202 Million Barrels of Proved plus Probable
(2P) Reserves including 21 Million Barrels of EOR
Reserves;
NPV of US$1.4 Billion
CALGARY, March 2, 2016 /CNW/ - Bankers Petroleum Ltd.
("Bankers" or the "Company") (TSX: BNK, AIM: BNK) announces the
results of its December 31, 2015,
independent reserves evaluation. Evaluations were conducted by RPS
Energy Canada Ltd. (RPS) for the Patos-Marinza oilfield,
Albania, and by DeGolyer and
McNaughton Canada Ltd. (D&M) for the Kuçova oilfield,
Albania; and were prepared in
accordance with Canadian National Instrument 51-101 – Standards of
Disclosure for Oil and Gas Activities.
David French, President and CEO
commented "The 2015 Reserves update represents a continuation of
our successful development plan over the past several years.
The doubling of our booked Enhanced Oil Recovery (EOR) barrels
demonstrates the success of the EOR program, and our dedication to
prioritize EOR as the most efficient dollars we can spend in this
pricing environment. It also marks an inflection point in our
Finding and Development Costs, as the transition to EOR development
will reduce our forward capital requirements to sustain and grow
the business. We have a deep inventory of future drilling
locations and injector conversions, and even modest changes in oil
price put us in a very enviable position of low cost operations and
development."
Overview
- EOR reserve volumes doubled in the Patos-Marinza oilfield
increasing to 4.6, 14.7, 21.1 and 27.3 million barrels on a Proved
Developed Producing (PDP), Proved (1P), Proved plus Probable (2P),
and Proved Probable plus Possible (3P) basis, respectively;
- 1P Reserves remained constant at 125 million barrels with after
tax value (discounted at 10%) down 12% to US$648 million (representing CAD$3.42 per share);
- 2P Reserves remained constant at 202 million barrels with after
tax value (discounted at 10%) down 21% to US$1.4 billion
(representing CAD$7.49 per
share);
- Reserves volume increases in the core area of the oilfield
resulted from additional future development in the Marinza
formation due to horizontal drilling on reduced spacing (100
metres) and the addition of future EOR patterns.
- Reserves volume decreases and overall valuation decreases are
attributable to the lower price forecast and resulting reduced
development plan in non-core areas, specifically in the Driza
Formation in the southern region of the Patos-Marinza
oilfield.
- 2015 Company average production was 19,384 bopd for an annual
total volume of 7.1 million barrels (6% of total proved
reserves);
- Reserves Life Index for 1P and 2P is 18 years and 29 years,
respectively.
Total Company Reserves Summary
Gross Oil Reserves – Using Forecast Prices (Million
barrels)
|
|
|
|
|
|
|
2015
|
|
2014
|
|
|
|
Patos-
Marinza
|
Kuçova
|
Total
Albania
|
|
Patos-
Marinza
|
Kuçova
|
Total
Albania
|
|
%
|
Proved
|
|
|
|
|
|
|
|
|
|
|
Developed
Producing
|
32.3
|
0.1
|
32.4
|
|
36.3
|
0.1
|
36.4
|
|
-11
|
|
Developed
Non-Producing
|
4.7
|
-
|
4.7
|
|
-
|
0.1
|
0.1
|
|
-
|
|
Undeveloped
|
85.8
|
2.7
|
88.5
|
|
86.0
|
2.6
|
88.5
|
|
0
|
|
|
|
|
|
|
|
|
|
|
Total Proved
(1P)
|
122.9
|
2.8
|
125.6
|
|
122.3
|
2.8
|
125.0
|
|
0
|
Probable
|
67.5
|
9.2
|
76.7
|
|
69.1
|
9.2
|
78.3
|
|
-2
|
|
|
|
|
|
|
|
|
|
|
Total Proved Plus
Probable (2P)
|
190.3
|
12.0
|
202.3
|
|
191.4
|
12.0
|
203.3
|
|
-1
|
Possible
|
73.6
|
15.6
|
89.3
|
|
81.4
|
15.5
|
96.9
|
|
-8
|
|
|
|
|
|
|
|
|
|
|
Total Proved,
Probable & Possible (3P)
|
263.9
|
27.6
|
291.6
|
|
272.8
|
27.5
|
300.3
|
|
-3
|
|
|
|
|
|
|
|
|
|
|
Net Present Value at 10% - After Tax Using Forecast Prices
(US$ millions)
|
|
|
|
|
|
|
2015
|
|
2014
|
|
%
|
|
Patos-
Marinza
|
Kuçova
|
Total
Albania
|
|
Patos-
Marinza
|
Kuçova
|
Total
Albania
|
|
|
Proved
|
|
|
|
|
|
|
|
|
|
|
Developed
Producing
|
297
|
0
|
297
|
|
388
|
1
|
389
|
|
-23
|
|
Developed
