Bankers Petroleum Ends '09 with Reserves, Production Increase

Bankers Petroleum provided its 2009 Financial Results.

During 2009, Bankers continued to be committed to its strategic priorities of:

  •  Increasing reserves and production in the Patos Marinza oil field in Albania;
  • Maintaining a strong balance sheet by controlling debt and managing capital expenditures.

In response to volatility in commodity prices in 2009, Bankers adjusted its capital programs accordingly with minimal activities in the first half and a resumption to normalized levels in the second half. The capital spending adjustments and equity financing completed in 2009 kept the Company's balance sheet strong.

Despite this reduced capital program, the Company continued to grow its Albanian reserves, production and acreage holdings and was successful in achieving the following results:

  • Average production at Patos Marinza increased 10% to 6,438 bopd from 5,875 bopd in 2008. Exit production at year-end 2009 was 8,100 bopd as compared to 6,960 bopd at year-end 2008.
  • Reserves in Albania increased at all levels: a 21% increase in Original-Oil-in-Place assessment to 6 billion barrels from 5 billion
  • barrels, a 19% increase to 214 million barrels of proved plus probable reserves and a 36% increase to 422 million barrels of proved, probable and possible reserves. Additionally, the Company's independent reservoir engineers assigned contingent and prospective resource oil estimates of 838 million and 384 million barrels, respectively.
  • In July 2009, Bankers resumed its horizontal drilling program to build on the success of its first horizontal well drilled in December 2008. A total of 10 horizontal wells were drilled and completed in 2009.
  • Bankers marketing efforts in 2009 resulted in achieving an average sales price of 60% of the Brent oil price, as compared to 53% in 2008. The netback, after royalties, operating, sales and transportation costs, for the fourth quarter of 2009 represented 42% of the average sales price, a significant increase from 19% in the fourth quarter of 2008.
  • Bankers exited 2009 with working capital of $75 million, inclusive of a cash position of $68 million. At December 31, 2009, the Company had drawn $28 million of its $141 million credit facilities.
  • In July 2009, Bankers commenced export operations from the new Port of Vlore export terminal. This facility significantly enhances the Company's export operations, provides 80,000 barrels of storage capacity and plays a key role in Bankers' production growth and additional export capacity.
  • In December 2009, the main terms and conditions for a petroleum agreement for the Block "F" exploration acreage application was accepted by the National Agency of Natural Resources. The area contains several seismically defined structural and amplitude anomalies prospective for oil and natural gas.


For 2010, the Company will remain focused on achieving its priorities and implementation of its capital programs in Albania:

  • In January 2010, a second drilling rig commenced drilling in the Patos Marinza oilfield and a third rig is being sourced to start drilling in the fourth quarter of 2010. The Company plans to drill 52 horizontal and 4 vertical wells in 2010.
  • An additional 80,000 barrels storage capacity will be ready by year-end at the Vlore export terminal. Phase one, a 14 kilometer oil pipeline connecting the field by rail to the export terminal is underway and is expected to supplement current truck transport capacity of 15,000 barrels per day with an additional 9,500 barrels per day through rail transport by early 2010. Phase two, a 30 kilometer, 70,000 barrels per day pipeline connecting the field to the export terminal, is planned for 2011.
  • Quantifying Contingent and Prospective resources at Patos Marinza validates the Company's plans for a thermal pilot proposed for the 2010 capital program. A water flood program is also planned for the Kuçova oil field. Success of such initiatives can lead to the conversion of significant volumes of these resources to recoverable reserves and the subsequent implementation of a commercial field expansion in 2012 and beyond.
  • Bankers expects to fund the $152 million 2010 capital program using funds generated from operations, existing cash resources and a portion of its unutilized $110 million credit facilities.
  • Current production is approximately 9,000 bopd and the Company expects to release its first quarter 2010 operations update on April 7, 2010. Bankers projects year-end production targets of 15,000 bopd for 2010 and 24,000 bopd for 2011.
  • Standard & Poor's completed their quarterly review and announced that, effective March 22, 2010, Bankers Petroleum Ltd. will be included in the S&P/TSX Energy Index.