13 Aug 2012 13:00
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") is pleased to provide its 2012 second quarterfinancial and operational results. The complete reporting package, consistingof Management's Discussion and Analysis along with Financial Statements andNotes, is posted on the Company's website www.bankerspetroleum.com and SEDAR: www.sedar.com.Results at a Glance Three months ended Six months ended (US$000, except as noted) June 30 June 30 2012 2011 Change 2012 2011 Change Oil revenue 98,587 85,184 16% 201,255 157,920 27% Net operating income 47,252 47,244 - 100,723 87,078 16% Net income 11,253 10,800 4% 19,018 22,019 (14%) Per share - basic ($) 0.044 0.044 - 0.076 0.089 (15%) - diluted ($) 0.044 0.042 5% 0.075 0.086 (13%) Funds generated from 43,159 43,220 - 91,231 73,168 25% operations Per share - basic ($) 0.171 0.175 (2%) 0.363 0.296 23% Capital expenditures 52,632 69,388 (24%) 115,333 121,318 (5%) Average sales (bopd) 14,169 12,152 17% 13,724 12,024 14% Average price ($/barrel) 76.46 77.03 (1%) 80.57 72.56 11% Netback ($/barrel) 36.65 42.72 (14%) 40.33 40.02 1% June 30 December 31 June 30 2012 2011 2011 Cash and deposits 60,297 54,013 81,429 Working capital 112,022 80,282 98,222 Total assets 770,829 661,216 565,340 Long-term debt 95,793 46,692 18,683 Shareholders' equity 454,752 412,679 389,959
Highlights for the quarter and six months ended June 30, 2012 are:
· Oil sales averaged 14,169 bopd for the second quarter of 2012, anincrease of 17% compared to 12,152 bopd for the same period in 2011 and anincrease of 7% compared to 13,279 bopd for the preceding quarter. For thefirst half of 2012, oil sales increased 14% to 13,724 bopd from 12,024 bopd forthe comparable 2011 period.· Revenue for the second quarter of 2012 increased by 16% to $98.6million ($76.46/bbl) from $85.2 million ($77.03/bbl) in the second quarter of2011. Revenue for the second quarter of 2012 represented 71% of the Brent oilprice of $108/bbl. Revenue for the first six months of 2012 totalled $201.3million ($80.57/bbl), an increase of 27% from $157.9 million (72.56/bbl) forthe first six months of 2011.· Royalties to the Albanian Government and related entities were $17.2million for the second quarter of 2012 (representing 17% of total revenue) and$13.1 million for the second quarter of 2011. Total royalties were $36.4million and $26.8 million for the six months ended June 30, 2012 and 2011,respectively.· In the second quarter of 2012, operating, sales and transportationcosts originating from Albanian based companies and their employees were $34.1million, 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 incometotalled $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 and2011 were $43.2 million. For the six months ended June 30, 2012, fundsgenerated from operations were $91.2 million as compared to $73.2 million forthe six months ended June 30, 2011.· Capital expenditures were $52.6 million in the second quarter of2012. The Company drilled 38 wells during the quarter, comprised of 36horizontal 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. Forthe first six months of 2012, capital expenditures totalled $115.3 million, areduction of 5% from $121.3 million for the comparable 2011 six months period.· The Company continues to maintain a strong financial position at June30, 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 operationalchallenges associated with mature heavy oilfield development includinginterference from old well bores, sand production, and water disposalcapacity. Horizontal wells that have demonstrated good production, but haveliner access issues, are being reviewed for clean-out and production resumptionor re-drilling of the lateral section and completion with improved tubularstrength. The first re-drill is planned for late in the third quarter. Furtherexpansion of the water disposal capacity with additional wells and higherpressure and volume injection pumps is planned for the fourth quarter. Workcontinues on water control in existing and future drilling fairways to improvethe water-cut performance on new wells by restricting water influx from somelegacy vertical wells with poor integrity existing in the field. A number ofwells have exhibited improved water-cuts as a result of the water controlinitiative.The second steam cycle for thermal well 5201 was completed in mid-July and thewell was immediately placed on its second production cycle. The well iscurrently flowing back at a rate of 570 barrels of fluid per day, 97% BS&W and3% heavy viscous oil. The production cycle will continue for several more weeksto recover the remaining steam equivalent injected volumes of water and observethe gradual change of temperature and oil water rates. The data collected willbe utilized alongside results from the thermal coring program of 4 wellsbeginning in the third quarter to determine the follow up location for thepilot program."While the rates from the D1 in this area were restricted due to highviscosity, the result of mobilization of the oil tells us that the reservoir isreceptive to thermal extraction. Now, with the new coring rig on its way intothe country, Bankers will begin the process of delineating the Western andSouthern flanks of the field to select the optimal location for the secondpilot." 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.
