14 Nov 2011 07:00
Bankers Petroleum Announces 2011 Third Quarter Results
Record Financial and Operational Quarter
CALGARY, Nov. 11, 2011 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the"Company") (AIM: BNK) is pleased to provide its 2011 third 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 (US$000, except as noted) Three months ended Nine months ended (1) September 30 September 30 2011 2010 Change 2011 2010 Change Oil revenue 93,650 42,135 122% 251,570 119,431 111% Net operating income 44,898 19,646 129% 131,976 55,638 137% Net income 13,696 2,958 363% 35,715 5,895 506% Per share - basic ($) 0.055 0.012 358% 0.145 0.025 480% - diluted ($) 0.054 0.012 350% 0.140 0.024 483% Funds generated from operations 42,601 16,308 161% 115,773 48,063 141% Per share - basic ($) 0.172 0.067 157% 0.469 0.205 129% Capital expenditures 65,147 27,456 137% 186,465 82,350 126%
Average production (bopd) 13,667 9,826 39% 12,578 9,318
35%
Average price ($/barrel) 74.48 46.61 60% 73.26 46.95
56% Royalties 14.68 9.16 60% 13.18 9.37 41% Operating expenses 13.78 10.40 33% 12.69 10.31 23% Sales and transportation 10.31 5.31 94% 8.96 5.40 66% Netback ($/barrel) 35.71 21.74 64% 38.43 21.87 76% September 30 September 30 December 31 2011 2010 Change 2010 Change Cash and deposits 53,243 134,362 (60%) 108,119 (51%) Working capital 73,491 138,785 (47%) 130,920 (44%) Total assets 612,348 442,345 38% 465,598 32%
Long-term bank loans 31,407 19,248 63% 21,815 44% Shareholders' equity 405,955 332,854 22% 346,267 17%
(1) Effective January 1, 2011, and retroactive to January 1, 2010, the Company
adopted International Financial Reporting Standards (IFRS). Previously,
the Company prepared its Financial Statements in accordance with Canadian
Generally Accepted Accounting Principles (GAAP). The transition has not
resulted in any material variation from prior periods. Full details on the
transition adjustments are contained in the Notes to the Consolidated Interim Financial Statements.
Highlights for the quarter ended September 30, 2011 are:
· Production averaged 13,667 bopd, an increase of 39%
compared
to the same period in 2010. Current production is 14,750 bopd.
· In the third quarter of 2011, revenue increased by 10%
to
$93.7 million ($74.48/bbl) from $85.2 million ($77.03/bbl) in the previous quarter and by 122% from $42.1 million ($46.61/bbl) in the third quarter of 2010.
· Net operating income (netback) was $44.9 million
($35.71/
bbl) in the third quarter of 2011, compared to $47.2 million ($42.72/bbl) during the second quarter of 2011 and $19.6 million ($21.74/bbl) in the third quarter of 2010.
· Funds generated from operations were $42.6 million in
the
third quarter of 2011 compared to $42.9 million in the second quarter of 2011 and $16.3 million in the third quarter of 2010.
· During the third quarter of 2011, capital expenditures
were
$65.1 million. The Company drilled sixteen (16) horizontal wells, a verticalcored delineation well, two (2) thermal horizontal wells, and two (2) waterdisposal wells, as well as reactivated 19 wells in addition to other relatedinfrastructure/expansion projects. During the same period of 2010, capitalexpenditures were $27.5 million.· New export market agreements for 2012 have been agreed
at
higher average price levels than the current year crude oil contracts. ARMO,the Albanian refinery, also agreed to purchase Patos-Marinza crude in 2012 fora significant realized average price increase from the current year contract. The 2012 pricing agreements represent an average 7% increase over the 2011Patos-Marinza oil price.· The Company continues to maintain a strong financial
position with cash of $53.2 million and working capital of $73.5 million at September 30, 2011. Working capital for December 31, 2010 and September 30, 2010 was $130.9 million and $138.8 million, respectively.
