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Bankers Petroleum Announces 2012 Third Quarter Financial and Operational Results

Date : 11/12/2012 @ 6:30PM
Source : PR Newswire (US)
Stock : Bankers Petroleum Ltd. (BNK)
Quote : 6.55  -0.05 (-0.76%) @ 1:44AM
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Bankers Petroleum Announces 2012 Third Quarter Financial and Operational Results

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Bankers Petroleum Announces 2012 Third Quarter Financial and Operational Results

Record Quarter of Production and Cash Flows

CALGARY, Nov. 12, 2012 /PRNewswire/ - Bankers Petroleum Ltd. ("Bankers" or the "Company") (TSX: BNK, AIM: BNK) is pleased to provide its 2012 third quarter financial and operational results.  The complete reporting package, consisting of Management's Discussion and Analysis along with the Financial Statements and Notes, is posted on the Company's website www.bankerspetroleum.com and on SEDAR: www.sedar.com.

Results at a Glance
(US$000, except as noted)
Three months ended
September 30
Nine months ended
September 30
  2012 2011 Change 2012 2011 Change
Oil revenue 115,054 93,650 23% 316,309 251,570 26%
Net operating income 58,159 44,898 30% 158,882 131,976 20%
Net income 12,274 13,696 (10%) 31,292 35,715 (12%)
  Per share - basic ($) 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
2012
December 31
2011
September 30
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, an increase of 15% compared to 13,667 bopd for the same period in 2011 and an increase of 11% compared to 14,169 bopd for the preceding quarter.  For the nine months ended September 30, 2012, oil sales increased 14% to 14,393 bopd from 12,578 bopd for the comparable 2011 period.
  • Revenue for the third quarter of 2012 increased by 23% to $115.1 million ($79.58/bbl) from $93.7 million ($74.48/bbl) in the same period of 2011.  Revenue for the third quarter of 2012 represented 73% of the Brent oil price of $110/bbl.  Revenue for the nine month 2012 period totalled $316.3 million ($80.21/bbl), an increase of 26% from $251.6 million ($73.26/bbl) for the same period of 2011.
  • Royalties to the Albanian Government and related entities were $23.3 million and $18.5 million for the third quarter of 2012 and 2011, respectively (both representing 20% of total revenue).  Total royalties were $59.6 million and $45.3 million for the nine months ended September 30, 2012 and 2011, respectively.
  • Operating, sales and transportation costs in the third quarter of 2012, originating from Albanian-based companies and their employees, were $33.6 million, 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 $44.9 million ($35.71/bbl) in the same period of 2011.  For the nine months ended September 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 quarter of 2011.  For the nine months ended September 30, 2012, funds generated from operations were $139.5 million as compared to $115.3 million for the nine months ended September 30, 2011. Included in funds generated from operations is a payment of $3.9 million for a financial commodity contract in August 2012.
  • Capital expenditures in the third quarter of 2012 were $53.5 million.  The Company drilled 34 wells during the quarter, comprised of 31 horizontal wells, one lateral re-drill sidetrack well, and two core wells in the southern area of the field.  Re-activation and re-completion work continued during the quarter.  During the same period of 2011, capital expenditures were $65.1 million.  For the nine months ended September 30, 2012, capital expenditures totalled $168.9 million, a reduction of 9% from $186.5 million for the comparable 2011 period.
  • During the third quarter of 2012, Bankers participated in the bid evaluation process for the privatization of the Albanian national oil company "Albpetrol Sh.A".  Although Bankers' participation was unsuccessful, the winning bid value of EUR 850 million attributed to Albpetrol's assets enhances Bankers oilfields' valuation and also demonstrates the Company's commitment to expand its business activities in Albania.
  • At September 30, 2012, total deposits and prepaid expenses were $29.2 million compared to $17.5 million at the end of December 2011, of which $16.6 million and $1.2 million, respectively, is paid to the Albanian court as deposits for procedure purposes on several legal cases.  The recoverability of these 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 the Albanian Government Tax Director negating the previous exemption relief from carbon and circulation taxes on diluent imports.  These assessments represent a total of $15 million covering the last five years. The Company was successful in setting aside a recently introduced separate excise tax assessment amounting to $8 million on the Company's importation and use of diluent.  Other audits have also resulted in an additional assessment of previously exempted Value Added Taxes for some of Bankers' subcontractors.  Bankers has urged the Government of Albania to re-consider its position before proceeding with implementation of this assessment and is hopeful that these contractual exemptions 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 that would extend existing repayments, currently scheduled to commence in October 2013.  The existing 2009 facility was based on 2008 year-end reserves; subsequent reserve increases have significantly expanded the Company's borrowing 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 challenges associated with mature heavy oilfield development including interference from old well bores, sand production, and water disposal capacity. Five (5) previously drilled wells that were shut-in due to liner failure in late 2011 have been re-drilled with a lateral sidetrack through the cased section of the wellbore and a new higher grade steel liner with redesigned slot configuration for additional strength has been run in the new lateral legs. The wells were successfully completed and are currently producing at a cumulative production rate of 500 bopd (average of 100 bopd per well). Additional candidate wells are being prepared for lateral re-drilling and installation of improved tubulars with three (3) re-drill sidetracks planned for the remainder of the fourth quarter and several more in the first half of next year to restore shut-in production from similar wells that have demonstrated good production capability, but are restricted due to liner failure concerns.

