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.
