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Press release from PR Newswire

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, 2012 Record Quarter of Revenue, Netback and Cash Flow CALGARY, May 14, 2012 /PRNewswire/ - 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$000, except as noted) Three months ended March 31           2012 2011 Change Oil revenue 102,668 72,736 41% Net operating income 53,471 39,834 34% Net income 7,765 11,219 (31%)   Per share - basic ($) 0.031 0.046 (33%)         Funds generated from operations 48,072 29,948 61%   Per share - basic ($) 0.192 0.122 57% Capital expenditures 62,701 51,930 21% Average sales (bopd) 13,279 11,894 12% Average price ($/barrel) 84.96 67.95 25% Netback ($/barrel) 44.24 37.22 19%           March 31 2012 December 31 2011 March 31 2011 Cash and deposits 77,150 54,013 82,854 Working capital 118,989 80,282 92,817 Total assets 747,029 661,216 522,476 Long-term debt 92,009 46,692 1,851 Shareholders' equity 441,101 412,679 371,355       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 Outlook Average 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 STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED MARCH 31 (Unaudited, expressed in thousands of US dollars, except per share amounts)     2012 2011    Revenues $ 102,668 $ 72,736 Royalties   (19,154)   (13,755)     83,514   58,981 Unrealized loss on financial commodity contracts   (3,209)   (1,401)     80,305   57,580           Operating expenses   17,432   11,597 Sales and transportation expenses   12,611   7,550 General and administrative expenses   4,110   2,858 Depletion and depreciation    13,677   8,265 Share-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   20,724 Deferred income tax expense   (17,617)   (9,505) Net income for the period   7,765   11,219           Other comprehensive income           Currency translation adjustment   506   1,814 Comprehensive 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 2012 December 31 2011 Current 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   145,578 Non-current assets             Property, plant and equipment    568,758   515,638   $ 747,029 $ 661,216   LIABILITIES Current liabilities             Accounts payable and accrued liabilities $ 58,393   $ 52,109     Current portion of long-term debt    889   13,187     59,282   65,296 Non-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' EQUITY Share capital    332,398   318,021 Warrants    -   1,540 Contributed surplus   56,965   49,651 Currency translation reserve   6,915   6,409 Retained earnings   44,823   37,058     441,101   412,679   $ 747,029 $ 661,216     BANKERS PETROLEUM LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31 (Unaudited, expressed in thousands of US dollars)     2012 2011 Cash 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   22,247 Investing 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   739 Increase (decrease) in cash and cash equivalents   23,137   (25,265) Cash and cash equivalents, beginning of period   49,013   106,619 Cash and cash equivalents, end of period $ 72,150 $ 81,354           Interest paid $ 201 $ 310 Interest 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 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 -   -   -   8,925   -   -   8,925 Options exercised 1,963,444   5,077   -   (1,947)   -   -   3,130 Net income for the period -   -   -   -   -   11,219   11,219 Currency translation adjustment -   -   -   -   1,814   -   1,814 Balance at March 31, 2011 246,758,434 $ 314,456 $ 1,597 $ 35,113 $ 7,908 $ 12,281 $ 371,355                             Share-based payments -   -   -   15,560   -   -   15,560 Options exercised 765,002   3,271   -   (1,022)   -   -   2,249 Warrants exercised 174,333   461   (57)   -   -   -   404 Share issue costs -   (167)   -   -   -   -   (167) Net income for the period -   -   -   -   -   24,777   24,777 Currency translation adjustment -   -   -   -   (1,499)   -   (1,499) Balance at December 31, 2011 247,697,769 $ 318,021 $ 1,540 $ 49,651 $ 6,409 $ 37,058 $ 412,679                             Share-based payments -   -   -   8,005   -   -   8,005 Options exercised 530,612   1,781   -   (698)   -   -   1,083 Warrants exercised 4,672,991   12,596   (1,533)   -   -   -   11,063 Warrants expired -   -   (7)   7   -   -   - Net income for the period -   -   -   -   -   7,765   7,765 Currency translation adjustment -   -   -   -   506   -   506 Balance at March 31, 2012 252,901,372 $  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. SOURCE Bankers Petroleum Ltd.For further information: <p> </p> <p> Abby Badwi<br/> President and Chief Executive Officer<br/> (403) 513-2694 </p> <p> Doug Urch<br/> Executive VP, Finance and Chief Financial Officer<br/> (403) 513-2691 </p> <p> Mark Hodgson<br/> VP, Business Development<br/> (403) 513-2695 </p> <p> Email: <a href="mailto:investorrelations@bankerspetroleum.com" cr="true">investorrelations@bankerspetroleum.com</a><br/> Website: <a href="http://www.bankerspetroleum.com">www.bankerspetroleum.com</a> </p> <p> AIM NOMAD:<br/> Canaccord Genuity Limited<br/> Henry Fitzgerald-O'Connor<br/> +44 20 7050 6500 </p> <p> AIM JOINT BROKERS:<br/> Canaccord Genuity Limited<br/> Ryan Gaffney/ Henry Fitzgerald-O'Connor<br/> +44 20 7050 6500 </p> <p> Macquarie Capital Advisors<br/> Paul Connolly <br/> +44 20 3037 5639 </p>