Field Evaluated at Over 490 MBBLS Original-Oil-in-Place
CALGARY, Jan. 30 /CNW/ - Bankers Petroleum Ltd. (TSX: BNK, AIM: BNK) is pleased to announce that it 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."
About the Kucova Oilfield:
The Kucova oilfield is located in the South Central region of Albania, approximately 30 kilometres 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 metres to 1,400 metres based on available information.
Caution Regarding Forward-looking Information
Information in this news release respecting the Company's option, the Kucova oilfield, potential recoveries and outcomes from the Company's plans for its Albanian operations constitutes forward-looking information. Statements containing forward-looking information express, as at the date of this news release, the Company's plans, estimates, forecasts, projections, expectations, or beliefs as to future events or results and are believed to be reasonable based on information currently available to the Company.
The transaction with Privatco is subject to certain conditions that may or may not be satisfied within the time frame anticipated or at all. Information on the Kucova oilfield available to the Company has not been independently verified and may not be accurate. Exploration for oil and natural gas is a speculative business that involves a high degree of risk. There is no assurance that funding for work programs required to be conducted to maintain the rights granted under the Kucova Petroleum and License Agreements will be available to the Company through funds from existing operations on reasonable terms. If funds are not available the Company may lose its investment. Few wells that are drilled are ultimately developed commercially. Attainment of commercial production is dependent upon a number of factors and subject to risks including, but not limited to the ability to establish economic flow rates, ultimate hydrocarbon recoveries, future transport capacity, and availability of the necessary equipment, personnel and financial resources. Should this transaction close but Bankers elect to not exercise the second option, the Company would relinquish its 50% ownership in Privatco to the vendors.
Oil recovery costs and plans, as well as acquisition opportunities, are based on a number of assumptions including that success rates will be similar to those rates experienced in similar primary extraction or secondary and enhanced oil recovery projects; continued availability of the necessary equipment, personnel and financial resources to sustain the Company's plans; continued political and economic stability in Albania; the existence of reserves as expected; availability of financing in the amounts and time frame required; if Brent oil prices fall, reduced returns and a change in the economics of the project could result; the inherent uncertainty in estimation of reserves; the ability of the Company to bring production to market; and general risks inherent in oil and gas operations.
Forward-looking statements and information are based on assumptions that financing, equipment and personnel will be available when required and on reasonable terms, none of which are assured and are subject to a number of other risks and uncertainties described under "Risk Factors" in the Company's Annual Information Form and Management's Discussion and Analysis, which are available on SEDAR under the Company's profile at www.sedar.com.
There can be no assurance that forward-looking statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. Readers should not place undue reliance on forward-looking information.
Review by Qualified Person
This operations update was reviewed by Richard Wadsworth, President of Bankers Petroleum Ltd., who is a "qualified person" under the rules and policies of AIM in his role with the Company and due to his training as a professional petroleum engineer with over 16 years experience in domestic and international oil and gas operations.
About Bankers Petroleum Ltd.
Bankers Petroleum Ltd. is a Canadian-based oil and gas exploration and production company focused on opportunities in unconventional petroleum assets. Bankers operates and has the full rights to develop the Patos-Marinza heavy oilfield in Albania, which is a 2.0 billion barrel resource. It also holds interests in four areas in the Northern and Central regions of the United States, where it is currently pursuing the exploration, development and production of shale and tight sand gas plays. Bankers shares are traded on the Toronto Stock Exchange and the AIM Market in London, England under the ticker symbol BNK.