12 Nov 2012 13:00
Bankers Petroleum Announces 2012 Third Quarter Financial and Operational Results
Record Quarter of Production and Cash Flows
CALGARY, Nov. 12, 2012 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the"Company") is pleased to provide its 2012 third quarterfinancial and operational results. The complete reporting package, consistingof Management's Discussion and Analysis along with the Financial Statements andNotes, is posted on the Company's website www.bankerspetroleum.com and onSEDAR: www.sedar.com.Results at a Glance Three months ended Nine months ended (US$000, except as noted) September 30 September 30 2012 2011 Change 2012 2011 Change Oil revenue 115,054 93,650 23% 316,309 251,570 26% Net operating income 58,159 44,898 30% 158,882 131,976 20% Net income 12,274 13,696 (10%) 31,292 35,715 (12%) Per share - basic ($) 0.049 0.055 (11%) 0.124 0.145 (14%) - diluted ($) 0.048 0.054 (11%) 0.123 0.140 (12%) Funds generated from operations(1) 48,308 42,099 15% 139,539 115,267 21% Per share - basic ($) 0.191 0.170 12% 0.554 0.467 19% Capital expenditures 53,526 65,147 (18%) 168,859 186,465 (9%) Average sales (bopd) 15,715 13,667 15% 14,393 12,578 14% Average price ($/barrel) 79.58 74.48 7% 80.21 73.26 9% Netback ($/barrel) 40.23 35.71 13% 40.29 38.43 5%
(1) Includes a $3.9 million payment for a financial commodity contract in
August 2012. September 30 December 31 September 30 2012 2011 2011
Cash and cash on deposits 40,112 54,013
53,243 Working capital 106,537 80,282 73,491 Total assets 810,017 661,216 612,348 Long-term debt 97,016 46,692 20,187 Shareholders' equity 471,907 412,679 405,955
Highlights for the quarter and nine months ended September 30, 2012 are:
· For the third quarter of 2012, oil sales averaged 15,715 bopd, anincrease of 15% compared to 13,667 bopd for the same period in 2011 and anincrease of 11% compared to 14,169 bopd for the preceding quarter. For thenine months ended September 30, 2012, oil sales increased 14% to 14,393 bopdfrom 12,578 bopd for the comparable 2011 period.· Revenue for the third quarter of 2012 increased by 23% to $115.1million ($79.58/bbl) from $93.7 million ($74.48/bbl) in the same period of2011. Revenue for the third quarter of 2012 represented 73% of the Brent oilprice of $110/bbl. Revenue for the nine month 2012 period totalled $316.3million ($80.21/bbl), an increase of 26% from $251.6 million ($73.26/bbl) forthe same period of 2011.· Royalties to the Albanian Government and related entities were $23.3million and $18.5 million for the third quarter of 2012 and 2011, respectively(both representing 20% of total revenue). Total royalties were $59.6 millionand $45.3 million for the nine months ended September 30, 2012 and 2011,respectively.· Operating, sales and transportation costs in the third quarter of2012, originating from Albanian-based companies and their employees, were $33.6million, compared with $30.3 million for the third quarter of 2011.· The Company recorded net operating income (netback) of $58.2 million($40.23/bbl) in the third quarter of 2012, an increase of 30% compared to $44.9million ($35.71/bbl) in the same period of 2011. For the nine months endedSeptember 30, 2012, net operating income totalled $158.9 million ($40.29/bbl),a 20% increase from $132.0 million ($38.43/bbl) for the same period in 2011.· Funds generated from operations for the third quarter of 2012 were$48.3 million, a 15% increase compared to $42.1 million for the third quarterof 2011. For the nine months ended September 30, 2012, funds generated fromoperations were $139.5 million as compared to $115.3 million for the ninemonths ended September 30, 2011. Included in funds generated from operations isa payment of $3.9 million for a financial commodity contract in August 2012.· Capital expenditures in the third quarter of 2012 were $53.5million. The Company drilled 34 wells during the quarter, comprised of 31horizontal wells, one lateral re-drill sidetrack well, and two core wells inthe southern area of the field. Re-activation and re-completion work continuedduring the quarter. During the same period of 2011, capital expenditures were$65.1 million. For the nine months ended September 30, 2012, capitalexpenditures totalled $168.9 million, a reduction of 9% from $186.5 million forthe comparable 2011 period.· During the third quarter of 2012, Bankers participated in the bidevaluation process for the privatization of the Albanian national oil company"Albpetrol Sh.A". Although Bankers' participation was unsuccessful, thewinning bid value of EUR 850 million attributed to Albpetrol's assets enhancesBankers oilfields' valuation and also demonstrates the Company's commitment toexpand its business activities in Albania.· At September 30, 2012, total deposits and prepaid expenses were $29.2million compared to $17.5 million at the end of December 2011, of which $16.6million and $1.2 million, respectively, is paid to the Albanian court asdeposits for procedure purposes on several legal cases. The recoverability ofthese amounts is dependent on the outcome of these cases. As of September 30,2012, these amounts were considered recoverable.· The Company is in the process of challenging assessments from theAlbanian Government Tax Director negating the previous exemption relief fromcarbon and circulation taxes on diluent imports. These assessments represent atotal of $15 million covering the last five years. The Company was successfulin setting aside a recently introduced separate excise tax assessment amountingto $8 million on the Company's importation and use of diluent. Other auditshave also resulted in an additional assessment of previously exempted ValueAdded Taxes for some of Bankers' subcontractors. Bankers has urged theGovernment of Albania to re-consider its position before proceeding withimplementation of this assessment and is hopeful that these contractualexemptions will continue to be applied.
