The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from CNW Group

Bankers Petroleum Announces 2011 Third Quarter Results

Saturday, November 12, 2011

Bankers Petroleum Announces 2011 Third Quarter Results00:37 EST Saturday, November 12, 2011Record Financial and Operational Quarter  CALGARY, Nov. 11, 2011 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the "Company") (TSX: BNK) (AIM: BNK) is pleased to provide its 2011 third quarter financial and operational 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.Results at a Glance (US$000, except as noted)(1)Three months endedSeptember 30 Nine months endedSeptember 30 2011 2010 Change 2011 2010 Change Oil revenue93,650 42,135 122% 251,570 119,431 111%Net operating income44,898 19,646 129% 131,976 55,638 137%Net income13,696 2,958 363% 35,715 5,895 506% Per share - basic ($)0.055 0.012 358% 0.145 0.025 480%  - diluted ($)0.054 0.012 350% 0.140 0.024 483%Funds generated from operations42,601 16,308 161% 115,773 48,063 141% Per share - basic ($)0.172 0.067 157% 0.469 0.205 129%Capital expenditures65,147 27,456 137% 186,465 82,350 126%Average production (bopd)13,667 9,826 39% 12,578 9,318 35%Average price ($/barrel)74.48 46.61 60% 73.26 46.95 56% Royalties14.68 9.16 60% 13.18 9.37 41% Operating expenses13.78 10.40 33% 12.69 10.31 23% Sales and transportation10.31 5.31 94% 8.96 5.40 66%Netback ($/barrel)35.71 21.74 64% 38.43 21.87 76%        September 30 2011September 30 2010Change December 31 2010ChangeCash and deposits53,243134,362(60%) 108,119(51%)Working capital73,491138,785(47%) 130,920(44%)Total assets612,348442,34538% 465,59832%Long-term bank loans31,40719,24863% 21,81544%Shareholders' equity405,955332,85422% 346,26717%  (1)Effective January 1, 2011, and retroactive to January 1, 2010, the Company adopted International Financial Reporting Standards (IFRS).  Previously, the Company prepared its Financial Statements in accordance with Canadian Generally Accepted Accounting Principles (GAAP).   The transition has not resulted in any material variation from prior periods.  Full details on the transition adjustments are contained in the Notes to the Consolidated Interim Financial Statements.Highlights for the quarter ended September 30, 2011 are:Production averaged 13,667 bopd, an increase of 39% compared to the same period in 2010.  Current production is 14,750 bopd.In the third quarter of 2011, revenue increased by 10% to $93.7 million ($74.48/bbl) from $85.2 million ($77.03/bbl) in the previous quarter and by 122% from $42.1 million ($46.61/bbl) in the third quarter of 2010.Net operating income (netback) was $44.9 million ($35.71/bbl) in the third quarter of 2011, compared to $47.2 million ($42.72/bbl) during the second quarter of 2011 and $19.6 million ($21.74/bbl) in the third quarter of 2010.Funds generated from operations were $42.6 million in the third quarter of 2011 compared to $42.9 million in the second quarter of 2011 and $16.3 million in the third quarter of 2010.During the third quarter of 2011, capital expenditures were $65.1 million. The Company drilled sixteen (16) horizontal wells, a vertical cored delineation well, two (2) thermal horizontal wells, and two (2) water disposal wells, as well as reactivated 19 wells in addition to other related infrastructure/expansion projects.  During the same period of 2010, capital expenditures were $27.5 million.New export market agreements for 2012 have been agreed at higher average price levels than the current year crude oil contracts. ARMO, the Albanian refinery, also agreed to purchase Patos-Marinza crude in 2012 for a significant realized average price increase from the current year contract.  The 2012 pricing agreements represent an average 7% increase over the 2011 Patos-Marinza oil price.The Company continues to maintain a strong financial position with cash of $53.2 million and working capital of $73.5 million at September 30, 2011.  Working capital for December 31, 2010 and September 30, 2010 was $130.9 million and $138.8 million, respectively.Operational UpdateCurrent production at the Patos-Marinza oilfield is 14,750 bopd. This volume represents an 8% increase from third quarter production average.  Four (4) of the ten (10) wells drilled and completed in the first five weeks of the fourth quarter targeted reserves and delineation drilling outside the main field. The Driza 1 formation outpost drilling to the west of the main field continues to demonstrate excellent cold flow production in this area of the concession with the last two wells producing at a current average rate of 160 bopd. In addition, the first Gorani 4 horizontal well has been drilled and is currently producing at a rate of 230 bopd. This well is located in the southern portion of Area 1 and extends into Area 2, a part of the field that to date had limited reactivation operations. A second Gorani 4 horizontal well is currently drilling further south in Area 2. Several more wells are scheduled to be drilled in this area.Two of the existing drilling rigs recently encountered mechanical issues and have been since been repaired and put back into service after eighteen days of combined down-time, The fifth drilling rig has arrived at the Patos-Marinza field and is currently rigging up and will spud its first well in the next few days.The first Block F exploration well is now scheduled to spud in January 2012 as soon as we can free one of the current rigs focused on incremental production and reserves assessment drilling and move it to the Block F exploration area.Surface facilities construction has been completed for the thermal pilot program at the Patos-Marinza oilfield. Steam injection into the first horizontal well is projected to commence later this month in the Driza 1 sandstone. The reservoir simulation model is being updated with new core data information. The