Resource World Magazine

THE OIL PATCH REPORT J o e l Ch u r y Bankers Petroleum plans $2 billion Albanian investment W ithin the Patos Marinza Basin, recognized as the largest onshore, heavy-oil, oilfield in Europe, Bankers Petroleum Ltd. [BNK-TSXV] continues to advance its petroleum projects. Through the convergence of two Albanian fields, including the company's flagship project within the Patos Marinza Basin, Bankers is in possession of a net 324.6 million barrels of oil in 3P reserves (proven + probable + possible). The Patos Marinza oilfield is massive, covering 44,000 acres with 5.1 billion barrels of original oil in place, which Bankers operates with a 100% working interest. Contiguous to Patos Marinza, the company is embarking on what may be an economic natural gas play through an exploration contract that covers 185,000 acres called Block F. "We represent approximately 85% of the country's total oil production, and range from 20-25% of the total foreign investment in the country," says Executive Vice President and Chief Operating Officer, Suneel Gupta. "It's a very big boost for the country, as Albania itself is not very big, with only 3 million people." "Our investment level is pretty high, which allows us access to higher levels of government and we do get a lot of support from them in return. It's been a good ride, beneficial for Albania and our shareholders." This relationship has the potential to carry on for over 25 years, thanks to the terms of the license Bankers holds with the government, and an option for multiple five-year extensions. Since taking over the project upon Premier Oil relinquishing its license in 2004, Bankers has been working to improve the field's recovery that to date was very low. "It's been a growth program where we APRIL 2013 are redeveloping the assets," says Gupta. "The field already has 2,400 wells on it, so the first stage of development was picking the low hanging fruit by reactivating some of the old existing vertical wells." In the early days, Bankers took the field from 500 barrels per day to around 5,000 barrels per day, before incorporating new methods of development through its drilling programs. By 2008, Bankers drilled the first horizontal well. Since then, the The company is closing in on 17,000 barrels per day in production company has continued with a healthy dose of horizontal development that includes horizontal legs that kick out 400600 metres in length. Today, the company is closing in on 17,000 barrels per day in production, which represents healthy growth. However, despite a 15% average production growth last year, missing its production targets has brought the stock of the company down to earth, after previous highs over $7 a share. Moving forward, the company is still quite healthy, with enough cash flow to carry out their capital program and keep Bankers' internal bankers happy. According to Gupta, the plan is to invest another $2 billion over the next 10 years, in order to get the field's production up to 30-40,000 barrels per day. Bankers is very confident that this will be a long term involvement in Albania, and that they're only getting started. Bankers has had no problems rapidly moving the rigs throughout their Albanian holdings. Easy onshore drilling conditions, with up to five drill rigs operating within two-week turnarounds of 1,500 to 2,000metre deep wells, coupled with speedy governmental cooperation has allowed the company to drill at a rate of 120 wells per year. A unique combination of deeper and hotter heavy oil wells has also given Bankers' wells a boost, with a 17% estimated recovery rate on primary development, versus the typical 15% witnessed among several heavy oil operations. But Bankers is also working on secondary and tertiary recovery programs that could bring significant upgrades, via methods such as polymer injection, thermal applications, and water flooding. In particular, the latter strategy of water flooding, if done effectively, will really make an impact. Bankers will look to assess the sweep patterns of its field so that by injecting water in the right spots, it can push the oil to adjacent producing wells. With this process, the company can look to more upside beyond the booked-in production reserves that will start to become more obvious as the secondary programs mature. "With this process we can feasibly bring recovery rates up from 17% to 25-30%, which is a significant upgrade," says Gupta. The implementation of these secondary methods, along with the addition of an economic natural gas play, offers some blue sky for the year ahead. After last year's missed production target, along with an unfriendly market attitude towards junior oil companies in 2012, Bankers looks to 2013 as a bounce back year. n www.resourceworld.com 57

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