corporate presentation - developing markets · 2012. 2. 8. · bankers petroleum 2011. 2011...

BANKERS PETROLEUM 2011

CORPORATE

PRESENTATION August 2011

AIM:BNK TSX:BNK

US-Albania Investment Forum

September 19, 2011


Disclaimer

Certain information respecting the Company and the Company's properties constitutes

forward-looking information. Such forward-looking information, including but not limited to

statements with respect to anticipated rates of production, 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.

2


Profile & Strategy

About Canadian, Calgary-based E&P company with an operational focus in

Albania

Strategy

Large scale growth of recoverable heavy oil reserves through proven

techniques and expertise

Maximize the value of Bankers assets by funding growth through

current cash position, cash flow and existing credit facilities

Production

13,400 bopd (as of August 10th, 2011)

Exit production target for 2011 through primary recovery methods:

20,000 bopd – High Case

18,000 bopd – Likely Case

16,000 bopd – Low Case

Team Proven team, experienced in Canadian and international heavy oil

operations and exploitation

3


Market Information

Exchange Listings TSX – Toronto AIM - London

Symbol BNK

Total Shares 247 million (270 million fully diluted)

Liquidity Excellent liquidity – 52 week average 3.6 million shares/day

Current Share Price CDN$5.00 (as of August 10th, 2011)

Market Capitalization CDN$1.24 Billion

Shareholder Breakdown Institutional 73%

Retail 20%

Directors & Officers 7%

4

Research

Coverage

15 analysts provide coverage: BMO, Dundee,

FirstEnergy, GMP, Goldman Sachs, Jennings,

Macquarie, Peters & Co, Raymond James,

RBC, Scotia Capital, Stifel Weisel,

TD Newcrest, Ticonderoga, UBS Securities


Albania, Europe

• Located in South East Europe

• Democratic elected government since 1991

• Economic policy is pro-privatization and foreign investments

• Joined NATO in April 2009

• Applied for EU membership in June 2009

• Population of 3.1 million

5


Asset Overview – Albania, Europe

Patos-Marinza Oilfield

• 7.5 billion barrels OOIP

• Largest onshore oil field in Europe

• 100% W.I. and operatorship

• 140 million barrels produced to date

• 6º to 24º API Oil

Kuçova Oilfield

• 297 million barrels OOIP

• 100% W.I. and operatorship

• 24 million barrels produced to date

• 14° to 22°API Oil

Block F Exploration Acreage

• 185,000 acres

• Gas and oil potential

6


Attractive Fiscal Terms

• 25 Year term (2031) + 5 yr extensions

• 100% cost recovery including royalties

• Royalties

• Current Blended Rate is 17% – 10% overriding government royalty

– Albpetrol (National Oil Co.) royalty 1% until full cost recovery 3% after 1x cost recovery 5% after 2x cost recovery

– 70% on Pre Existing Albpetrol Production currently at 1,150 bopd declining at 15% per annum

• Profit tax

50% after full cost recovery

• 100% crude oil export permitted

7

12

13

14

15

16

17

18

2011 2012 2013 2014 2015

Blended Royalty Rate*

* Inclusive of declining Pre Existing Production component


$9.16 $10.26 $12.85 $11.81

$10.40 $10.98 $10.83 $13.24

$5.31 $5.33 $7.05 $9.26

$21.74 $26.55 $37.22 $42.72

Netback

Sales

Operating

Royalty*

Netback Per Barrel

8 Royalty is based on blended rate but all incremental new production carries a flat 11% royalty until full cost recovery

$90.00

$100.00

$110.00

$58.50

(65%)

$65.00

(65%)

$71.50

(65%)

INCREMENTAL OIL (forecast)

Q3 2010

$76.86 Q4 2010

$87.08

Q2 2011

$117.04 Brent Price

$46.61

(60%) $53.12

(61%)

$77.03

(66%) Sales Price

Q1 2011

$105.43

$67.95

(65%)

$6.43 $7.15 $7.87

$11.00 $12.00 $13.00

$7.00 $8.00

$9.00

$34.07 $37.85 $41.63


Operating & Financial Highlights

9

Adjusted Working Capital of $98 million; CASH of $81 million

Credit Facilities Available: Utilized:

Raiffeisen Bank $24 Million $4 Million

IFC/EBRD

Tranche 1 $60 Million $30 Million

Tranche 2 $50 Million nil

$134 Million $34 Million

LIQUIDITY at June 30, 2011

0

10

20

30

40

50

60

70

80

2006 2007 2008 2009 2010

Cash Flow (millions of US$) Capital Expenditures (millions of US$)

