Fully Funded US$153Million Capital Program
CALGARY, Jan. 30, 2015 /PRNewswire/ - Bankers Petroleum Ltd. ("Bankers" or the "Company") (TSX: BNK, AIM: BNK) announces its revised 2015 capital program of US$153 million (all amounts referenced below are in US dollars), reduced from the previously announced 2015 capital program of $218 million. These adjustments have been made to ensure 2015 spending fits within funds generated from operations and cash resources in the latest oil price environment. The revised budget has been approved by the Company's Board of Directors and will be submitted to the Albanian authorities for their approval.
David French, President and CEO, commented, "We believe it is prudent with today's commodity outlook to show capital discipline and preserve our strong balance sheet. Our project portfolio is flexible enough to allow us to choose our pace and scale of development as appropriate. This revised budget reflects our rigorous focus on capital and operating cost efficiency with a balance of both short term drilling execution and long term flood expansion of the field."
CAPITAL PROGRAM FUNDING
The revised 2015 capital program utilizes a $50 per barrel average annual Brent oil price forecast in comparison to the budget announced on December 12, 2014, which was predicated on an annual Brent oil price forecast of $70 per barrel. The Company expects to fully fund the $153 million capital program with funds generated from operations and cash resources.
The revised capital program includes $80 million to be spent on the drilling, completion and associated costs of approximately 60 new horizontal wells. The number of active drilling rigs will be reduced from three rigs down to two within 30 days.
Enhanced Oil Recovery: Polymer Flood Expansion
The revised program includes $28 million for the accelerated EOR program. This program allows for the conversion of up to 20 existing production wells to polymer injection throughout the year, as well as the associated facilities and infrastructure to support the acceleration of the EOR program. This represents a reduction from the 25 - 30 conversions in the previously announced budget.
Facilities, Infrastructure, and Associated Capital
A total of $45 million of the 2015 capital program will be allocated to facilities and infrastructure activities. Projects include:
- well servicing and work overs;
- flow lining within the field;
- electrification of well pads;
- expansion of water disposal capabilities with one (1) water disposal well; and
- continuation of environmental remediation and social initiatives.
Based on the revised 2015 capital expenditures, Bankers anticipates its 2015 average production levels will decrease from its average 2014 production levels by approximately 5% on account of reduced drilling activity and shut-in volumes due to marginal economics.
Bankers maintains a strong balance sheet with a cash position of approximately $73 million at December 31, 2014, as well as a hedge which represents 6,000 bopd at $80 per barrel Brent for 2015. Inclusive of the January realization, the hedge valuation is currently in excess of $60 million. Management will continue to protect the financial position of the Company with the strategic view to maintain capital expenditures within 2015 cash flow, supplemented with cash resources. At December 31, 2014, Bankers had drawn $104 million from its $224 million credit facilities; no additional draws are anticipated in 2015.
UPDATED CORPORATE PRESENTATION
For additional information on this operational update, please see the Company's updated January 2015 corporate presentation at www.bankerspetroleum.com.
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.