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Bankers Petroleum Announces 2014 Third Quarter Financial and OperationalResults Netback of US$45.78/bbl and Q4 Average Production to Date 22,000 bopd CALGARY, Nov. 7, 2014 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the"Company") (TSX: BNK, AIM: BNK) is pleased to provide its 2014 third quarterfinancial and operational results. During the quarter, Bankers achieved a netback of US$45.78 per barrel. Allamounts listed in this news release are in US dollars unless otherwise stated. Results at a Glance Three months ended September 30 Nine months ended September 30 (US$000s, except as noted) 2014 2013 % change 2014 2013 % change Financial Oil revenue 158,932 146,665 8% 474,448 411,065 15% Net operating income 92,624 82,725 12% 291,134 225,032 29% Net income 25,592 19,507 31% 77,780 46,708 67% Basic (US$/share) 0.10 0.08 27% 0.30 0.18 63% Diluted (US$/share) 0.10 0.08 25% 0.29 0.18 60% Funds generated from operations 84,617 71,074 19% 261,439 198,210 32% Basic (US$/share) 0.32 0.28 14% 1.01 0.78 29% Capital expenditures 87,605 66,199 32% 218,971 165,915 32% Operating Average production (bopd) 21,865 18,541 18% 20,809 17,787 17% Average sales (bopd) 21,994 18,332 20% 20,696 17,655 17% Average Brent oil price (US$/barrel) 101.93 110.29 (8%) 106.52 108.46 (2%) Average realized price (US$/barrel) 78.55 86.96 (10%) 83.97 85.29 (2%) Netback (US$/barrel) 45.78 49.05 (7%) 51.53 46.69 10% September 30, 2014 December 31, 2013 September 30, 2013 Cash and restricted cash 87,976 31,706 40,659 Working capital 190,218 134,094 121,973 Total assets 1,230,406 1,007,148 971,587 Long-term debt 98,450 98,150 98,153 Shareholders' equity 661,775 564,675 542,655 Highlights for the quarter ended September 30, 2014 are summarized below: Operational Highlights: * Average oil production for the three months ended September 30, 2014 was 21,865 barrels of oil per day (bopd), 6% higher as compared to 20,630 bopd in the previous quarter and 18% higher than 18,541 bopd in the third quarter of 2013. For the nine months ended September 30, 2014, average oil production was 20,809 bopd, 17% higher than 17,787 bopd for the same period in 2013. * Oil sales for the third quarter of 2014 averaged 21,994 bopd, a 2% increase compared to 21,620 bopd for the previous quarter and 20% increase compared to 18,332 bopd for the third quarter of 2013. Crude oil inventory at September 30, 2014 decreased to 342,500 barrels, 11,500 barrels lower than 354,000 barrels at June 30, 2014. Oil sales for the nine months ended September 30, 2014 were 20,696 bopd, an increase of 17% from 17,655 bopd for the comparable 2013 period. * Capital expenditures in the third quarter of 2014 were $88 million. The Company drilled 45 wells during the quarter, comprised of 44 horizontal production wells and the Company's first multi-lateral well in the main area of the Patos-Marinza oilfield. Capital expenditures were $72 million for the previous quarter and $66 million for the third quarter of 2013. Product Margin Highlights: * For the three and nine months ended September 30, 2014, operating costs and sales and transportation costs, originating from Albanian-based companies and their employees, were $43 million ($21.41/bbl) and $113 million ($20.03 /bbl), respectively, compared to $39 million ($23.29/bbl) and $116 million ($24.15/bbl) for the same periods in 2013. * Net operating income (netback) in the third quarter of 2014 was $93 million ($45.78/bbl) compared to $106 million ($53.89/bbl) and $83 million ($49.05/ bbl) in the previous quarter and third quarter of 2013, respectively. Net operating income for the nine months ended September 30, 2014 was $291 million ($51.53/bbl), a 29% increase compared to $225 million ($46.69/bbl) in the comparable 2013 period. Financial Highlights: * Revenue for the third quarter of 2014 was $159 million ($78.55/bbl) compared to $171 million ($86.68/bbl) in the previous quarter and $147 million ($86.96/bbl) in the third quarter of 2013. Field price realization represented 77% of the Brent oil benchmark price ($101.93/bbl) for the third quarter of 2014 compared to 79% of the Brent oil price ($109.67/bbl) in the previous quarter and 79% of the Brent oil price ($110.29/bbl) in the third quarter of 2013. The reduction as a percentage of Brent