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Presentation: The revival and transformation of
Europe’s largest onshore oilfield; the Patos-
Marinza field
Leonidha Çobo,...
TSX | AIM: BNK
Leonidha Çobo PhD, VP & General Director
March 2015
The revival and transformation of Europe’s
largest onsh...
Disclaimer
Certain information contained herein respecting the Company, the Company's properties or
anticipated financial ...
Company Overview
Stock Exchange Symbol: BNK TSX – Toronto | AIM – London
Total Shares 261 Million (285 Million fully dilut...
Assets Overview
Patos-Marinza Oilfield
• Largest onshore oilfield in Europe
• 100% W.I. and operatorship
• 191 Million Bar...
Investment Highlights
Capital Investment (CAPEX)
~ 1.3 billion USD
~500 million last 2 years
Large Primary Reserves
203 Mi...
-
4,000
8,000
12,000
16,000
20,000
1939 1944 1949 1954 1959 1964 1969 1974 1979 1984 1989 1994 1999 2004 2009 2014
(bopd)
...
0
2,500
5,000
7,500
10,000
12,500
15,000
17,500
20,000
22,500
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ...
• Operational flexibility to adjust pace of drilling with oil
prices
Execute Horizontal
Drilling Program
• 19 polymer and ...
Reserves Value / Metrics
December 31, 2014
Reserves 125 Mbbls 203 Mbbls
Patos-Marinza 122 Mbbls 191 Mbbls
Kuçova 3 Mbbls 1...
Reservoir Characteristics &
Development Strategy
Primary Development
• Horizontal Drilling & Reactivation of Existing
Well...
Primary Development and Margin Expansion $125 Million
• 2 drilling rigs, 60 horizontal wells to be drilled
• Gathering and...
Development Program
• 60 primary horizontal wells to be
drilled in 2015
• 558 horizontal wells drilled to the
end of Q4 20...
Netbacks
Netback ($/bbl)
2013 2014 Q4 2014
Brent $108.66 $98.95 $76.58
Sales Price
(% of Brent)
$85.39
(79%)
$77.26
(78%)
...
2015 Sales Contracts
Export Market
• 55% of 2015 volumes will be sold to the export market
• All export volumes committed ...
16
Surface Infrastructure Optimization
Lease Construction
Well Pad Tie ins, Treating, Testing, Sour
Handling, Control & Au...
EOR Program
• 23 EOR patterns in operation at end of 2014, positive results to date
• 11.3 million barrels 2P Reserves boo...
EOR Well Performance
18
0
1
2
3
4
5
6
7
8
9
10
0
50
100
150
200
250
0 10 20 30 40 50 60
PatternCount
OilRate(bbl/d)
Months...
0
50
100
150
200
250
300
350
2009 2010 2011 2012 2013 2014
0
50
100
150
200
250
300
350
2009 2010 2011 2012 2013 2014
Stro...
Previous Albpetrol well
Re-activated well
LIABILITY MANAGEMENT BY CONTINUOUS CLEAN-UP
Health, Safety,
Environment &
Commun...
21
Corporate & Social Responsibility
Program
Community Investments by Year
TOTAL
2012 2013 2014
Economic Development $ 190...
David French
President & CEO
Rob Carss
VP, HSSE
Doug Urch
Executive VP Finance
& CFO
Leonidha Çobo
VP & General Director
A...
Board of Directors
Robert Cross, Chairman
Private investor; over 20 years experience financing companies in the resource s...
Analyst Coverage
Canaccord Genuity
Christopher
Brown
Industrial Alliance
Securities
Amin Haque
CIBC Dave Popowich Mackie R...
