Record Year with 2014 Average Production of
20,687 bopd
CALGARY, Jan. 6, 2015 /PRNewswire/ - 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 14% growth in 2014 with average production of
20,687 bopd compared to 2013's average production of 18,169
bopd. For the fourth quarter 2014, average production from
the Patos-Marinza oilfield in Albania was 20,324 bopd.
In November, the Company elected to shut-in production from
several higher water-cut wells due to reduced water handling
capacity after a disposal pump failure. The replacement parts
needed for the pump are due to arrive in country by mid-January and
disposal rates will be resumed throughout the balance of the first
quarter. Two additional water disposal wells are planned in
later in 2015 to provide additional water handling capacity.
While a large amount of uncertainty around oil prices will have
an impact on the level of capital deployment, Bankers is carefully
evaluating the economic return of each well in the field on a
regular basis. The Company will continue to manage work-over
activity and operational practices of marginal volumes in
accordance with the current economic environment.
Sales and Oil Prices
In 2014, oil sales averaged 20,678 bopd, 14% higher than the
average sales in 2013. During the fourth quarter, oil sales
averaged 20,619 bopd, 6% lower than the previous quarter average of
21,992 bopd. Crude oil inventory at December
31, 2014 decreased to 315,500 barrels compared to 342,500
barrels at September 30,
2014.
The Patos-Marinza fourth quarter average oil price was
approximately $57.31 per barrel
(representing 75% of Brent oil price of $76.27 per barrel), as compared with the third
quarter average oil price of $78.55
per barrel (representing 77% of Brent oil price of $101.85 per barrel). Sales to the export
market during the fourth quarter represented 64% of total sales
(net of in-kind royalties), at an average export price of 77% of
Brent oil price.
Bankers continues to maintain its 2015 hedge program covering
6,000 bopd whereby the difference between the monthly Brent
price and $80/bbl is received
within the first week of the following month. For
December 2014, the cash settlement
represented US$3.3 million. At
December 31, 2014, the 2015 hedge
represented a valuation of US$44
million.
Drilling Update
In 2014, Bankers drilled a record total of 160 horizontal wells.
In the fourth quarter, thirty-nine (39) wells were drilled and rig
released: thirty-seven (37) horizontal wells plus one (1) lateral
re-drill were in the main area of the Patos-Marinza oilfield and
the Company's first horizontal well was drilled in Kuçova. Thirty
(30) of these wells including the Kuçova well were completed and
are on production with the remaining nine (9) to be placed on
production in January pending drilling rig move off the pad, well
completions and facilities tie-in.
As previously announced, Bankers has chosen to lay down two (2)
of its drilling rigs in December, with a third to follow in early
January. The Company will continue to drill utilizing a three (3)
rig program and projects 85 – 90 new horizontal wells in 2015
pending oil prices.
Secondary Recovery Program
The polymer flood and water flood patterns in the Patos-Marinza
oilfield continue to perform to model expectations from the
nineteen (19) polymer and four (4) water flood patterns installed
at the end of the fourth quarter. Reservoir pressure and production
response are positive with good reservoir flood conformance.
Peak rates are being managed to control draw-down across the
laterals of the producers in all patterns to establish stable
operating conditions.
Two (2) additional wells were converted to injection in the
fourth quarter bringing the total number of implemented patterns to
four (4) water flood injectors in the Upper Marinza (M0 reservoir
sand), thirteen (13) polymer flood injectors in the Lower Driza
spread evenly between the D5, D4, and D3 reservoir sands with an
additional injector in the D3 sand in the southern region, and six
(6) polymer injectors spread evenly in the three Lower Driza zones
in the central region of the field.
The Company continues to be strongly encouraged by the results
to date and plans to move forward with 25 – 30 additional
conversions in 2015.
Infrastructure Development
The field electrification project continued in the northern and
central areas of the Patos-Marinza oilfield with the conversion of
68 wells in the fourth quarter. With the good cost savings
performance, the electrification program will carry-on in 2015 with
plans to electrify up to 250 wells throughout the year.
Construction of the west water disposal line is over half
completed, with commissioning expected in the first quarter.
Construction of the north gathering oil line is scheduled to
commence in the first quarter of 2015 with completion
mid-year. Both projects will target reductions in trucked
volumes within the field and reduce operating costs over the year.
The third gathering system, the west oil flow-line project, has
been temporarily deferred under the current oil price
environment.
Other infrastructure activities include the commissioning of the
Satellite 3 treating facility, installation of several GOR skids
for gas capturing and measurement as well as maintenance
turnarounds of main treating facilities.
Updated Corporate Presentation
For additional information on this Operational Update please see
the Company's January 2015 corporate
presentation at www.bankerspetroleum.com.
Conference Call
The Management of Bankers will host a conference call on
January 6, 2015, 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/1467845/1633727.
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 20, 2015 by dialing 1-855-859-2056 or
1-416-849-0833 and entering access code 60030326.
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.