Bankers Petroleum has announced the following operational and corporate updates.
Fourth quarter production averaged 6,563 bopd from the Patos Marinza oil field in Albania compared to third quarter production of 5,880 bopd. Net oil inventory at the end of December was approximately 90,000 barrels, an increase of 10,000 barrels from the previous quarter. The exit production rate was 6,960 bopd and represents a 31% increase from the 2007 exit production rate of 5,300 bopd. During the quarter, 11 re-activation operations of existing wells were completed with 10 wells placed on production. Six new oil wells were also drilled.
Production for 2008 averaged 5,874 bopd, generating revenue of approximately $110 million, representing an average price of $51.29 per barrel.
Patos Marinza Oil Price
Fourth quarter average oil price was approximately $29.62 per barrel (54% of the Brent oil price), 52% lower than the third quarter price of $62.08 per barrel.
Eleven new vertical infill wells were drilled in 2008 with 10 oil wells currently on production and one well awaiting completion. Total production from the new wells was 320 bopd with individual well averages ranging from 15 to 75 bopd. Several of the wells are demonstrating productive capabilities beyond their existing completion configurations and will be re-equipped with larger tubing and rods in order to maximize production rates. Others, with lower production rates, will have additional pay sections perforated and commingled with existing production.
The field extension well (5012) has also been drilled and log analysis indicates 42 meters of potential net oil pay from the four main producing formations. The well is currently being tested to evaluate productivity of the different pay zones.
The first horizontal well (5013) in Patos Marinza has been successfully drilled and completed with 375 meters of lateral pay section. The well is currently producing at a rate of 120 bopd. Fluid levels in the well are high and production rates are expected to increase as the well is optimized.
Overall, the production levels from all the new wells are in line with forecast.
Technical evaluations of the Kucova pools are advancing. This analysis indicates that there is significant evidence that the implementation of waterflood technology will increase production rates and reserves recovery. Current plans call for a first phase waterflood demonstration project involving the re-activation of a 14 well unit in the second quarter of 2009.
Total cash on deposit as at December 2008 was approximately $18.5 million and total debt with Raiffeisen Bank was US$28.3 million. In January 2009, the Company received approval for an increase to its existing facility to $35 million, of which $11 million continues as a three-year term loan, a new $4 million five-year term loan and a $20 million revolving operating loan facility renewable after its maturity in February 2010. To supplement the Raiffeisen facility, the Company continues to examine other proposals for reserve-based debt facilities that will be more closely aligned with the year-end 2008 reserves, when finalized in February.
"We had a successful re-activation and drilling program in 2008 including the first horizontal well at the Patos Marinza oil field and, despite reduced capital expenditures in the fourth quarter to cope with low oil prices, the Company was able to achieve its exit rate production guidance of approximately 7,000 bopd. We will continue to monitor oil prices and adjust our capital expenditure programs accordingly to remain within our financial capabilities."
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