The Company continues to be pleased with the results of the horizontal drilling program, along with the results of lateral section re-drills initiated in the third 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
September 30
  Nine months ended
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 commodity contracts     (1,085)   4,998   (4,050)   2,982
      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
2012
  December 31
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 expenses             29,162    17,463
  Financial commodity contracts             2    3,684
              156,834    145,578
Non-current assets                   
  Financial commodity contract             3,530    -
  Property, plant and equipment             649,653    515,638
            $ 810,017  $ 661,216
 
LIABILITIES
Current liabilities                 
   Accounts payable and accrued liabilities         $ 48,808   $  52,109
   Current portion of long-term debt           1,489    13,187
            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
September 30
  Nine months ended
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
common
shares
  Share
capital
  Warrants   Contributed
surplus
  Currency
translation
reserve
  Retained
earnings
  Total
Balance at December 31, 2010   244,794,990 $ 309,379 $ 1,597 $ 28,135   $ 6,094 $ 1,062 $ 346,267
                                  
Share-based payments   -     -   -   19,166     -   -    19,166
Options exercised   2,721,779     8,303   -   (2,956)     -   -    5,347
Share issue costs   -     (167)   -   -     -   -    (167)
Net income for the period   -     -   -   -     -   35,715    35,715
Currency translation adjustment   -     -   -   -     (373)   -    (373)
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     -   -    5,319
Options exercised   6,667     45   -   (13)     -   -    32
Warrants exercised   174,333     461   (57)   -     -   -    404
Net income for the period   -     -   -   -     -   281    281
Currency translation adjustment   -     -   -   -     688   -    688
Balance at December 31, 2011   247,697,769 $ 318,021 $ 1,540  $ 49,651   $ 6,409 $ 37,058  $ 412,679
                                  
Share-based payments   -     -   -   14,938     -   -   14,938
Options exercised   553,945     1,833   -   (719)     -   -   1,114
Warrants exercised   4,672,991     12,596   (1,533)   -     -   -   11,063
Warrants expired   -     -   (7)   7     -   -   -
Net income for the period   -     -   -   -     -   31,292   31,292
Currency translation adjustment   -     -   -   -     821   -   821
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 future production levels from wells, future prices and netback, work plans, anticipated total oil recovery of the Patos-Marinza and Kuçova 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 reactivations and well recompletions of the past will continue and success rates and production rates will be similar to those rates experienced for previous well recompletions and reactivations; 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.

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 Kuçova 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.

Copyright 2012 PR Newswire



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