11 Nov 2010 13:00
BANKERS PETROLEUM ANNOUNCES THIRD QUARTER FINANCIAL RESULTS
$84 Million Capital Investment in Albania for the Nine Month Period in 2010
CALGARY, Nov. 11 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the "Company") is pleased to provide its third quarter 2010 Financial Results. The complete reporting package, consisting of Management's Discussion and Analysis along with Financial Statements and Notes, is posted on the Company's website www.bankerspetroleum.com and SEDAR: www.sedar.com.
------------------------------------------------------------------------- Q3 - 2010 Q2 - 2010 Q3 - 2009 --------- --------- --------- ------------------------------------------------------------------------- Capital Expenditures ($000) 27,991 29,262 12,104 ------------------------------------------------------------------------- Brent Oil Price ($/bbl) 76.86 78.24 68.27 ------------------------------------------------------------------------- Patos-Marinza Oil Price ($/bbl) 46.61 47.12 40.71 ------------------------------------------------------------------------- Royalties ($/bbl) 9.16 9.35 9.32 ------------------------------------------------------------------------- Operating Costs ($/bbl) 10.40 9.94 10.56 ------------------------------------------------------------------------- Transportation ($/bbl) 5.31 5.07 4.76 ------------------------------------------------------------------------- Netback ($/bbl) 21.74 22.76 16.07 ------------------------------------------------------------------------- Highlights for the quarter ended September 30, 2010 are: - Revenue was $42.1 million ($46.61/bbl) in the third quarter of 2010, consistent with the second quarter and increased by 80% from $23.4 million ($40.71/bbl) in the third quarter of 2009. - Net operating income (netback) increased 112% to $19.6 million ($21.74/bbl) in the third quarter of 2010 from $9.3 million ($16.07/bbl) in the third quarter of 2009. Net operating income (netback) for the second quarter was $20.4 million ($22.76/bbl). - Funds generated from operations increased 125% to $16.6 million in the third quarter of 2010 from $7.4 million in the same quarter of 2009. Funds generated from operations for the second quarter were $18.8 million. - Average production was 9,826 bopd, an increase of 57% over the same quarter of 2009 and flat from the second quarter of 2010. Production at September 30, 2010 was approximately 10,500 bopd. - A third drilling rig was added in late July and a total of 15 new wells were drilled in the quarter; 11 horizontal wells and 4 vertical wells. - On July 15, 2010, the Company completed a prospectus offering with a syndicate of underwriters and issued an aggregate of 12,903,228 common shares at a price of CAD$7.75 per common share on a bought deal basis, resulting in gross proceeds of $96.2 million. - Bankers continues to maintain a strong balance sheet; at September 30, 2010, Bankers had working capital of $138.8 million (including cash and cash equivalents totaling $134.4 million) and long-term bank loans of $19.2 million. ($000s, except as noted) Three months ended Nine months ended September 30 September 30 ---------------------------------------- Results at a Glance 2010 2009 2010 2009 ------------------------------------------------------------------------- Financial Oil revenue 42,135 23,441 119,431 56,600 Net operating income 19,646 9,251 55,638 18,846 Net income (loss) 4,267 1,708 7,431 (2,463) Funds generated from operations 16,571 7,371 49,182 14,634 Additions to property, plant and equipment 27,991 12,104 83,953 21,065 Operating Average production (bopd) 9,826 6,258 9,318 6,170 Average price ($/barrel) 46.61 40.71 46.95 33.60 Netback ($/barrel) 21.74 16.07 21.87 11.19 Average Brent oil price ($/barrel) 76.86 68.27 77.14 57.15 ---------------------------- September 30 September 30 2010 2009 --------------------------- Cash and deposits 134,362 61,386 Working capital 138,785 50,188 Total assets 445,774 292,212 Bank loans 23,887 31,355 Shareholders' equity 331,682 203,007OUTLOOK
Throughout the remainder of 2010, the Company will remain focused on achieving its priorities and implementing its capital program in Albania.
The drilling focus for the fourth quarter is mostly dedicated to production growth with all three rigs currently drilling horizontal wells. Near the end of the quarter, plans include two additional step-out vertical wells in the western extension area.
With current production capacity of 11,000 bopd and expected production from reactivations and the remaining horizontal drilling program, Bankers' projected 2010 year-end production target is 12,000 bopd.
Construction of an additional 80,000 barrels of storage capacity at the Vlore export terminal is near completion and expected to be operational by the first quarter of 2011. Work continues on phase one of the pipeline connecting the field to the central hub site at Fier. The construction plans for the hub are complete and excavation is expected to begin in the first quarter of 2011. This pipeline is expected to be completed in the first half of 2011 and will add an additional 9,500 bopd of off-take capacity, giving the Company sales capacity of up to 24,500 bopd by mid-2011. Phase two, a 30 kilometre, 70,000 bopd capacity pipeline connecting the oilfield to the export terminal, is scheduled to be completed by mid-2012.
