LONDON (Alliance News) - Bankers Petroleum Ltd on Tuesday said production in the first quarter of 2016 was slightly lower than the previous quarter whilst the average price it achieved was substantially lower.
The company said it produced 17,363 barrels of oil per day in the first quarter of 2016, slowing 4.3% from the 17,137 barrels of oil per day that were being produced in the final quarter of 2015.
More notably, Bankers said the average oil price achieved in the most recent quarter was only USD21.07 per barrel, a more than 37% drop from the USD33.62 per barrel achieved in the previous quarter, despite the company having some of its production hedged.
"Sales prices were lower than expected in the first quarter due to temporarily reduced pricing in February at the request of our export crude buyer as Brent prices reached levels of USD30 per barrel. March crude sales recovered towards better pricing as the Brent oil price improved and we are expecting continued improvement as we enter into the second quarter and seasonally higher demand for heavy crude oil on both the export and domestic markets," said Bankers.
Bankers has hedged 5,000 barrels a day at an average price of USD52.09 per barrel, considerably higher than current Brent prices, for the remainder of 2016. The hedging programme delivered a USD7.4 million benefit in the first quarter, it said, with the remaining hedging programme in 2016 valued at around USD16.2 million.
Sales in the first quarter fell to an average of 17,280 barrels a day from 18,558 barrels a day in the previous quarter. As sales were lower than production, Bankers' oil inventory rose to 266,000 barrels at the end of March from the 258,000 barrels reported at the end of 2015.
Bankers has continued its enhanced oil recovery programme, aimed at improving production from existing wells facing natural declines whilst also continuing to improve local infrastructure in order to bring down costs further.
Bankers added that its USD18.0 million credit facility with Raiffeisen Bank has been extended until the end of May from the end of March, allowing the bank to conduct due diligence on the proposed sale of Bankers to two companies with connections to a large Chinese firm for CAD575.0 million.
Bankers said it had entered into the agreement with 1958082 Alberta Ltd and Charter Power Investment Ltd, which are both affiliates of Geo-Jade Petroleum Corp, "one of the largest independent oil and gas exploration and production companies in China," according to Bankers.
Bankers on Tuesday said the meeting for shareholders to vote on the transaction will be held on the last day of May.
Bankers shares were untraded on Tuesday, last trading at 100.50 pence per share.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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