Non-Producing
|
48
|
-
|
48
|
|
-
|
1
|
1
|
|
-
|
|
Undeveloped
|
288
|
15
|
303
|
|
327
|
17
|
344
|
|
-12
|
|
|
|
|
|
|
|
|
|
|
Total
Proved
|
633
|
15
|
648
|
|
715
|
19
|
734
|
|
-12
|
Probable
|
702
|
70
|
772
|
|
968
|
100
|
1,068
|
|
-28
|
|
|
|
|
|
|
|
|
|
|
Total Proved Plus
Probable
|
1,335
|
85
|
1,420
|
|
1,683
|
119
|
1,802
|
|
-21
|
Possible
|
526
|
166
|
692
|
|
846
|
197
|
1,043
|
|
-34
|
|
|
|
|
|
|
|
|
|
|
Total Proved,
Probable & Possible
|
1,861
|
251
|
2,112
|
|
2,529
|
316
|
2,845
|
|
-26
|
Bankers Calculated Share Value from 2015 Year End Reserves
Evaluation
|
2015
|
Reserves Value
10% Discounted, After Tax
|
CAD$/Share
|
US$/Share
|
1P
reserves
|
$3.42
|
$2.48
|
2P
reserves
|
$7.49
|
$5.43
|
3P
reserves
|
$11.14
|
$8.07
|
Basic shares outstanding as of December
31, 2015, were approximately 261 million (285 million
diluted).
Values are based on RPS (Patos-Marinza) and D&M (Kuçova)
January 1, 2016, price forecast
tables summarized below:
Reserves Evaluator Price Decks – Dated Brent
BRENT Oil Price
Forecast US$/bbl
|
Year
|
RPS
|
D&M
|
2016
|
44.00
|
52.00
|
2017
|
50.00
|
60.10
|
2018
|
58.00
|
63.34
|
2019
|
65.00
|
69.85
|
2020
|
73.00
|
75.59
|
2021
|
78.00
|
75.59
|
2022
|
83.00
|
80.41
|
2023
|
88.00
|
87.64
|
2024
|
93.00
|
89.40
|
2025
|
95.61
|
91.19
|
2026
|
97.52
|
93.01
|
2027
|
+2.0%
Thereafter
|
+2.0%
Thereafter
|
Finding and Development Costs (F&D)
The future development capital has improved with the addition of
the enhanced oil recovery program as well as continued cost savings
per well. The resulting future horizontal well count in
Patos-Marinza has decreased from 882 to 817 in the 2P development
case and from 870 to 803 in the 1P and 999 to 928 in the 3P cases.
In 2015, Bankers drilled 57 new horizontal production wells
(including 1 Kucova well).
Total future undiscounted capital costs for Patos-Marinza and
Kuçova are projected to be US$1.9
billion, US$2.0 billion and
US$2.2 billion on a 1P, 2P and 3P
basis, respectively. This represents a decrease of 5% on a 1P
and 2P basis and an 8% decrease in future capital on a 3P basis,
compared to the previous year. The Finding and Development
(F&D) costs, calculated as total future development capital
divided by recoverable reserves excluding currently developed PDP
and Proved Developed Non-Producing (PDNP) reserves, are summarized
in the table below:
Finding and Development Costs (F&D) Annual
Summary
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
F&D
Costs
|
|
|
|
US$/bbl
|
|
|
|
US$/bbl
|
1P
reserves
|
|
|
|
$21.39
|
|
|
|
$22.57
|
2P
reserves
|
|
|
|
$12.22
|
|
|
|
$12.69
|
3P
reserves
|
|
|
|
$8.82
|
|
|
|
$8.95
|
Contingent Resources and Prospective Resources
Patos-Marinza Contingent Resources (Million barrels – P50
Probability Level)
|
|
|
|
|
|
|
|
2015
|
2014
|
|
Change
(%)
|
|
|
Development
Pending
|
Development
Unclarified or
On Hold
|
Total
|
Total
|
|
|
|
|
|
|
|
|
|
|
Contingent Resource –
2C
|
|
29.3
|
533.5
|
562.8
|
512
|
|
10
|
Patos-Marinza Prospective Resources (Million barrels – P50
Probability Level)
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
Change
(%)
|
|
|
|
|
|
|
|
|
|
Prospective Resource
– Best Estimate
|
|
|
|
290
|
|
315
|
|
-8
|
The Company retained RPS to conduct an independent evaluation of
the Contingent and Prospective Resources in the Patos-Marinza
oilfield in accordance with Canadian Oil and Gas Evaluation
Handbook (COGEH) and the standards established by NI 51-101,
with an effective date of December
31, 2015. All Contingent Resources evaluated in the
"Development Pending" project maturity sub-class were deemed
economic as of the effective date. The Contingent Resources
in this category will require further resolution of technical
uncertainties related to enhanced recovery processes in expanded
areas of the field in order to be re-classified as Reserves.