steam cycle is planned for a period of 60 days following which the well will undergo a soak period for several days before being placed on production and at that time steam injection in the second horizontal well will begin.OutlookCurrent year-end capital expenditures estimate remains at $215 million, net of capital inventory. The Company plans to drill an additional 18 wells before the end of this 2011, including 17 horizontal and one water disposal well. Exit production target is 16,000 bopd; while this rate represents the low case projection, it is a 33% increase from the 2010 exit rate. The Company expects to release its 2011 reserves updates in February 2012.The 2012 work program and budget is being finalized and its details will be announced in December after receiving necessary board of directors and government approvals. Bankers' continues to hold a strong financial position of $53 million in cash and minimal long-term debt of $31 million with $80 million remaining available within current credit facilities. With Patos-Marinza crude sales agreements being based on Brent crude oil pricing, the Company anticipates a strong cash flow projection for next year and will be able to deliver its most active capital program in 2012.For additional information, please see an updated version of the Company's corporate presentation on www.bankerspetroleum.com.  BANKERS PETROLEUM LTD.  CONSOLIDATED STATEMENTSOF COMPREHENSIVE INCOME  (Unaudited, expressed in thousands of US dollars, except per share amounts)   Three months endedSeptember 30 Nine months ended September 30   2011 2010 2011 2010          Revenues   $93,650  $42,135  $251,570  $119,431Royalties  (18,457) (8,284) (45,274) (23,841)   75,193 33,851 206,296 95,590Unrealized gain on financial commodity contracts  4,998 - 2,982 -   80,191 33,851 209,278 95,590          Operating expenses  17,328 9,401 43,562 26,218Sales and transportation expenses  12,967 4,804 30,758 13,734General and administrative expenses  3,536 2,462 9,974 7,245Depletion and depreciation  9,591 5,415 26,983 14,968Share-based payments  2,515 1,247 9,487 6,402   45,937 23,329 120,764 68,567   34,254 10,522 88,514 27,023          Finance income  1,513 268 501 543Finance expense  (1,659) (2,349) (4,551) (4,240)   (146) (2,081) (4,050) (3,697)          Income before income tax   34,108 8,441 84,464 23,326Deferred income tax expense  (20,412) (5,483) (48,749) (17,431)Net income for the period  13,696 2,958 35,715 5,895          Other comprehensive income (loss)          Currency translation adjustment  (2,626) 1,752 (373) 2,055Comprehensive income for the period $11,070$4,710$35,342$7,950          Basic earnings per share $0.055$0.012$0.145$0.025Diluted earnings per share $0.054$0.012$0.140$0.024 BANKERS PETROLEUM LTD.CONSOLIDATED STATEMENT OF FINANCIAL POSITION(Unaudited, expressed in thousands of US dollars) ASSETS      September 302011 December 312010Current assets         Cash and cash equivalents     $46,743  $106,619 Restricted cash     6,500 1,500 Accounts receivable     55,355 29,233 Inventory     16,279 4,199 Deposits and prepaid expenses     11,909 16,624      136,786 158,175Non-current assets         Deferred financing costs     - 13,980 Financial commodity contracts     9,570 - Property, plant and equipment     465,992 293,443     $612,348$465,598LIABILITIESCurrent liabilities         Accounts payable and accrued liabilities    $54,354  $ 23,241 Current portion of long-term debt     8,941 4,014      63,295 27,255Non-current liabilities         Long-term debt     20,187 21,815 Decommissioning obligation     10,523 6,622 Deferred tax liabilities     112,388 63,639      206,393 119,331SHAREHOLDERS' EQUITYShare capital     317,515 309,379Warrants     1,597 1,597Contributed surplus     44,345 28,135Accumulated other comprehensive income     5,721 6,094Retained earnings     36,777 1,062      405,955 346,267     $612,348$465,598 BANKERS PETROLEUM LTD.CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited, expressed in thousands of US dollars)  Three months endedSeptember 30 Nine months endedSeptember 30  2011 2010 2011 2010Cash provided by (used in):        Operating activities         Net income for the period$13,696$2,958$35,715$5,895 Depletion and depreciation 9,591 5,415 26,983 14,968 Finance expense 1,659 2,349 4,551 4,240 Interest paid (197) (364) (1,349) (1,466) Foreign exchange (gain) loss (77) (780) 1,207 593 Deferred income tax expense 20,412 5,483 48,749 17,431 Share-based payments 2,515 1,247 9,487 6,402 Unrealized gain on financial commodity contracts (4,998) - (2,982) - Cash premiums paid for financial commodity contracts - - (6,588) -  42,601 16,308 115,773 48,063 Change in non-cash working capital (15,854) (2,264) (18,517) (4,589)  26,747 14,044 97,256 43,474Investing activities         Additions to property, plant and equipment (65,147) (27,456) (186,465) (82,350) Restricted cash - - (5,000) - Change in non-cash working capital 5,095 (435) 15,637 6,680  (60,052) (27,891) (175,828) (75,670)Financing activities         Issue of shares for cash 54 97,145 5,347 102,947 Financing costs - (21) (30) (193) Increase (decrease) in long-term debt 6,579 (3,443) 14,519 (4,198) Share issue costs (167) (4,149) (167) (4,307) Note receivable - - - 2,749 Short-term deposits - (5,000) - 2,275 Change in non-cash working capital - 3 - 146  6,466 84,535 19,669 99,419Foreign exchange gain (loss) on cash and cash equivalents  (1,347) 1,256 (973) 1,144Increase (decrease) in cash and cash equivalents (28,186) 71,944 (59,876) 68,367Cash and cash equivalents, beginning of period 74,929 55,918 106,619 59,495Cash and cash equivalents, end of period $46,743$127,862$46,743$127,862Caution 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.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@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