9 May 2013 13:00
BANKERS PETROLEUM LIMITED - Bankers Petroleum Q1 ResultsBANKERS PETROLEUM LIMITED - Bankers Petroleum Q1 Results
PR Newswire
London, May 9
Bankers Petroleum Announces 2013 First Quarter Financial and OperationalResults
Realised Free Cash Flow and Record Production; Current Production 17,500 bopd
CALGARY, May 9, 2013 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the"Company") (TSX: BNK, AIM: BNK) is pleased to provide its 2013 first quarterfinancial and operational results. During the quarter, Bankers achievedseveral key milestones, including its first quarter of free cash flow andrecord production levels. Results at a Glance Three months ended March 31 (US$000s, except as noted) 2013 2012 Change (%) Oil revenue 132,562 102,668 29% Net operating income 73,165 53,471 37% Net income 14,177 7,765 83% Per share - basic ($) 0.06 0.03 81% - diluted 0.06 0.03 81% Funds generated from 65,419 48,072 36%operations Per share - basic ($) 0.26 0.19 34% Capital expenditures 47,327 62,701 (25%) Average sales (bopd) 16,605 13,279 25% Average price ($/barrel) 88.70 84.96 4% Netback ($/barrel) 48.96 44.24 11% March 31, December 31, March 31, 2013 2012 2012 Cash and deposits 39,847 38,740 77,150 Working capital 108,497 88,799 118,989 Total assets 899,669 825,816 747,029 Long-term debt 99,488 97,158 92,009 Shareholders' equity 501,404 483,032 441,101Highlights for the quarter ended March 31, 2013 are:
· Average oil production was 16,919 barrels of oil per day (bopd), 5%higher than 16,168 bopd in the fourth quarter of 2012 and 20% higher than14,119 bopd in the first quarter of 2012. Production for the second quarterto-date is approximately 17,500 bopd.
· Oil sales averaged 16,605 bopd for the first quarter of 2013, anincrease of 25% compared to 13,279 bopd for the same period in 2012 and anincrease of 4% compared to 16,033 bopd for the preceding quarter.
· Revenue for the first quarter of 2013 increased by 14% to $133million ($88.70/bbl) from $116 million ($78.53/bbl) in the previous quarter andby 29% from $103 million ($84.96/bbl) in the same quarter of 2012. Revenue forthe first quarter of 2013 represented 79% of the Brent oil price of $113/bbl,compared to 71% of the Brent oil price of $110/bbl in the previous quarter and72% of the Brent oil price of $119/bbl in the first quarter of 2012.
· Royalties to the Albanian Government and related entities were $23million (18% of revenue) for the first quarter of 2013 compared to $19 million(19% of revenue) for the same quarter of 2012. Total royalties for 2012 were$78 million (18% of revenue).
· Operating, sales and transportation costs in the first quarter of2013, originating from Albanian-based companies and their employees, were $36million, compared to $30 million for the first quarter of 2012.
· In the first quarter of 2013, the Company recorded net operatingincome (netback) of $73 million ($48.96/bbl), an increase of 37% compared to$53 million ($44.24/bbl) in the same period of 2012. Net operating income was$59 million ($40.25/bbl) for the fourth quarter of 2012.
· Funds generated from operations were $65 million for the firstquarter of 2013, a 36% increase compared to $48 million for the first quarterof 2012, and a 23% increase from $53 million for the fourth quarter of 2012.
· Capital expenditures in the first quarter of 2013 were $47 million.The Company drilled 32 wells during the quarter, comprised of 31 horizontalproduction wells and one horizontal lateral re-drill well in the main area ofthe Patos-Marinza field. Reactivation and re-completion work continued duringthe quarter. In the first quarter of 2012, capital expenditures were $63million.
· The Company continues to maintain a strong financial position atMarch 31, 2013 with cash of $40 million and working capital of $108 million.Working capital for December 31, 2012 and March 31, 2012 was $89 million and$119 million, respectively.
· Both the International Finance Corporation (IFC) and European Bankfor Reconstruction and Development (EBRD) have approved an extension of theCompany's existing credit facility to September 2020, subject to finaldocumentation. No repayments are required until September 2017, from whichtime the facility amount will decrease by 25% annually. Collectively, therevolving loan facilities will increase to $200 million from the existing $100million. Availability upon documentation completion will be $120 million; theadditional $80 million will be available as the Company continues to maintainits proved and probable reserves base and is conditional upon Brent oil pricesremaining above $70/bbl.