Thank You
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The revival and transformation of Europe’s largest onshore oilfield; the Patos-Marinza field

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Presentation: The revival and transformation of Europe’s largest onshore oilfield; the Patos-Marinza field
Leonidha Çobo, General Manager, Bankers Petroleum Albania Ltd

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The revival and transformation of Europe’s largest onshore oilfield; the Patos-Marinza field

  1. 1. Presentation: The revival and transformation of Europe’s largest onshore oilfield; the Patos- Marinza field Leonidha Çobo, General Manager, Bankers Petroleum Albania Ltd
  2. 2. TSX | AIM: BNK Leonidha Çobo PhD, VP & General Director March 2015 The revival and transformation of Europe’s largest onshore oilfield The Patos Marinza
  3. 3. Disclaimer Certain information contained herein respecting the Company, the Company's properties or anticipated financial results or performance of the Company or its 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 many 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, but are not limited to, risks related to international operations including political risks, general risks associated with petroleum operations (such as commodity prices, production delays, production costs, exchange rate fluctuations and environmental costs and risks) 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. The forward-looking statements contained herein are made as of the date hereof and the Company undertakes no obligations to update or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise. Accordingly, readers should not place undue reliance on forward- looking information. 3
  4. 4. Company Overview Stock Exchange Symbol: BNK TSX – Toronto | AIM – London Total Shares 261 Million (285 Million fully diluted) Share Price $ 2.69 (as of March 11, 2015) Market Capitalization CDN $772 Million Liquidity 2 Million shares/day (3 months average) Research Coverage 15 analysts provide coverage Bankers Petroleum Ltd. is an international E&P company with operational focus in Albania. 4 Canada United States United Kingdom France Australia & NZ Other Europe Asia Ownership by Region
  5. 5. Assets Overview Patos-Marinza Oilfield • Largest onshore oilfield in Europe • 100% W.I. and operatorship • 191 Million Barrels – 2P Reserves Kuçova Oilfield • 100% W.I. and operatorship • 12 Million Barrels 2P Reserves • Drilled first horizontal well in 2014 Block F Exploration Acreage • Prospective for natural gas CORE FOCUS AREA ACCESSIBLE TO REGIONAL AND INTERNATIONAL MARKETS 5
  6. 6. Investment Highlights Capital Investment (CAPEX) ~ 1.3 billion USD ~500 million last 2 years Large Primary Reserves 203 Million barrels 2P 5.4 Billion barrels OIIP Strong Record of Production Growth 1.2 million tons production in 2014 ~ 6 million tons produced since 2004 Contribution to Albanian State Finances and its Agencies ~500 million USD since 2004 ~230 million USD as Royalty Tax ~190 million USD to Albpetrol as PEP&ASP ~80 million USD as C&C, excise, local taxes, personal etc. Largest FDI in Albania 35% of FDI for the first three quarters of 2014 701 million USD total FDI for Q1-Q3 2014 Strong Balance Sheet 2014 year end cash position of $73 million 2015 capital program fully-funded 6 Albania’s largest producer, foreign investor and contributor to Albanian Economy
  7. 7. - 4,000 8,000 12,000 16,000 20,000 1939 1944 1949 1954 1959 1964 1969 1974 1979 1984 1989 1994 1999 2004 2009 2014 (bopd) Albpetrol Bankers AAP History of Patos-Marinza 1928 – 1990 Patos-Marinza was first discovered by APOC (Anglo Persian Oil Co.) and developed in stages. 1990 Fall of Communism in Albania 1995 – 2004 AAP (Anglo Albanian Petroleum, a JV between Premier Oil , IFC, OMV, and Albpetrol) signed a concession agreement, but due to contract terms, weak oil price environment and technical challenges, the foreign partners relinquished the field in early 2004. 2004 - 2007 Bankers Petroleum negotiated and signed a new PA & LA in July 2004 and grew production from 400 to 6,000 bopd through reactivation of legacy vertical wells. 2008 – 2012 Growth of production from 6,000 to 15,000 bopd through development and delineation drilling of new horizontal wells across 11 different reservoir zones and multiple areas of the field. 2013 - 2014 Two year average production growth of 17.5% through a strategy of primary development with horizontal wells, validating secondary recovery techniques, and reducing costs through operational efficiencies in the field Average Historical Patos-Marinza Production 7