0

20

40

60

80

100

120

140

2007 2008 2009 2010


Production Metrics (Incremental Oil)

10

Cost

$000’s IP

Reserves

BBL 000’s

$/

Flowing bbl

Before

Tax IRR

NPV10

$000’s Payout

Reactivation 225 38 130+ 5,921 >100% 2,448 7

Horizontal Well 1,250 153 245+ 8,170 >100% 4,658 8

1P 2P 3P

Finding and Development

Costs

$10.06/bbl

$5.80/bbl

$3.85/bbl

Future Capital

(millions)

$1,028

$1,217

$1,517

Number of HZ Wells 531 624 782

Recycle Ratio at

$100 Brent

4.0x

6.9x

10.4x

Assumptions: Flat $100 Brent; Reserves, NPV10 and Payout


Production and Reserves Growth

11

0

50

100

150

200

250

300

350

400

450

2006 2007 2008 2009 2010

Poss

Prob

Prov

Reserves – Primary Recovery (millions of barrels)

0

2

4

6

8

2006 2007 2008 2009 2010

Original Oil In Place (billions of barrels)

Original Oil in Place 7.8 Billion

Barrels (297mm in Kuçova)

Proven Reserves 120 Million


Proven & Probable

Reserves 238 Million


Proven, Probable &

Possible Reserves 427 Million


Contingent Resources 1.2 Billion Barrels (pilot testing thermal

application efficacy)

Prospective Resources 540 Million Barrels

0

2000

4000

6000

8000

10000

12000

2006 2007 2008 2009 2010

Annual Average Oil Production(Patos-Marinza)


Development Strategy

Reactivation of existing wells

Drilling new horizontal wells

EOR utilizing waterflood

EOR utilizing thermal techniques

• Well depth: 800 to 1,800m

• Reservoir sands:

– Gross oil pay up to 300m

– Net oil pay up to 200m

– 6° to 24° API

• Average viscosity @ 40°C

– Gorani: 5,000 to 50,000cp

– Driza: 1,000 to 5,000cp

– Marinza: 50 to 1,000cp

• Porosity: Sandstone 25%-30%

• Permeability: 100md – 2000md

12

Co

mp

osite Typ

e Sectio

n

I Go

rani I D

riza I Marin

za I

50 m

Po

tential W

aterfloo

d 10–24 A

PI

Prim

ary Ho

rizon

tal Drillin

g 8-24 A

PI

Po

tential T

herm

al 6–10 AP

I


2011 Horizontal Program

• 36 horizontal wells drilled

in 1H-2011

• 10 of 22 oil productive

zones have been put on

production

• Several more zones and

other areas of the field will

be targeted with an

additional 40 horizontal

wells in 2H-2011

13


Horizontal Well Performance

• Current Decline Range from 15% (D4) to 33% (D3U)

• Range is due to reservoir heterogeneity, different pressure regimes, and well

optimization profiles

• Average Decline is 25%

• Sample of selective zones performance:

14

Type Well IP Current

Decline Recovery

Before Tax

IRR Pay Out NPV10

Zone (bbl/d) (%) (Mbbl) (%) (months) (M$)

D1 170 30 297 746 6 6,556

D2 132 22 244 174 11 4,095

D3U 160 33 127 332 7 2,769

D4 149 15 313 242 10 5,212

Average 153 25 245 373 8 4,658

RPS 2P (2010 Reserve’s) 157 260

Assumptions: Flat $100/bbl Brent; Op costs of $4,000/well/month plus $12/bbl variable OPEX (includes Sales

&Transport)


Patos-Marinza Production

• Cumulative Production

to date from Horizontal

Wells is 2.8 MM bbls

• Horizontal wells are

performing as per

independent evaluation

• Vertical Reactivation

program designed to

offset production

declines from old

vertical wells.

