Albania: Bankers Petroleum Ltd - First Quarter Operational Update

Production

Average production from the Patos-Marinza and Kuçova oilfields in Albania for the first quarter of 2015 (Q1) was 19,767 barrels of oil per day (bopd), 2.7% less than 20,324 bopd in the fourth quarter of 2014 (Q4).

Bankers drilled two (2) wells in the Bubullima reservoir sands in the Patos Marinza field during Q1 with positive results. The 30 day average production rate from the wells is approximately 200 bopd per well at 75% watercut and 16 degrees API lighter quality oil. The Company plans to drill two to three additional Bubullima wells in 2015 utilizing recent 3D seismic data for prospect evaluation.

As previously disclosed, several high-water cut wells were shut-in to accommodate temporary reduced water handling capacity in Q4. Additionally, in early February, Albania experienced severe flooding that caused Bankers to shut-in 81 wells in the northern and central area of the Patos-Marinza oilfield due to limited surface access. Full water handling capacity resumed in early February and by mid-month shut-in wells were brought back on line and have largely returned to previous production rates after a period of clean-up and optimization.

On April 1st, the Company experienced a non-routine surface release of carbon dioxide (CO2) gas during drilling operations and activated its Emergency Response Plan (ERP). Control of the well was established shortly thereafter and returned to normal well operations with no injuries reported. Bankers is currently coordinating with authorities regarding the release. According to David French, President and CEO "We are working closely with government agencies and local Prefect and Commune representatives to recover from this disruption to the lives of the villagers of Marinza. Some of our employees live and work in this same community. Efforts to further review the incident are ongoing, although our highest priority is assisting the residents in restoring their day-to-day activities."

Sales and Oil Prices

Oil sales during the quarter averaged 20,284 bopd, 1.6% lower than the previous quarter average of 20,619 bopd. Crude oil inventory at March 31, 2015, was 270,000 barrels, down from 315,500 barrels at December 31, 2014.

The Patos-Marinza first quarter average oil price was approximately $39.65 per barrel (representing 73% of the average Brent oil price of $53.97 per barrel), as compared with the fourth quarter average oil price of $57.31 per barrel (representing 75% of the average Brent oil price of $76.27 per barrel). Export sales during Q1 represented 47% of total sales, at an average export price of 77% of Brent.

Bankers realized $14.1 million (representing $7.76 per barrel) during Q1 in proceeds from corporate hedges. The Company has hedged 6,000 bopd at a Brent price of $80 per barrel for 2015. Additionally, Bankers received $3.6 million (representing $1.96 per barrel) in legacy accounts receivable realization as part of its domestic sales program.

Drilling Update

Twenty-one (21) wells were drilled during the first quarter in the main area of the Patos-Marinza oilfield: twenty (20) horizontal production wells and one (1) lateral re-drill. As of March 31st, seventeen (17) of these wells were on production, and the remaining four (4) waiting on completion. Bankers reduced its active rig count from three (3) to two (2) in February in response to decreased commodity prices.

Enhanced Oil Recovery (EOR) Program

The polymer and water flood patterns in the Patos-Marinza oilfield continue to perform to model expectations from the nineteen (19) polymer and four (4) water flood patterns installed by year end 2014. Reservoir pressure and production response are positive with good reservoir flood conformance.

In Q1, Bankers converted four (4) additional wells to injectors. As of March 31st, two (2) wells were on-line injecting with the remaining two (2) wells expected to begin injection by mid-April. The Company continues to be strongly encouraged by the results to date and plans to move forward with 20 to 25 additional conversions in 2015.

Infrastructure Development

Bankers infrastructure projects in the first quarter continued to focus on operating cost structure improvements. Completion and commencement in February of the water disposal pipeline from the central and satellite facilities to the sandstone disposal area significantly reduces in-field fluid trucking. Also during Q1, construction continued in full swing on the northern gathering system with completion projected in the third quarter of 2015. This will enable additional transportation cost savings and allow gathered gas to further offset diesel energy usage.

About Bankers Petroleum Ltd.

Bankers Petroleum Ltd. is a Canadian-based oil and gas exploration and production company focused on developing large oil and gas reserves. In Albania, Bankers operates and has the full rights to develop the Patos-Marinza heavy oilfield, has a 100% interest in the Kuçova oilfield, and a 100% interest in Exploration Block "F". Bankers' shares are traded on the Toronto Stock Exchange and the AIM Market in London, England under the stock symbol BNK.

(source: Balkans.com)