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BANKERS PETROLEUM ANNOUNCES 2010 RESERVES REPORT

Wednesday, March 9, 2011 8:02 AM


       Proved Reserves Increase by 30% and Proved plus Probable by 11%
                    Original Oil in Place Increase by 30%

CALGARY, March 9 /PRNewswire-FirstCall/ - Bankers Petroleum Ltd. ("Bankers" or the "Company") (TSX: BNK, AIM: BNK) is pleased to provide the results of its December 31, 2010 independent reserves evaluation and reports the sixth consecutive year of reserves additions since Company inception in 2004.

Evaluations were conducted by RPS Energy Canada Ltd. ("RPS") for the Patos-Marinza oilfield, Albania and by DeGolyer and McNaughton Canada Ltd. ("D&M") for the Kuçova oilfield, Albania and were prepared in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities.

Total Albania Reserves Summary

    -   Proved reserves ("1P") of 120 million barrels (30% increase from
        December 31, 2009) representing over eleven times production
        replacement
    -   Proved plus probable reserves ("2P") of 238 million barrels (11%
        increase from December 31, 2009)
    -   Proved, probable and possible reserves ("3P") of 427 million barrels
        (1% increase from December 31, 2009)
    -   Mean original oil in place resource estimate ("OOIP") of 7.8 billion
        barrels (30% increase from December 31, 2009)
    -   2010 production was approximately 3.5 million barrels

Patos-Marinza Field

    -   1P reserves increased 30% to 117 million barrels of oil from 90
        million barrels at December 31, 2009
    -   2P reserves increased 11% to 226 million barrels (December 31, 2009 -
        203 million barrels)
    -   3P reserves increased 1% to 395 million barrels (December 31, 2009 -
        390 million barrels)
    -   Original oil in place estimate (P50) increased 32% to 7.5 billion
        barrels (December 31, 2009 - 5.7 billion barrels)
    -   All of Patos-Marinza's 2010 recoverable reserves estimates are from
        primary recovery methods only

The 2010 reserves growth is primarily attributable to the expansion of the Company's horizontal drilling program in new areas of the field and new zones within the field area. This is reflected in the upgrade of 2P and 3P reserves into 1P and 2P reserves category, respectively, and the expansion of 3P reserves and oil in place.

Patos-Marinza Contingent and Prospective Resources

RPS has also updated the Contingent and Prospective Resource oil estimates for the Patos-Marinza oilfield as at December 31, 2010. Contingent and Prospective resources are based on thermal development technologies to be applied to the Gorani and Driza formations and secondary water flood methods proposed for the Marinza formation and expansion of the development areas, primarily to the west of the current development.

The thermal pilot first steam injection is scheduled for the third quarter of 2011. There are no current water flood plans for the field.

Contingent resource for 2010 is 1.2 billion barrels, compared to 838 million barrels in 2009

Prospective resource for 2010 is 568 million barrels, compared to 384 million barrels in 2009

Kuçova Field

There were no activities or Company production from the field in 2010; field reserves remain unchanged. Early stage development has begun with road-building and lease clearing.

    -   1P reserves 3 million barrels
    -   2P reserves 11 million barrels
    -   3P reserves 32 million barrels
    -   Mean original oil in place resource estimate remains unchanged at
        297 million barrels

Total Net Present Value of Total Albania Reserves (After Tax, discounted at 10%)

    -   1P reserves US$949 million
    -   2P reserves US$1.97 billion
    -   3P reserves US$3.55 billion
    -   Values are based on RPS (Patos-Marinza) and D&M (Kuçova) January 1,
        2011 price forecast tables summarized below
    -   Basic shares outstanding of as of December 31, 2010 were
        approximately 245 million

Finding and Development Costs ("F&D")

With successful results from the Company's horizontal drilling activities in the northern part of Patos-Marinza oilfield, the Company is expanding the horizontal drilling program into the central, southern and western part of the field. Also, due to casing failures in old vertical wells, replacement of old vertical wells with new horizontal wells has been added to the capital program. Accordingly, in the 2P development case, the number of well re-activations has been reduced to 310 wells and new horizontal wells have increased from 260 wells in the previous year's projected capital program to 624 wells in 2011 and beyond.

Future undiscounted capital costs for Patos-Marinza and Kuçova are now projected to be US$1.5 billion, US$1.2 billion and US$1.0 billion on a 3P, 2P and 1P basis, respectively. This represents the following F&D costs:

    -   1P reserves US$10.06 per barrel
    -   2P reserves US$5.80 per barrel
    -   3P reserves US$3.85 per barrel

Gross Oil Reserves - Using Forecast Prices (MMbbls)

