Bankers Partners with Peninsula for Palo Duro Program
Bankers Petroleum Ltd. said that it has entered into a letter of understanding with Peninsula Merchant Syndications Corp. (Peninsula) to sell 27% of its working interest in its approximate 375,000 net acres in the Palo Duro basin, Texas. Peninsula is a private merchant bank controlled by Sam Magid, a former founding partner of Salman Partners. The total consideration to be paid for the acreage is US$19.5 million, of which a minimum of US$15.0 million will be in cash. Bankers will continue as operator for its exploration activities in the Palo Duro basin.
The cash received from the sale will be utilized to fund Bankers' 2007 U.S. exploration budget in the Palo Duro basin as well as the development program in Oklahoma, where the Company anticipates it will have its first natural gas production tied-in by summer. The transaction is expected to close prior to March 31, 2007, subject to satisfaction of certain conditions including completion of formal documentation.
"We're pleased to have made this partnership with Peninsula, which underlines the potential of the Palo Duro basin," said Richard Wadsworth, President. "Both management teams have a similar view about the prospective value of the Palo Duro basin and philosophies towards the methodology to develop this asset. We look forward to a successful business relationship as we continue our work in determining the best way to economically develop the hydrocarbons in this basin."
Palo Duro Basin Activity Update
Bankers is expecting to commence drilling its Cogdell No.1-64 well in the next week. This well offsets the legacy Cogdell No.1-1 well that had produced at a reported 2.8 million cubic feet of natural gas per day over a three day test before being shut-in and experiencing mechanical problems. Bankers is focusing on the Bend Group interval, utilizing underbalanced air drilling techniques in order to minimize reservoir damage. This follows the apparent success of another operator in the basin that had encouraging early results using the same technique.
Two additional wells are planned to be drilled in the basin over the next four months. Bankers is also in the planning and permitting stage for a 3D seismic program over a portion of its ground.
Bankers Petroleum Ltd. is a Canadian-based oil and gas exploration and production company focused on opportunities in unconventional petroleum assets. Bankers holds interests in four prospects in the Northern and Central regions of the United States, where it is currently pursuing the exploration of shale gas plays. It also operates in the Patos-Marinza oilfield in Albania pursuant to a license agreement, producing heavy oil.
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Company: Peninsula Merchant Syndications Corp. more info
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