15


Patos-Marinza Reserves and Recovery Factors

16

1

2

3

Area 1

OOIP 2P Res 2P RF

2P

Capital (M$)

HISTORICAL

PROD

HISTORICAL

RF

Gorani 222 11 5% 50 1 0.4%

Driza 703 125 17% 700 49 7%

Marinza 238 21 9% 40 50 21%

Total 1,163 157 790 100

Area 2

OOIP 2P Res 2P RF

2P

Capital (M$)

HISTORICAL

PROD

HISTORICAL

RF

Gorani 1,109 4 0.4% 15 2 0.2%

Driza 770 60 8% 380 15 2%

Marinza 408 2 0.5% 15 1 0.2%

Total 2,287 66 410 18

Area 3

OOIP 2P Res 2P RF

2P

Capital (M$)

HISTORICAL

PROD

HISTORICAL

RF

Gorani 2,016 0.0% 0 0.0%

Driza 1,630 3 0.2% 17 3 0.4%

Marinza 815 0.0% 0 0.3%

Total 4,461 3 17 3

•OOIP and 2P Reserves and Historical Production in millions of barrels

•Total OOIP is a probabilistic total and does not sum arithmetically


Patos-Marinza Horizontal Drilling Reserves Growth Potential

17

1

2

3

Area 1 & 2

OOIP

MMbbls

2P

MMbbls 2P RF

RISKED

POTENTIAL

RF

POTENTIAL

Reserves Add

MMbbls

Gorani Area 1 222 11 5% 20% 33

Gorani Area 2 1,109 4 0.4% 10% 107

Driza Area 2 770 60 8% 15% 56

Area 3 North

Gorani 256 0 0.0% 10% 26

Driza 280 0 0.2% 10% 28

Marinza/Bubulima 260 0 0.0% 15% 26

Total 2,897 75 276

•OOIP and 2P Reserves and Historical Production in millions of barrels

•Total OOIP is a probabilistic total and does not sum arithmetically


2011 Thermal Program

18

1 vertical monitoring well and

2 horizontal thermal wells will be drilled in Q3

First steam injection is expected to commence in Q4

First results from the pilot should be available near year-end


Thermal Pilot Simulation Forecast

Simulation Details

• Well Length 400m

• Reservoir Depth 800m

• Net Pay 10m

• Drainage Area 500m x 100m

(11 acres)

• OOIP 665,000 barrels

• Forecast Recovery 250,000

bbls/well

• Forecast Recovery Factor 37.6%

• 5 Cycles

• Cumulative Steam/Oil Ratio 2.4

• First cycle – 60 days injection,

~ 240 days production

19

0

1

2

3

4

5

6

0

100

200

300

400

500

600

0 1000 2000 3000 4000 5000

Cu

mu

la

tive

S

te

am

O

il R

atio

Ba

rre

ls o

f O

il p

er D

ay

Days

Thermal Cyclic Steam Stimulation Forecast

400m Horizontal Well

Predicted Oil Rate CSOR

Steam Injection Periods


Block F

• Three existing gas fields with

potential field extensions

• Exploration well in Q4 to identify

gas potential of structural and

stratigraphic prospects

• Continue work on potential

Pliocene gas above Povelca and

Frakulla fields, and other untested

stratigraphic anomalies

• Continue reprocessing and

interpreting 430 km of 2D seismic

to detail identified anomalies for

Q4 drilling.

20

Frakulla

Gas Field

Povelca

Gas Field

Divjaka Pliocene

Gas Field

Divjaka Tortonian

Gas Field

Ardenica

undeveloped

structure

Geochemical Survey


Frakulla

Gas

Field

Povelca

Gas

Field

Ardenica

undeveloped

structure

Block F Seismic Data

21

North South

Ardenica

undeveloped

structure

West East

Conventional Structural Trap

Untested Stratigraphic Trap

AVO anomalies interpreted as Pliocene turbidities


Kuçova Waterflood Project

• $50mm Plan of Development

approved

• Waterflood pilot initiated in the

Ferme pool

• Bankers has taken over 12 wells

and has commenced the pilot with

one injector and two producers

• Results will be monitored and the

project expanded as successful

response is seen within the

reservoir

22

0

500

1,000

1,500

2,000

2,500

2012(E) 2013(E) 2014(E) 2015(E)

Average Annual Production – Kucova (bopd)

Gege

Kucova

Kozare

Arreza

Ferme

Ciflik Pilot pool

Future pools


Patos-Marinza Primary Production

23

Thermal production and

Kuçova water flood will add

additional growth to the

production curve

Exit Rate Production Targets (bopd)

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

2011 2012 2013 2014 2015

Horizontal

Reactivation

Base

As per RPS 2P Production Forecast


Transport and Storage Facilities

• All volumes currently trucked to Export

Terminal at Vlore and to Domestic refineries at

Fier and Ballsh

• Total storage capacity at Vlore is 160,000 bbls

(26k MT)

