LONDON (Alliance News) - Bankers Petroleum Ltd Friday said it will focus on cutting costs in the fourth quarter, after sales and production rose over the third quarter, but revenue declined due to weak oil prices and reduced margins.
Revenue in the three months ended September 30 decreased to USD159 million at an average realised price of USD78.55 per barrel, compared with the second quarter when it generated USD171 million at an average realised price of USD86.68 per barrel.
In the third quarter a year earlier, Bankers made revenue of USD147 million at an average realised price of USD86.96 per barrel.
Oil sales rose by 2% to 21,994 barrels of oil per day, compared with 21,620 barrels of oil per day in the second quarter. Compared to the third quarter of 2013, it is a 20% increase from 18,332 barrels of oil per day.
For the first nine months of the year, oil sales totalled 20,696 barrels of oil per day, a 17% rise from the 17,655 barrels of oil per day in 2013.
Its product margin was reduced in the third quarter, with its net operating income totalling USD45.78 per barrel, compared with USD53.89 per barrel in the second quarter. In the third quarter of 2013, Banker's net operating income was USD49.05 per barrel.
For the first nine months of the year, the net operating income totalled USD51.53 per barrel, a 29% increase from a year earlier when it stood at USD46.69 per barrel.
Average oil production reached 21,865 barrels of oil per day, 6% higher than the previous quarter when it produced 20,630 barrels of oil per day on average. The average production is 18% higher compared with a year earlier when it was producing 18,541 barrels of oil per day during the third quarter in 2013.
For the first nine months of the year, average production was 20,809 barrels of oil per day, a 17% increase from the comparable period a year earlier when average production stood at 17,878 barrels of oil per day.
Bankers spent USD88 million in capital expenditure during the quarter, used to drill 45 new wells in the Patos-Marinza oilfield in Albania. In the previous quarter it spent USD72 million and in the third quarter of 2013, it spent USD66 million.
The company had cash of USD88 million and working capital of USD190 million at the end of September. It has drawn USD104 million of its USD224 million approved credit facilities.
Bankers is in the process of reviewing its sales contracts for 2015 and volume commitments will be determined in the fourth quarter of 2014, it said in a statement.
"In the fourth quarter of 2014, the company will remain focused on its three part strategy to deliver steady and reliable growth through the development drilling program, expanding product margins through surface-level improvements," it said in a statement.
So far, from the beginning of the fourth quarter to date, average production stands at 22,000 barrels of oil per day, 1% higher than average production reported in the third quarter. The company is also expecting cost reductions to feature in the fourth quarter as it plans to electrify between 60 and 75 wells to reduce energy costs.
"The company anticipates maintaining a similar activity level in 2015 with a continued focus on production growth, polymer and water flood pilot expansion and cost improvements. The 2015 program will be funded with cash flow generated in 2015 supplemented with existing cash and credit facilities," said Bankers in a statement.
Bankers Petroleum shares were down 1.5% to 221.67 pence per share Friday afternoon.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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