|By PR Newswire||
|November 12, 2012 08:02 AM EST||
Record Quarter of Production and Cash Flows
CALGARY, Nov. 12, 2012 /PRNewswire/ - Bankers Petroleum Ltd. ("Bankers" or the "Company") (TSX: BNK, AIM: BNK) is pleased to provide its 2012 third quarter financial and operational results. The complete reporting package, consisting of Management's Discussion and Analysis along with the Financial Statements and Notes, is posted on the Company's website www.bankerspetroleum.com and on SEDAR: www.sedar.com.
Results at a Glance
(US$000, except as noted)
Three months ended
Nine months ended
|Net operating income||58,159||44,898||30%||158,882||131,976||20%|
|Per share||- basic ($)||0.049||0.055||(11%)||0.124||0.145||(14%)|
|- diluted ($)||0.048||0.054||(11%)||0.123||0.140||(12%)|
|Funds generated from operations(1)||48,308||42,099||15%||139,539||115,267||21%|
|Per share||- basic ($)||0.191||0.170||12%||0.554||0.467||19%|
|Average sales (bopd)||15,715||13,667||15%||14,393||12,578||14%|
|Average price ($/barrel)||79.58||74.48||7%||80.21||73.26||9%|
|(1) Includes a $3.9 million payment for a financial commodity contract in August 2012.|
|Cash and cash on deposits||40,112||54,013||53,243|
Highlights for the quarter and nine months ended September 30, 2012 are:
- For the third quarter of 2012, oil sales averaged 15,715 bopd, an increase of 15% compared to 13,667 bopd for the same period in 2011 and an increase of 11% compared to 14,169 bopd for the preceding quarter. For the nine months ended September 30, 2012, oil sales increased 14% to 14,393 bopd from 12,578 bopd for the comparable 2011 period.
- Revenue for the third quarter of 2012 increased by 23% to $115.1 million ($79.58/bbl) from $93.7 million ($74.48/bbl) in the same period of 2011. Revenue for the third quarter of 2012 represented 73% of the Brent oil price of $110/bbl. Revenue for the nine month 2012 period totalled $316.3 million ($80.21/bbl), an increase of 26% from $251.6 million ($73.26/bbl) for the same period of 2011.
- Royalties to the Albanian Government and related entities were $23.3 million and $18.5 million for the third quarter of 2012 and 2011, respectively (both representing 20% of total revenue). Total royalties were $59.6 million and $45.3 million for the nine months ended September 30, 2012 and 2011, respectively.
- Operating, sales and transportation costs in the third quarter of 2012, originating from Albanian-based companies and their employees, were $33.6 million, compared with $30.3 million for the third quarter of 2011.
- The Company recorded net operating income (netback) of $58.2 million ($40.23/bbl) in the third quarter of 2012, an increase of 30% compared to $44.9 million ($35.71/bbl) in the same period of 2011. For the nine months ended September 30, 2012, net operating income totalled $158.9 million ($40.29/bbl), a 20% increase from $132.0 million ($38.43/bbl) for the same period in 2011.
- Funds generated from operations for the third quarter of 2012 were $48.3 million, a 15% increase compared to $42.1 million for the third quarter of 2011. For the nine months ended September 30, 2012, funds generated from operations were $139.5 million as compared to $115.3 million for the nine months ended September 30, 2011. Included in funds generated from operations is a payment of $3.9 million for a financial commodity contract in August 2012.
- Capital expenditures in the third quarter of 2012 were $53.5 million. The Company drilled 34 wells during the quarter, comprised of 31 horizontal wells, one lateral re-drill sidetrack well, and two core wells in the southern area of the field. Re-activation and re-completion work continued during the quarter. During the same period of 2011, capital expenditures were $65.1 million. For the nine months ended September 30, 2012, capital expenditures totalled $168.9 million, a reduction of 9% from $186.5 million for the comparable 2011 period.
- During the third quarter of 2012, Bankers participated in the bid evaluation process for the privatization of the Albanian national oil company "Albpetrol Sh.A". Although Bankers' participation was unsuccessful, the winning bid value of EUR 850 million attributed to Albpetrol's assets enhances Bankers oilfields' valuation and also demonstrates the Company's commitment to expand its business activities in Albania.
- At September 30, 2012, total deposits and prepaid expenses were $29.2 million compared to $17.5 million at the end of December 2011, of which $16.6 million and $1.2 million, respectively, is paid to the Albanian court as deposits for procedure purposes on several legal cases. The recoverability of these amounts is dependent on the outcome of these cases. As of September 30, 2012, these amounts were considered recoverable.
