Bankers Petroleum Announces 2011 Second Quarter Financial and Operational Results
CALGARY, Aug. 11, 2011 /PRNewswire/ -- Bankers Petroleum Ltd. ('Bankers' or the 'Company') (TSX: BNK) (AIM: BNK) is pleased to provide its 2011 second quarter financial and operational results. The complete reporting package, consisting of Management's Discussion and Analysis along with Financial Statements and Notes, is posted on the Company's website http://www.bankerspetroleum.com/ and SEDAR: http://www.sedar.com/.
Results at a Glance
(US$000, except as Three months ended Six months ended
noted)(1) June 30 June 30
2011 2010 Change 2011 2010 Change
Oil revenue 85,184 42,147 102% 157,920 77,296 104%
Net operating income 47,244 20,353 132% 87,078 35,992 142%
Net income 10,800 3,300 227% 22,019 2,937 650%
Per share - basic
($) 0.044 0.014 214% 0.089 0.013 585%
- diluted
($) 0.042 0.014 200% 0.086 0.012 617%
Funds generated from
operations 42,913 17,941 139% 73,172 31,755 130%
Per share - basic
($) 0.174 0.078 123% 0.296 0.138 114%
Capital expenditures 69,388 28,724 142% 121,318 54,894 121%
Average production
(bopd) 12,152 9,830 24% 12,024 9,060 33%
Average price
($/barrel) 77.03 47.12 63% 72.56 47.14 54%
Netback ($/barrel) 42.72 22.76 88% 40.02 21.95 82%
December
June 30 June 30 31
2011 2010 Change 2010 Change
Cash and deposits 81,429 57,418 42% 108,119 (25%)
Working capital 98,222 59,417 65% 130,920 (25%)
Total assets 565,340 337,007 68% 465,598 21%
Long-term bank loans 31,630 22,691 39% 21,815 45%
Shareholders' equity 389,959 232,737 68% 346,267 13%
(1) Effective January 1, 2011, and retroactive to January 1, 2010, the
Company adopted International Financial Reporting Standards
(IFRS). Previously, the Company prepared its Financial Statements
in accordance with Canadian Generally Accepted Accounting
Principles (GAAP). The transition has not resulted in any
material variation from prior periods. Full details on the
transition adjustments are contained in the Notes to the
Consolidated Interim Financial Statements.
Highlights for the quarter ended June 30, 2011 are:
-- Production averaged 12,152 bopd, an increase of 24% compared to
the same period in 2010. Production at June 30, 2011 was
13,150 bopd.
-- Revenue increased 17% to $85.2 million ($77.03/bbl) in the
second quarter of 2011 from $72.7 million ($67.95/bbl) in the
first quarter of 2011 and by 102% from $42.1 million
($47.12/bbl) in the second quarter of 2010.
-- Net operating income (netback) increased 19% to $47.2 million
($42.72/bbl) in the second quarter of 2011 from $39.8 million
($37.22/bbl) during the first quarter of 2011 and by 132% from
$20.4 million ($22.76/bbl) in the second quarter of 2010.
-- Funds generated from operations increased by 42% to $42.9
million in the second quarter of 2011 from $30.3 million over
the first quarter of 2011 and by 139% from $17.9 million in the
second quarter of 2010.
-- Capital expenditures for the second quarter of 2011 were $69.4
million and included drilling 18 horizontal wells and one (1)
vertical water disposal well, as well as 14 reactivations and
related infrastructure/expansion projects. During the same
period of 2010, capital expenditures were $28.7 million.
-- The Company continues to maintain a strong financial position
with cash of $81.4 million and working capital of $98.2 million
at June 30, 2011. Working capital for December 31, 2010 and
June 30, 2010 was $130.9 million and $59.4 million,
respectively.
Operational Update
Current production at the Patos-Marinza oilfield is 13,400 bopd. Of the 1,750 bopd of reported shut-in production in early July, 800 bopd have been put back on production and the additional oil inventory available for sale at the end of the second quarter was sold during the month of July reflecting record sales of 494,000 barrels. A new service rig was delivered in early August and another is due for delivery in October.
The thermal pilot program in the southwest area of the Patos-Marinza oilfield has now commenced. The vertical delineation well is drilling near total depth. Several cores have been cut and the rig will commence drilling the first of two horizontal thermal wells once casing has been set on the delineation well. The horizontal wells are targeting the thick Driza 1 sandstone where visual core inspection shows the zone to have excellent porosity and is fully saturated with oil. Steam injection is expected to commence in the fourth quarter of 2011 upon completion of the surface facilities construction.
Outlook
Despite the current equity sell off in financial markets and recent decline in oil prices, Bankers' financial position remains strong with $81 million in cash and minimal long-term debt of $31 million. In addition, Patos- Marinza crude sales agreements are based on Brent crude price which is currently at a 27% premium to WTI. Cash on hand and cash generated from operations are projected to be sufficient to fund Bankers capital program for 2011 and beyond, based on $100/bbl Brent price average for this year and $85/bbl for 2012 and beyond. The financial oil hedge agreements entered into by the Company earlier this year are an additional risk management protection strategy against declining commodity prices.
For additional information, please see an updated version of the Company's corporate presentation on http://www.bankerspetroleum.com/.
BANKERS PETROLEUM LTD.