                                 -------------------------- -----------------
                                            2010              2009
                                 --------------------------
                                  Patos-            Total    Total
                                 Marinza   Kuçova  Albania  Albania      %
    ------------------------------------------------------- -----------------
    Proved
      Developed Producing           17.3        -     17.3     22.9      -24
      Developed Non-Producing          -        -        -        -        -
      Undeveloped                   99.7      3.2    102.9     69.9       47
                                 -------------------------- -----------------
    Total Proved                   117.0      3.2    120.2     92.8       30
    Probable                       109.2      8.2    117.4    121.1       -3
                                 -------------------------- -----------------
    Total Proved Plus Probable     226.2     11.4    237.6    213.9       11
    Possible                       168.4     20.6    189.0    208.4       -9
                                 -------------------------- -----------------
    Total Proved, Probable
     & Possible                    394.6     32.0    426.6    422.3        1
    ------------------------------------------------------- -----------------

Net Present Value at 10% - After Tax Using Forecast Prices ($ millions)

                                 -------------------------- -----------------
                                            2010              2009
                                 --------------------------
                                  Patos-            Total    Total
                                 Marinza   Kuçova  Albania  Albania      %
    ------------------------------------------------------- -----------------
    Proved
      Developed Producing            220        -      220      149       48
      Developed Non-Producing          -        -        -        -        -
      Undeveloped                    710       19      729      377       93
                                 -------------------------- -----------------
    Total Proved                     930       19      949      526       80
    Probable                         904      115    1,019      993        3
                                 -------------------------- -----------------
    Total Proved Plus Probable     1,834      134    1,968    1,519       30
    Possible                       1,278      306    1,584    1,514        5
                                 -------------------------- -----------------
    Total Proved, Probable
     & Possible                    3,112      440    3,552    3,033       17
    ------------------------------------------------------- -----------------

Patos-Marinza Contingent and Prospective Resource (MMbbls)

                                       ----------------------
                                         2010     2009     %
    ---------------------------------------------------------
    Contingent Resource                 1,200      838    43
    ---------------------------------------------------------
    Prospective Resource                  568      384    48
    ---------------------------------------------------------
    Total Resources                     1,768    1,222    45
    ---------------------------------------------------------

Reserve Auditor Price Decks - Dated Brent

    ---------------------------------------
      BRENT Oil Price Forecast US$/bbl
    ---------------------------------------
       Year          RPS          D&M
    ---------------------------------------
       2011       $90.00        $91.00
    ---------------------------------------
       2012       $89.50        $91.78
    ---------------------------------------
       2013       $89.10        $92.64
    ---------------------------------------
       2014       $89.25        $94.57
    ---------------------------------------
       2015       $91.00        $97.58
    ---------------------------------------
       2016       $93.20        $99.58
    ---------------------------------------
       2017       $95.30       $101.61
    ---------------------------------------
       2018       $97.30       $103.68
    ---------------------------------------
       2019       $99.40       $105.79
    ---------------------------------------
       2020       $101.58      $107.95
    ---------------------------------------
       2021       $103.61      $110.15
    ---------------------------------------
       2022       $105.68      $112.39
    ---------------------------------------
       2023       $107.80  +2.0% Thereafter
    ---------------------------------------

Field gate prices the Company is receiving in Albania are currently at a discount to Brent:

    -   Patos-Marinza field gate price is approximately 65% of Brent;
    -   Kuçova field gate price is approximately 70% of Brent

For additional information, please see an updated version of the Company's corporate presentation on www.bankerspetroleum.com

Conference Call

The Management of Bankers will host a conference call on March 9, 2011 at 7:30am MST to discuss this reserves report. Following Management's presentation, there will be a question and answer session for analysts and investors.

To participate in the conference call, please contact the conference operator ten minutes prior to the call at 1-888-231-8191 or 1-647-427-7450. A live audio web cast of the conference call will also be available on Bankers website at www.bankerspetroleum.com or by entering the following URL into your web browser http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3434640

The web cast will be archived two hours after the presentation on the website, and posted on the website for 90 days. A replay of the call will be available until March 23, 2011 by dialing 1-800-642-1687 or 1-416-849-0833 and entering access code 50341069.

    ------------------------

Caution Regarding Forward-looking Information

Information in this news release respecting matters such as the expected future production levels from wells, future prices and netback, work plans, anticipated total oil recovery of the Patos-Marinza and Kuçova oilfields constitute 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 is a speculative business that involves a high degree of risk. 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; availability of financing; delays associated with equipment procurement, equipment failure and the lack of suitably qualified personnel; the inherent uncertainty in the 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, well reactivations and well recompletions of the past will continue and success rates will be similar to those rates experienced for previous well recompletions/reactivations/development; that further wells taken over and recompleted will produce at rates similar to the average rate of production achieved from wells recompletions/reactivations/development 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; 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 and forward looking statements.

Review by Qualified Person

This release was reviewed by Abdel F. (Abby) Badwi, CEO 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 geologist (member of APEGGA) with over 40 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 100% interest in the Kuçova oilfield, and a 100% interest in Exploration Block F. Bankers' shares are traded on the Toronto Stock Exchange and the AIM Market in London, England under the stock symbol BNK.

SOURCE Bankers Petroleum Ltd.

(Source: PR Newswire )
(Source: Quotemedia)

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