· The Company continues to maintain a strong financial position at September 30, 2012 with cash of $40.1 million and working capital of $106.5 million. Working capital for December 31, 2011 and September 30, 2011 was $80.3 million and $73.5 million, respectively.
Financial Update
Bankers has commenced discussions with EBRD and IFC, its reserve-based lenders,for an increase to its $110 million credit facility and a term extension thatwould extend existing repayments, currently scheduled to commence in October2013. The existing 2009 facility was based on 2008 year-end reserves;subsequent reserve increases have significantly expanded the Company'sborrowing base.
Operational Update and Outlook
The average fourth quarter 2012 production to date from the Patos-Marinza oilfield in Albania was 16,100 barrels of oil per day ("bopd"), 3% higher than the third quarter average.
The Company has made several improvements to address operational challengesassociated with mature heavy oilfield development including interference fromold well bores, sand production, and water disposal capacity. Five (5)previously drilled wells that were shut-in due to liner failure in late 2011have been re-drilled with a lateral sidetrack through the cased section of thewellbore and a new higher grade steel liner with redesigned slot configurationfor additional strength has been run in the new lateral legs. The wells weresuccessfully completed and are currently producing at a cumulative productionrate of 500 bopd (average of 100 bopd per well). Additional candidate wells arebeing prepared for lateral re-drilling and installation of improved tubularswith three (3) re-drill sidetracks planned for the remainder of the fourthquarter and several more in the first half of next year to restore shut-inproduction from similar wells that have demonstrated good productioncapability, but are restricted due to liner failure concerns.The Company continues to be pleased with the results of the horizontal drillingprogram, along with the results of lateral section re-drills initiated in thethird quarter and continuing into the fourth quarter and first part of 2013.
For additional information, please see an updated version of the Company's November 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 Nine months ended September 30 September 30 2012 2011 2012 2011 Revenues $ 115,054 $ 93,650 $ 316,309 $ 251,570 Royalties (23,259) (18,457) (59,627) (45,274) 91,795 75,193 256,682 206,296 Unrealized gain (loss) on financial (1,085) 4,998 (4,050) 2,982 commodity contracts 90,710 80,191 252,632 209,278 Operating expenses 20,229 17,328 56,699 43,562
Sales and transportation expenses 13,407 12,967 41,101 30,758
General and administrative expenses 3,999 3,536 11,617 9,974 Depletion and depreciation 15,644 9,591 43,388 26,983 Share-based payments 1,953 2,515 7,636 9,487 55,232 45,937 160,441 120,764 35,478 34,254 92,191 88,514 Net finance expense 3,732 146 8,449 4,050 Income before income tax 31,746 34,108 83,742 84,464 Deferred income tax expense (19,472) (20,412) (52,450) (48,749) Net income for the period 12,274 13,696 31,292 35,715
Other comprehensive income (loss)
Currency translation adjustment 820 (2,626) 821 (373)
Comprehensive income for the period $ 13,094 $ 11,070 $ 32,113 $ 35,342 Basic earnings per share $ 0.049 $ 0.055 $ 0.124 $ 0.145 Diluted earnings per share $ 0.048 $ 0.054 $ 0.123 $ 0.140 BANKERS PETROLEUM LTD. