Bankers Petroleum Announces 2011 Third Quarter Results
Record Financial and Operational Quarter
CALGARY, Nov. 11, 2011 /PRNewswire/ - Bankers Petroleum Ltd. ('Bankers' or the 'Company')
(AIM: BNK) is pleased to provide its 2011 third 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 www.bankerspetroleum.com and SEDAR: www.sedar.com.
Results at a
Glance
(US$000, except as Three months ended Nine months ended
noted)(1) September 30 September 30
2011 2010 Change 2011 2010 Change
Oil revenue 93,650 42,135 122% 251,570 119,431 111%
Net operating
income 44,898 19,646 129% 131,976 55,638 137%
Net income 13,696 2,958 363% 35,715 5,895 506%
Per share - 480%
basic ($) 0.055 0.012 358% 0.145 0.025
- diluted ($) 0.054 0.012 350% 0.140 0.024 483%
Funds generated
from operations 42,601 16,308 161% 115,773 48,063 141%
Per share - 129%
basic ($) 0.172 0.067 157% 0.469 0.205
Capital
expenditures 65,147 27,456 137% 186,465 82,350 126%
Average production
(bopd) 13,667 9,826 39% 12,578 9,318 35%
Average price
($/barrel) 74.48 46.61 60% 73.26 46.95 56%
Royalties 14.68 9.16 60% 13.18 9.37 41%
Operating
expenses 13.78 10.40 33% 12.69 10.31 23%
Sales and
transportation 10.31 5.31 94% 8.96 5.40 66%
Netback ($/barrel) 35.71 21.74 64% 38.43 21.87 76%
September 30 September 30 December 31
2011 2010 Change 2010 Change
Cash and deposits 53,243 134,362 (60%) 108,119 (51%)
Working capital 73,491 138,785 (47%) 130,920 (44%)
Total assets 612,348 442,345 38% 465,598 32%
Long-term bank
loans 31,407 19,248 63% 21,815 44%
Shareholders'
equity 405,955 332,854 22% 346,267 17%
(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 September 30, 2011 are:
-- Production averaged 13,667 bopd, an increase of 39% compared to
the same period in 2010. Current production is 14,750 bopd.
-- In the third quarter of 2011, revenue increased by 10% to $93.7
million ($74.48/bbl) from $85.2 million ($77.03/bbl) in the
previous quarter and by 122% from $42.1 million ($46.61/bbl) in
the third quarter of 2010.
-- Net operating income (netback) was $44.9 million ($35.71/bbl)
in the third quarter of 2011, compared to $47.2 million
($42.72/bbl) during the second quarter of 2011 and $19.6
million ($21.74/bbl) in the third quarter of 2010.
-- Funds generated from operations were $42.6 million in the third
quarter of 2011 compared to $42.9 million in the second quarter
of 2011 and $16.3 million in the third quarter of 2010.
-- During the third quarter of 2011, capital expenditures were
$65.1 million. The Company drilled sixteen (16) horizontal
wells, a vertical cored delineation well, two (2) thermal
horizontal wells, and two (2) water disposal wells, as well as
reactivated 19 wells in addition to other related
infrastructure/expansion projects. During the same period of
2010, capital expenditures were $27.5 million.
-- New export market agreements for 2012 have been agreed at
higher average price levels than the current year crude oil
contracts. ARMO, the Albanian refinery, also agreed to purchase
Patos-Marinza crude in 2012 for a significant realized average
price increase from the current year contract. The 2012
pricing agreements represent an average 7% increase over the
2011 Patos-Marinza oil price.
-- The Company continues to maintain a strong financial position
with cash of $53.2 million and working capital of $73.5 million
at September 30, 2011. Working capital for December 31, 2010
and September 30, 2010 was $130.9 million and $138.8 million,
respectively.
