OilVoice - Bankers Petroleum Announces Third Quarter Financial and Operational Results

Bankers Petroleum Announces Third Quarter Financial and Operational Results

Friday, November 14, 2008

Bankers Petroleum Ltd. achieved record production and net income and significantly improved its revenues and funds from operations during the third quarter period ended September 30, 2008:

- Average production was 5,880 bopd compared to 4,753 bopd for the same period in 2007 an increase of 24%. Production at the end of September 2008 was approximately 6,200 bopd and current production exceeds 6,600 bopd.

- Net income was $4.9 million ($0.026 per share) during the quarter, compared to a net income of $572,000 ($0.004 per share) for the same period in 2007.

- Funds from continuing operations were $14.8 million, an increase of 130% from $6.4 million for the three months ended September 30, 2007. For the comparable nine month periods in 2008 and 2007, funds from operations totalled $41.4 million and $14.7 million, respectively.

- An independent evaluation of the Kuçova oil field estimates Bankers share of reserves to be 8.6 million barrels of proved plus probable reserves and 33.6 million barrels of proved, probable and possible reserves.

- With recent sharp declines in oil prices, Bankers has chosen a measured reduction of its capital expenditure program in 2009 with an objective to remain self-funding from cash flow, cash on hand and available credit facilities.

In Albania, Bankers operates and has the full rights to develop both the Patos Marinza and the Kuçova heavy oil fields.

KUÇOVA

An independent reserves evaluation to define the reserves and production potential of the Kuçova oil field, compliant with National Instrument 51-101 with an effective date of September 30, 2008 has now been completed. The following table represents a summary of the Kuçova oil field reserves:

Oil (Mbbl)
Proved Undeveloped: 1,518
Probable: 7,042

Total Proved Plus Probable: 8,560
Possible: 25,067

Total Proved, Probable & Possible: 33,627

PATOS MARINZA

Revenue from the third quarter was $33.5 million ($62.08 per barrel) as compared to $16.2 million ($37.14 per barrel) for the same period in 2007.

Net operating income (netbacks) for the three months ended September 30, 2008 increased to $16.3 million ($30.79 per barrel) from $8.7 million ($19.93 per barrel) in the corresponding 2007 quarter, an increase of 87%.

Bankers initiated its vertical infill drilling program on June 21, 2008 to evaluate the different producing horizons and undrilled spacing units in the field. Seven successful oil wells have been drilled as of September 30, 2008. The initial production rates from these wells have been between 15 and 45 bopd per well from four different zones and it is expected that production rates from each individual well will continue to increase. Overall the production levels from the new wells are in line with forecast. Since the end of the third quarter an additional three vertical oil wells have been drilled and will shortly be completed and put on production. Current average production from the new wells is between 15 and 60 bopd.

The drilling program is continuing with the rig currently drilling the 11th vertical location following which the rig will be mobilized to drill the first ever horizontal well in Albania in the Patos Marinza oil field.

The well re-activation and re-completion program continued concurrently in the third quarter and into the fourth quarter with good results. The recent re-completion and workover initiatives have demonstrated improved productivity from the wells and have contributed to the production increase.

2009 CAPITAL BUDGET

With recent sharp declines in oil prices, Bankers has decided to slow down its capital expenditure program in 2009 with an objective to remain self funding from cash flow, cash on hand and available credit facilities. Strategic allocation of the work program and budget is designed to prove additional recoverable reserves at the Patos Marinza and Kuçova oil fields and still achieve an appropriate growth in production.

The revised capital program for 2009 includes the following:

- Reactivation and recompletion of existing wells:
- Drilling of vertical and horizontal wells including three field delineation wells and one exploration well; A waterflood program;
- A cyclic thermal steam pilot project; and,
- Field evaluation program at Kuçova.

Capital investment is estimated to be $60 million and is intended to achieve a forecast exit production rate for 2009 of 9,000 bopd. The budget for 2010 remains unchanged however the exit production target has been adjusted to 14,000 bopd to reflect the reduced investment in 2009. Bankers corporate presentation will be updated and posted on its website next week.

To implement this slow down, the Company terminated its recently awarded contract for an additional drilling rig and three service rigs, and will maintain its existing drilling rig and service rig agreements for 2009. Bankers will consider adding additional equipment when warranted.