Fully Funded US$313 Million Capital Program in Albania
CALGARY, Dec. 12, 2013 /PRNewswire/ - Bankers Petroleum Ltd. ("Bankers" or the "Company") (TSX: BNK, AIM: BNK) is pleased to announce its 2014 capital program of US$313 million, to be fully funded with funds generated from operations, cash and available credit facilities. This represents a record annual activity level for the Company. The budget has been approved by the Company's Board of Directors and submitted to the Albanian authorities for their approval.
The 2014 capital program will focus on horizontal drilling and expansion of the secondary recovery program in the Patos-Marinza oilfield. The Company will also direct capital towards associated projects including infrastructure and facilities construction, drilling of core wells in the South area of the field, new development in Kuçova, and exploration for natural gas in Block "F".
David French, President & CEO commented, "Our 2014 capital budget extends on Bankers three key strategies of disciplined growth through drilling, validation of our enhanced recovery potential, and expanding our operating margins. We have put together a balanced spend profile to deliver reliable in-year production growth, and at the same time build on our understanding of the prize of further development over the next decade."
Primary Drilling Capital
With the addition of the sixth drilling rig in the first quarter and a budget of $216 million, the Company intends to drill a total 150 to 170 wells in 2014. This includes horizontal development wells, lateral re-drills, vertical delineation wells, and core wells. Approximately 90% of drilling activities will focus on production growth and 10% of the wells will target new reserves through delineation of zones and areas. Included in the drilling budget is $15 million for re-activation and work-over of old vertical wells.
Water and Polymer Flood Program
The 2014 capital program includes $15 million for expansion of polymer and water flood patterns with up to fourteen (14) injector conversions as well as associated facilities aimed to offset field declines and increase recovery of the oil in place. The Company will continue to evaluate the existing patterns and adjust the secondary recovery plan based on early results, which are expected in the first half of the year.
Facilities, Infrastructure, and Associated Capital
A total of $76 million of the 2014 capital program will be allocated to facilities and infrastructure activities in 2014. Projects include:
- construction of additional sales tank storage;
- flow lining within the field;
- continuation of the water remediation program, as required;
- expansion of water disposal capabilities with up to three (3) water disposal wells; and
- continuation of environmental remediation and social initiatives.
The Company plans to spend $4 million on drilling of the first two (2) horizontal wells in the Kuçova oilfield to produce lighter oil and evaluate further field development. The budget also includes capital for re-activation of offset vertical wells for data collection and assessment.
Block "F" Exploration Block
The Company has submitted an application to enter into the second exploration phase of Block "F" for an additional two year period. The capital program for 2014 includes $2 million dollars for the acquisition of 20 km2 of 3D seismic, with commitments to drill two (2) exploratory wells in the following year. As a part of the agreement to extend the exploration phase, the Company will relinquish 25% of the block within the first quarter of 2014.
CAPITAL PROGRAM FUNDING
Bankers is pleased to announce that 70% of 2014 crude volumes have been committed through term contracts to counterparties in the Mediterranean and extending east into Asia at 81% of Dated Brent.
Utilizing a $100 per barrel Brent oil price forecast and average price realization of 81% of Brent for Patos-Marinza crude, the Company expects to fully fund the 2014 capital program with funds generated from operations, cash and available credit facilities.
With this capital program the Company expects to achieve 10% to 15% annual growth in production from the 2013 average.
UPDATED CORPORATE PRESENTATION
For additional information on this operational update, please see the December 2013 version of the Company's corporate presentation at www.bankerspetroleum.com.
Management of Bankers will host a conference call on December 12, 2013 at 6:30 am MST to discuss the 2014 Capital Budget. 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 http://www.newswire.ca/en/webcast/detail/1277883/1409799.
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 December 26, 2013 by dialing 1-855-859- 2056 or 1-416-849-0833 and entering access code 23976676.
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.