Bankers Petroleum Operational Update for the Fourth Quarter 2013
Average Quarterly Production 19,300 bopd
CALGARY, Jan. 7, 2014 /PRNewswire/ - 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.
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.
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.
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.
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.