Bankers Cites Daily Production Increases by 12%, Spuds Albanian Well
Bankers Petroleum Ltd. has announced the following production, operational and corporate
Second quarter production averaged 5,822 bopd from the Patos Marinza oil field in Albania. Daily production increased by 12% over first quarter production of 5,218 bopd, with quarterly exit production of 5,867 bopd. With
these results, the Company is well on track to meet its production target of 7,000 bopd by the end of this year. 42 re-activation operations of existing wells were completed during the quarter.
On June 21, Bankers commenced drilling operations in the field with the spudding of the first vertical infill well. The well has been drilled and cased to a total depth of 1,343 meters. As the first of four wells to be drilled off a drilling pad, the well was programmed to test the potential of multiple Gorani and Driza sandstone formations within the first of numerous undrilled spacing units in the field that the Company interprets as being undrained areas.
Log analysis indicates that eight individual sandstone units, ranging from 3 to 18 meters of net pay, are hydrocarbon bearing with combined net pay of 39 meters. Six of the eight zones were evaluated for reservoir pressure: data confirms that the zones tested were porous and permeable reservoir quality sandstones, and that five of the six zones were at or near virgin reservoir pressure with the sixth interval demonstrating an approximate 50% pressure depletion. These positive results confirm the Company's drainage model and support its plans to drill an additional 110 vertical and horizontal wells within the field over the next three years.
The second well on the pad reached total depth of 1,390 meters and is currently being prepared for logging operations. It is anticipated that it will take three more weeks to finish drilling the remaining two wells on the
pad, following which completion operations will commence and the wells will be placed on production. The second and third pads have been built and are ready to drill an additional 10 wells in 2008.
Technical and commercial evaluation for a second drilling rig capable of drilling horizontal wells and several service rigs tenders are complete; agreements with the winning contractors will be finalized in the next few
weeks. Bankers anticipates having the rigs available for drilling and workover operations commencing in October 2008.
Patos Marinza Oil Price & Marketing
The second quarter average oil price was $64.47 per barrel (54% of the Brent oil price), 24% higher than the first quarter average oil price of $51.96 per barrel. The average oil price for June 2008 was $70.00 per barrel
(53% of Brent).
Bankers is finalizing arrangements with the developers of the Port of Vlore oil export terminal for the construction of a 13,000 cubic meter Company-dedicated oil tank farm and expansion of the terminal. The
availability of this storage facility will improve the Company's export operations and allow for larger oil liftings when the terminal is ready to receive larger vessels next year.
Several meetings with the successful bidders of the recently announced privatization of ARMO, the Albanian refinery, have taken place. The objective of these meetings is to extend the Company's current oil pricing agreement beyond its current term of July 2009 and develop a pricing formula that will provide future sales price for Patos Marinza oil that is competitive with similar crudes sold in European markets. Based on discussions to date, the Company is confident that it will reach an acceptable agreement with ARMO that meets the financial and operational objectives for both firms.
Equity & Liquidity
Approximately 15.0 million options and 4.3 million warrants were exercised during the second quarter, generating proceeds of approximately $13.0 million. Total cash on deposit at the end of the second quarter, was approximately $42.5 million. The Company expects that its strong working capital position, future cash flow from operations and available credit facilities are more than sufficient to fund the previously announced
three-year Albanian capital expenditure program, including plans for the recently acquired Kucova field.
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