Operational Update
Current production at the Patos-Marinza oilfield is 14,750 bopd. This volume represents an 8% increase from third quarter production average. Four (4) of the ten (10) wells drilled and completed in the first five weeks of the fourth quarter targeted reserves and delineation drilling outside the main field. The Driza 1 formation outpost drilling to the west of the main field continues to demonstrate excellent cold flow production in this area of the concession with the last two wells producing at a current average rate of 160 bopd. In addition, the first Gorani 4 horizontal well has been drilled and is currently producing at a rate of 230 bopd. This well is located in the southern portion of Area 1 and extends into Area 2, a part of the field that to date had limited reactivation operations. A second Gorani 4 horizontal well is currently drilling further south in Area 2. Several more wells are scheduled to be drilled in this area.
Two of the existing drilling rigs recently encountered mechanical issues and have been since been repaired and put back into service after eighteen days of combined down-time, The fifth drilling rig has arrived at the Patos-Marinza field and is currently rigging up and will spud its first well in the next few days.
The first Block F exploration well is now scheduled to spud in January 2012 as soon as we can free one of the current rigs focused on incremental production and reserves assessment drilling and move it to the Block F exploration area.
Surface facilities construction has been completed for the thermal pilot program at the Patos-Marinza oilfield. Steam injection into the first horizontal well is projected to commence later this month in the Driza 1 sandstone. The reservoir simulation model is being updated with new core data information. The steam cycle is planned for a period of 60 days following which the well will undergo a soak period for several days before being placed on production and at that time steam injection in the second horizontal well will begin.
Outlook
Current year-end capital expenditures estimate remains at $215 million, net of capital inventory. The Company plans to drill an additional 18 wells before the end of this 2011, including 17 horizontal and one water disposal well. Exit production target is 16,000 bopd; while this rate represents the low case projection, it is a 33% increase from the 2010 exit rate. The Company expects to release its 2011 reserves updates in February 2012.
The 2012 work program and budget is being finalized and its details will be announced in December after receiving necessary board of directors and government approvals. Bankers' continues to hold a strong financial position of $53 million in cash and minimal long-term debt of $31 million with $80 million remaining available within current credit facilities. With Patos-Marinza crude sales agreements being based on Brent crude oil pricing, the Company anticipates a strong cash flow projection for next year and will be able to deliver its most active capital program in 2012.
For additional information, please see an updated version of the Company's corporate presentation on www.bankerspetroleum.com.
BANKERS PETROLEUM LTD.
CONSOLIDATED STATEMENTSOFCOMPREHENSIVE INCOME
(Unaudited, expressed in thousands of US dollars,except per
shareamounts)
Three months ended Nine months ended
September 30 September 30
2011 2010 2011 2010
Revenues 93,650 $ 42,135 $ 251,570 $ 119,431
$
Royalties (18,457) (8,284) (45,274) (23,841)
75,193 33,851 206,296 95,590
Unrealized gain on 4,998 - 2,982 -
financial commodity
contracts
80,191 33,851 209,278 95,590
Operating expenses 17,328 9,401 43,562 26,218
Sales and 12,967 4,804 30,758 13,734
transportation
expenses
General and 3,536 2,462 9,974 7,245
administrative
expenses
Depletion and 9,591 5,415 26,983 14,968
depreciation
Share-based 2,515 1,247 9,487 6,402
payments