- The Company is in the process of challenging assessments from the Albanian Government Tax Director negating the previous exemption relief from carbon and circulation taxes on diluent imports. These assessments represent a total of $15 million covering the last five years. The Company was successful in setting aside a recently introduced separate excise tax assessment amounting to $8 million on the Company's importation and use of diluent. Other audits have also resulted in an additional assessment of previously exempted Value Added Taxes for some of Bankers' subcontractors. Bankers has urged the Government of Albania to re-consider its position before proceeding with implementation of this assessment and is hopeful that these contractual exemptions will continue to be applied.
- The Company continues to maintain a strong financial position at September 30, 2012 with cash of $40.1 million and working capital of $106.5 million. Working capital for December 31, 2011 and September 30, 2011 was $80.3 million and $73.5 million, respectively.
Bankers has commenced discussions with EBRD and IFC, its reserve-based lenders, for an increase to its $110 million credit facility and a term extension that would extend existing repayments, currently scheduled to commence in October 2013. The existing 2009 facility was based on 2008 year-end reserves; subsequent reserve increases have significantly expanded the Company's borrowing base.
Operational Update and Outlook
The average fourth quarter 2012 production to date from the Patos-Marinza oilfield in Albania was 16,100 barrels of oil per day ("bopd"), 3% higher than the third quarter average.
The Company has made several improvements to address operational challenges associated with mature heavy oilfield development including interference from old well bores, sand production, and water disposal capacity. Five (5) previously drilled wells that were shut-in due to liner failure in late 2011 have been re-drilled with a lateral sidetrack through the cased section of the wellbore and a new higher grade steel liner with redesigned slot configuration for additional strength has been run in the new lateral legs. The wells were successfully completed and are currently producing at a cumulative production rate of 500 bopd (average of 100 bopd per well). Additional candidate wells are being prepared for lateral re-drilling and installation of improved tubulars with three (3) re-drill sidetracks planned for the remainder of the fourth quarter and several more in the first half of next year to restore shut-in production from similar wells that have demonstrated good production capability, but are restricted due to liner failure concerns.
The Company continues to be pleased with the results of the horizontal drilling program, along with the results of lateral section re-drills initiated in the third quarter and continuing into the fourth quarter and first part of 2013.
For additional information, please see an updated version of the Company's November corporate presentation on www.bankerspetroleum.com.
Bankers Petroleum is expanding and has several exciting career opportunities available for both Calgary and Albania. Please visit our website for full details on these career opportunities and to see how to apply.
|BANKERS PETROLEUM LTD.|
|CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME|
|(Unaudited, expressed in thousands of US dollars, except per share amounts)|
Three months ended
Nine months ended
|Unrealized gain (loss) on financial commodity contracts||(1,085)||4,998||(4,050)||2,982|
|Sales and transportation expenses||13,407||12,967||41,101||30,758|
|General and administrative expenses||3,999||3,536||11,617||9,974|
|Depletion and depreciation||15,644||9,591||43,388||26,983|
|Net finance expense||3,732||146||8,449||4,050|
|Income before income tax||31,746||34,108||83,742||84,464|
|Deferred income tax expense||(19,472)||(20,412)||(52,450)||(48,749)|
|Net income for the period||12,274||13,696||31,292||35,715|
|Other comprehensive income (loss)|
|Currency translation adjustment||820||(2,626)||821||(373)|
|Comprehensive income for the period||$||13,094||$||11,070||$||32,113||$||35,342|
|Basic earnings per share||$||0.049||$||0.055||$||0.124||$||0.145|
|Diluted earnings per share||$||0.048||$||0.054||$||0.123||$||0.140|
|BANKERS PETROLEUM LTD.|
|CONSOLIDATED STATEMENTS OF FINANCIAL POSITION|
|(Unaudited, expressed in thousands of US dollars)|
|Cash and cash equivalents||$||21,695||$||49,013|
|Deposits and prepaid expenses||29,162||17,463|
|Financial commodity contracts||2||3,684|
|Financial commodity contract||3,530||-|
|Property, plant and equipment||649,653||515,638|
|Accounts payable and accrued liabilities||$||48,808||$||52,109|
|Current portion of long-term debt||1,489||13,187|
|Deferred tax liabilities||175,437||122,988|
|Currency translation reserve||7,230||6,409|
|BANKERS PETROLEUM LTD.|
|CONSOLIDATED STATEMENTS OF CASH FLOWS|
|(Unaudited, expressed in thousands of US dollars)|
Three months ended
Nine months ended
|Cash provided by (used in):|
|Net income for the period||$||12,274||$||13,696||$||31,292||$||35,715|
|Depletion and depreciation||15,644||9,591||43,388||26,983|
|Amortization of deferred financing costs||-||-||-||734|
|Accretion of long-term debt||1,239||845||3,565||1,593|