compared to the previous quarter was mainly due to commencement of domestic sales during the quarter. * Royalties to the Albanian Government and related entities during the third quarter of 2014 were $23 million (14% of revenue) compared to $25 million (15% of revenue) in the previous quarter and $25 million (17% of revenue) for the third quarter of 2013. For the nine months ended September 30, 2014, royalties were $70 million (15% of revenue) compared to $70 million (17% of revenue) for the comparable period in 2013. * Funds generated from operations for the third quarter of 2014 were $85 million ($0.32 per share) compared to $94 million ($0.36 per share) for the previous quarter and $71 million ($0.28 per share) for the third quarter of 2013. Funds generated from operations for the nine months period ended September 30, 2014 were $261 million, a 32% increase from $198 million for the same period in 2013. * The Company continues to maintain a strong financial position at September 30, 2014, with cash of $88 million and working capital of $190 million. At September 30, 2014, the Company had drawn $104 million of its $224 million approved credit facilities. Working capital for December 31, 2013 and September 30, 2013 was $134 million and $122 million, respectively. * In August 2014, Bankers commenced delivery of crude oil to the domestic refinery, under new ownership and management. The temporary contract enables the restart of the refinery to test the commercial viability of the refinery system. Bankers agreed to sell oil to an affiliate of this domestic refinery on a monthly basis until December 31, 2014 at 73% of Dated Brent (FOB Vlore equivalent) plus $40/tonne or approximately $6/bbl recovery against a delinquent accounts receivable balance. All sales are fully secured by letters of credit. Bankers is in the process of reviewing its sales contracts for the 2015 calendar year and volume commitments for next year will be determined in the fourth quarter of 2014. Fiscal Terms Mitigation: * Bankers and the Government of Albania have worked together to reach an agreement on mitigation of the 2014 fiscal changes. Terms of the agreement have been approved by Albpetrol Sh.A, the Albanian National Agency for Natural Resources (AKBN), and were ratified by the Council of Ministers on November 2, 2014. The agreement is structured to allow excise and any applicable carbon and circulation taxes to be deducted from revenue and eligible for inclusion in the cost recovery pool for the Patos-Marinza concession as Petroleum Costs to determine the Company's taxable position. This mechanism enables the near term impact on cash flow to be fully offset through deferred and reduced profit tax burden which keeps the net asset value of the project whole and the economics of future investment consistent with the pre-2013 fiscal regime. Outlook In the fourth quarter of 2014, the Company will remain focused on its threepart strategy to deliver steady and reliable growth through the developmentdrilling program, expanding product margins through surface-level improvementsand continuing to validate the polymer and water flood projects throughexpansion into new areas of the field. The fourth quarter average production to date is 22,000 bopd from thePatos-Marinza oilfield, 1% higher than the third quarter average of 21,865bopd. Nine (9) wells were converted to polymer injection late in the thirdquarter completing the planned conversions for the year. The Company continuesto monitor the progress of the twenty-one (21) polymer and water-flood patternsin the field. The results are meeting expectations and additional conversionsare being planned for the 2015 program. Our infrastructure projects in the fourth quarter focus primarily on costreduction initiatives. The Company expects to electrify sixty (60) toseventy-five (75) wells in the quarter, aimed at reducing energy costs.Construction of a water disposal line will continue in the fourth quarter andwill be completed by early 2015 to reduce infield trucking volumes and costs. The Company also commenced activity in Kuçova during the third quarter withreactivation of three (3) wells and drilling of the first horizontal well inthe field. The well was cored and logged prior to drilling the horizontallateral for reservoir evaluation and