Bankers Petroleum's fourth quarter production averaged 7,230 bopd from the Patos Marinza oil field in Albania compared to third quarter production of 6,258 bopd, an increase of 16%. The exit production rate for 2009 exceeded 8,100 bopd.
The Patos Marinza fourth quarter average oil price was US$45.10 per barrel representing 61% of the Brent oil price, compared to third quarter's average oil price of US$40.71 per barrel (60% of Brent).
Five (5) horizontal wells have been drilled and completed during the quarter; four (4) of these wells are on production, and the fifth well is expected to be placed on production next week. Production rates from the four oil wells vary between 120 to 280 bopd. The average production from all nine (9) horizontal wells currently on production is 130 bopd, with the average from the last four wells at 170 bopd.
The Simmons' rig is currently drilling the 12th horizontal well in the field. The second drilling rig provided by Crosco Integrated Drilling & Well Services Co., Ltd., with a capacity to reach 3,000 meters total depth, is now on location at the Patos Marinza field and is expected to spud its first well in January. The Company expects to drill 52 horizontal and four (4) vertical wells this year as part of its US $152 million 2010 capital program. Bankers expects to fund the capital program from funds generated from operations, existing cash resources and from its unutilized US $110 million credit facilities.
Well Re-activations and Re-completions
Ten (10) wells were re-activated in the quarter following takeover from the state oil company and reconfigured with progressing cavity pumping systems. Twenty (20) wells from Bankers' inventory were returned to production following well servicing work including eight (8) re-completions to new oil producing horizons and four (4) re-perforations in existing oil zones to improve inflow performance. Several wells were worked over and returned to production as part of the water control initiative and other wells tested and re-configured as part of the water disposal expansion.
The Company completed two new contracts for its crude oil export arrangements with BP Oil International Ltd., UK, and Vitol S.A., Geneva, and renegotiated its current agreements with the two refineries in Italy; the average Patos Marinza crude price for 2010 is expected to represent between 61% and 63% of the Brent oil price.
Bankers has initiated the process to start construction of an additional 13,000 Metric tonnes (80,000 barrels) of storage capacity at the Le Petrolifera Italo Albanese (PIA) Terminal in Vlore. Tank construction is expected to be completed by September 2010 and will facilitate faster and larger oil shipments and can lead to the ability to realize higher oil prices.
At December 31, 2009, Bankers held US $68 million of cash and working capital was approximately US $71 million, exclusive of debt. No funds were drawn from the US $110 million credit facility from the European Bank for Reconstruction and Development and the International Finance Corporation. The Company continued to utilize US $28 million of the Raiffeisen credit facility.
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