4,000 BOPD AT US$80 PER BARREL FLOOR PRICE
CALGARY, Feb. 25 /PRNewswire/ - Bankers Petroleum Ltd. (the "Company") announced today the purchase of put contracts representing 4,000 barrels of oil per day at US$80 per barrel of Dated Brent for the period January 1, 2012 to December 31, 2012. This volume represents approximately 20% of the Company's forecasted 2012 average production in Albania. The hedge is strictly financial and does not take into account the Patos-Marinza crude price differential to Dated Brent.
With the recent spike in oil prices due to the current geopolitical situation in the Middle East and North Africa, and with our Patos-Marinza oil marketing agreements priced relative to the Brent oil price, the Company elected to implement this relatively inexpensive strategy to start in 2012 as a form of insurance to have downside protection below US$80 per barrel, on a percentage of our production representative of field declines, while continuing full upside participation above the strike price on all 2012 production. If oil prices drop below US$80 per barrel, these hedge contracts and the resulting production cash flow would generate sufficient revenue to fund a significant portion of our capital program in 2012 and service any outstanding debt during that period.
Additional oil hedging contracts might be considered in the future as part of Bankers overall risk management strategy.
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 and 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.