News

November 13, 2009

Higher Oil Prices Improve Netback Numbers For Heavy Oil Producer Bankers Petroleum

Producers of heavy oil are highly sensitive to fluctuations in the oil price as their discounted viscous crudes are often uneconomic to produce when prices are low. This year’s revival in the oil price to around US$70 a barrel, although still far short of last summer’s heady heights, is welcome news to the likes of Bankers Petroleum, the TSX and AIM listed company with rights to the largest onshore oilfield in Europe.

The oilfield in question is the Patos Marinza heavy oilfield in Albania, with original oil in place of 4.7 billion barrels, of which only 120 million barrels have been produced to date. The crude ranges from 14-degree to 22-degree API and achieves about 60 per cent of the Brent price (this gave Bankers an average sales price of US$40.71 a barrel in Q3, with a netback per barrel of just over US$16. This was about half the netback number of Q3 2008, when oil prices were much higher, but...