  8. 8. 0 2,500 5,000 7,500 10,000 12,500 15,000 17,500 20,000 22,500 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2006 2007 2008 2009 2010 2011 2012 2013 2014 Production(bopd) HorizontalWells:429VerticalWells:107 8 KNOWLEDGE TEAM AND INFRASTRUCTURE TO DELIVER STEADY GROWTH Bankers Quarterly Production
  9. 9. • Operational flexibility to adjust pace of drilling with oil prices Execute Horizontal Drilling Program • 19 polymer and 4 water flood patterns to end of 2014 • Initial production results are performing in line or exceeding expectations • Up to 20 - 30 polymer conversions anticipated in 2015 Accelerate Polymer Flood Program • Optimize treating process and sourcing to reduce diluent costs • Install flow lines to reduce infield trucking • Reduce energy costs through alternate fuel use Operational Improvements to Reduce Costs Three-Part Operational Strategy 9
  10. 10. Reserves Value / Metrics December 31, 2014 Reserves 125 Mbbls 203 Mbbls Patos-Marinza 122 Mbbls 191 Mbbls Kuçova 3 Mbbls 12 Mbbls Reserve Life Index 17 years 27 years Net Present Value at 10% After Tax (US$ Millions) $734 $1,802 Per Share ($CDN) Exchange rate as of Feb. 20, 2014 $3.49 $8.57 Finding and development costs $22.57/bbl $12.69/bbl Future capital (Millions) $2,001 $2,115 Number of Hz wells (at Patos-Marinza) 870 882 10
  11. 11. Reservoir Characteristics & Development Strategy Primary Development • Horizontal Drilling & Reactivation of Existing Wells Secondary and Tertiary Development • Reduced Space Pattern Drilling • Water Flood – Viscosity 50cP to 500cP • Polymer Flood – Viscosity 500cP to 2500cP • Additional Core & Data Collection for Tertiary • Tertiary - Viscosity > 2500cP Reservoir Description • Well Depth: 300 to 2,000m • Sandstone Reservoir • Up to 300m Gross & 200m Net Oil Pay • Porosity 25 to 30%, Permeability 100 to 2,000md • API 5° to 20°, Live Oil Viscosity 50cP to 80,000cP WaterandPolymerFlood8–20API IGoraniIDrizaIMarinza 50m PrimaryHorizontalDrilling8-20API TertiaryDevelopment5–10API Composite Type Section 11
  12. 12. Primary Development and Margin Expansion $125 Million • 2 drilling rigs, 60 horizontal wells to be drilled • Gathering and flow line systems • 1 water disposal well • Large programs for electrification, pump upsizing, and other OPEX reductions EOR Development $28 Million • Capital allocated for 20 wells to be converted for water and polymer injection • Associated facilities • Shifting from pilot to development phase of the EOR project 2015 Capital Program of $153 M 12 Drilling Workovers Facilities Disposal Others Facilities Well Conversions
  13. 13. Development Program • 60 primary horizontal wells to be drilled in 2015 • 558 horizontal wells drilled to the end of Q4 2014 (includes 24 lateral redrills) • 20 – 30 EOR conversions planned in 2015 • 23 patterns in place to date (includes 19 polymer flood and 4 water flood patterns) • 882 future horizontal well locations and ~54 future EOR patterns (based on 2P Recovery Case YE2014) Historical Drilling Program by Zone 2014 locations in red Marinza & Bubullima Gorani Upper Driza Lower Driza 13
  14. 14. Netbacks Netback ($/bbl) 2013 2014 Q4 2014 Brent $108.66 $98.95 $76.58 Sales Price (% of Brent) $85.39 (79%) $77.26 (78%) $57.29 (75%) Royalties $14.22 $11.39 $8.36 Transportation $2.44 $2.38 $2.46 Energy $2.88 $2.25 $2.21 Well Servicing $2.77 $2.25 $2.18 Other $5.25 $5.75 $6.17 OPEX $13.34 $12.63 $13.02 Net Diluent $7.29 $5.67 $7.19 Transportation & Terminal Fees $2.81 $2.21 $1.71 Sales & Transport $10.10 $7.88 $8.90 Netbacks $47.73 $45.36 $27.01 14 $0 $10 $20 $30 $40 $50 $60 2009 2010 2011 2012 2013 2014
  15. 15. 2015 Sales Contracts Export Market • 55% of 2015 volumes will be sold to the export market • All export volumes committed to contracts at 79-80% of Dated Brent • Counterparties in the Mediterranean, the United States Domestic Market • 45% of 2015 volumes will be sold to domestic refiners • Agreement for 74% of Dated Brent FOB Vlora 15 Export Partners REPSOL Spain OMV Austria ENI Italy API Italy MOCOH Trader
  16. 16. 16 Surface Infrastructure Optimization Lease Construction Well Pad Tie ins, Treating, Testing, Sour Handling, Control & Automation Satellite Treating Facility (Pad D/H, Sat 3) Central Treating Facility (CTF) Fier Hub Storage Sales Oil Transfer Storage at PIA (increasing storage & loading capacity) Tanker (increasing load size from 20,000 to 40,000MT) Production Gathering System Disposal Pipeline Water Disposal System Disposal sites WTP
