REG-Bankers Petroleum Limited: Operational Update for the Third Quarter 2015 <Origin Href="QuoteRef">BNK.TO</Origin>

Big Banc SplitAnnouncement

07/10/2015 12:10

Bankers Petroleum Operational Update for the Third Quarter 2015

    Average Quarterly Production 19,598 bopd and Improved Corporate Decline    

CALGARY, Oct. 7, 2015 /CNW/ - Bankers Petroleum Ltd. (Bankers or the Company)
(TSX: BNK, AIM: BNK) is pleased to announce the Company's third quarter
operational update.

Production

Average production from the Patos-Marinza and Kuçova oilfields in Albania for
the third quarter of 2015 was 19,598 barrels of oil per day (bopd), a decrease
of 2% compared to the second quarter average of 20,045 bopd. Production in the
quarter stabilized with development drilling utilizing two rigs, response from
the enhanced oil recovery (EOR) patterns that were implemented last year and
continued focus on converting wells to injectors as part of the 2015 EOR
program.

The Bubullima reservoir continues to perform well, with four (4) producing
wells averaging close to 200 bopd per well, which includes some downtime for
workovers in the quarter. The latest Bubullima well drilled in the third
quarter was recently tied-in and is being optimized. While the volumes are very
encouraging, the Bubullima production is both slightly sour and high in
watercut requiring the Company to manage the disposal capacity and sour
treatment facilities ahead of the Bubullima development program. The Company
has facilities in place to support its plans to drill two (2) to three (3)
additional Bubullima wells in the fourth quarter and is planning the 2016
program accordingly.

Sales and Oil Prices

Oil sales during the third quarter averaged 19,730 bopd, 0.4% higher than the
previous quarter average of 19,599 bopd. Crude oil inventory at September 30,
2015, was 297,000 barrels down from 307,000 barrels at June 30, 2015.

The Patos-Marinza third quarter average oil price was approximately $39.52 per
barrel (representing 79% of the Brent oil price of $50.26 per barrel), as
compared with the second quarter average oil price of $47.98 per barrel
(representing 77% of the Brent oil price of $61.92 per barrel). Sales to the
export market during the third quarter 2015 represented 97% of total sales, at
an average export price of 79% of the Brent oil price. The majority of the
volumes were sold to the export market in the third quarter to capitalize on
the continued demand during the summer months. In the fourth quarter, crude oil
volumes have been largely committed to the export market to capture higher
realized prices and consistent off-take during the winter months.

Bankers realized $16.4 million (representing $9.05 per barrel) during the third
quarter in proceeds from corporate hedges.

Hedging Strategy

Bankers has hedged 6,000 bopd at a Brent price of $80 per barrel for the
balance of 2015. The remaining 2015 hedge program at September 30, 2015, is
valued at $23.4 million.

During the third quarter, Bankers initiated its 2016 hedging strategy by
placing two costless collar contracts with an average floor of $54 and average
ceiling of $58 for a total of 2,500 bopd for the full year. The Company will
look to add to this hedging position as the markets allow, for up to 6,000
bopd. These contracts are designed to protect Bankers against further weakness
in oil prices in 2016, while still providing the Company and its shareholders
the opportunity to benefit from price improvement.

Enhanced Oil Recovery Program

The EOR program continues to demonstrate strong performance with twenty-eight
(28) polymer and six (6) water flood patterns operating in the Patos-Marinza
oilfield at the end of the third quarter. During the third quarter, Bankers
converted two (2) producing wells to injector wells and plans to convert an
additional ten (10) to fifteen (15) wells before the end of 2015.

The polymer and water flood programs produced a total of approximately 3,715
bopd in the month of September, representing 19% of Bankers total production or
12% incremental production above what the estimated primary performance would
have produced. With a growing percentage of the field under pressure support
from the EOR program, the Company estimates that the base corporate decline has
begun to shallow from an estimated thirty (30) percent in early 2015 to an
estimated twenty (20) to twenty-five (25) percent corporate decline in 2016.

"This is a significant milestone for the Company. The EOR program is doing
exactly what it was intended to do, provide an incremental production wedge as
well as reduce our corporate decline, allowing the Company to achieve more with
less activity," commented David French, President and Chief Executive Officer
of Bankers Petroleum.

Drilling Update

Bankers drilled a total of fourteen (14) wells in the third quarter: thirteen
(13) horizontal producers in Patos-Marinza and one (1) horizontal producer in
Kuçova. Twelve (12) of the producing wells are on production, the remaining two
(2) wells will be placed on production early in the fourth quarter.

In the fourth quarter, Bankers plans to drill fourteen (14) horizontal
production wells and one (1) multi-lateral well. This will be the second
multi-lateral well in Patos-Marinza, testing the Lower Driza performance from
thinner stacked reservoir sands. The multi-lateral concept reduces the capital
cost of each lateral leg compared to a single lateral well improving access to
the reservoir and allowing expansion of our development plan.

Infrastructure Development

Infrastructure projects in the third quarter focused on emulsion gathering
systems to tie-in wells and improved inlet systems and vapour recovery units at
satellite facilities. The final stages of the north gathering system are being
completed with partial commissioning underway and the remaining leases being
tied-in during the coming weeks. The inlet vessels at Satellite 3 treating
facility are currently being commissioned in conjunction with the north
gathering system. Construction on the west gathering system has progressed as
scheduled, with expected completion in the first half of 2016.

Additional projects included the installation of vapor recovery units at Pad H
and Pad D treating facilities that commenced late in the second quarter and are
expected to be commissioned in the latter half of the fourth quarter. As well,
the second commercial polymer skid was commissioned, completing the majority of
the necessary facilities associated with the remainder of the planned EOR
conversions in 2015.

Cost Recovery Audit Update

The Company is pleased to announce that it has signed a formal Terms of
Reference with the Albanian National Agency for Natural Resources (AKBN) and
the Minister of Energy and Industry to engage a third-party international
auditor to assist in resolving the outstanding cost recovery audit. The audit
firm will be selected by mid-October and this process is expected to be
finalized by the end of the fourth quarter.

In parallel with this process, the Albanian Courts have formally deferred
(subject to appeal) the previously announced profits tax assessment until
resolution of the outstanding cost recovery audit. It is expected that the
findings of the third-party audit will trigger a reduction of the previously
announced tax assessment.

Updated Corporate Presentation

For additional information on this Operational Update, please see the Company's
October 2015 corporate presentation at http://www.bankerspetroleum.com/.

Conference Call

The Management of Bankers will host a conference call on October 7, 2015 at 6:
30 am MDT (8:30 am EDT, 1:30 pm BST). 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 
http://www.bankerspetroleum.com./ or by entering the following URL into your
web browser, https://event.on24.com/eventRegistration/EventLobbyServlet?target=
registration.jsp&eventid=1061615&sessionid=1&key=
69706B8BF384996018CDFB67BCE1568C&sourcepage=register.

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 October 21, 2015 by dialing 1-855-859-2056 or 1-416-849-0833 and entering
access code 53385520.

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


 



END



Copyright © 2015 PR Newswire Association, LLC. All Rights Reserved