Bankers Petroleum (TSE:BNK), a Canadian oil and gas company with operations in Albania, announced a $218 million capital program for 2015, and forecast 2015 output levels to match 2014 levels, in recognition of the falling crude-oil prices.
The Calgary, Alberta-based company said in a statement today that the capital program will continue to focus on three main strategic goals: execution of the primary horizontal drilling program, acceleration of the secondary recovery program, and targeted capital for operational improvements to reduce costs and provide infrastructure and facilities necessary to support the future growth of the company.
The 2015 capital program utilizes a $70 per barrel average annual Brent oil price forecast.
The capital program will be fully supported by funds generated from operations and cash resources, the company said.
The majority of the 2015 capital program, at $118 million, is for primary drilling with three rigs and between 85 - 90 new horizontal wells. The company noted that a total of $64 million of the 2015 capital program will be allocated to facilities and infrastructure activities, which include improvements aimed at lowering operating costs.
"This budget builds upon our low-cost development of horizontal wells, and continues our commitment to reserves growth and future volumes through expansion of polymer flooding. We believe our financial discipline, reservoir management, and operational capability will serve us well in this volatile market," chief executive officer David French said in the statement.
Bankers anticipates 2015 average production levels to be in line with the 2014 average production level, on the back of the recent pullback in Brent oil prices, reduced 2015 capital expenditure and the acceleration of the polymer flood program.
Global crude prices have plunged 40 percent in the past six months due to oversupply and tepid demand growth, prompting many oil producers to trim their capital budgets.
WTI for January delivery dropped today as much as $1.15 to $58.80 a barrel, the lowest since July 2009, in electronic trading on the New York Mercantile Exchange.
Bankers Petroleum fell 5.2 percent to C$2.50 at 9:30 a.m. in Toronto. The stock had lost 43 percent this year through yesterday.