Bankers Petroleum Ltd. announces its financial and operating results for the period ended September 30, 2009.
Highlights
· Production averaged 6,258 bopd, compared to second quarter production of 6,383 bopd. The slight drop in production was due to restricted production during July caused by water disposal infrastructure enhancements, which have since been completed.
· Current production is 7,100 bopd with 350 bopd shut-in pending well servicing.
· Revenue increased 17% to $23.4 million ($40,.71/bbl) in the third quarter of 2009 from $20.1 million ($34.63/bbl) during the second quarter.
· Net operating income (netbacks) increased 33% to $9.3 million ($16.07/bbl) in the third quarter from $7.0 million ($12.00/bbl) during the second quarter of 2009.
· Funds generated from operations increased 23% to $7.4 million in the third quarter of 2009 from $6.0 million in the second quarter of 2009.
· In July 2009, International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD) exercised their warrants generating total proceeds of $21.9 million.
· Bankers maintained a strong balance sheet with working capital of $50.2 million at September 30, 2009 ($61.4 million in cash) as compared to working capital of $28.2 million at June 30, 2009.
· 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 will play a key role in Bankers’ production growth.
· Subsequent to September 30, 2009, 2.7 million November 2009 series warrants were exercised generating total proceeds of CAD$6.8 million. Bankers expects to receive approximately $10.0 million from BNK Petroleum Inc. as payment on the note receivable from their expected November 13, 2009 equity issue.
Drilling Update
Commencing in July 2009, Bankers initiated its horizontal drilling program to follow up on its successful first horizontal well 5013 drilled in December 2008 that is currently producing at a steady rate of 135 bopd and has produced in excess of 42,000 barrels of oil.
Five horizontal wells have been drilled and completed during the quarter; four oil wells are currently producing at a combined total rate of 500 bopd. Well repairs to shut off crossflow problems adjacent to the fifth well have been completed and the well is currently producing at a rate of 24 bopd with high rates of water production. The Company expects that the oil cut will improve as the cross flow water dries up.
Upgrades on the current drilling rig have been completed and drilling operations resumed last month. Horizontal well 5015 (D4 zone – 440 metre lateral) was drilled and completed as an oil well and will be placed on production this week. The rig is currently drilling horizontal well 5021, moving northwards within the deeper part of the field where a recent vertical completion provided excellent production rates and indicated virgin reservoir pressures. After drilling well 5021, three additional horizontal wells are planned for the 4th quarter 2009. Due to the downtime necessary to upgrade the drilling rig, it is now anticipated that the vertical wells, planned to acquire core information to add in the thermal planning process, will be delayed until January 2010. The second drilling rig, Crosco Skytop 3, has been mobilized and is expected to be in Albania next month.
The Company will continue to drill test horizontal wells in different areas and zones to fully evaluate the field’s reserves and production potential. In 2010, the horizontal development drilling program will focus on the highest productivity areas and zones in the field. Detailed mapping has outlined more than 400 horizontal drilling locations to be drilled at the Patos Marinza field over the next few years.