The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from CNW Group

Bankers Petroleum Announces 2012 First Quarter Financial and Operational Results

Monday, May 14, 2012

Bankers Petroleum Announces 2012 First Quarter Financial and Operational Results08:00 EDT Monday, May 14, 2012Record Quarter of Revenue, Netback and Cash FlowCALGARY, May 14, 2012 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the "Company") (TSX: BNK, AIM: BNK) is pleased to provide its 2012 first quarter financial and operational results.  During the quarter, Bankers achieved several key milestones, including record revenue, netback and cash flow.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$000, except as noted)Three months endedMarch 31     20122011ChangeOil revenue102,66872,73641%Net operating income53,47139,83434%Net income7,76511,219(31%) Per share - basic ($)0.0310.046(33%)    Funds generated from operations48,07229,94861% Per share - basic ($)0.1920.12257%Capital expenditures62,70151,93021%Average sales (bopd)13,27911,89412%Average price ($/barrel)84.9667.9525%Netback ($/barrel)44.2437.2219%     March 312012December 312011March 312011Cash and deposits77,15054,01382,854Working capital118,98980,28292,817Total assets747,029661,216522,476Long-term debt92,00946,6921,851Shareholders' equity441,101412,679371,355   Highlights for the quarter ended March 31, 2012 are:Oil sales averaged 13,279 bopd, an increase of 12% compared to 11,894 bopd for the same period in 2011, and 13,399 bopd during the previous quarter.Revenue increased by 16% to $102.7 million ($84.96/bbl) from $88.3 million ($71.67/bbl) in the previous quarter and by 41% from $72.7 million ($67.95/bbl) in the first quarter of 2011. Revenue represented 72% of the Brent oil price of $119 per barrel.Royalties in favor of the Albanian Government and related entities, totalled $19.1 million for the quarter, up from $13.8 million for the first quarter of 2011.  Total royalties for 2011 were $64 million, representing 19% of revenue.Operating, sales and transportation costs were $30 million in the first quarter, which include Albanian based companies and their employees.  This compares with $19 million for the first quarter of 2011 and $106 million for 2011.The Company recorded net operating income (netback) of $53.5 million ($44.24/bbl) in the first quarter of 2012, compared to $37.7 million ($30.56/bbl) during the previous quarter and $39.8 million ($37.22/bbl) in the same period of 2011.In the first quarter of 2012, funds generated from operations were $48.1 million, an increase of 47% from the preceding quarter of $32.7 million and an increase of 61% from $29.9 million in the first quarter of 2011.Capital expenditures were $62.7 million in the first quarter of 2012. The Company drilled 27 wells during the quarter, of which 24 were horizontal production wells and 3 were water disposal wells. Reactivation and recompletion work continued with 7 new reactivations and recompletions.  During the same period of 2011, capital expenditures were $51.9 million.Equity proceeds from warrant and option exercises during the period raised $12.1 million.The Company continues to maintain a strong financial position at March 31, 2012 with cash of $77.2 million and working capital of $119.0 million.  Working capital for December 31, 2011 and March 31, 2011 was $80.3 million and $92.8 million, respectively.Operational Update and OutlookAverage second quarter production to date is 13,600 bopd. Flat production over the last few months is primarily due to operational challenges associated with mature heavy oilfield development including interference from old well bores, sand production, and water disposal capacity, all of which are impacting new well performance and the overall production growth rate. The Company is undertaking several technical and operational initiatives to enhance well and field performance as it continues to implement the necessary actions required to mitigate or lessen these operational challenges.Over the next few months, the Company will focus its development drilling campaign in high impact areas of the Patos-Marinza oilfield along with reviewing secondary pressure support programs in the Gorani and Driza formations. Steam injection at the thermal pilot will resume shortly and a new drilling location is being finalized for the exploration of Block F.The Company will be releasing an operational update on the morning of June 4, 2012, followed immediately by a Company hosted Capital Markets day in Calgary to present a detailed description of its development activities for the remainder of this year. Further details on time and venue will be announced closer to the event.Bankers' Annual General Meeting will be held at The Metropolitan Centre, 333 - 4 Avenue SW, Calgary, Alberta, on June 27, 2012 at 3:00 p.m. (Calgary time).For additional information, please see an updated version of