CONSOLIDATED STATEMENTSOF COMPREHENSIVE INCOME
(Unaudited, expressed in thousands of US dollars, except
pershareamounts)
Three months ended Six months ended
June 30 June 30
2011 2010 2011 2010
Revenues $ 85,184 $ 42,147 $ 157,920 $ 77,296
Royalties (13,062) (8,367) (26,817) (15,557)
72,122 33,780 131,103 61,739
Operating expenses 14,637 8,892 26,234 16,817
Sales and
transportation
expenses 10,241 4,535 17,791 8,930
General and
administrative
expenses 3,580 2,327 6,438 4,783
Depletion and
depreciation 9,127 5,084 17,392 9,468
Share-based payments 2,327 1,451 6,972 5,155
Unrealized loss on
financial commodity
contracts 615 - 2,016 -
40,527 22,289 76,843 45,153
31,595 11,491 54,260 16,586
Finance income 98 487 405 1,214
Finance expense (2,061) (1,479) (4,309) (2,915)
(1,963) (992) (3,904) (1,701)
Income before income
tax 29,632 10,499 50,356 14,885
Deferred income tax
expense (18,832) (7,199) (28,337) (11,948)
Net income for the
period 10,800 3,300 22,019 2,937
Other comprehensive
income (loss)
Currency
translation
adjustment 439 (1,141) 2,253 303
Comprehensive income
for the period $ 11,239 $ 2,159 $ 24,272 $ 3,240
Basic earnings per
share $ 0.044 $ 0.014 $ 0.089 $ 0.013
Diluted earnings per
share $ 0.042 $ 0.014 $ 0.086 $ 0.012
BANKERS PETROLEUM LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Unaudited, expressed in thousands of US dollars)
ASSETS
June30 December 31
2011 2010
Current assets
Cash and cash equivalents $ 74,929 $ 106,619
Restricted cash 6,500 1,500
Accounts receivable 44,504 29,233
Inventory 15,487 4,199
Deposits and prepaid 16,624
expenses 13,553
154,973 158,175
Non-current assets
Deferred financing costs - 13,980
Financial commodity -
contracts 4,572
Property, plant and 293,443
equipment 405,795
$ 565,340 $ 465,598
LIABILITIES
Current liabilities
Accounts payable and accrued 23,241
liabilities $ 54,612 $
Current portion of long-term 4,014
debt 2,139
56,751 27,255
Non-current liabilities
Long-term debt 18,683 21,815
Decommissioning obligation 7,971 6,622
Deferred tax liabilities 91,976 63,639
175,381 119,331
SHAREHOLDERS'EQUITY
Share capital 317,591 309,379
Warrants 1,597 1,597
Contributed surplus 39,343 28,135
Accumulated other comprehensive
income 8,347 6,094
Retained earnings 23,081 1,062
389,959 346,267
$ 565,340 $ 465,598
BANKERS PETROLEUM LTD.
CONSOLIDATEDSTATEMENTS OF CASH FLOWS
(Unaudited, expressed in thousands of US dollars)
Three months ended Six months ended
June 30 June 30
2011 2010 2011 2010
Cash provided by (used
in):
Operating activities
Net income for the 2,937
period $ 10,800 $ 3,300 $ 22,019 $
Depletion and 9,468
depreciation 9,127 5,084 17,392
Finance expenses 2,915
(including accretion) 2,061 1,479 4,309
Interest paid (842) (937) (1,152) (1,102)
Foreign exchange (gain) 434
loss (7) 365 (133)
Deferred income tax 11,948
expense 18,832 7,199 28,337
Share-based payments 2,327 1,451 6,972 5,155
Unrealized loss on -
financial commodity
contracts 615 - 2,016
Cash premiums paid for -
financial commodity
contracts - - (6,588)
42,913 17,941 73,172 31,755
Change in non-cash (2,325)
working capital 5,349 (647) (2,663)
48,262 17,294 70,509 29,430
Investing activities
Additions to property, (54,894)
plant and equipment (69,388) (28,724) (121,318)
Restricted cash (5,000) - (5,000) -
Change in non-cash 7,115
working capital 4,554 2,093 10,542
(69,834) (26,631) (115,776) (47,779)
Financingactivities
Issue of shares for cash 2,163 1,386 5,293 5,802
Financing costs (4) (20) (30) (172)
Increase (decrease) in (755)
long-term debt 13,353 912 7,940
Share issue costs - (158) - (158)
Note receivable - 2,749 - 2,749
Short-term deposits - 9,075 - 7,275
Change in non-cash 143
working capital - 143 -
15,512 14,087 13,203 14,884
Foreign exchangegain
(loss) on cash and cash
equivalents (365) (969) 374 (112)
Increase (decrease) in
cash and cash equivalents (6,425) 3,781 (31,690) (3,577)
Cash and cash equivalents,
beginning of period 81,354 52,137 106,619 59,495
Cash and cash equivalents,
end of period $ 74,929 $ 55,918 $ 74,929 $ 55,918
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 http://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.
Bankers Petroleum Ltd.
CONTACT:
Abby Badwi President and Chief (403) 513-2694
Executive Officer
Doug Urch Executive VP, Finance and (403) 513-2691
Chief Financial Officer
Mark Hodgson VP, Business Development (403) 513-2695
Email: investorrelations@bankerspetroleum.com
Website: http://www.bankerspetroleum.com/
AIM NOMAD:
Canaccord Genuity Limited
Ryan Gaffney/ Henry Fitzgerald-O'Connor
+44 20 7050 6500
AIM JOINT BROKERS:
Canaccord Genuity Limited Macquarie Capital Advisors
Ryan Gaffney/ Henry Ben Colegrave/Paul Connolly
Fitzgerald-O'Connor
+44 20 7050 6500 +44 20 3037 5639