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited, expressed in thousands of US dollars) ASSETS September 30 December 31 2012 2011 Current assets Cash and cash equivalents $ 21,695 49,013 $ Restricted cash 18,417 5,000 Accounts receivable 75,646 56,006 Inventory 11,912 14,412 Deposits and prepaid 29,162 17,463 expenses Financial commodity 2 3,684 contracts 156,834 145,578 Non-current assets Financial commodity 3,530 - contract Property, plant and 649,653 515,638 equipment $ 810,017 $ 661,216 LIABILITIES Current liabilities Accounts payable and $ 48,808 52,109 accrued liabilities $ Current portion of 1,489 13,187 long-term debt 50,297 65,296 Non-current liabilities Long-term debt 97,016 46,692 Decommissioning obligation 15,360 13,561 Deferred tax liabilities 175,437 122,988 338,110 248,537 SHAREHOLDERS' EQUITY Share capital 332,450 318,021 Warrants - 1,540 Contributed surplus 63,877 49,651 Currency translation reserve 7,230 6,409 Retained earnings 68,350 37,058 471,907 412,679 $ 810,017 $ 661,216 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 2012 2011 2012 2011 Cash provided by (used in): Operating activities Net income for the period $ 12,274 $ 13,696 $ 31,292 $ 35,715 Depletion and depreciation 15,644 9,591 43,388 26,983 Amortization of deferred financing costs - - - 734 Accretion of long-term debt 1,239 845 3,565 1,593 Accretion of decommissioning obligation 211 115 608 309 Unrealized foreign exchange (gain) loss 328 (77) 448 1,267 Deferred income tax expense 19,472
20,412 52,450 48,749
Share-based payments 1,953
2,515 7,636 9,487
Unrealized (gain) loss on financial commodity contracts 1,085 (4,998) 4,050 (2,982)
Cash premiums paid for financial commodity contracts (3,898) - (3,898) (6,588) 48,308 42,099 139,539 115,267 Change in non-cash working capital (16,153) (15,352) (28,767) (18,011) 32,155 26,747 110,772 97,256 Investing activities Additions to property, plant and equipment (53,526)
(65,147) (168,859) (186,465)
Restricted cash (13,417) - (13,417) (5,000) Change in non-cash working capital 736
5,095 (3,373) 15,637
(66,207)
(60,052) (185,649) (175,828)
Financing activities Issue of shares for cash - 54 12,177 5,347 Financing costs - - (750) (30) Increase in long-term debt 290 6,579 36,107 14,519 Share issue costs - (167) - (167) 290 6,466 47,534 19,669
Foreign exchange gain (loss) on cash and cash equivalents 160 (1,347) 25 (973)
Decrease in cash and cash equivalents (33,602)
(28,186) (27,318) (59,876)
Cash and cash equivalents, beginning of period 55,297
74,929 49,013 106,619
Cash and cash equivalents, end of period $ 21,695 $ 46,743 $ 21,695 $ 46,743 Interest paid $ 253 $ 197 $ 1,975 $ 1,349 Interest received $ 43 $ 80 $ 321 $ 443 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 TotalBalance at December 31, 2010 244,794,990 $ 309,379 $ 1,597 $ 28,135 $ 6,094 $ 1,062 $ 346,267 Share-based payments - - - 19,166 - - 19,166Options exercised 2,721,779 8,303 - (2,956) - - 5,347Share issue costs - (167) - - - - (167)Net income for the period - - - - - 35,715 35,715Currency translation - - - - (373) - (373)
adjustment
Balance at September 30, 2011 247,516,769 $ 317,515 $ 1,597 $ 44,345 $ 5,721 $ 36,777 $ 405,955 Share-based payments - - - 5,319 - - 5,319Options exercised 6,667 45 - (13) - - 32Warrants exercised 174,333 461 (57) - - - 404Net income for the period - - - - - 281 281Currency translation - - - - 688 - 688adjustmentBalance at December 31, 2011 247,697,769 $ 318,021 $ 1,540 $ 49,651 $ 6,409 $ 37,058 $ 412,679 Share-based payments - - - 14,938 - - 14,938Options exercised 553,945 1,833 - (719) - - 1,114Warrants exercised 4,672,991 12,596 (1,533) - - - 11,063Warrants expired - - (7) 7 - - -Net income for the period - - - - - 31,292 31,292Currency translation - - - - 821 - 821adjustment
Balance at September 30, 2012 252,924,705 $ 332,450 $ - $ 63,877 $ 7,230 $ 68,350 $ 471,907
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 BadwiPresident and Chief Executive Officer(403) 513-2694Doug UrchExecutive VP, Finance and Chief Financial Officer(403) 513-2691Mark HodgsonVP, Business Development(403) 513-2695Email: investorrelations@bankerspetroleum.comWebsite: www.bankerspetroleum.comAIM NOMAD:Canaccord Genuity LimitedHenry Fitzgerald-O'Connor+44 20 7050 8000AIM JOINT BROKERS:Canaccord Genuity LimitedHenry Fitzgerald-O'Connor+44 20 7050 8000Macquarie Capital AdvisorsPaul Connolly+44 20 3037 5639(BNK., BNK)
XLON