Bankers
Petroleum operational update for the first quarter 2016
CALGARY, April 5, 2016 /CNW/ - 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.
David French, President and Chief
Executive Officer, (403) 513-6930; Doug
Urch, Executive VP, Finance and Chief Financial Officer,
(403) 513-2691; Laura Bechtel,
Investor Relations & Corporate Communications Specialist, (403)
513-3428; Email: investorrelations@bankerspetroleum.com, Website:
www.bankerspetroleum.com; AIM NOMAD: Canaccord Genuity Limited,
Henry Fitzgerald-O'Connor, +44 0 207
523 8000; AIM BROKER: FirstEnergy Capital LLP, Hugh Sanderson / David
van Erp, +44 0 207 448 0200