From the two wells that were drilled in the western extension area of the Patos-Marinza oilfield, the cored sections were shipped to Canada for a full suite of thermal testing, the results of which will define the parameters of a thermal pilot set to commence in the first quarter of 2011. The results of the thermal pilot will serve to validate the most appropriate thermal extraction methodology to extract a large portion of the contingent and prospective resources at Patos-Marinza through a commercial field expansion in 2012 and beyond.
Work continues on Bankers' pilot environmental remediation project within the boundaries of the Patos-Marinza oilfield known as Sector 3. Three separate remediation contractors will begin work on the clean-up of legacy hazardous material left by previous operators in the field. This is an important part of the work Bankers continues to press forward in Albania, and will mark the beginning of environmental change for both the local community as well as the country as a whole.
Bankers expects to fund the balance of its $124 million 2010 capital program using funds generated from operations and existing cash.
The 2011 capital program is now being finalized and details will be announced in December 2010.
In a signing ceremony on November 5, 2010 in Tirana, Albania attended by Deputy Minister of Economy, Trade and Energy, Mr. Sokol Dervishi, President of the Albanian refinery ARMO, Mr. Rezart Taci and President and CEO of Bankers, Mr. Abby Badwi, it was announced that ARMO has agreed to buy significant volumes of Patos-Marinza 2011 production at an average price of 64% of Brent oil price. Deputy Minister Dervishi thanked both parties for this cooperation and commented "signing of this very important contract will increase the domestic refining capacities and as a result of that will create many jobs and provide better working conditions for Albanian citizens".
For additional information, please see an updated version of the Company's corporate presentation on www.bankerspetroleum.com
BANKERS PETROLEUM LTD. CONSOLIDATED BALANCE SHEETS (Unaudited, expressed in thousands of US dollars) ------------------------------------------------------------------------- ASSETS September December 30 2010 31 2009 ------------------------ Current assets Cash and cash equivalents $ 127,862 $ 59,495 Short-term deposits 5,000 7,275 Restricted cash 1,500 1,500 Accounts receivable 15,408 23,358 Inventory 3,096 2,031 Deposits and prepaid expenses 13,877 5,899 ------------------------ 166,743 99,558 Note receivable - 2,749 Deferred financing costs 12,500 14,383 Property, plant and equipment 266,531 188,130 ------------------------ $ 445,774 $ 304,820 ------------------------ ------------------------ LIABILITIES Current liabilities Accounts payable and accrued liabilities $ 23,319 $ 19,505 Current portion of long-term debt 4,639 4,639 ------------------------ 27,958 24,144 Long-term debt 19,248 23,446 Asset retirement obligations 4,994 3,856 Future income tax liability 61,892 39,414 SHAREHOLDERS' EQUITY Share capital 306,864 206,058 Warrants 1,623 1,739 Contributed surplus 26,413 16,812 Deficit (3,218) (10,649) ------------------------ 331,682 213,960 ------------------------ $ 445,774 $ 304,820 ------------------------ ------------------------ BANKERS PETROLEUM LTD. CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited, expressed in thousands of US dollars, except per share amounts) ------------------------------------------------------------------------- Three months ended Nine months ended September 30 September 30 ------------------------------------------------------------------------- 2010 2009 2010 2009 -------------------------------------------- Revenue Oil revenue $ 42,135 $ 23,441 $ 119,431 $ 56,600 Royalties (8,284) (5,368) (23,841) (14,243) Interest 268 216 431 697 -------------------------------------------- 34,119 18,289 96,021 43,054 -------------------------------------------- Expenses Operating 9,401 6,083 26,218 17,343 Sales and transportation 4,804 2,739 13,734 6,168 General and administrative 1,927 1,410 5,642 4,693 Interest and bank charges 271 685 875 1,283 Interest on long-term debt 364 205 1,073 552 Foreign exchange gain (475) (2,638) (1,847) (3,670) Stock-based compensation 1,352 923 6,566 3,083 Amortization of deferred financing costs 694 692 2,076 1,128 Depletion, depreciation and accretion 6,030 3,877 16,858 11,759 -------------------------------------------- 24,368 13,976 71,195 42,339 -------------------------------------------- Income before income tax 9,751 4,313 24,826 715 Future income tax expense (5,484) (2,605) (17,395) (3,178) -------------------------------------------- Net income (loss) for the period $ 4,267 $ 1,708 $ 7,431 $ (2,463) -------------------------------------------- -------------------------------------------- Basic earnings (loss) per share $ 0.018 $ 0.008 $ 0.032 $ (0.012) -------------------------------------------- -------------------------------------------- Diluted earnings (loss) per share $ 0.017 $ 0.008 $ 0.030 $ (0.012) -------------------------------------------- -------------------------------------------- BANKERS PETROLEUM LTD. CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited, expressed in thousands of US dollars) ------------------------------------------------------------------------- Three months ended Nine months ended September 30 September 30 ------------------------------------------------------------------------- 2010 2009 2010 2009 -------------------------------------------- Cash provided by (used in): Operating activities Net income (loss) for the period $ 4,267 $ 1,708 $ 7,431 $ (2,463) Items not involving cash: Depletion, depreciation and accretion 6,030 3,877 16,858 11,759 Amortization of deferred financing costs 694 692 2,076 1,128 Future income tax expense 5,484 2,605 17,395 3,178 Stock-based compensation 1,352 923 6,566 3,083 Unrealized foreign exchange gain (1,256) (2,434) (1,144) (2,051) -------------------------------------------- 16,571 7,371 49,182 14,634 Change in non-cash working capital (1,992) (2,359) (4,105) (14,960) -------------------------------------------- 14,579 5,012 45,077 (326) -------------------------------------------- Investing activities Additions to property, plant and equipment (27,991) (12,104) (83,953) (21,065) Change in non-cash working capital (435) 1,140 6,680 (3,756) -------------------------------------------- (28,426) (10,964) (77,273) (24,821) -------------------------------------------- Financing activities Issue of shares for cash 97,145 24,952 102,947 63,475 Share issue costs (4,149) - (4,307) (2,220) Note receivable - 323 2,749 1,658 Short-term deposits (5,000) 2,000 2,275 (2,000) Financing costs (21) (222) (193) (1,768) Increase (decrease) in long-term debt (3,443) (1,296) (4,198) 3,230 Change in non-cash working capital 3 - 146 - -------------------------------------------- 84,535 25,757 99,419 62,375 -------------------------------------------- Foreign exchange gain on cash and cash equivalents 1,256 2,434 1,144 2,051 -------------------------------------------- Increase in cash and cash equivalents 71,944 22,239 68,367 39,279 Cash and cash equivalents, beginning of period 55,918 32,647 59,495 15,607 -------------------------------------------- Cash and cash equivalents, end of period $ 127,862 $ 54,886 $ 127,862 $ 54,886 -------------------------------------------- --------------------------------------------
Caution Regarding Forward-looking Information
Information in this news release respecting matters such as the expected future production levels from wells, future prices and netback, work plans, anticipated total oil recovery of the Patos-Marinza and Ku§ova oilfields constitute forward-looking information. Statements containing forward-looking information express, as at the date of this news release, the Company's plans, estimates, forecasts, projections, expectations, or beliefs as to future events or results and are believed to be reasonable based on information currently available to the Company.
Exploration for oil is a speculative business that involves a high degree of risk. The Company's expectations for its Albanian operations and plans are subject to a number of risks in addition to those inherent in oil production operations, including: that Brent oil prices could fall resulting in reduced returns and a change in the economics of the project; availability of financing; delays associated with equipment procurement, equipment failure and the lack of suitably qualified personnel; the inherent uncertainty in the estimation of reserves; exports from Albania being disrupted due to unplanned disruptions; and changes in the political or economic environment.
Production and netback forecasts are based on a number of assumptions including that the rate and cost of well takeovers, well reactivations and well recompletions of the past will continue and success rates will be similar to those rates experienced for previous well recompletions/reactivations/ development; that further wells taken over and recompleted will produce at rates similar to the average rate of production achieved from wells recompletions/reactivations/development in the past; continued availability of the necessary equipment, personnel and financial resources to sustain the Company's planned work program; continued political and economic stability in Albania; the existence of reserves as expected; the continued release by Albpetrol of areas and wells pursuant to the Plan of Development and Addendum; the absence of unplanned disruptions; the ability of the Company to successfully drill new wells and bring production to market; and general risks inherent 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.
Review by Qualified Person
This release was reviewed by Abdel F. (Abby) Badwi, CEO of Bankers Petroleum Ltd., who is a "qualified person" under the rules and policies of AIM in his role with the Company and due to his training as a professional petroleum geologist (member of APEGGA) with over 40 years experience in domestic and international oil and gas operations.
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 both the Patos Marinza and the Ku§ova heavy oil fields. Bankers' shares are traded on the Toronto Stock Exchange and the AIM Market in London, England under the stock symbol BNK.
For further information: 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(at)bankerspetroleum.com, Website: www.bankerspetroleum.com; AIM NOMAD: Canaccord Genuity Limited, Ryan Gaffney, Henry Fitzgerald-O'Connor, +44 20 7050 6500; AIM JOINT BROKERS: Canaccord Genuity Limited, Ryan Gaffney, Henry Fitzgerald-O'Connor, +44 20 7050 6500; Macquarie Capital Advisors, Ben Colegrave, Paul Connolly, +44 20 3037 5639
(BNK.)
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