45,937 23,329 120,764 68,567
34,254 10,522 88,514 27,023
Finance income 1,513 268 501 543
Finance expense (1,659) (2,349) (4,551) (4,240)
(146) (2,081) (4,050) (3,697)
Income before 34,108 8,441 84,464 23,326
income tax
Deferred income tax (20,412) (5,483) (48,749) (17,431)
expense
Net income for the 13,696 2,958 35,715 5,895
period
Other
comprehensiveincome
(loss)
Currency (2,626) 1,752 (373) 2,055
translation
adjustment
Comprehensive $ 11,070 $ 4,710 $ 35,342 $ 7,950
income for the
period
Basic earnings per $ 0.055 $ 0.012 $ 0.145 $ 0.025
share
Diluted earnings $ 0.054 $ 0.012 $ 0.140 $ 0.024
per share
BANKERS PETROLEUMLTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Unaudited, expressed in thousands of US dollars)
ASSETS
September 30 December 31
2011 2010
Current assets
Cash and cash equivalents $ 46,743 $ 106,619
Restricted cash 6,500 1,500
Accounts receivable 55,355 29,233
Inventory 16,279 4,199
Deposits and prepaid expenses 11,909 16,624
136,786 158,175
Non-current assets
Deferred financing costs - 13,980
Financial commodity contracts 9,570 -
Property, plant and equipment 465,992 293,443
$ 612,348 $ 465,598
LIABILITIES
Current liabilities
Accounts payable and accrued $ 54,354 $ 23,241
liabilities
Current portion of long-term 8,941 4,014
debt
63,295 27,255
Non-current liabilities
Long-term debt 20,187 21,815
Decommissioning obligation 10,523 6,622
Deferred tax liabilities 112,388 63,639
206,393 119,331
SHAREHOLDERS' EQUITY
Share capital 317,515 309,379
Warrants 1,597 1,597
Contributed surplus 44,345 28,135
Accumulated other comprehensive 5,721 6,094
income
Retained earnings 36,777 1,062
405,955 346,267
$ 612,348 $ 465,598
BANKERS PETROLEUM LTD.
CONSOLIDATED STATEMENTS OFCASH FLOWS
(Unaudited, expressedin thousands of US dollars)
Three months ended Nine months ended
September 30 September 30
2011 2010 2011 2010
Cash provided by (used
in):
Operating activities
Net income for the $ 13,696 $ 2,958 $ 35,715 $ 5,895
period
Depletion and 9,591 5,415 26,983 14,968
depreciation
Finance expense 1,659 2,349 4,551 4,240
Interest paid (197) (364) (1,349) (1,466)
Foreign exchange (gain) (77) (780) 1,207 593
loss
Deferred income tax 20,412 5,483 48,749 17,431
expense
Share-based payments 2,515 1,247 9,487 6,402
Unrealized gain on (4,998) - (2,982) -
financial commodity
contracts
Cash premiums paid for - - (6,588) -
financial commodity
contracts
42,601 16,308 115,773 48,063
Change in non-cash (15,854) (2,264) (18,517) (4,589)
working capital
26,747 14,044 97,256 43,474
Investing activities
Additions to property, (65,147) (27,456) (186,465) (82,350)
plant and equipment
Restricted cash - - (5,000) -
Change in non-cash 5,095 (435) 15,637 6,680
working capital
(60,052) (27,891) (175,828) (75,670)
Financing activities
Issue of shares for cash 54 97,145 5,347 102,947
Financing costs - (21) (30) (193)
Increase (decrease) in 6,579 (3,443) 14,519 (4,198)
long-term debt
Share issue costs (167) (4,149) (167) (4,307)
Note receivable - - - 2,749
Short-term deposits - (5,000) - 2,275
Change in non-cash - 3 - 146
working capital
6,466 84,535 19,669 99,419
Foreign exchange gain (1,347) 1,256 (973) 1,144
(loss) on cash and cash
equivalents
Increase (decrease) in (28,186) 71,944 (59,876) 68,367
cash and cash equivalents
Cash and cash equivalents, 74,929 55,918 106,619 59,495
beginning of period
Cash and cash $ 46,743 $ 127,862 $ 46,743 $ 127,862
equivalents,end of period
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 Kucova 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 Kucova 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 Executive Officer (403) 513-2694
Doug Urch Executive VP, Finance and Chief (403) 513-2691
Financial Officer
Mark Hodgson VP, Business Development (403) 513-2695
Email: investorrelations@bankerspetroleum.com
Website: 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 Fitzgerald-O'Connor Ben Colegrave/Paul Connolly
+44 20 7050 6500 +44 20 3037 5639