RPS risked the Contingent Resources "Development Pending" by
applying a chance of development of 75% to the volumes and NPV
values. This chance of development is RPS' estimate of the
probability that the Contingent Resources will ultimately be
developed, given the technical uncertainties associated with the
projects.
Summary of Oil and Gas 2C Contingent Resources (P50
Probability Level)
Gross 2C Volumes
(MMstb)
|
Chance of
Development
|
Risked Gross 2C
Volume
(MMstb)
|
29.3
|
75%
|
21.9
|
Summary of Net Present Value of Future Revenues for 2C
Contingent Resources (P50 Probability Level)
|
NPV
(Million
US$)
|
Chance of
Development
|
Risked NPV
(Million US$)
|
Before Tax
|
531
|
75%
|
398
|
After Tax
|
325
|
75%
|
244
|
Chance of Development is the estimated probability that once
discovered a known accumulation will be commercially
developed. For the Contingent Resources "Development Pending"
provided within, RPS has evaluated several Chance of Development
factors, including, but not limited to:
- Technical Factors: including reservoir presence and quality and
presence of hydrocarbons
- Economic Factors: including factors beyond the scope of
commodity price forecasts including the additional capital costs
associated with EOR projects, including but not limited to polymer
chemical, electricity, and facility costs.
- Technology Factors: primarily the likelihood of a commercially
viable incremental EOR response from a reservoir whose
characteristics differ from that of current analogous EOR
projects. The principal risk as it pertains to Patos-Marinza
is oil viscosity, though other reservoir characteristics such as
thickness and permeability also merit consideration.
- Development Plan Factors: including production facilities,
market availability, and transportation.
- Development Timeframe Factors: primarily the likelihood that
major capital spending will begin within 5 years.
- Other Contingency Factors: major factors beyond the control of
the operators and outside the scope of the aforementioned
factors.
The Contingent Resources "Development Pending" in Patos-Marinza
will be developed from an established commercially productive
oilfield with available infrastructure, market accessibility, and
crude oil export transportation infrastructure. The estimates
for Contingent Resources foresee the technology factors associated
with implementing an EOR development outside the range of current
analogous production as the primary risk to commercial
development. Efforts to resolve these conditions for
development are being actively pursued through pilot testing in the
field and further engineering studies. The estimated capital
cost to bring these Contingent Resources to production is
$247 million.
The Contingent Resource assessments were prepared by RPS in
accordance with the definitions, standards, and procedures
contained in the COGEH and NI 51-101. Contingent Resource is
defined as quantities of petroleum potentially recoverable from
known accumulations using established technology or technology
under development, but which are not currently considered to be
commercially recoverable due to one or more contingencies.
Production from Contingent Resources may be greater or less than
the estimates provide herein.
Oil Initially in Place
In Patos-Marinza, the Oil Initially in Place ("OIIP") volumes in
the reserves area increased slightly to 2.4 billion barrels and the
OIIP outside the reserves area at 3.1 billion barrels in 2015.
As part of Bankers continuous efforts to evaluate the
Patos-Marinza oilfield, typically after three years a geological
review is undertaken to incorporate additional drilling and log
data into the geological mapping and corresponding OIIP estimates
used by RPS. This review was undertaken as part of the year
end 2015 reserves process and resulted in a slight increase in net
pay values in regions and productive reservoirs of the field,
resulting in a marginal increase in the overall OIIP.
The Kuçova OIIP resource estimate remains at 297 million
barrels.
Further details, including the March
2016 Corporate Presentation, are available on the Company's
website www.bankerspetroleum.com.
Conference Call
Bankers' Management will host a conference call on March 2, 2016 at 6:30 am
MST (8:30 am EST, 1:30 pm GMT) to discuss this reserves report.
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://event.on24.com/r.htm?e=1142214&s=1&k=E18C8B993C48260FDA6BEAA00C689FCE.
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 March 15, 2016 by dialing 1-855-859-2056 or
1-416-849-0833 and entering access code 58198062.
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.