Bankers Petroleum Acquires Stake in Kucova Heavy Oilfield in Albania
Bankers Petroleum has agreed to acquire 50% of the issued and outstanding securities of an independent private company ("Privatco") and has an option to acquire the remaining 50% interest for an aggregate 100%. Privatco holds the exclusive right to evaluate and redevelop the Kucova heavy oilfield located in Albania pursuant to a Petroleum Agreement with Albpetrol Sh.A. of Albania, the state-owned petroleum company, and a License Agreement with the National Agency of National Resources (AKBN). The terms of the Petroleum Agreement are substantially the same as those governing Bankers' Petroleum Agreement for the Patos Marinza oilfield.
The Kucova field has in excess of 490 million barrels of original-oil-in-place that averages 17 degrees API gravity, based on previous reservoir reports prepared by DeGolyer and MacNaughton Canada Limited for Privatco. Geologically, it is similar to Bankers' Patos Marinza oilfield, consisting of multiple stacked sandstone reservoirs of various oil gravities. Recovery to date is approximately six percent. Once closed, Bankers will undertake an evaluation of the oilfield to further define its remaining reserves and production potential and ensure compliance with Canadian Security Administrators' National Instrument 51-101.
The acquisition of the initial 50% interest in Privatco is expected to close in February, subject to the satisfaction of certain conditions including completion of formal documentation. The Company has until June 30, 2008 to exercise its option to acquire the remaining 50% interest.
"We're extremely pleased with this opportunity as we see many synergies between Kucova and our existing Patos Marinza asset," said Richard Wadsworth, President. "From initial review, the reservoir appears to be very similar geologically, and we believe it has the potential to provide additional production and reserves through secondary and enhanced oil recovery techniques. This acquisition fits well with our strategy of focusing on our investments in Albania."
The Kucova oilfield is located in the South Central region of Albania, approximately 30 kilometers north-east of the Patos Marinza field. The field was discovered in 1928 and has had over 1,700 wells drilled, resulting in cumulative production of 23.2 million barrels by the end of 2006. At that time, average daily production was approximately 400 barrels.
Bankers' management believes that the use of modern technologies and maintenance practices will make this field an attractive candidate for further development given the low recovery of oil to date. A revitalization program planned for this opportunity would involve updating surface and downhole equipment, wellbore stimulations, recompletions and the incorporation of secondary recovery techniques, such as waterflood and thermal recovery. The depths of the reservoir are believed to vary from 150 meters to 1,400 meters based on available information.
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