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Re: News Release - Tuesday, March 25, 2008
Bankers Petroleum Announces Three-Year Plan
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Albanian Production to Increase to Approximately 20,000 boed by
Year-End 2010; Restructuring for U.S. Subsidiary in 2008
CALGARY, March 25, 2008 - Bankers Petroleum Ltd. (TSX: BNK, AIM: BNK)
is pleased to introduce its three-year plan of development (the Plan)
for its Albanian assets as well as a proposed restructuring for its
U.S. subsidiary Bankers Petroleum (US) Inc.
Albania Three-Year Strategic Plan
In March 2008, the Company completed an Addendum to the Plan of
Development that outlined the technical, capital and production
profiles for the Patos Marinza field. Under this Addendum, Bankers
plans to access additional reserves through the application of infill
vertical and horizontal drilling, and waterflood and thermal recovery
techniques. The Addendum was submitted to Albpetrol Sh. A. and the
Albanian Government and is currently awaiting final approval.
Regarding the recently acquired Kucova oilfield in Albania, the Company
will be completing its evaluation and will disclose details of its
capital program and reserves assessment by the end of the second
quarter.
The Plan's total capital investment is estimated to be $370.0 million
and will be primarily funded from existing working capital and future
cash flow. The Plan's objective is to achieve production target of
20,000 bopd by December 2010.
The Company's strategic objective is to remain focused on exploration
and production activities in Albania.
Maximizing Patos Marinza's Potential
The original plan of development was mainly comprised of recompleting
active wells and re-activation of suspended wells through primary cold
heavy oil production (CHOP) of previously operated wells by the state
oil company, Albpetrol Sh. A. The new Addendum to the plan of
development moves beyond primary recovery techniques, identifying
methods to further access the substantial oil reserves of the field by
applying the appropriate extraction method to each individual
formation. The various technologies will be focused to maximize the
recoveries from each formation through disciplined and staged exposure
of capital and an overall 'field to formation' development plan. While
the Plan includes approximately $90.0 million for waterflood and
thermal work programs, there are no reserves recognition for these
activities in the recently announced 2007 year-end reserves report.
Positive results from these programs are expected to contribute to
additional reserves recognition in 2008 and beyond.
The Plan contemplates the following activities for the Patos Marinza
field over the next three years(1):
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Reactivations 250 existing wells
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Vertical & horizontal
infill wells 60 wells
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Waterflood program 50 wells - reactivation and new wells
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Cyclic Steam Stimulation Initial eight well pilot phase in 2008
Evaluation period in 2009
30 well commercial expansion in 2010
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Capital Expenditure Total: $370.0 million
. 2008 - $80.0 million
. 2009 - $120.0 million
. 2010 - $170.0 million
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Production Target Exit Rate . 2008 - 7,000 bopd
. 2009 - 14,000 bopd
. 2010 - 20,000 bopd
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(1) During this period, Bankers will continue to review additional
requirements for investment and growth and will provide new or
revised plans in annual work programs and budgets. Note that these
are estimates and may change based on changing circumstances,
knowledge and results.
Restructuring of Bankers Petroleum (US) Inc.
Recognizing the size of Patos Marinza and Kucova heavy oilfields in
Albania, Bankers' Board of Directors decided in its three-year plan to
focus its resources on maximizing the potential of these very important
assets. With recent success in Oklahoma, the Company determined that
the timing is right for Bankers U.S. to be restructured into a separate
entity to proceed with its own growth plans in a manner that will
maximize value and preserve future upside to all Bankers' existing
shareholders. As such, the Company will consider structuring
alternatives in respect of Bankers U.S. over the next few weeks to
determine the most optimal arrangement for this restructuring and will
announce further details as soon as possible.
A 2008 capital program of $45.0 million has been established to drill,
complete and tie-in 30 wells in the Tishomingo gasfield. This is
expected to be funded from working capital and debt secured by the US
assets; Bankers is currently evaluating several debt financing
proposals.