|Accretion of decommissioning obligation||211||115||608||309|
|Unrealized foreign exchange (gain) loss||328||(77)||448||1,267|
|Deferred income tax expense||19,472||20,412||52,450||48,749|
|Unrealized (gain) loss on financial commodity contracts||1,085||(4,998)||4,050||(2,982)|
|Cash premiums paid for financial commodity contracts||(3,898)||-||(3,898)||(6,588)|
|Change in non-cash working capital||(16,153)||(15,352)||(28,767)||(18,011)|
|Additions to property, plant and equipment||(53,526)||(65,147)||(168,859)||(186,465)|
|Change in non-cash working capital||736||5,095||(3,373)||15,637|
|Issue of shares for cash||-||54||12,177||5,347|
|Increase in long-term debt||290||6,579||36,107||14,519|
|Share issue costs||-||(167)||-||(167)|
|Foreign exchange gain (loss) on cash and cash equivalents||160||(1,347)||25||(973)|
|Decrease in cash and cash equivalents||(33,602)||(28,186)||(27,318)||(59,876)|
|Cash and cash equivalents, beginning of period||55,297||74,929||49,013||106,619|
|Cash and cash equivalents, end of period||$||21,695||$||46,743||$||21,695||$||46,743|
|BANKERS PETROLEUM LTD.|
|CONSOLIDATED STATEMENT OF CHANGES IN EQUITY|
|(Unaudited, expressed in thousands of US dollars, except number of common shares)|
|Balance at December 31, 2010||244,794,990||$||309,379||$||1,597||$||28,135||$||6,094||$||1,062||$||346,267|
|Share issue costs||-||(167)||-||-||-||-||(167)|
|Net income for the period||-||-||-||-||-||35,715||35,715|
|Currency translation adjustment||-||-||-||-||(373)||-||(373)|
|Balance at September 30, 2011||247,516,769||$||317,515||$||1,597||$||44,345||$||5,721||$||36,777||$||405,955|
|Net income for the period||-||-||-||-||-||281||281|
|Currency translation adjustment||-||-||-||-||688||-||688|
|Balance at December 31, 2011||247,697,769||$||318,021||$||1,540||$||49,651||$||6,409||$||37,058||$||412,679|
|Net income for the period||-||-||-||-||-||31,292||31,292|
|Currency translation adjustment||-||-||-||-||821||-||821|
|Balance at September 30, 2012||252,924,705||$||332,450||$||-||$||63,877||$||7,230||$||68,350||$||471,907|
Caution Regarding Forward-looking Information
Information in this news release respecting matters such as the expected future production levels from wells, future prices and netback, work plans, anticipated total oil recovery of the Patos-Marinza and Kuçova oilfields constitute forward-looking information. Statements containing forward-looking information express, as at the date of this news release, the Company's plans, estimates, forecasts, projections, expectations, or beliefs as to future events or results and are believed to be reasonable based on information currently available to the Company.
Exploration for oil is a speculative business that involves a high degree of risk. The Company's expectations for its Albanian operations and plans are subject to a number of risks in addition to those inherent in oil production operations, including: that Brent oil prices could fall resulting in reduced returns and a change in the economics of the project; availability of financing; delays associated with equipment procurement, equipment failure and the lack of suitably qualified personnel; the inherent uncertainty in the estimation of reserves; exports from Albania being disrupted due to unplanned disruptions; and changes in the political or economic environment.
Production and netback forecasts are based on a number of assumptions including that the rate and cost of well reactivations and well recompletions of the past will continue and success rates and production rates will be similar to those rates experienced for previous well recompletions and reactivations; continued availability of the necessary equipment, personnel and financial resources to sustain the Company's planned work program; continued political and economic stability in Albania; the existence of reserves as expected; the continued release by Albpetrol of areas and wells pursuant to the Plan of Development and Addendum; the absence of unplanned disruptions; the ability of the Company to successfully drill new wells and bring production to market; and general risks inherent in oil and gas operations.
Forward-looking statements and information are based on assumptions that financing, equipment and personnel will be available when required and on reasonable terms, none of which are assured and are subject to a number of other risks and uncertainties described under "Risk Factors" in the Company's Annual Information Form and Management's Discussion and Analysis, which are available on SEDAR under the Company's profile at www.sedar.com.
There can be no assurance that forward-looking statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. Readers should not place undue reliance on forward-looking information and forward looking statements.
About Bankers Petroleum Ltd.
Bankers Petroleum Ltd. is a Canadian-based oil and gas exploration and production company focused on developing large oil and gas reserves. In Albania, Bankers operates and has the full rights to develop the Patos-Marinza heavy oilfield and has a 100% interest in the Kuçova oilfield, and a 100% interest in Exploration Block F. Bankers' shares are traded on the Toronto Stock Exchange and the AIM Market in London, England under the stock symbol BNK.
SOURCE Bankers Petroleum Ltd.
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