BANKERS PETROLEUM LTD. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited, expressed in thousands of US dollars, except per share amounts)
Three months ended Six months ended June 30 June 30 2012 2011 2012 2011 Revenues $ 98,587 $ 85,184 $ 201,255 $ 157,920 Royalties (17,214) (13,062) (36,368) (26,817) 81,373 72,122 164,887 131,103 Unrealized gain (loss) on financial 244 (615) (2,965) (2,016) commodity contracts 81,617 71,507 161,922 129,087 Operating expenses 19,038 14,637 36,470 26,234
Sales and transportation expenses 15,083 10,241 27,694 17,791
General and administrative expenses 3,508 3,580 7,618 6,438 Depletion and depreciation 14,067 9,127 27,744 17,392 Share-based payments 1,447 2,327 5,683 6,972 53,143 39,912 105,209 74,827 28,474 31,595 56,713 54,260 Net finance expense 1,860 1,963 4,717 3,904 Income before income tax 26,614 29,632 51,996 50,356 Deferred income tax expense (15,361) (18,832) (32,978) (28,337) Net income for the period 11,253 10,800 19,018 22,019
Other comprehensive income (loss)
Currency translation adjustment (505) 439 1 2,253
Comprehensive income for the period $ 10,748 $ 11,239 $ 19,019 $ 24,272 Basic earnings per share $ 0.044 $ 0.044 $ 0.076 $ 0.089 Diluted earnings per share $ 0.044 $ 0.042 $ 0.075 $ 0.086 BANKERS PETROLEUM LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited, expressed in thousands of US dollars)
ASSETS June 30 December 31 2012 2011 Current assets Cash and cash equivalents $ 55,297 $ 49,013 Restricted cash 5,000 5,000 Accounts receivable 50,944 56,006 Inventory 24,977 14,412 Deposits and prepaid expenses 24,761 17,463 Financial commodity contracts 719 3,684 161,698 145,578 Non-current assets Property, plant and equipment 609,131 515,638 $ 770,829 $ 661,216 LIABILITIES Current liabilities Accounts payable and accrued liabilities $ 48,187 $ 52,109 Current portion of long-term debt 1,489 13,187 49,676 65,296 Non-current liabilities Long-term debt 95,793 46,692 Decommissioning obligation 14,643 13,561 Deferred tax liabilities 155,965 122,988 316,077 248,537 SHAREHOLDERS' EQUITY Share capital 332,450 318,021 Warrants - 1,540 Contributed surplus 59,816 49,651 Currency translation reserve 6,410 6,409 Retained earnings 56,076 37,058 454,752 412,679 $ 770,829 $ 661,216 BANKERS PETROLEUM LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, expressed in thousands of US dollars)
Three months ended Six months ended June 30 June 30 2012 2011 2012 2011
Cash provided by (used in):
Operating activities
Net income for the period $ 11,253 $ 10,800 $ 19,018 $ 22,019
Depletion and depreciation 14,067 9,127 27,744 17,392 Amortization of deferred - - - 734 financing costs Accretion of long-term debt 1,199 748 2,326 748 Accretion of decommissioning 202 99 397 194 obligation Unrealized foreign exchange (126) 672 120 1,344 (gain) loss Deferred income tax expense 15,361 18,832 32,978 28,337 Share-based payments 1,447 2,327 5,683 6,972 Unrealized (gain) loss on (244) 615 2,965 2,016 financial commodity contracts Cash premiums paid for - - -
(6,588)
financial commodity contracts 43,159 43,220 91,231 73,168 Change in non-cash working (6,775) 5,042 (12,614) (2,659) capital 36,384 48,262 78,617 70,509 Investing activities Additions to property, plant (52,632) (69,388) (115,333) (121,318) and equipment Restricted cash - (5,000) - (5,000) Change in non-cash working (3,467) 4,554 (4,109) 10,542 capital (56,099) (69,834) (119,442) (115,776) Financing activities Issue of shares for cash 31 2,163 12,177 5,293 Financing costs - (4) (750) (30) Increase in long-term debt 2,993 13,353 35,817 7,940 3,024 15,512 47,244 13,203
Foreign exchange gain (loss) on
cash and cash equivalents (162) (365) (135) 374 Increase (decrease) in cash and (16,853) (6,425) 6,284 (31,690) cash equivalents Cash and cash equivalents, 72,150 81,354 49,013 106,619 beginning of period Cash and cash equivalents, end $ 55,297 $ 74,929 $ 55,297 $ 74,929 of period Interest paid $ 1,521 $ 842 $ 1,722 $ 1,152 Interest received $ 218 $ 225 $ 278 $ 363 BANKERS PETROLEUM LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited, expressed in thousands of US dollars, except number of common