Operational Update
Current production at the Patos-Marinza oilfield is 14,750 bopd. This volumerepresents an 8% increase from third quarter production average. Four (4) ofthe ten (10) wells drilled and completed in the first five weeks of the fourthquarter targeted reserves and delineation drilling outside the main field. TheDriza 1 formation outpost drilling to the west of the main field continues todemonstrate excellent cold flow production in this area of the concession withthe last two wells producing at a current average rate of 160 bopd. Inaddition, the first Gorani 4 horizontal well has been drilled and is currentlyproducing at a rate of 230 bopd. This well is located in the southern portionof Area 1 and extends into Area 2, a part of the field that to date had limitedreactivation operations. A second Gorani 4 horizontal well is currentlydrilling further south in Area 2. Several more wells are scheduled to bedrilled in this area.Two of the existing drilling rigs recently encountered mechanical issues andhave been since been repaired and put back into service after eighteen days ofcombined down-time, The fifth drilling rig has arrived at the Patos-Marinzafield and is currently rigging up and will spud its first well in the next fewdays.The first Block F exploration well is now scheduled to spud in January 2012 assoon as we can free one of the current rigs focused on incremental productionand reserves assessment drilling and move it to the Block F exploration area.Surface facilities construction has been completed for the thermal pilotprogram at the Patos-Marinza oilfield. Steam injection into the firsthorizontal well is projected to commence later this month in the Driza 1sandstone. The reservoir simulation model is being updated with new core datainformation. The steam cycle is planned for a period of 60 days following whichthe well will undergo a soak period for several days before being placed onproduction and at that time steam injection in the second horizontal well willbegin.Outlook
Current year-end capital expenditures estimate remains at $215 million, net ofcapital inventory. The Company plans to drill an additional 18 wells before theend of this 2011, including 17 horizontal and one water disposal well. Exitproduction target is 16,000 bopd; while this rate represents the low caseprojection, it is a 33% increase from the 2010 exit rate. The Company expectsto release its 2011 reserves updates in February 2012.The 2012 work program and budget is being finalized and its details will beannounced in December after receiving necessary board of directors andgovernment approvals. Bankers' continues to hold a strong financial position of$53 million in cash and minimal long-term debt of $31 million with $80 millionremaining available within current credit facilities. With Patos-Marinza crudesales agreements being based on Brent crude oil pricing, the Companyanticipates a strong cash flow projection for next year and will be able todeliver its most active capital program in 2012.
For additional information, please see an updated version of the Company's corporate presentation on www.bankerspetroleum.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 2011 2010 2011 2010 Revenues 93,650 42,135 251,570 119,431 $ $ $ $ Royalties (18,457) (8,284) (45,274) (23,841) 75,193 33,851 206,296 95,590 Unrealized gain on financial 4,998 - 2,982 -commodity contracts 80,191 33,851 209,278 95,590 Operating expenses 17,328 9,401 43,562 26,218
Sales and transportation expenses 12,967 4,804 30,758
13,734 General and administrative 3,536 2,462 9,974 7,245expenses Depletion and depreciation 9,591 5,415 26,983 14,968 Share-based payments 2,515 1,247 9,487 6,402 45,937 23,329 120,764 68,567 34,254 10,522 88,514 27,023 Finance income 1,513 268 501 543 Finance expense (1,659) (2,349) (4,551) (4,240) (146) (2,081) (4,050) (3,697) Income before income tax 34,108 8,441 84,464 23,326 Deferred income tax expense (20,412) (5,483) (48,749) (17,431) Net income for the period 13,696 2,958 35,715 5,895
