Bankers Petroleum provides technical and operational progress update prnews CALGARY, June 4, 2012 /PRNewswire/ - Bankers Petroleum Ltd. ("Bankers" or the "Company") (TSX: BNK, AIM:BNK) is pleased to provide the following update. Production Average production for April and May 2012 was 13,800 barrels of oil per day ("bopd"), and average production for May 2012 was 14,150 bopd. First five months 2012 production average of 14,000 bopd represents a 7% growth over 2011 production. Horizontal Drilling Performance New horizontal drilling in the central and northern areas of the field in 2012 has encountered good results with flow rates north of the river averaging 170 bopd and wells in the North Central region averaging 90 bopd. To follow up on this positive performance, the remainder of the 2012 drilling program will utilize 4 rigs to drill high impact Driza and Gorani wells focused on steady production additions in these areas of the field. The 5th rig will be used for core and delineation wells in other part of the fields, and to drill water disposal wells and an exploration well into Block F. Three (3) type curves for horizontal wells in the Patos-Marinza oilfield have been added to the Corporate Presentation representing the majority of the wells drilled to date and additional production performance.


 Results are consistent with previously forecasted 40-50% declines in production during the transient phase, followed by a shallower 15-30% decline as well performance transitions into a steady state phase. While results across the field and in different zones vary, the future development program will continue to focus on those areas of the field which can yield the best results. Secondary recovery methods are being reviewed to enhance both the ultimate recovery and also the pace of recovery through stemming the above stated natural reservoir declines. Indications are present in the field that secondary flooding will be effective. The Company is planning to gather core data for special core analysis and establishing water-flood and polymer-flood pilots over the next several months to validate the potential for secondary recovery processes.

Wellbore Construction Improvements Drilling procedures, sand production, and localized tectonics within the field area are believed to be the main causes of recent liner mechanical integrity concerns in some of the horizontal wells. Wellbore construction has been an ongoing focus of the technical team and several improvements are being implemented, including liner and slotting design for additional strength and adjusted drilling techniques for better down-hole conditions. As these improvements are implemented by the fourth quarter, they are expected to largely mitigate concerns in the go-forward program.

While the impact of wellbore construction has contributed to lower production results in the first part of the year, liner and slotting configuration adjustment for optimum performance is not uncommon in heavy oil developments and the Company believes the solutions discussed will aid in rectifying the situation within the next few quarters. Water Control Water control initiatives in the field continue with over 200 old vertical wells now plugged to prevent water cross-flow, which impacted existing and new production in both re-activated vertical wells and several new horizontal wells. The expansion of the Company's water disposal capacity in the first quarter has enabled many of the shut-in high water cut wells to be brought back on line. The Company expects to see a gradual increase of oil production from these wells as the water cut decreases over time.

 Included in the Company's plans is the utilization of third party consultants and oilfield service providers with global experience in similar old oilfield developments, to help provide the needed solutions on a collaborative basis with Bankers' technical and operational teams towards production and reserves enhancements. Thermal Program Laboratory results from the oil sample recovered from the first cycle of the thermal pilot have shown viscosity measurements of over 100,000 centipoise at reservoir temperature and demonstrated oil mobility can occur at temperatures over 90 degrees Celsius. To achieve optimum results in the second phase of the pilot, steam will be injected for a shorter 30 day cycle at over 250 degrees Celsius and the well will be put on production after a few days soak period to enable higher temperatures during flow-back and production. The second steam injection cycle is expected to commence this month. Exploration Block "F" The Company intends to drill the second Block "F" exploration well in the fourth quarter. Seismic modeling and detailed interpretation of a large turbidite prospect is underway. Work has also commenced to gain lease access and the approvals to construct the road necessary for the well location. 2012 Budget and Liquidity The Company will continue to maintain a strong balance sheet, especially considering this global economic uncertainty.

