Bankers Petroleum* (BNK : TSX : $8.65), Net Change: -0.74, % Change: -7.88%, Volume: 6,639,375
More Bankers for your buck. Bankers Petroleum, an Albania-focused heavy oil producer, traded lower after reporting year-end2010 reserves. The company's reserves report was very positive year over year (YoY). Proved reserves (1P) were up 30% to 120
million barrels. While Proved plus probable reserves (2P) increased 11% to 238 million barrels. Banker's original oil-in-place
million barrels. While Proved plus probable reserves (2P) increased 11% to 238 million barrels. Banker's original oil-in-placeestimate (P50) increased 32% to 7.5 billion barrels. Slightly negative was news that reactivations are failing more often so more
capital is being allocated to horizontal wells. Reactivations have been reduced to 310 wells and new horizontal wells have
increased from 260 wells in the previous year's projected capital program to 624 wells in 2011 and beyond. This results in 1.5x
higher future capital due to more horizontal wells to be drilled (to $1.2 billion from $785.6 million last year). Bankers'
horizontal well profiles now have declines much earlier (no plateau period) and a smaller estimated recovery (EUR) down to
260,000 bbls from 370,000 bbls. Declines are estimated at 30-35%, which are higher than previous expectations of perhaps a
15% decline after a 1.5- to 2.0-year plateau period. The company maintained current guidance for estimated production and
capex: 2011e: 16,500 bbl/d; $215 million capex; 2012e: 26,000 bbl/d; $200 million capex. It also released guidance for 2013
with estimated production and capex of 35,000 bbl/d and $200 million. Bankers should be providing a Q1/11 operational update
in early April.