  17. 17. EOR Program • 23 EOR patterns in operation at end of 2014, positive results to date • 11.3 million barrels 2P Reserves booked in 2014 • 20 – 30 projected conversions in 2015 • half of planned conversions are expansion to existing patterns, half will be testing new areas with high viscosity and thicker reservoir zones • Polymer Flood • 1st Polymer pattern initiated late Q1 2013 • 19 injection wells in 3 different zones at the end of 2014, distributed evenly in the D5, D4 and D3 • Viscosity range tested: 700 – 1,600 cP • Water flood • 1st pattern initiated in late Q2 2013 • 4 injection wells in the Upper Marinza (M0 and M) formation at the end of 2014; • Viscosity range tested: 10 – 700 cP (best results in lower viscosity (<150 cP) 17
  18. 18. EOR Well Performance 18 0 1 2 3 4 5 6 7 8 9 10 0 50 100 150 200 250 0 10 20 30 40 50 60 PatternCount OilRate(bbl/d) Months On Injection Average Polymer Flood Profile 1P Recovery Case (7%) 2P Recovery Case (8%) 3P Recovery Case (10%) Oil Rate Primary Recovery Case Pattern Count (6%)
  19. 19. 0 50 100 150 200 250 300 350 2009 2010 2011 2012 2013 2014 0 50 100 150 200 250 300 350 2009 2010 2011 2012 2013 2014 Strong Balance Sheet CAPEX (Millions of US$) LIQUIDITY at December 31, 2014 Adjusted Cash Flow* (Millions of US$) Working capital of 201 Million; CASH of $73 Million Credit Facilities Facility Utilized Approved Raiffeisen Bank $20 Million $0 Million $20 Million IFC / EBRD $204 Million $104 Million $100 Million Total $224 Million $104 Million $120 Million Financial hedge (Put Option) in place 2015 - 6,000 bopd at $80/bbl Dated Brent 19 * Before contract settlement expense
  20. 20. Previous Albpetrol well Re-activated well LIABILITY MANAGEMENT BY CONTINUOUS CLEAN-UP Health, Safety, Environment & Community Relations Environmental •Clean-up and remediation •Meeting International standards Economic Development •Agricultural Programs •Supporting Sustainable business Stakeholder Engagement •Building Capacity •Reducing Impacts •Occupational Training Health & Safety •Creating safe work environments •Trained and competent workforce 20 Corporate & Social Responsibility
  21. 21. 21 Corporate & Social Responsibility Program Community Investments by Year TOTAL 2012 2013 2014 Economic Development $ 190,628 $ 532,116 $ 740,327 $ 1,463,071 Quality of Life Improvement $ 288,851 $ 497,894 $ 375,022 $ 1,161,767 General Local Plans/ Compliance/ Other $ 33,774 $ 690,213 $ 231,240 $ 955,227 TOTAL $ 513,253 $ 1,720,223 $ 1,346,589 $ 3,580,065 Examples of Investments: • Economic Development: 690 students have graduated from Bankers Vocational and English Training Programs to date • Quality of Life Improvements: Bankers collaborates with local Communes and Municipalities to invest in local roads, schools, parks and health clinics • General Local Plans: In 2013, Bankers supported seven Communes and Municipalities in our area to develop General Local Plans
  22. 22. David French President & CEO Rob Carss VP, HSSE Doug Urch Executive VP Finance & CFO Leonidha Çobo VP & General Director Albania Suneel Gupta Executive VP & COO Mark Hodgson VP, Business Development Bayne Assmus VP, Production & Operations Craig Nardone VP, Exploration & Development Management Team 22
  23. 23. Board of Directors Robert 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, Vice Chairman Retired from President and CEO of Bankers Petroleum in April 2013; 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 David French President and CEO, Bankers Petroleum since April 2013; 23 years experience in the development and production of oil and gas fields in North America and overseas. Previously held the position of VP, Business Development, of Apache Corporation Jonathan Harris Business Consultant, Genet Consulting Ltd since February 2005; Chief Operating Officer and Director of Anglo-African Minerals Plc from May 2009 to February 2012; Previously COO of Tribeka Ltd and director of Eastern Platinum Ltd. London, UK based Phil Knoll President, Corridor Resources from October 2010 to September 2014; Executive Vice President, Duke Energy from March 2002 to July 2005; Director of Corridor Resources, AltaGas Utility Group; former Director of Rally Energy Ian McMurtrie Previously Executive VP, Exploration & Development, Bankers Petroleum Ltd. and Vice President, Exploration of Rally Energy Corp. Former Chairman, Porto Energy Corp. 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 23
  24. 24. Analyst Coverage Canaccord Genuity Christopher Brown Industrial Alliance Securities Amin Haque CIBC Dave Popowich Mackie Research Mark Heim Cormark Securities Garett Ursu Pareto Securities Aaditya Chintalapati & Thomas Aarrestad Credit Suisse David Phung RBC Capital Markets Al Stanton Dundee Capital Markets David Dudlyke Scotiabank Gavin Wylie FirstEnergy Darren Engels TD Securities Jamie Somerville GMP David Beddis Wood & Company Robert Rethy Haywood Securities Darrell Bishop 24
  25. 25. Thank You

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