TIRANA, Feb. 18 – Bankers Petroleum Ltd. (TSX: BNK, AIM: BNK) has provided an operational update of its Albanian heavy oil operations and its United States exploration program.
Bankers’ Patos Marinza operations increased its 2007 exit production by 12 percent to 5,337 bopd from 4,406 bopd at the end of 2006. During the fourth quarter, average daily production was 5,169 bopd, which represents a 24 percent increase compared to the same period in 2006.
Effective January 1, 2008, the Company renegotiated its domestic crude oil sales agreement with ARMO Sh.A, the state-owned Albanian refining and marketing organization, and completed an export agreement with a second refinery in Italy. The higher domestic sales price compares favorably to the previous contract, becoming competitive with export pricing. The domestic sales contract with ARMO Sh.A. includes volume commitments of between 50 to 55 percent of Bankers production in Albania.
Bankers expects that its overall average sales price will approximate 56 percent of the Brent oil price for 2008, based upon total domestic versus export volumes. Based on a current Brent price of US$93.00 per barrel, this translates into an average sales price of US$52.00 per barrel as compared to US$35.54 per barrel in 2007. For January 2008, the average blended sales price was US$49.51 as compared to US$39.56 for December 2007, a 25 percent improvement.
Steam injection operations commenced on an existing well into the Driza formation sands during the fourth quarter of 2007. In early December, approximately 17,000 barrels of cold water equivalent steam was successfully injected into the well. Initial flowback and production of condensed water and oil was encouraging with estimated oil production reaching over 150 bopd during the first few days of production. The well subsequently experienced casing collapse at the perforations. Since that time, the Company made adjustments to place the well back on production in a non-optimized configuration. Current production rates are approximately 25 to 30 bopd with a strong fluid level as optimization continues, compared to prior production of seven bopd.
Bankers believes that newly planned thermal wells will be designed to overcome the casing integrity issues experienced with existing wells. The Company expects to drill eight new wells for the thermal steam project in the fourth quarter of 2008.
