Mr. Abby Badwi reports

BANKERS PETROLEUM OPERATIONAL UPDATE FOR THE SECOND QUARTER 2011

Bankers Petroleum Ltd. is providing an operational update.

Production and oil price

Oil sales from the Patos-Marinza oil field in Albania during the second quarter averaged 12,152 barrels of oil per day compared with first quarter sales of 11,894 bopd. The last export shipment of approximately 54,000 barrels (equivalent to about 600 bopd for the quarter) scheduled for June 29 was delayed due to late vessel arrival to July 2 and will be included in next quarter's oil sales. Oil inventory on June 30 was 239,000 barrels, an increase of 71,000 barrels in the quarter (equivalent to about 800 bopd) from the March 31 inventory level of 168,000 barrels, as a result of additional new well site tanks and storage tanks at the export terminal requiring certain minimum operational volumes in each tank.

Average production for the second quarter was 12,973 bopd representing a 7-per-cent increase from 12,147 bopd in the first quarter, yet approximately 1,200 bopd lower than forecast due to several operational challenges detailed herein. Current production is 13,150 bopd.

The Patos-Marinza oil field currently has shut-in production of 1,750 bopd. This volume is approximately 60 per cent higher than normal, representing 1,000 bopd of additional productive capacity. Most of these wells are waiting on service rigs for workovers, a few are shut in for proximity to new drilling, and the rest are wells with high-water-production shut-in to provide water disposal capacity for water from high-productivity oil wells. To mitigate these challenges, additional service rigs are being sourced, and new water disposal wells are being equipped to handle additional water disposal volumes from the field.

The Patos-Marinza second quarter average oil price was $77.02 (U.S.) per barrel (representing 66 per cent of the Brent oil price of $117.36 (U.S.) per barrel), an increase of 13 per cent compared with first quarter's average oil price of $68.06 (U.S.) per barrel (65 per cent of Brent). With the current differential between Brent and WTI, Patos-Marinza crude is presently priced at approximately 80 per cent of WTI.

Drilling update

Nineteen wells have been drilled during the second quarter: 18 horizontal production wells and one vertical water disposal well. Fifteen of these wells have been completed and are on production, with three awaiting completion, including the third Gorani horizontal well test, the first two of which are currently producing at rates of 170 and 180 bopd. The success of these two wells has now validated primary productivity from the Gorani formation in the northern area of the field, and the company intends to develop this formation further with the addition of a large number of horizontal wells to access more than 220 million barrels of oil in place assigned to the Gorani formation in this part of the field.

Production rates from 15 horizontal wells drilled and put on production in the second quarter are averaging 180 bopd with strong initial production in the lower Gorani sands tested and continuing in the Driza (D1) sands. Production rates from the 16 horizontal wells drilled in the first quarter are averaging 135 bopd, and the average production from all 75 producing horizontal wells in the field is 120 bopd per well at the end of the second quarter.

Horizontal well decline analysis is continuing with current indication showing varied decline rates depending on formation, area of the field and well optimization with current average declines of approximately 25 per cent per year. High initial productivity wells are exhibiting 30- to 50-per-cent declines in the first six to 12 months followed by a levelling off in rate and reduced declines of 10 to 20 per cent beyond the initial decline period. Please refer to the decline analysis by producing horizon available on the July, 2011, corporate presentation at the Bankers website.

The fourth drilling rig arrived in Albania in May, and, after start-up delays, the rig spudded its first well on June 5 and is currently drilling its second well at the Patos-Marinza oil field; this delay had a negative impact on the second quarter production numbers. The fifth drilling rig has now been contracted and is expected to be ready for drilling operations in October, 2011. The company's current estimates are to drill 79 horizontal wells and complete 82 well reactivations in 2011.

Due to observed variance in productivity and decline rates of the horizontal wells versus forecast rates, as well as the loss of some productivity from old vertical wells due to casing conditions of these wells, the company is providing guidance that exit production in 2011 will now range from a high case of 20,000 bopd, likely case of 18,000, and a low case of 16,000 bopd.

Well reactivations

Reactivation and recompletion work continued in the second quarter with 14 wells reactivated, nine of which are on production and averaging 33 bopd per well. Current production from these wells is 300 bopd. Production from nine wells reactivated in the first quarter and on production is currently 230 bopd averaging 26 bopd per well.

The current production split is 7,470 bopd (representing 57 per cent) from new horizontal wells and 5,630 bopd from reactivated vertical wells.

Thermal program and exploration Block F

Road access and site construction for the thermal facilities have been completed. Drilling the vertical delineation well is scheduled for later this month to be followed immediately with two thermal horizontal wells. The first 60-day steam injection cycle is scheduled for September, 2011.

Seismic reprocessing and interpretation on Block F is progressing to finalize the location for drilling the first gas exploration well in the fourth quarter.

Infrastructure development

Construction on the first phase of the crude oil sales pipeline, which connects the Patos-Marinza oil field to the storage and loading hub facility at Fier, is progressing, and the project is scheduled for September, 2011, completion. Social and environmental impact assessments for the second phase of the pipeline, from Fier to the export terminal at Vlore, are under way.

Construction of the third and fourth oil-treating train expansions of the central treatment facility is under way and on schedule for completion during the fourth quarter of 2011 and will increase the CTF capacity to 25,000 bopd.

Construction of the Seman River Bridge in the northern area of the Patos-Marinza oil field is progressing with completion expected in December, 2011, which will facilitate a larger drilling and reactivation program in the higher productivity area north of the river.

Kucova

Water injection in one vertical well started in May, 2011, and pressure and fluid level observations are being monitored in two vertical wells. With positive pressure buildup, the company can expand the water flood project and initiate production operations in 2012.

Environmental initiatives

The pilot remediation project in Sector 3 is moving ahead with continuing strong results with the mechanical (centrifuge) separation unit providing the best outcome in cleaning contaminated solids and residues from contaminated sites. The bioremediation test process is also continuing yet, due to the nature of this type of treatment, will take a longer period to provide results.

For additional information on this operational update, please see the July, 2011, version of the company's corporate presentation at Bankers website.

Conference call

The management of Bankers will host a conference call on July 6, 2011, at 7 a.m. MDT to discuss this operations update. 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 10 minutes prior to the call at 1-888-231-8191 or 1-647-427-7450. A live audio webcast of the conference call will also be available on Bankers website. The webcast 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 July 20, 2011, by dialling 1-800-642-1687 or 1-416-849-0833 and entering access code 80070287.

Review by qualified person

This release was reviewed by Suneel Gupta, executive vice-president and chief operating officer of Bankers, who is a qualified person under the rules and policies of Alternative Investment Market in his role with the company and due to his training as a professional engineer (member of Apegga) with over 20 years experience in domestic and international oil and gas operations.

We seek Safe Harbor.