/NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES/ BNK.H:TSX-V
VANCOUVER, Aug. 19 /CNW/ - Effective August 23, 2004, the Company's listing will be upgraded from NEX to Tier 2 of the TSX Venture Exchange and the Company's shares will commence trading under the symbol "BNK" at opening August 24, 2004.
Completion of Financing
The Company has closed its recently announced private placement of 30,000,000 units at $0.26 per unit. Each unit consists of one common share and one-half transferable warrant, each whole warrant entitling the holder to purchase one additional share of the Company at a price of $0.40 per share for a period of twenty-four months. The securities are subject to hold periods and the shares, warrants and any shares issued upon the exercise thereof may not be traded in Canada until December 20, 2004, except as permitted by the Securities Act and the Rules thereunder and the TSX Venture Exchange. Proceeds from the private placement will be applied to working capital and the search for further acquisitions.
Patos-Marinza Work Program
Further to the Company's news release of 23 July 2004, Bankers, through its wholly owned subsidiary Saxon International Energy Ltd, has acquired the right to redevelop, produce and sell product from the existing Patos-Marinza Oilfield in Albania pursuant to the terms of petroleum and license agreements (the "Patos Marinza Agreements") with state-owned Albpetrol Sh.A. Initial production from existing wells was approximately 700 bbls oil per day. As at 6 August 2004 production has increased, as a result of optimization and well servicing, to approximately 900 bbls oil per day. At current international oil prices, the Company is currently receiving $22.60 US/bbl net at the refinery gate in Albania.
The Patos Marinza oilfield in Southern Albania was first discovered in 1928 and is one of the largest onshore oilfields in Europe. The Patos Marinza consists of multiple stacked sand reservoir layers with the primary production intervals in the ionian thrust belt, which marks the front of the former Ionian Mesozoic passive margin. The sands outcrop at surface in the south and extend to depths of 2000 m in the north, spanning an approximate distance of 16 km and a width of 4 km. Gravities range from 7 API to 32 API with the majority of reserves being from the heavier range. Total existing production from this field by Albpetrol in May 2004 was 4,880 boepd of heavy oil at an average gravity of approximately 12 API.
A previous reserves study prepared in 1999 by Adams Pearson and Associates of Calgary, Alberta, Canada, indicated original oil in place of 1.240 Billion bbls (P90), proven reserves of 50.1 Million bbls (P90) and proven plus probable reserves of 129.4 Million bbls (P50). Since the date of that report, approximately 4.3 Million bbls have been produced. While the Company believes this study to be a fair representation, it was not undertaken to current National Instrument 51-101 standards and the Company has engaged Adams Pearson and Associates to prepare a Reserves Engineering Report on the Patos Marinza Oilfield in accordance with National Instrument 51-101. The report is scheduled to be completed by December, 2004.
The Company's rights under the Patos Marinza Agreements are subject to minimum capital expenditures commitment during a 24 month evaluation period of US$2 MM. The terms of the agreement include a 1% gross over-riding royalty as a production share, which increases up to 5% after payout.
Pending completion of the NI 51-101 Report, work at Patos-Marinza will focus on bringing on additional low cost production to provide positive operating cash flow and fulfilling the Company's minimum work commitment under the Patos Marinza Agreements. Anticipated capital costs for the program and the Patos Marinza project for the remainder of 2004 is US$3,102,000.
Specific objectives of the program are:
- Optimise production from wells taken over from Albpetrol in July 2004 by performing workover sand cleanouts, pump changes and increasing drawdown of fluid levels which Albpetrol had not carried out over the past 4 months.
- Take over 12 additional wells from Albpetrol in 2004 and place on production by performing the following:
- baseline environmental assessment of lease;
- rehabilitation of Albpetrol existing site, including removal of
derrick contamination resulting from previous Albpetrol operations
and all other equipment surface and downhole;
- reconstruct well site with gravel, containment, and compaction to
accommodate western double rig service equipment and facility
equipment;
- workover sand cleanout of wellbore, selective perforating utilising
western big hole charges where pay has been bypassed, and
installation of downhole equipment to between 1400-1800 m depths
(progressive cavity pump (PCP) with sucker rods and tubing to
surface);
- install surface equipment and facilities. This includes drivehead,
and independently powered gas or diesel prime movers for PCP
system, flowlines to one or two single 120 m(3) atmospheric tanks
with internal firetubes for heat;
- place well on production;
The total time frame to carry out the foregoing is approximately 2 weeks per well. The estimated capital cost per well re-completed as above is anticipated to be approximately US$220,000.
- Identify additional water disposal well candidate and determine pump disposal requirements, flowlines and facility upgrades, and commence procurement for early 2005 installation.
- Construct a truck unloading point at Fier refinery to allow direct crude oil sales to ARMO (national refining and marketing company of Albania). (this was completed in early August and first sales commenced to this refinery on 2 August 2004). Crude oil is to be trucked from the field which is about 10 km away. Cost for this portion of the work was approximately $15,000.
Due to limited refining and storage capacity at the Fier refinery, the Ballsh refinery (about 40 km from the Patos Marinza field) will also require construction of a truck unloading facility and tank upgrades to take sales in late 2004 early 2005. The Ballsh refinery has current excess capacity of some 3,000 bbls per day and available storage tank capacity in excess of 100,000 bbls. The expected cost of this is under review. A preliminary budget has been established for US$135,000 in early 2005. The Fier refinery provides fuel oil for the Fier power station, while the Ballsh refinery is the main refinery in Albania processing mainly diesel fuel.
The work program will also include identification of potential water sources impacting high water cut wells, which will require temperature and radioactive tracer log surveys and testing of offset Albpetrol wells. Expected cost in 2004 is US$220,000.
Bankers Petroleum continues to review similar development opportunities in Albania and other countries involving large existing fields, in addition to reviewing exploration targets with large production and reserves potential.
BANKERS PETROLEUM LTD.
Per: "Richard Wadsworth P.Eng."
Richard Wadsworth, President
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.
Information respecting the Company's proposed program on the Patos-Marinza oilfield constitutes forward-looking information. Such forward-looking information, including but not limited to statements with respect to the estimated costs and timing of the Company's planned work program and reserves determination involve known and unknown risks, uncertainties and other factors which may cause the actual costs and results of the Company and its operations to be materially different from estimated costs or results expressed or implied by such forward-looking statements. Such factors include, among others, risks related to international operations, general risks associated with petroleum operations and risks associated with equipment procurement and equipment failure. Although the Company has attempted to take into account important factors that could cause actual costs or results to differ materially, there may be other factors that cause costs of the Company's program or results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information.
/For further information: please contact (604) 609-6110/
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