· The Company was successful in setting aside a recently introducedseparate assessment of excise tax on its importation and use of diluents. Overthe past few months, the Courts have also ruled in favor of Bankers for othercases heard, including the carbon and circulation taxes on diluent imports,which resulted in recent assessments to the Company totalling approximately $21million. The Company is now preparing to continue its defence at variouslevels of appeals.
Outlook
The average second quarter 2013 production to date from the Patos-Marinzaoilfield in Albania is approximately 17,500 barrels of oil per day ("bopd"), 4%higher than the first quarter average.
The Company continues to be pleased with the results of the horizontal drillingprogram, along with the results of lateral section re-drills. Improvements todrilling practices, fluid systems, well construction, and drilling pace perwell has yielded good production additions from the new wells with the fivedrilling rig program in the central and northern areas of the Patos Marinzafield. The average drill time has improved to roughly 12 days per wellimproving the cost per well. Additional equipment in being reviewed forreplacing existing equipment with fit for purpose, more efficient equipment tofurther improve performance and cost per well throughout the year and into nextyear.
Infrastructure expansion plans are underway for additional storage capacity,treating efficiency, and cost efficiencies in fuel and diluent usage. The thirdsales tank at the Central Treating Facility ("CTF") is being constructed withprojected commissioning in the third quarter 2013. Pad cascade facilities anda satellite facility are being constructed to improve remote treating prior tofinal stage processing to sales specification at the CTF. Planning for thesecond phase of the sales pipeline is underway with application for preliminaryapproval pending later this year. Expansion plans for the Petrolifera Terminalare also being reviewed to enhance storage and export capacity at the Vloreport facilities.
The Company has made several improvements over the past year to optimizeproduction with improved down-hole pump run lives, reduced rod and tubularwear, and reduced well servicing frequency. With the addition of automation onthe wells, production monitoring will allow further improvements to wellperformance.
The secondary recovery testing program is underway with water injection intoone pattern in the Upper Marinza reservoir zone and polymer injection into aLower Driza reservoir. Pending good injectivity results, the patterns will beexpanded with additional injectors and the offset producers will be monitoredfor pressure and production responses.
Well take-overs in the Kuçova field are pending along with new well drilling toexpand the water-flood pattern into the Arreza pool. The Block "F" explorationwell is ready to spud and will commence during the second quarter 2013.
CEO Message
David French, President and CEO of Bankers Petroleum commented "I am quitepleased with our quarterly results and the operational performance of thecompany. Strong production delivery and the evolution of free cash flow setsus up well for the year. Having just returned from Albania, I come back with aclear picture of the growth opportunity before us. We have the skills andresources to reward investors with reliable organic growth and are doing theright things to determine the timing and prize of enhanced recovery. This is agreat time in the story of Bankers."
BANKERS PETROLEUM LTD. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED MARCH 31(Unaudited, expressed in thousands of US dollars, except per share amounts)
2013 2012 Revenues $ 132,562 $ 102,668 Royalties (23,318) (19,154) 109,244 83,514 Unrealized loss on financial commodity (1,374) (3,209)contract 107,870 80,305 Operating expenses 21,154 17,432 Sales and transportation expenses 14,925 12,611 General and administrative expenses 5,955 4,110 Depletion and depreciation 23,197 13,677 Share-based payments 3,258 4,236 68,489 52,066 39,381 28,239 Net finance expense 1,940 2,857 Income before income tax 37,441 25,382 Deferred income tax expense (23,264) (17,617) Net income for the period 14,177 7,765 Other comprehensive income (loss) Currency translation adjustment (352) 506 Comprehensive income for the period $ 13,825 $ 8,271 Basic earnings per share $ 0.056 $ 0.031 Diluted earnings per share $ 0.055 $ 0.031 BANKERS PETROLEUM LTD. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited, expressed in thousands of US dollars) ASSETS March 31 December 31 2013 2012 Current assets Cash and cash equivalents $ 34,847 $ 33,740 Restricted cash 5,000 5,000 Accounts receivable 62,829 35,603 Inventory 41,942 23,517 Deposits and prepaid expenses 33,875 30,265 Financial commodity contract 176 1,550 178,669 129,675 Non-current assets Long-term receivable 10,356 11,150 Property, plant and equipment 706,918 681,399 Exploration and evaluation assets 3,726 3,592 $ 899,669 $ 825,816 LIABILITIES Current liabilities Accounts payable and accrued liabilities $ 50,800 $ 38,787 Current portion of long-term debt 19,372 2,089 70,172 40,876 Non-current liabilities Long-term debt 99,488 97,158 Decommissioning obligation 17,338 16,747 Deferred tax liabilities 211,267 188,003 398,265 342,784 SHAREHOLDERS' EQUITY Share capital 334,935 334,764 Contributed surplus 73,811 69,435 Currency translation reserve 7,010 7,362 Retained earnings 85,648 71,471 501,404 483,032 $ 899,669 $ 825,816 BANKERS PETROLEUM LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31 (Unaudited, expressed in thousands of US dollars) 2013 2012 Cash provided by (used in): Operating activities Net income for the period $ 14,177 $ 7,765 Depletion and depreciation 23,197 13,677 Accretion of long-term debt 1,149 1,127 Accretion of decommissioning obligation 241 195 Unrealized foreign exchange (gain) loss (180) 246 Deferred income tax expense 23,264 17,617 Share-based payments 3,258 4,236 Unwinding of discount of long-term receivable (741) - Revaluation gain of long-term receivable (320) - Unrealized loss on financial commodity 1,374 3,209 contract 65,419 48,072 Change in long-term receivable 1,855 - Change in non-cash working capital (37,812) (5,839) 29,462 42,233 Investing activities Additions to property, plant and equipment (47,193) (62,145) Additions to exploration and evaluation (134) (556) assets Change in non-cash working capital 564 (642) (46,763) (63,343) Financing activities Issue of shares for cash 101 12,146 Financing costs - (750) Increase in long-term debt 18,337 32,824 18,438 44,220 Foreign exchange gain (loss) on cash and cash (30) 27equivalents Increase in cash and cash equivalents 1,107 23,137 Cash and cash equivalents, beginning of period 33,740 49,013 Cash and cash equivalents, end of period $ 34,847 $ 72,150 Interest paid $ 222 $ 201 Interest received $ 45 $ 60 BANKERS PETROLEUM LTD. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited, expressed in thousands of US dollars, except number of commonshares) Number of Currency common Share Contributed translation Retained shares capital Warrants surplus reserve earnings Total Balance at 247,697,769 $ 318,021 $ 1,540 $ 49,651 $ 6,409 $ 37,058 $ 412,679December31, 2011 Share-based - - - 8,005 - - 8,005payments Options 530,612 1,781 - (698) - - 1,083exercised Warrants 4,672,991 12,596 (1,533) - - - 11,063exercised Warrants - - (7) 7 - - -expired Net income - - - - - 7,765 7,765for theperiod Currency - - - - 506 - 506translationadjustment Balance at 252,901,372 $ 332,398 $ - $ 56,965 $ 6,915 $ 44,823 $ 441,101March 31,2012 Share-based - - - 13,427 - - 13,427payments Options 927,278 2,366 - (957) - - 1,409exercised Net income - - - - - 26,648 26,648for theperiod Currency - - - - 447 - 447translationadjustment Balance at 253,828,650 $ 334,764 $ - $ 69,435 $ 7,362 $ 71,471 $ 483,032December31, 2012 Share-based - - - 4,446 - - 4,446payments Options 43,334 171 - (70) - - 101exercised Net income - - - - - 14,177 14,177for theperiod Currency - - - - (352) - (352)translationadjustment Balance at 253,871,984 $ 334,935 $ - $ 73,811 $ 7,010 $ 85,648 $ 501,404March 31,2013 Supporting DocumentsThe full Management Discussion and Analysis (MD&A), Financial Statements andupdated March corporate presentation are available on www.bankerspetroleum.com.The MD&A and Financial Statements will also be available on www.sedar.com.
Updated Corporate Presentation
For additional information on this operational update, please see the May 2013version of the Company's corporate presentation at www.bankerspetroleum.com.
Annual General Special Meeting
Bankers Petroleum invites all shareholders to attend its Annual General SpecialMeeting to be held on Tuesday, May 21 at The Metropolitan Centre, CalgaryAlberta. This years' meeting will be held in the Travoli room at 3:00 pm (MST).
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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 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 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 and has a 100% interest in the Kuçova oilfield, and a 100%interest in Exploration Block F. Bankers' shares are traded on the TorontoStock Exchange and the AIM Market in London, England under the stock symbolBNK.
SOURCE: Bankers Petroleum Ltd.
For further information:
David FrenchPresident and Chief Executive Officer(403) 513-6930Doug UrchExecutive VP, Finance and Chief Financial Officer(403) 513-2691
Mark HodgsonVP, Business Development(403) 513-2695 Email: investorrelations@bankerspetroleum.comWebsite: www.bankerspetroleum.com AIM NOMAD:Canaccord Genuity LimitedHenry Fitzgerald-O'Connor+44 20 7050 6500 AIM BROKER:FirstEnergy Capital LLPHugh Sanderson / David van Erp+44 0 207 448 0200(BNK.)