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Caution Regarding Forward-looking Information
Information in this news release respecting the expected future
production levels, future prices and netback, work plans, anticipated
total oil recovery of the Patos Marinza oilfield and the Tishomingo
gasfield in Oklahoma, U.S., the proposed plan of arrangement for the
U.S. assets, and potential opportunities constitutes forward-looking
information. Statements containing forward-looking information express,
as at the date of this news release, the Company's plans, estimates,
forecasts, projections, expectations, or beliefs as to future events or
results and are believed to be reasonable based on information
currently available to the Company.
Exploration for oil and natural gas is a speculative business that
involves a high degree of risk. Few shale natural gas wells that are
drilled are ultimately developed commercially. There is no assurance
that expenditures made by the Company on its US properties will result
in discovery of commercial qualities of natural gas. The Company's
expectations for its Albanian operations and plans are subject to a
number of risks in addition to those inherent in oil production
operations, including: that Brent oil prices could fall resulting in
reduced returns and a change in the economics of the project; delays
associated with equipment procurement, equipment failure and the lack
of suitably qualified personnel; the inherent uncertainty in estimation
of reserves; exports from Albania being disrupted due to unplanned
disruptions; and changes in the political or economic environment.
Production and netback forecasts are based on a number of assumptions
including that the rate and cost of well takeovers and well
recompletions of the past will continue and success rates will be
similar to those rates experienced for previous well
recompletions/development; that further wells taken over and
recompleted will produce at rates similar to the average rate of
production achieved from wells recompleted/redeveloped in the past;
continued availability of the necessary equipment, personnel and
financial resources to sustain the Company's planned work program;
continued political and economic stability in Albania; approval of the
Addendum to the Plan of Development; the existence of reserves as
expected; the continued release by Albpetrol of areas and wells
pursuant to the Plan of Development and Addendum; the absence of
unplanned disruptions; the ability of the Company to successfully drill
new wells and bring production to market; and general risks inherent in
oil and gas operations.
Forward-looking statements and information are based on assumptions
that financing, equipment and personnel will be available when required
and on reasonable terms, none of which are assured and are subject to a
number of other risks and uncertainties described under "Risk Factors"
in the Company's Annual Information Form and Management's Discussion
and Analysis, which are available on SEDAR under the Company's profile
at www.sedar.com.
There can be no assurance that forward-looking statements will prove to
be accurate. Actual results and future events could differ materially
from those anticipated in such statements. Readers should not place
undue reliance on forward-looking information.
Review by Qualified Person
This operations update was reviewed by Richard Wadsworth, President of
Bankers Petroleum Ltd., who is a "qualified person" under the rules and
policies of AIM in his role with the Company and due to his training as
a professional petroleum engineer with over 16 years experience in
domestic and international oil and gas operations.
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 and has a 50% interest in the Kucova oil
field. It also holds an average 50% interest in the Tishomingo gas
field in Oklahoma and varied interests in three other areas in the
Northern and Central regions of the United States, where it is
currently pursuing the exploration, development and production of shale
and tight sand gas plays. Bankers shares are traded on the Toronto
Stock Exchange and the AIM Market in London, England under the ticker
symbol BNK.
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For further information, contact:
Abby Badwi
Chief Executive Officer
(403) 513-2694
Doug Urch
VP, Finance and Chief Financial Officer
(403) 513-2691
Susan J. Soprovich
VP, Investor Relations and Corporate Governance
(403) 513-2681
Email: investorrelations@bankerspetroleum.com
Website: www.bankerspetroleum.com
AIM NOMAD:
Canaccord Adams Limited
Ryan Gaffney/ Adam Janikowski
+44 20 7050 6500
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Copyright (c) 2008 BANKERS PETROLEUM LTD. (BNK.H) All rights reserved.
For more information visit our website at http://www.bankerspete.com/
or send mailto:info@bankerspetroleum.com
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