shares) Number of Currency common Share Contributed translation Retained shares capital Warrants surplus
reserve earnings Total
Balance at December 31, 2010 244,794,990 $ 309,379 $ 1,597 $ 28,135 $ 6,094 $ 1,062 $ 346,267 Share-based payments - - - 14,127 - - 14,127 Options exercised 2,686,779 8,212 - (2,919) - - 5,293 Net income for the period - - - - - 22,019 22,019 Currency translation adjustment - - - - 2,253 - 2,253 Balance at June 30, 2011 247,481,769 $ 317,591 $ 1,597 $ 39,343 $ 8,347 $ 23,081 $ 389,959 Share-based payments - - - 10,358 - - 10,358 Options exercised 41,667 136 - (50) - - 86 Warrants exercised 174,333 461 (57) - - - 404 Share issue costs - (167) - - - - (167) Net income for the period - - - - - 13,977 13,977 Currency translation adjustment - - - - (1,938) - (1,938) Balance at December 31, 2011 247,697,769 $ 318,021 $ 1,540 $ 49,651 $ 6,409 $ 37,058 $ 412,679 Share-based payments - - - 10,877 - - 10,877 Options exercised 553,945 1,833 - (719) - - 1,114 Warrants exercised 4,672,991 12,596 (1,533) - - - 11,063 Warrants expired - - (7) 7 - - - Net income for the period - - - - - 19,018 19,018 Currency translation adjustment - - - - 1 - 1 Balance at June 30, 2012 252,924,705 $ 332,450 $ - $ 59,816 $ 6,410 $ 56,076 $ 454,752
Caution Regarding Forward-looking Information
Information in this news release respecting matters such as the expected futureproduction levels from wells, future prices and netback, work plans,anticipated total oil recovery of the Patos-Marinza and Ku§ova oilfieldsconstitute forward-looking information. Statements containing forward-lookinginformation express, as at the date of this news release, the Company's plans,estimates, forecasts, projections, expectations, or beliefs as to future eventsor results and are believed to be reasonable based on information currentlyavailable to the Company. Exploration for oil is a speculative business that involves a high degree ofrisk. The Company's expectations for its Albanian operations and plans aresubject to a number of risks in addition to those inherent in oil productionoperations, including: that Brent oil prices could fall resulting in reducedreturns and a change in the economics of the project; availability offinancing; delays associated with equipment procurement, equipment failure andthe lack of suitably qualified personnel; the inherent uncertainty in theestimation of reserves; exports from Albania being disrupted due to unplanneddisruptions; and changes in the political or economic environment.Production and netback forecasts are based on a number of assumptions includingthat the rate and cost of well reactivations and well recompletions of the pastwill continue and success rates and production rates will be similar to thoserates experienced for previous well recompletions and reactivations; continuedavailability of the necessary equipment, personnel and financial resources tosustain the Company's planned work program; continued political and economicstability in Albania; the existence of reserves as expected; the continuedrelease by Albpetrol of areas and wells pursuant to the Plan of Development andAddendum; the absence of unplanned disruptions; the ability of the Company tosuccessfully drill new wells and bring production to market; and general risksinherent 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 Ku§ova 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.
For further information:
Abby Badwi, President and Chief Executive Officer, (403) 513-2694 Doug Urch, Executive VP, Finance and Chief Financial Officer, (403) 513-2691 Mark Hodgson, VP, Business Development, (403) 513-2695
Email: investorrelations@bankerspetroleum.comWebsite: www.bankerspetroleum.comAIM NOMAD:Canaccord Genuity LimitedHenry Fitzgerald-O'Connor+44 207 523 8000AIM JOINT BROKERS:Canaccord Genuity LimitedRyan Gaffney/ Henry Fitzgerald-O'Connor+44 207 523 8000Macquarie Capital AdvisorsPaul Connolly+44 203 037 5639(BNK. BNK)