11 May 2009 14:44
Bankers Petroleum finalizes US$110 million debt financing
CALGARY, May 11 /CNW/ - Further to the announcement made on February 25, 2009 regarding expanding credit facilities, Bankers Petroleum Ltd. ("Bankers" or the "Company") is pleased to announce that it has finalized loan agreements with the International Finance Corporation ("IFC"), a member of the World Bank Group, and the European Bank for Reconstruction and Development ("EBRD") for the provision of reserve-based long-term financing of up to US$110 million to fund capital requirements and working capital needs for the Company's projects in Albania.
The credit facilities consist of two six-year revolving facilities, aggregating US$50 million each to be used for the development of the Patos Marinza oil field and two eight-year term loans, aggregating to US$10 million, to fund environmental remediation of the oil field. All of the facilities will be funded equally between EBRD and IFC. Subject to fulfilling all other conditions precedent, the US$10 million term loan is expected to be available immediately, amounts under the first US$50 million tranche of the revolving facility will be available when the Brent oil price stabilizes above US$55 per barrel (45 consecutive days), and the second US$50 million tranche is subject to mutual agreement among Bankers, EBRD and IFC when Bankers' production exceeds 10,000 bopd and the Brent oil price stabilizes above US$62 per barrel unless another suitable oil price threshold is agreed among Bankers and EBRD/IFC.
As part of the facility, Bankers has issued 16 million common share purchase warrants (8 million for each of IFC and EBRD), each warrant will entitle EBRD/IFC to purchase one common share of the Company at a price of $1.50 per common share which was priced at a 25% premium to market when this transaction was announced on February 25, 2009. The warrants will be exercisable when the Brent oil price stabilizes for 10 consecutive trading days above US$55 per barrel and until the earlier of, 1) one year from such date, or 2) 45 days after the date on which the Company has notified the lenders that its common shares have closed at or above the exercise price for 20 consecutive trading days.
Abby Badwi, President and CEO of Bankers stated that "this $110 million debt financing is more than just a credit facility; it's a strategic investment with two influential global organizations who have significant presence and initiatives in Albania. Their financial support at this time of tight credit markets is vital to carrying out a large development project at the Patos Marinza oil field and we particularly appreciate their expertise, and efforts to involve other stakeholders, in tackling the environmental clean-up challenges ahead of us. In addition, this sizable long-term investment will allow the Company continued access to competitive and sustainable financing arrangements to fund currently planned and future growth opportunities in Albania."
"This project is a good example of how investing in the private sector can lead to tangible benefits for people on the ground," said Somit Varma, IFC's Global Head for Oil, Gas, Mining, and Chemicals. "While IFC provides financing to help improve recovery rates and accelerate domestic oil production, we also help the company to contribute to environmental remediation initiatives aimed at improving living conditions in the surrounding area."
"With this project, the EBRD is providing much-needed long-term funding to support private investments in the Albanian oil sector. By investing to modernise in Bankers Petroleum's operations, the Bank is helping to revamp the oil industry in Albania, by fostering further privatisation and helping set high standards of environmental management", said Paul Shapiro, the EBRD Operations Leader for the Project. The on-shore oil deposits are an important source of public revenue and energy security for Albania which can now look forward to more sustainable and efficient development further explained Kevin Bortz, Director EBRD Natural Resources Team.
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 oil fields 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 well 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; approval of the Addendum to the Plan of Development; 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.
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.
International Finance Corporation - World Bank Group IFC Supports Modernization of Albania's Oil and Gas Industry and Sustainable Environmental Practices
Washington, D.C./Tirana, Albania, May 11, 2009 - IFC, a member of the World Bank Group, has agreed to support the further privatization of the Patos Marinza oilfield in southern Albania to help revive an outmoded industry and promote the reduction of pollution in the area.
IFC has approved a US$50 million loan plus a special-purpose environmental-term loan of US$5 million to Bankers Petroleum Ltd, a Canadian oil and gas company. IFC may also make an equity investment of up to 12 million Canadian dollars. The European Bank for Reconstruction and Development (EBRD) is providing equal amounts.
Bankers Petroleum has been operating a small portion of the Patos Marinza oilfield since 2004. The current expansion of Bankers' operation will modernize the oilfield, transferring specialized technical know-how and experience to a largely local workforce. This will contribute revenues to the Albanian government and help promote much-needed foreign direct investment in the country's hydrocarbon sector.
"IFC's financial support at this time of tight credit markets is vital to carrying out a large development project at Patos Marinza," said Abby Badwi, CEO of Bankers Petroleum. "We particularly appreciate their expertise in helping us to involve other stakeholders in tackling the significant environmental remediation needs in the oilfield. In addition, this sizable long-term investment will allow our company continued access to competitive and sustainable financing arrangements to fund currently planned and future growth opportunities in Albania."
Patos Marinza is severely polluted following decades of ownership by the state-owned operator Albpetrol. Bankers will clean up existing wells taken over from Albpetrol and help reduce pollution and oilfield-contamination risks as they expand their activities in the area.
"This project is a good example of how investing in the private sector can lead to tangible benefits for people on the ground," said Somit Varma, IFC's Global Head for Oil, Gas, Mining, and Chemicals. "While IFC provides financing to help improve recovery rates and accelerate domestic oil production, we also help the company to contribute to environmental remediation initiatives aimed at improving living conditions in the surrounding area."
The United Nations Development Program has classified the Patos Marinza area as one of Albania's pollution hotspots. As the clean-up takes a wider effort involving many more stakeholders than Bankers alone, IFC and EBRD have helped establish a multi-stakeholder working group to formulate environmental and social strategies and initiatives. IFC has engaged with Albanian ministries to secure their support and leadership on this initiative, as well as with the European Union to align ongoing initiatives.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous year. For more information, visit www.ifc.org.
For further information: International Finance Corporation: In Washington,D.C., Hannfried von Hindenburg, (202) 458-5613, E-mail:hvonhindenburg(at)ifc.org; In Belgrade, Slobodan Brkic, +381 11 3023 750,E-mail: sbrkic(at)ifc.org; Bankers Petroleum Ltd.: Abby Badwi, President andChief Executive Officer, (403) 513-2694; Doug Urch, VP, Finance and ChiefFinancial Officer, (403) 513-2691, Email:investorrelations(at)bankerspetroleum.com, Website: www.bankerspetroleum.com;AIM NOMAD: Canaccord Adams Limited, Ryan Gaffney, Henry Fitzgerald-O'Connor,+44 20 7050 6500; AIM JOINT BROKERS: Canaccord Adams Limited, Ryan Gaffney,Henry Fitzgerald-O'Connor, +44 20 7050 6500; Tristone Capital Ltd., NickMorgan, +44 20 7355 5800(BNK. BNK)
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