• Size of current export cargos 10-20k MT

24


Oil Exports

• 15 refineries in the Mediterranean can process Patos-Marinza crude

• Mediterranean market is tightening with less supply and more capacity

• Increased Bankers production volumes mean more significant contracts and savings from

better logistical efficiencies

• Bankers negotiates new 1yr contracts with all export buyers in October of every year

• Current export contracts with: Alma Petroli, AOT, BP Trading, ENI and Vitol

25


Takeaway and Infrastructure 2011

• Phase 1 - Pipeline to Fier Hub and Fier Refinery to be completed by end Q3-2011

• Completion of CTF Train 3 Expansion to be completed by end Q3-2011

2012

• Phase 2 – Connecting from Fier to Vlore by Q4 2012

• Line Capacity 70,000 BOPD

26


Environmental Clean-Up and Community Initiatives

• All of Bankers operations are conducted

according to Western operating and HSE

standards

• Bankers is actively implementing its

Environmental & Social Action Plan and is fully

engaged with Albpetrol, the Government of

Albania and environmental groups at the IFC,

EBRD to achieve these objectives

• Sector 3 Clean-up trials (Thermal, mechanical

and biological methods) are in progress.

• To supplement Bankers HSE capital

commitments, all stakeholders are actively

engaged to source outside funding for future

clean-up of Patos-Marinza

“It’s not our Liability, but has become our

Responsibility.”

27


Capital Expenditures

2011 Program

Beyond 2011

• Total pipeline project is $45MM over

two years

(Phase 1 $15MM, Phase 2 $30MM)

• 2012 - 2014 capital programs to

average $200 - 250 MM/year

• Continuation of drilling,

reactivations, workovers and

infrastructure

• Capital for thermal pilot program

only – Commercial expansion to be

determined after obtaining results of

thermal pilot

28

PATOS-MARINZA

Capital (million

US$)

2011

Production

Additions

(bopd)

Horizontal Wells 101 8,000

Well Reactivations 18 2,000

Vertical Wells 9

Base Program

Facility Infrastructure 10

Pipeline/Sales Infrastructure 21

Well Workovers 14

Water Control/Disposal 12

Environmental Stewardship 12

Geology and Geophysics 3

Thermal Pilot Project 10

BLOCK F

Seismic and Drilling 3

KUÇOVA

Wells/Waterflood 2

Total 215 10,000


Management Team

Abby Badwi

President & CEO

Doug Urch

Executive VP, Finance & CFO

Suneel Gupta

Executive VP & COO

Ian McMurtrie

Executive VP, Exploration & Development

Eugene Christensen

VP, Engineering

Craig Nardone

VP, Exploration & Development

Bayne Assmus

VP, Production & Operations

Mark Hodgson

VP, Business Development

Leonidha Çobo

VP & General Director Albania

29


Board of Directors

30

Bob Cross, Chairman Private investor; over 20 years experience financing companies in the resource sector

and is on the board of several Canadian energy and mining companies

Abdel (Abby) Badwi More than 40 years experience in the exploration, development and production of

international oil and gas fields. Previously President and CEO of Rally Energy Corp.

Eric Brown President, E.M.Brown Consulting Corporation. Previously held the position of

Regional Managing Partner for Meyers Norris Penny, LLP

General Wesley Clark (ret.) CEO, Wesley Clark & Associates since 2004; Chairman of Rodman & Renshaw from

February 2006. Senior Fellow, UCLA’s Burkle Centre for International Relations

Jonathan Harris Business Consultant, Genet Consulting Ltd since February 2005; Director of

Frankfurt-listed Anglo-African Minerals plc; Previously COO of Tribeka Ltd and director

of Eastern Platinum Ltd. London, UK Based

Phil Knoll President, Corridor Resources; Executive Vice President, Duke Energy from March

2002 to July 2005; Director of AltaGas Utility Group; former Director of Rally Energy

Ian McMurtrie Executive VP, Exploration & Development, Bankers Petroleum Ltd. Previously Vice

President, Exploration of Rally Energy Corp. and provided advisory services to that

company since late 2003

John Zaozirny Vice-Chairman, Canaccord Financial Inc.; Previously Counsel, McCarthy Tetrault LLP.

Currently on the Board of Directors for numerous Canadian oil and gas companies


Suite 1700, 255 – 5 Avenue S.W. Calgary, AB T2P 3G6

Phone: (403) 513-2699 Fax: (403) 228-9506

Email: [email protected] Website: www.bankerspetroleum.com

corporate presentation - developing markets · 2012. 2. 8. · bankers petroleum 2011. 2011...

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