Bankers Petroleum's first quarter 2010 production averaged 8,282 bopd from the Patos Marinza oil field in Albania, a 14% increase from the fourth quarter 2009 production of 7,234 bopd. Total current production is in excess of 9,500 bopd. Bankers average wellhead oil price for the first quarter was approximately $47.08 per barrel (representing 62% of the Brent oil price), 4% higher than the fourth quarter 2009 price of $45.10 per barrel.
During the first quarter the focus remained on execution of Bankers' horizontal drilling program and with the activation of a second drilling rig in January, 10 new horizontal wells were drilled. There are now 17 horizontal wells on production averaging 160 bopd, including several recently completed wells that are still in their cleanup phase. Two additional wells are being completed that will be brought on-line in April and two others that continue to be shut in as a result of localized water intrusion. A total of 21 horizontal wells have been drilled to date, with the 22nd well currently drilling. Overall the average production levels from the horizontal wells are in-line with or exceeding forecasts.
The Company is currently in discussions with the two rig providers in-country to bring in a third drilling rig for the third quarter. The new rig will have the capability of drilling both horizontal wells and the planned thermal pilot wells to be drilled later in the year. Drilling is on schedule to reach the targeted 52 new horizontal wells this year, and will be aided significantly by the addition of the third drilling rig.
There are now six discrete sandstones within the field that have been tested with at least one horizontal well, including successful first wells into the D2 formation and one of the Marinza sandstones. There are seven separate Marinza sandstones that are being evaluated in the northern portion of the field for horizontal development.
As to the two horizontal wells with water intrusion problems, several offsetting old vertical wells have bein identified with cross flow problems and remedial completion repairs are being undertaken on these wells to remedy the situation. It is anticipated that these horizontal wells will be returned to production in the near future after the Company has increased its water disposal capacity in the field, which includes an additional disposal well that is currently drilling.
During the quarter, 47 wells were taken over from the state oil company of which 10 are in the process of being reconfigured with progressive cavity pumping systems. An additional 26 inactive wells were acquired in Sector 3, the environmental remediation test area identified by the Company, completing the entire takeover of this area. With all wells in Sector 3 under Bankers' control, the Company is now in a position later this year to continue implementation of its environmental remediation program.
From the Company's inventory of inactive wells, nine wells were successfully reactivated including recompletions of new producing formations, and four current producers completed pump upsizing to handle increasing production rates.
The Central Treatment Facility has been expanded to enable processing of 15,000 bopd with the second train completed and brought on-line during the quarter. Further expansion options are available for the third train expansion and will be reviewed later this year as production levels continue to grow.
Planning for a 14 kilometer crude sales pipeline from the Patos Marinza oil field to the rail tie-in at Fier is currently underway. The Company is in the process of acquiring the necessary materials and finalizing the route and right of way. Construction is scheduled to begin in the fourth quarter.
The ordering of early lead items and well planning have begun. During April, vertical drilling to acquire cores will commence on the western flank of the field with two vertical wells currently scheduled for the second quarter. The cores will be frozen and sent back to Canada for technical analysis and evaluation to provide new up-to-date information for thermal evaluation and simulation leading towards the implementation of the thermal pilot.
Additionally, commencing in the third quarter, the Company will initiate a drilling program with wells strategically located within the areas defined by our 2009 independent reserves evaluation as containing contingent and prospective resources.
Current plans call for a first phase waterflood demonstration project involving the re-activation of a 14 well unit in the second quarter of 2010. One vertical well will be drilled as an injector in the second or third quarter.
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