30 am
MST (8:30 am EST, 1:30 pm GMT) to discuss this reserves
report. 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/1488471/1657241.
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 March 16, 2015 by dialing 1-855-859-2056 or
1-416-849-0833 and entering access code 89799223.
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.