CALGARY, April 5, 2016 /PRNewswire/ - Bankers
Petroleum Ltd. ("Bankers" or the "Company") (TSX: BNK, AIM: BNK) is
pleased to announce the Company's first quarter operational
update.
Production
Bankers achieved a first quarter 2016 production average of
17,363 barrels of oil per day (bopd), 4% below the fourth quarter
2015 average of 18,137 bopd. During the first quarter of 2016, the
Company continued to optimize current production levels and monitor
the economic return of all wells in accordance with the current oil
price environment.
Sales and Oil Prices
In the first quarter of 2016, oil sales averaged 17,280 bopd,
compared to the fourth quarter sales in 2015 of 18,558 bopd. Crude
oil inventory at March 31, 2016
increased to 266,000 barrels compared to 258,000 barrels at
December 31, 2015.
Bankers' first quarter average oil price was
approximately $21.07 per barrel (representing 62% of the
Brent oil price of $33.89 per barrel), as compared with
the fourth quarter 2015 average oil price of $33.62 per
barrel (representing 77% of the Brent oil price
of $43.69 per barrel). Sales to the export market during
the first quarter 2016 represented 96% of total sales. Sales prices
were lower than expected in the first quarter due to temporarily
reduced pricing in February at the request of our export crude
buyer as Brent prices reached levels of $30 per barrel.
March crude sales recovered towards better pricing as the Brent oil
price improved and we are expecting continued improvement as we
enter into the second quarter and seasonally higher demand for
heavy crude oil on both the export and domestic markets.
Bankers has hedged 5,000 bopd under costless collar contracts
with an average floor of $52.09 per barrel and an average
ceiling of $54.64 per barrel (all prices are referenced to
Dated Brent) for the balance of 2016. In the first quarter of 2016,
the hedge program generated proceeds of $7.4
million. The remaining 2016 hedge program at March 31, 2016, is valued at $16.2 million. These contracts are designed
to protect Bankers against further volatility in oil prices in
2016.
Drilling Update
Due to the low oil price environment, Bankers elected to defer
drilling activity at the start of the year in order to protect the
strength of the Company's balance sheet. Drilling activity will
resume as pricing improves.
Enhanced Oil Recovery (EOR) Program
Bankers continues to monitor the existing polymer flood and
water flood patterns which continue to perform to reservoir model
expectations. The average incremental production over primary
decline in the month of March coming from EOR patterns is
approximately 3,219 bopd (representing about 19% of total
production). The total production coming from these EOR patterns is
close to 4,952 bopd (or 29% of total production). The Company
converted one (1) producing well to injection in the first quarter
and has forty-nine (49) polymer and five (5) water flood patterns
implemented at the end of the first quarter 2016.
Infrastructure Development
In the first quarter of 2016, Bankers focused on completing
existing projects that will help to optimize operations and capture
additional cost savings. The commissioning of the north emulsion
gathering flowlines was completed early in the quarter and is now
fully operational. Construction of the west emulsion gathering
system was also completed in the quarter and is expected to be
commissioned along with the necessary expansion at satellite
facility Pad D in the second quarter.
Credit Facility Update
The expiry date for the Company's existing $18 million credit facility from Raiffeisen Bank
has been extended until May 31, 2016
(from March 31, 2016). This
will allow sufficient time for Raiffeisen Bank to continue with
their due diligence requirements pursuant to Bankers' recently
announced corporate transaction.
Corporate Transaction Update
Pursuant to the March 20, 2016
announcement of the acquisition of the Company by affiliates of
Geo-Jade Petroleum Corporation, Bankers advises that the Special
Meeting of Shareholders is currently scheduled on May 31, 2016. The meeting materials will be
distributed on or before April 26,
2016. Additionally, the parties have commenced preparation
of the various applications for the necessary regulatory
approvals.
Updated Corporate Presentation
For additional information on this Operational Update please see
the Company's April 2016 corporate
presentation on the Company's website,
www.bankerspetroleum.com.
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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, timing of the Special Meeting
of Shareholders and the regulatory approvals required to complete
the corporate transaction 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.
Forward-looking statements in this new release are made as of the
date hereof, and the Company undertakes no obligation to update or
revise any forward looking statements, whether as a result of new
information, future events or otherwise, unless required by
applicable securities laws.
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 and
Eastern Europe. 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". In
2015 Bankers acquired an 85% interest in the rights to explore the
Püspökladány Block concession within the Pannonian Basin located in
north eastern Hungary. 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.
