CALGARY, July 6, 2016 /CNW/ - Bankers Petroleum Ltd.
("Bankers" or the "Company") (TSX: BNK, AIM: BNK) is pleased to
announce the Company's second quarter operational update.
Production
Bankers achieved a second quarter 2016 production average of
15,934 barrels of oil per day (bopd), 8.2% below the first quarter
2016 average of 17,363 bopd. Following a previously announced
business interruption at the Petrolifera Italo Albanese ("PIA")
Terminal port facility in late May, the Company curtailed
production by approximately 4,000 bopd for 5 days due to lack of
storage capacity. Production was brought back on-line
beginning June 8 and resumed
production levels within a week. In addition, maintenance and
optimization of the water disposal system during the quarter
further restricted production (approximately 300 bopd over the
quarter). The Company continued to optimize production levels
and monitor the economic return of all wells in accordance with the
current oil price environment.
Sales and Oil Prices
In the second quarter 2016, oil sales averaged 15,023 bopd,
compared to the first quarter sales in 2016 of 17,280 bopd. Crude
oil inventory at June 30, 2016
increased to 348,700 barrels compared to 266,000 barrels at
March 31, 2016, with the last
scheduled cargo of the quarter deferred to the first few days of
July.
Bankers' second quarter average oil price was
approximately $29.99 per barrel (representing 66% of the
Brent oil price of $45.57 per barrel), as compared with
the first quarter 2016 average oil price of $21.07 per
barrel (representing 62% of the Brent oil price
of $33.89 per barrel). Sales to the export market during
the second quarter 2016 represented 94% of total sales, at an
average export price of 66% of the Brent oil price. Sales prices in
the second quarter improved compared to the first quarter of 2016
as the Brent benchmark price climbed back over $40 per barrel and demand increased seasonally
for heavy crude oil on both the export and domestic markets.
For the six months ended June 30, 2016, average oil sales
were 16,152 bopd (representing 63% of the Brent oil price of
$25.22 per barrel) compared
19,899 bopd (representing 75% of the Brent oil price of
$57.95 per barrel) for the first
six months of 2015.
On April 29, 2016, Bankers added
another 1,000 bopd to its existing hedge position for 2016. The
Company now has a total of 6,000 bopd under costless collar
contracts with an average floor of $51.52 per barrel and an
average ceiling of $53.78 per barrel (all prices are
referenced to Dated Brent) for the balance of 2016. In the second
quarter of 2016, the hedge program generated proceeds of
$2.7 million. The remaining 2016
hedge program at June 30, 2016, is
valued at $2.2 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 and is being reviewed for resumption in
the second half of 2016.
Enhanced Oil Recovery (EOR) Program
The existing polymer flood and water flood patterns continue to
perform well and in several cases above reservoir model
expectations. The average incremental production over primary
decline in the month of June coming from EOR patterns is
approximately 3,665 bopd (representing about 24% of total
production). The total production coming from these EOR patterns is
close to 5,285 bopd (or 35% of total production). The Company
converted four (4) producing wells to injection in the second
quarter and has fifty-three (53) polymer and five (5) water flood
patterns implemented at the end of the second quarter 2016.
Infrastructure Development
In the second quarter of 2016, Bankers implemented plans to
expand the reach of natural gas generated power through the
installation of stock gas generators synchronized with overhead
powerlines and continued expansion on the polymer distribution
system. The Company also focused on the optimization of its
water disposal system with the purchase of high pressure pumps to
be installed in the third quarter to increase the injection
capacity at existing disposal wells. The planned commissioning of
the new inlet system at Pad D was delayed due to late arrival of
equipment and is now expected early in the third quarter.
Corporate Transaction Update
Completion of the proposed plan of arrangement (the
"Arrangement") with affiliates of Geo-Jade Petroleum Corporation
("Geo-Jade") is subject to the outstanding regulatory approval of
the Chinese State Administration of Foreign Exchange (SAFE).
Bankers anticipates receipt of this approval in the coming weeks
and closing of the Arrangement to occur shortly thereafter in July.
Following a successful completion of the Arrangement, the
common shares of Bankers (the "Bankers Shares") will be delisted
from the Toronto Stock Exchange ("TSX") and the AIM market of the
London Stock Exchange.
Updated Corporate Presentation
For additional information on this Operational Update please see
the Company's July 2016 corporate
presentation on the Company's website,
www.bankerspetroleum.com.
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, the regulatory approvals
required to complete the Arrangement and the anticipated delisting
of the Bankers Shares following completion of the Arrangement
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.