production testing. Bankers intends to announce its 2015 Capital Budget and Work Program on Friday,December 12, 2014. The Company anticipates maintaining a similar activity levelin 2015 with a continued focus on production growth, polymer and water floodpilot expansion and cost improvements. The 2015 program will be funded withcash flow generated in 2015 supplemented with existing cash and creditfacilities. Supporting Documents The full Management Discussion and Analysis (MD&A), Financial Statements andupdated November corporate presentation are available onwww.bankerspetroleum.com. The MD&A and Financial Statements will also beavailable on www.sedar.com. BANKERS PETROLEUM LTD. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited, expressed in thousands of US dollars, except per share amounts) Three months ended Nine months ended September 30 September 30 2014 2013 2014 2013 Revenues $ 158,932 $ 146,665 $ 474,448 $ 411,065 Royalties (22,985) (24,664) (70,111) (69,655) 135,947 122,001 404,337 341,410 Unrealized gain (loss) on 1,556 (2,208) (1,216) (3,588)financial commodity contracts 137,503 119,793 403,121 337,822 Operating expenses 25,639 22,000 70,617 65,445 Sales and transportation 17,684 17,276 42,586 50,933expenses General and administrative 6,601 4,434 19,089 14,902expenses Depletion and depreciation 29,921 25,583 84,597 73,218 Share-based compensation 1,062 1,692 3,529 8,053 80,907 70,985 220,418 212,551 56,596 48,808 182,703 125,271 Net finance expense (2,096) (3,311) (9,903) (8,867) Income before income tax 54,500 45,497 172,800 116,404 Deferred income tax expense (28,908) (25,990) (95,020) (69,696) Net income for the period 25,592 19,507 77,780 46,708 Other comprehensive income(loss) Currency translation adjustment (1,362) 263 (1,162) (599) Comprehensive income for the $ 24,230 $ 19,770 $ 76,618 $ 46,109period Basic earnings per share $ 0.098 $ 0.077 $ 0.300 $ 0.184 Diluted earnings per share $ 0.095 $ 0.076 $ 0.292 $ 0.183 BANKERS PETROLEUM LTD. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited, expressed in thousands of US dollars) ASSETS September 30 December 31 2014 2013 Current assets Cash and cash equivalents $ 82,976 $ 24,597 Restricted cash 5,000 7,109 Accounts receivable 90,722 53,981 Inventory 11,309 38,025 Deposits and prepaid expenses 63,482 44,956 Financial commodity contracts 44 734 253,533 169,402 Non-current assets Long-term receivable 4,368 7,019 Financial commodity contracts 2,321 - Property, plant and equipment 961,712 823,908 Exploration and evaluation assets 8,472 6,819 $ 1,230,406 $ 1,007,148 LIABILITIES Current liabilities Accounts payable and accrued liabilities $ 62,115 $ 33,812 Current portion of long-term debt 1,200 1,496 63,315 35,308 Non-current liabilities Long-term debt 98,450 98,150 Decommissioning obligation 25,637 22,806 Deferred tax liabilities 381,229 286,209 568,631 442,473 SHAREHOLDERS' EQUITY Share capital 363,482 340,305 Contributed surplus 82,116 84,811 Currency translation reserve 5,183 6,345 Retained earnings 210,994 133,214 661,775 564,675 $ 1,230,406 $ 1,007,148 BANKERS PETROLEUM LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, expressed in thousands of US dollars) Three months ended Nine months ended September 30 September 30 2014 2013 2014 2013 Cash provided by (used in): Operating activities Net income for the period $ 25,592 $ 19,507 $ 77,780 $ 46,708 Depletion and depreciation 29,921 25,583 84,597 73,218 Accretion of long-term debt 24 424 1,073 2,402 Accretion of decommissioning 284 259 830 750 obligation Unrealized foreign exchange 382 48 446 (400) (gain) loss Deferred income tax expense 28,908 25,990 95,020 69,696 Share-based compensation 1,062 1,692 3,529 8,053 Discount and revaluation of - - (205) (1,168) long-term receivable Unrealized (gain) loss on financial commodity (1,556) 2,208 1,216 3,588 contracts Cash premiums paid for financial commodity - (4,637) (2,847) (4,637) contracts 84,617 71,074 261,439 198,210 Change in long-term 2,856 - 2,856 2,057 receivable Change in non-cash working 18,139 5,722 (18,599) (39,227) capital 105,612 76,796 245,696 161,040 Investing activities Additions to property, plant (86,220) (63,879) (217,318) (162,914) and equipment Additions to exploration and (1,385) (2,320) (1,653) (3,001) evaluation assets Restricted cash 5,000 - 2,109 (2,109) Change in non-cash working 15,853 5,260 18,351 6,792 capital (66,752) (60,939) (198,511) (161,232) Financing activities Issue of shares for cash 758 545 13,818 1,955 Financing costs - - (435) (1,994) Change in long-term debt - (9,191) (896) 10 758 (8,646) 12,487 (29) Foreign exchange gain (loss) (1,469) 67 (1,293) 31on cash and cash equivalents Increase (decrease) in cash 38,149 7,278 58,379 (190)and cash equivalents Cash and cash equivalents, 44,827 26,272 24,597 33,740beginning of period Cash and cash equivalents, $ 82,976 $ 33,550 $ 82,976 $ 33,550end of period Interest paid $ 21 $ 44 $ 3,452 $ 2,832 Interest received $ 66 $ 26 $ 340 $ 145 BANKERS PETROLEUM LTD. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited, expressed in thousands of US dollars, except number of commonshares) Number of Share Contributed Currency Retained common capital surplus translation Total shares reserve earnings Balance atDecember 31, 253,828,650 $ 334,764 $ 69,435 $ 7,362 $ 71,471 $ 483,0322012 Share-based - - 11,558 - - 11,558payments Options 1,033,664 3,277 (1,321) - - 1,956exercised Net income for - - - - 46,708 46,708the period Currencytranslation - - - (599) - (599)adjustment Balance atSeptember 30, 254,862,314 $ 338,041 $ 79,672 $ 6,763 $ 118,179 $ 542,6552013 Share-based - - 6,027 - - 6,027compensation Options 819,597 2,264 (888) - - 1,376exercised Net income for - - - - 15,035 15,035the period Currencytranslation - - - (418) - (418)adjustment Balance atDecember 31, 255,681,911 $ 340,305 $ 84,811 $ 6,345 $ 133,214 $ 564,6752013 Share-based - - 6,664 - - 6,664compensation Options 4,958,713 21,616 (8,921) - - 12,695exercised Warrants 400,000 1,561 (438) - - 1,123exercised Net income for - - - - 77,780 77,780the period Currencytranslation - - - (1,162) - (1,162)adjustment Balance atSeptember 30, 261,040,624 $ 363,482 $ 82,116 $ 5,183 $ 210,994 $ 661,7752014 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 Kuçova 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 takeovers, well reactivations and wellrecompletions of the past will continue and success rates will be similar tothose rates experienced for previous well recompletions/reactivations/development; that further wells taken over and recompleted will produce atrates similar to the average rate of production achieved from wellsrecompletions/reactivations/development in the past; continued availability ofthe necessary equipment, personnel and financial resources to sustain theCompany's planned work program; continued political and economic stability inAlbania; the existence of reserves as expected; the continued release byAlbpetrol of areas and wells pursuant to the Plan of Development and Addendum;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 thatfinancing, equipment and personnel will be available when required and onreasonable terms, none of which are assured and are subject to a number ofother risks and uncertainties described under "Risk Factors" in the Company'sAnnual Information Form and Management's Discussion and Analysis, which areavailable on SEDAR under the Company's profile at www.sedar.com. There can be no assurance that forward-looking statements will prove to beaccurate. Actual results and future events could differ materially from thoseanticipated in such statements. Readers should not place undue reliance onforward-looking information and forward looking statements. About Bankers Petroleum Ltd. Bankers Petroleum Ltd. is a Canadian-based oil and gas exploration andproduction company focused on developing large oil and gas reserves. InAlbania, Bankers operates and has the full rights to develop the Patos-Marinzaheavy oilfield, has a 100% interest in the Kuçova oilfield, and a 100% interestin Exploration Block "F". Bankers' shares are traded on the Toronto StockExchange and the AIM Market in London, England under the stock symbol BNK. David French, President and Chief Executive Officer, 403-513-6930; Doug Urch,Executive VP, Finance and Chief Financial Officer, 403-513-2691; Laura Bechtel,Investor Relations Analyst, 403-513-3428; Email:investorrelations@bankerspetroleum.com, Website: www.bankerspetroleum.com; AIMNOMAD: Canaccord Genuity Limited, Henry Fitzgerald-O'Connor, +44 0 207 5238000; AIM BROKER: FirstEnergy Capital LLP, Hugh Sanderson / David van Erp, +440 207 448 0200