Bankers announced the following operational update:
Production and Oil Price
Oil sales from the Patos-Marinza oilfield in Albania during the first quarter averaged 11,894 bopd compared to fourth quarter sales of 10,424 bopd, an increase of 14%. Average production for the first quarter was 12,147 bopd and oil inventory on March 31, 2011 was approximately 168,000 barrels. Current production is 13,550 bopd. Gross sales achieved record levels for March, averaging 15,247 bopd.
The Patos-Marinza first quarter average oil price was US$68.06 per barrel (representing 65% of the Brent oil price) an increase of 28%, compared to the fourth quarter's average oil price of US$53.12 per barrel (61% of Brent).
Sixteen (16) horizontal wells have been drilled during the first quarter. Thirteen (13) of these wells have been completed and are on production, two (2) drilled late in March will be placed on production this month, and one (1) drilled early in the quarter has water encroachment concerns that are being mitigated with continuing water control activities. Production rates from the last thirteen (13) horizontal wells drilled is averaging 175 bopd per well with strong initial production from the Driza (D1) sands averaging in excess of 200 bopd per well. Average production for all horizontal wells is 130 bopd per well at the end of the first quarter.
The fourth drilling rig is expected to arrive in Albania later this month and scheduled to commence drilling in May 2011. With strong oil prices, the Company is also sourcing a fifth drilling rig and expects to have one available in the fourth quarter of 2011. The additional rig capacity will support the Company's strategic drilling objectives of wells targeted for production growth and other wells planned for reserves expansion, the thermal pilot and for exploration and water disposal drilling.
Reactivation and recompletion work resumed in the first quarter with eight (8) wells on production. Current production from these wells is 250 bopd and improving.
With the recent Company announcement to acquire the remaining 140 active Albpetrol wells and sole operatorship of the Patos-Marinza oilfield, Bankers will have a larger inventory of reactivation candidates for the 2011 capital program and for the following few years.
Thermal Program & Exploration Block "F"
Road access and site construction plans are underway for the drilling and thermal facilities project. All necessary materials and equipment are in country. Drilling of the one (1) delineation and two (2) thermal wells will commence in May and first steam injection is scheduled for July 2011.
Seismic reprocessing and interpretation on Block "F" is progressing and drilling of the first gas exploration well is expected in the third quarter. Several structural and stratigraphic prospects have been identified.
Construction of 80,000 barrels of additional storage at the Petrolifera Terminal at the Port of Vlore is now complete and fully operational. Bankers' total port storage capacity from three tanks is 160,000 barrels and the Company will now be able to handle export shipments of up to 25,000 metric tonnes in a single cargo.
Construction on the first phase of the crude oil sales pipeline, which connects the Patos-Marinza oilfield to the storage and loading Fier Hub facility, is progressing and the project is scheduled for third quarter 2011 completion.
Construction of the third and fourth oil treating train expansion of the Central Treatment Facility (CTF) has commenced. The addition of the new processing facilities should be completed by the fourth quarter 2011 and the expanded CTF will be able to handle over 25,000 bopd of net oil production.
Construction of a bridge over the Seman River in the northern area of the Patos-Marinza oilfield has commenced with completion expected in the third quarter of 2011, in time to begin a larger drilling and re-activation program in the higher productivity area north of the river.
The Plan of Development (PoD) for the field has been approved by the Albanian authorities. The PoD has a 25 year term plus Company elected extensions for further development and production of the field. Activity has commenced as part of the approved 2011 work program on the first group of wells with re-completion of two production wells, one water source well and the conversion of one water injection well. Water injection is expected to commence during the second quarter.
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