 As a development company with significant production, Bankers can rely on a relatively consistent cash flow to fund its project growth. The work program maintains sufficient flexibility to be modified, if needed, to fit within expected cash resources, thereby focusing capital program spending during lower oil prices towards maintaining and supporting production levels. The Company has stress-tested its liquidity at various Brent oil price levels and additionally, by way of a hedge executed in 2011, has secured a floor price of US$80 Brent oil price for 25% of its production in 2012. On the basis of Bankers independent reserve valuation at December 2011, the existing borrowing base covenants show that nearly $300 million of debt capacity is supported by proved reserves. The existing $110 million credit facilities, held jointly with the European Bank for Reconstruction and Development ("EBRD") and the International Finance Corporation ("IFC"), are mid-way through their initial six year term. Under the terms of these facilities, and with the expectation that cash flow will be in excess of capital program requirements, principal repayments will commence in October 2013 and over the remaining two years.

The Company expects to open discussions with its lenders early next year to extend the facility, thereby deferring the repayment requirements. At the end of March, 2012, the Company renewed its US$20 million revolving loan with Raiffeisen bank for another two years. With its $215 million capital program, Bankers anticipates delivering growth in production for 2012, however, until the Company completes a full assessment and determines the time needed to implement and see positive results from the wellbore construction and water control initiatives, the Company will not be providing production guidance for this year. Updated Corporate Presentation For additional information on this update, please see the June 2012 version of the Company's corporate presentation and also a new presentation titled Technical and Operational Progress Update Dated June 4, 2012 at www.bankerspetroleum.com. Conference Call The Management of Bankers will host a conference call on June 4, 2012 at 2:30PM MDT to discuss this Technical and Operational Update. Following Management's presentation, there will be a question and answer session for analysts and investors. \

As questions will not be able to be asked from the dial in live, please forward any questions to mhodgson@bankerspetroleum.com during the webcast and we will attempt to incorporate them into the Q&A. ial, sans-serif; font-size: 13px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: normal; orphans: 2; text-align: -webkit-auto; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px;">prnews






CALGARY, June 4, 2012 /PRNewswire/ - Bankers Petroleum Ltd. ("Bankers" or the
 "Company") (TSX: BNK, AIM:BNK) is pleased to provide the following
 update.


Production


Average production for April and May 2012 was 13,800 barrels of oil per
 day ("bopd"), and average production for May 2012 was 14,150 bopd.
 First five months 2012 production average of 14,000 bopd represents a
 7% growth over 2011 production.


Horizontal Drilling Performance


New horizontal drilling in the central and northern areas of the field
 in 2012 has encountered good results with flow rates north of the river
 averaging 170 bopd and wells in the North Central region averaging 90
 bopd.  To follow up on this positive performance, the remainder of the
 2012 drilling program will utilize 4 rigs to drill high impact Driza
 and Gorani wells focused on steady production additions in these areas
 of the field. The 5th rig will be used for core and delineation wells in other part of the
 fields, and to drill water disposal wells and an exploration well into
 Block F.


Three (3) type curves for horizontal wells in the Patos-Marinza oilfield
 have been added to the Corporate Presentation representing the majority
 of the wells drilled to date and additional production performance.
 Results are consistent with previously forecasted 40-50% declines in
 production during the transient phase, followed by a shallower 15-30%
 decline as well performance transitions into a steady state phase.
 While results across the field and in different zones vary, the future
 development program will continue to focus on those areas of the field
 which can yield the best results.


Secondary recovery methods are being reviewed to enhance both the
 ultimate recovery and also the pace of recovery through stemming the
 above stated natural reservoir declines. Indications are present in the
 field that secondary flooding will be effective. The Company is
 planning to gather core data for special core analysis and establishing
 water-flood and polymer-flood pilots over the next several months to
 validate the potential for secondary recovery processes.


Wellbore Construction Improvements


Drilling procedures, sand production, and localized tectonics within the
 field area are believed to be the main causes of recent liner
 mechanical integrity concerns in some of the horizontal wells. Wellbore
 construction has been an ongoing focus of the technical team and
 several improvements are being implemented, including liner and
 slotting design for additional strength and adjusted drilling
 techniques for better down-hole conditions. As these improvements are
 implemented by the fourth quarter, they are expected to largely
 mitigate concerns in the go-forward program. While the impact of
 wellbore construction has contributed to lower production results in
 the first part of the year, liner and slotting configuration adjustment
 for optimum performance is not uncommon in heavy oil developments and
 the Company believes the solutions discussed will aid in rectifying the
 situation within the next few quarters.


