Bankers makes public 2012 oil reserves in Albania

224 Million Barrels of Proved plus Probable (2P) Reserves; NPV of $1.86 billion.
Average Production 1st Quarter to Date 16,800 bopd
Bankers Petroleum announced on 25 Feberuary the results of its December 31, 2012 independent reserves evaluation. Evaluations were conducted by RPS Energy Canada Ltd. (RPS) for the Patos-Marinza oilfield, Albania and by DeGolyer and McNaughton Canada Ltd. (D&M) for the Kuçova oilfield, Albania and were prepared in accordance with Canadian National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities.
Highlights
– 2P Reserves after tax value at 10% is $1.86 billion ($7.31 per share);
– 2012 Company average production was 15,020 bopd for an annual total volume of 5.45 million barrels (4.1% of total proved reserves);
– Reserves Life Index is 30+ years;
– Technical adjustments to the estimated ultimate recovery (EUR) per horizontal well and type curves reflect production performance, improved geological mapping, reservoir modeling, fluid testing and drilling results;
– Reserve volumes have been adjusted to reflect reduced recoverable oil booking in non-core area extensions of the field where drilling to date has been limited.
Basic shares outstanding of as of December 31, 2012 were approximately 254 million (274 million diluted).
Values are based on RPS (Patos-Marinza) and D&M (Kuçova) January 1, 2013 price forecast tables
summarized below:
Reserve Auditor Price Decks – Dated Brent
BRENT Oil Price Forecast US$/bbl
Year  RPS     D&M
2013 $108.00 $111.00
2014 $102.30 $108.35
2015 $98.20 $105.72
2016 $94.80 $107.88
2017 $97.42 $106.62
2018 $99.37 $107.10
2019 $101.35 $110.36
2020 $103.38 $112.57
2021 $105.45 $114.82
2022 $107.56 $117.12
2023 $109.71 $119.46
2024 $111.90 $121.85
2025 $114.14 +2.0% Thereafter
Patos-Marinza Crude Pricing
The average realized sales price the Company is receiving for crude oil from the Patos-Marinza and Kuçova oilfields are at a discount to Brent oil. Currently, the average sales price for export sales is approximately 80% of Brent (an increase of 13% over the 2012 average realized pricing of 71% of Brent).
Finding and Development Costs (F&D)
In the 2012 2P development case, the horizontal well count has been increased from 910 wells at a cost of $1.4 million per well in the previous year to 1,085 total wells at a cost of $1.2 million per well in 2013 and beyond.
Total future undiscounted capital costs for Patos-Marinza and Kuçova are projected to be US$2.3 billion, US$2.4 billion and US$2.7 billion on a 1P, 2P and 3P basis, respectively. This represents the following F&D costs, calculated as total future development capital divided by recoverable reserves excluding currently developed PDP and PDNP reserves:
Reserves US$/bbl
1P reserves $21.04
2P reserves $12.31
3P reserves $8.10
Original Oil in Place
The Original Oil in Place (“OOIP”) volumes in the reserves area of the field has been revised to 2.4 billion barrels, compared to 2.6 billion barrels at the end of 2011. OOIP outside the reserves area is 2.7 billion barrels compared to 5.1 billion barrels in 2011. Kucova OOIP resource estimate remains at 297 million barrels.
Abby Badwi, President and CEO of Bankers commented “The 2012 reserves are attributable to primary recovery methods by continued implementation of horizontal drilling which has been demonstrating positive results based on extended periods of actual well and reservoir performance. Well counts have increased marginally from the 2011 forecast, however, individual well and project economic metrics remain strong. While additional drilling capital and corresponding reserves could have been added to the development plan in lower recovery areas and zones in the field, the Company elected to defer these plans
until further evaluation drilling is conducted in these areas. Looking forward to the waterflood and polymer flood development opportunities, a successful thermal pilot and confirming an economic source for natural gas, the Company will be able to increase and accelerate the overall recovery from this world class asset.”
Operational Update
Average production for the first quarter to date was 16,800 bopd; this rate is 4.0% higher than the fourth quarter average production of 16,163 bopd.
Last month one of the five drilling rigs operating for the Company in Albania was damaged during mobilization between locations. The rig is currently being repaired and is expected to resume drilling next week. Bankers 2012 production forecast remains unchanged. The Government of Albania declared last week that the process for the privatization of Albpetrol was unsuccessful and has been terminated. There was no further disclosure regarding future plans for proceeding with this process.

energjia.al, 28.02.2013