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Bankers Petroleum increases production, hit by fiscal changes

27 February 2014

Bankers Petroleum Albania, the main oil extraction company in the country, announced an increase of production by 4.1 % in the last quarter 2013.

Average production from the Patos-Marinza oilfield in Albania for the fourth quarter of 2013 was 19,303 barrels of oil per day (bopd), 4.1% higher than 18,541 bopd in the third quarter. Average oil production for 2013 was 18,169 bopd, 21% higher than 2012 average production of 15,020 bopd.

Oil sales during the quarter averaged 19,710 bopd, 7.5% higher than the previous quarter average of 18,332 bopd.

The crude oil inventory at December 31, 2013 was 311,000 barrels, 38,000 barrels lower than 349,000 barrels at September 30, 2013.

The Patos-Marinza fourth quarter average oil price was approximately $85.71 per barrel (representing 78% of the Brent oil price of $109.27 per barrel), as compared with the third quarter average oil price of $86.96 per barrel (representing 79% of the Brent oil price of $110.37 per barrel).

The 2013 average oil sales were 18,173 bopd ($85.41 per barrel), an increase of 23% from 14,808 bopd ($79.73 per barrel) in 2012.

Government cancels fiscal exemptions for petroleum extraction companies

The Parliament of Albania approved the State Budget presented by the Albanian Government on December 28, 2013. Included in the fiscal changes are tax law related amendments that pertain to hydrocarbon operations.

The Government of Albania has implemented effective January 1, 2014, removal of exemptions on the Value Added Tax (VAT) of 20% on goods and services related to the extraction of hydrocarbons. The legislation provides that this VAT will be fully reimbursed on a timely basis to the companies by the Albanian Government.

The fiscal changes also include potential implementation of Excise Tax on imported petroleum products effective April 1, 2014 for companies operating in the hydrocarbon sector, which were previously exempt. The Albanian Government has elected to take the next three months to consult with industry members to understand the potential impact of the Excise Tax on all parties.

“The Company is currently in discussions with officials of the Government of Albania to fully assess the implications of this new legislation and to reach an agreement on financial offsets which we are entitled to under our production agreements. We anticipate these changes will have minimal impact on our ongoing business and plan to move forward with our 2014 capital plan as previously reported. We look forward to another successful year and continued robust investment in Albania” commented David French, President and Chief Executive Officer of Bankers Petroleum.

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