Water Control


Water control initiatives in the field continue with over 200 old
 vertical wells now plugged to prevent water cross-flow, which impacted
 existing and new production in both re-activated vertical wells and
 several new horizontal wells. The expansion of the Company's water
 disposal capacity in the first quarter has enabled many of the shut-in
 high water cut wells to be brought back on line. The Company expects to
 see a gradual increase of oil production from these wells as the water
 cut decreases over time.


Included in the Company's plans is the utilization of third party
 consultants and oilfield service providers with global experience in
 similar old oilfield developments, to help provide the needed solutions
 on a collaborative basis with Bankers' technical and operational teams
 towards production and reserves enhancements.


Thermal Program


Laboratory results from the oil sample recovered from the first cycle of
 the thermal pilot have shown viscosity measurements of over 100,000
 centipoise at reservoir temperature and demonstrated oil mobility can
 occur at temperatures over 90 degrees Celsius. To achieve optimum
 results in the second phase of the pilot, steam will be injected for a
 shorter 30 day cycle at over 250 degrees Celsius and the well will be
 put on production after a few days soak period to enable higher
 temperatures during flow-back and production. The second steam
 injection cycle is expected to commence this month.


Exploration Block "F"


The Company intends to drill the second Block "F" exploration well in
 the fourth quarter. Seismic modeling and detailed interpretation of a
 large turbidite prospect is underway. Work has also commenced to gain
 lease access and the approvals to construct the road necessary for the
 well location.


2012 Budget and Liquidity


The Company will continue to maintain a strong balance sheet, especially
 considering this global economic uncertainty. As a development company
 with significant production, Bankers can rely on a relatively
 consistent cash flow to fund its project growth.  The work program
 maintains sufficient flexibility to be modified, if needed, to fit
 within expected cash resources, thereby focusing capital program
 spending during lower oil prices towards maintaining and supporting
 production levels. The Company has stress-tested its liquidity at
 various Brent oil price levels and additionally, by way of a hedge
 executed in 2011, has secured a floor price of US$80 Brent oil price
 for 25% of its production in 2012.


On the basis of Bankers independent reserve valuation at December 2011,
 the existing borrowing base covenants show that nearly $300 million of
 debt capacity is supported by proved reserves. The existing $110
 million credit facilities, held jointly with the European Bank for
 Reconstruction and Development ("EBRD") and the International Finance
 Corporation ("IFC"), are mid-way through their initial six year term.
 Under the terms of these facilities, and with the expectation that cash
 flow will be in excess of capital program requirements, principal
 repayments will commence in October 2013 and over the remaining two
 years. The Company expects to open discussions with its lenders early
 next year to extend the facility, thereby deferring the repayment
 requirements. At the end of March, 2012, the Company renewed its US$20
 million revolving loan with Raiffeisen bank for another two years.


With its $215 million capital program, Bankers anticipates delivering
 growth in production for 2012, however, until the Company completes a
 full assessment and determines the time needed to implement and see
 positive results from the wellbore construction and water control
 initiatives, the Company will not be providing production guidance for
 this year.


Updated Corporate Presentation


For additional information on this update, please see the June 2012
 version of the Company's corporate presentation and also a new presentation titled Technical and Operational Progress Update
 Dated June 4, 2012 at www.bankerspetroleum.com.


Conference Call


The Management of Bankers will host a conference call on June 4, 2012 at
 2:30PM MDT to discuss this Technical and Operational Update. Following
 Management's presentation, there will be a question and answer session
 for analysts and investors. As questions will not be able to be asked
 from the dial in live, please forward any questions to mhodgson@bankerspetroleum.com during the webcast and we will attempt to incorporate them into the
 Q&A.