the Company's May corporate presentation on www.bankerspetroleum.com. BANKERS PETROLEUM LTD.CONSOLIDATED STATEMENTSOF COMPREHENSIVE INCOMEFOR THE THREE MONTHS ENDED MARCH 31(Unaudited, expressed in thousands of US dollars, except per share amounts)  20122011  Revenues$102,668$72,736Royalties (19,154) (13,755)  83,514 58,981Unrealized loss on financial commodity contracts (3,209) (1,401)  80,305 57,580     Operating expenses 17,432 11,597Sales and transportation expenses 12,611 7,550General and administrative expenses 4,110 2,858Depletion and depreciation  13,677 8,265Share-based payments 4,236 4,645  52,066 34,915  28,239 22,665     Net finance expense 2,857 1,941     Income before income tax  25,382 20,724Deferred income tax expense (17,617) (9,505)Net income for the period 7,765 11,219     Other comprehensive income     Currency translation adjustment 506 1,814Comprehensive income for the period$8,271$13,033 Basic earnings per share$0.031$0.046 Diluted earnings per share$0.031$0.044 BANKERS PETROLEUM LTD.CONSOLIDATED STATEMENTS OF FINANCIAL POSITION(Unaudited, expressed in thousands of US dollars) ASSETS March 31 2012December 312011Current assets  Cash and cash equivalents$72,150  $49,013  Restricted cash 5,000 5,000  Accounts receivable 72,397 56,006  Inventory 18,527 14,412  Deposits and prepaid expenses 9,722 17,463  Financial commodity contracts 475 3,684  178,271 145,578Non-current assets      Property, plant and equipment  568,758 515,638 $747,029$661,216 LIABILITIESCurrent liabilities      Accounts payable and accrued liabilities$58,393  $52,109  Current portion of long-term debt  889 13,187  59,282 65,296Non-current liabilities      Long-term debt 92,009 46,692  Decommissioning obligation 14,032 13,561  Deferred tax liabilities  140,605 122,988  305,928 248,537     SHAREHOLDERS' EQUITYShare capital  332,398 318,021Warrants  - 1,540Contributed surplus 56,965 49,651Currency translation reserve 6,915 6,409Retained earnings 44,823 37,058  441,101 412,679 $747,029$661,216  BANKERS PETROLEUM LTD.CONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE THREE MONTHS ENDED MARCH 31(Unaudited, expressed in thousands of US dollars)  20122011Cash provided by (used in):    Operating activities     Net income for the period$7,765$11,219 Depletion and depreciation 13,677 8,265 Amortization of deferred financing costs - 734 Accretion of long-term debt 1,127 - Accretion of decommissioning obligation 195 95 Unrealized foreign exchange loss 246 672 Deferred income tax expense 17,617 9,505 Share-based payments 4,236 4,645 Unrealized loss on financial commodity contracts 3,209 1,401 Cash premiums paid for financial commodity contracts - (6,588)  48,072 29,948 Change in non-cash working capital (5,839) (7,701)  42,233 22,247Investing activities     Additions to property, plant and equipment (62,701) (51,930) Change in non-cash working capital (642) 5,988  (63,343) (45,942)Financing activities     Issue of shares for cash 12,146 3,130 Financing costs (750) (26) Increase (decrease) in long-term debt 32,824 (5,413)  44,220 (2,309)Foreign exchange gain on cash and cash equivalents  27 739Increase (decrease) in cash and cash equivalents 23,137 (25,265)Cash and cash equivalents, beginning of period 49,013 106,619Cash and cash equivalents, end of period $72,150$81,354     Interest paid$201$310Interest received$60$138 BANKERS PETROLEUM LTD.CONSOLIDATED STATEMENT OF CHANGES IN EQUITY(Unaudited, expressed in thousands of US dollars, except number of common shares) Number ofcommonshares Sharecapital Warrants ContributedsurplusCurrencyTranslationReserveRetainedearningsTotal Balance at December 31, 2010244,794,990$309,379$1,597$28,135$6,094$1,062$346,267              Share-based payments- - - 8,925 - - 8,925Options exercised1,963,444 5,077 - (1,947) - - 3,130Net income for the period- - - - - 11,219 11,219Currency translation adjustment- - - - 1,814 - 1,814Balance at March 31, 2011246,758,434$314,456$1,597$35,113$7,908$12,281$371,355              Share-based payments- - - 15,560 - - 15,560Options exercised765,002 3,271 - (1,022) - - 2,249Warrants exercised174,333 461 (57) - - - 404Share issue costs- (167) - - - - (167)Net income for the period- - - - - 24,777 24,777Currency translation adjustment- - - - (1,499) - (1,499)Balance at December 31, 2011247,697,769$318,021$1,540$49,651$6,409$37,058$412,679              Share-based payments- - - 8,005 - - 8,005Options exercised530,612 1,781 - (698) - - 1,083Warrants exercised4,672,991 12,596 (1,533) - - - 11,063Warrants expired- - (7) 7 - - -Net income for the period- - - - - 7,765 7,765Currency translation adjustment- - - - 506 - 506Balance at March 31, 2012252,901,372$ 332,398$ -$ 56,965$ 6,915$ 44,823$ 441,101 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.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 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 Paul Connolly  +44 20 3037 5639