Other comprehensive income (loss) Currency translation adjustment (2,626) 1,752 (373) 2,055 Comprehensive income for the $ 11,070 $ 4,710 $ 35,342 $ 7,950period Basic earnings per share $ 0.055 $ 0.012 $ 0.145 $ 0.025 Diluted earnings per share $ 0.054 $ 0.012 $ 0.140 $ 0.024 BANKERS PETROLEUM LTD. CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Unaudited, expressed in thousands of US dollars) ASSETS September December 31 30 2010 2011 Current assets Cash and cash equivalents $ 46,743 $ 106,619 Restricted cash 6,500 1,500 Accounts receivable 55,355 29,233 Inventory 16,279 4,199
Deposits and prepaid expenses 11,909
16,624 136,786 158,175 Non-current assets Deferred financing costs - 13,980 Financial commodity contracts 9,570 - Property, plant and equipment 465,992 293,443 $ 612,348 $ 465,598 LIABILITIES Current liabilities
Accounts payable and accrued $ 54,354 $ 23,241 liabilities Current portion of long-term debt 8,941
4,014 63,295 27,255 Non-current liabilities Long-term debt 20,187 21,815
Decommissioning obligation 10,523
6,622 Deferred tax liabilities 112,388 63,639 206,393 119,331 SHAREHOLDERS' EQUITY Share capital 317,515 309,379 Warrants 1,597 1,597 Contributed surplus 44,345 28,135 Accumulated other comprehensive income 5,721 6,094 Retained earnings 36,777 1,062 405,955 346,267 $ 612,348 $ 465,598 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 2011 2010 2011 2010 Cash provided by (used in): Operating activities Net income for the period $ 13,696 $ 2,958 $ 35,715 $ 5,895 Depletion and depreciation 9,591 5,415 26,983 14,968 Finance expense 1,659 2,349 4,551 4,240 Interest paid (197) (364) (1,349) (1,466)
Foreign exchange (gain) loss (77)
(780) 1,207 593
Deferred income tax expense 20,412
5,483 48,749 17,431
Share-based payments 2,515
1,247 9,487 6,402
Unrealized gain on financial commodity contracts (4,998) - (2,982) - Cash premiums paid for financial commodity contracts - - (6,588) - 42,601 16,308 115,773 48,063 Change in non-cash working capital (15,854) (2,264) (18,517) (4,589) 26,747 14,044 97,256 43,474 Investing activities Additions to property, plant and equipment (65,147) (27,456) (186,465) (82,350) Restricted cash - - (5,000) - Change in non-cash working capital 5,095
(435) 15,637 6,680
(60,052)
(27,891) (175,828) (75,670)
Financing activities Issue of shares for cash 54 97,145 5,347 102,947 Financing costs - (21) (30) (193) Increase (decrease) in long-term debt 6,579 (3,443) 14,519 (4,198) Share issue costs (167) (4,149) (167) (4,307) Note receivable - - - 2,749 Short-term deposits - (5,000) - 2,275 Change in non-cash working capital - 3 - 146 6,466 84,535 19,669 99,419
Foreign exchange gain (loss) on cash and cash equivalents (1,347) 1,256 (973) 1,144
Increase (decrease) in cash and cash equivalents (28,186)
71,944 (59,876) 68,367
Cash and cash equivalents, beginning of period 74,929
55,918 106,619 59,495
Cash and cash equivalents, end of period $ 46,743 $
127,862 $ 46,743 $ 127,862
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.
For further information:
Abby Badwi President and Chief Executive Officer (403) 513-2694 Doug Urch Executive VP, Finance and Chief (403) 513-2691 Financial Officer Mark Hodgson VP, Business Development (403) 513-2695 Email: investorrelations@bankerspetroleum.comWebsite: www.bankerspetroleum.comAIM NOMAD: Canaccord Genuity LimitedRyan Gaffney/ Henry Fitzgerald-O'Connor+44 20 7050 6500AIM JOINT BROKERS: Canaccord Genuity Limited Macquarie Capital Advisors
Ryan Gaffney/ Henry Fitzgerald-O'Connor Ben Colegrave/Paul Connolly +44 20 7050 6500
+44 20 3037 5639
(BNK., BNK)
XLON