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.