Bankers Petroleum Announces 2012 Second Quarter Financial and Operational Results

Record Quarter of Production

CALGARY, Aug. 13, 2012 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the "Company") (TSX: BNK, AIM: BNK) is pleased to provide its 2012 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 www.bankerspetroleum.com and SEDAR: www.sedar.com.

Highlights for the quarter and six months ended June 30, 2012 are:

• Oil sales averaged 14,169 bopd for the second quarter of 2012, an increase of 17% compared to 12,152 bopd for the same period in 2011 and an increase of 7% compared to 13,279 bopd for the preceding quarter.  For the first half of 2012, oil sales increased 14% to 13,724 bopd from 12,024 bopd for the comparable 2011 period.
• Revenue for the second quarter of 2012 increased by 16% to $98.6 million ($76.46/bbl) from $85.2 million ($77.03/bbl) in the second quarter of 2011.  Revenue for the second quarter of 2012 represented 71% of the Brent oil price of $108/bbl.  Revenue for the first six months of 2012 totalled $201.3 million ($80.57/bbl), an increase of 27% from $157.9 million (72.56/bbl) for the first six months of 2011.
• Royalties to the Albanian Government and related entities were $17.2 million for the second quarter of 2012 (representing 17% of total revenue) and $13.1 million for the second quarter of 2011.  Total royalties were $36.4 million and $26.8 million for the six months ended June 30, 2012 and 2011, respectively.
• In the second quarter of 2012, operating, sales and transportation costs originating from Albanian based companies and their employees were $34.1 million, compared with $24.9 million for the second quarter of 2011.
• The Company recorded net operating income (netback) of $47.3 million ($36.65/bbl) in the second quarter of 2012, compared to $47.2 million ($42.72/bbl) in the same period of 2011.  On a six months basis, net operating income totalled $100.7 million ($40.33/bbl) for 2012, an increase from $87.1 million ($40.02/bbl) in 2011.
• Funds generated from operations for the second quarters of 2012 and 2011 were $43.2 million.  For the six months ended June 30, 2012, funds generated from operations were $91.2 million as compared to $73.2 million for the six months ended June 30, 2011.
• Capital expenditures were $52.6 million in the second quarter of 2012.  The Company drilled 38 wells during the quarter, comprised of 36 horizontal wells, one water injection well and one exploration well in Block "F".  Re-activation and re-completion work continued during the quarter.  During the same period of 2011, capital expenditures were $69.4 million.  For the first six months of 2012, capital expenditures totalled $115.3 million, a reduction of 5% from $121.3 million for the comparable 2011 six months period.
• The Company continues to maintain a strong financial position at June 30, 2012 with cash of $60.3 million and working capital of $112.0 million.  Working capital for December 31, 2011 and June 30, 2011 was $80.3 million and $98.2 million, respectively.

Operational Update and Outlook

The average third quarter 2012 production to date is 15,400 bopd, 9% higher than the second quarter 2012 rate of 14,169 bopd.

The Company continues to focus on improvements to address operational challenges associated with mature heavy oilfield development including interference from old well bores, sand production, and water disposal capacity.  Horizontal wells that have demonstrated good production, but have liner access issues, are being reviewed for clean-out and production resumption or re-drilling of the lateral section and completion with improved tubular strength. The first re-drill is planned for late in the third quarter.  Further expansion of the water disposal capacity with additional wells and higher pressure and volume injection pumps is planned for the fourth quarter. Work continues on water control in existing and future drilling fairways to improve the water-cut performance on new wells by restricting water influx from some legacy vertical wells with poor integrity existing in the field.  A number of wells have exhibited improved water-cuts as a result of the water control initiative.

The second steam cycle for thermal well 5201 was completed in mid-July and the well was immediately placed on its second production cycle. The well is currently flowing back at a rate of 570 barrels of fluid per day, 97% BS&W and 3% heavy viscous oil. The production cycle will continue for several more weeks to recover the remaining steam equivalent injected volumes of water and observe the gradual change of temperature and oil water rates. The data collected will be utilized alongside results from the thermal coring program of 4 wells beginning in the third quarter to determine the follow up location for the pilot program.

"While the rates from the D1 in this area were restricted due to high viscosity, the result of mobilization of the oil tells us that the reservoir is receptive to thermal extraction. Now, with the new coring rig on its way into the country, Bankers will begin the process of delineating the Western and Southern flanks of the field to select the optimal location for the second pilot." said Abby Badwi, President and Chief Executive Officer.

For additional information, please see an updated version of the Company's August 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.

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.