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 PR Newswire

Bankers Petroleum Announces 2013 Third Quarter Financial and Operational Results

Friday, November 08, 2013

Bankers Petroleum Announces 2013 Third Quarter Financial and Operational Results

08:00 EST Friday, November 08, 2013

Accumulated Free Cash Flow of $32 Million and Q4 Average Production to Date 19,050 bopd

CALGARY, Nov. 8, 2013 /PRNewswire/ - Bankers Petroleum Ltd. ("Bankers" or the "Company") (TSX: BNK, AIM: BNK) is pleased to provide its 2013 third quarter financial and operational results.  During the quarter, Bankers achieved its third consecutive quarter of free cash flow and record production levels.

Results at a Glance Three months ended September 30 Nine months ended September 30
($000s, except as noted) 2013 2012 % change 2013 2012 % change
Financial            
   Oil revenue 146,665 115,054 27% 411,065 316,309 30%
   Net operating income 82,725 58,159 42% 225,032 158,882 42%
   Net income 19,507 12,274 59% 46,708 31,292 49%
    Per share - basic ($) 0.08 0.05 60% 0.18 0.12 50%
      - diluted ($) 0.08 0.05 60% 0.18 0.12 50%
   Funds generated from operations 71,074 48,308 47% 198,210 139,539 42%
    Per share - basic ($) 0.28 0.19 47% 0.78 0.55 42%
   Capital expenditures 66,199 53,526 24% 165,915 168,859 (2%)
Operating            
   Average sales (bopd) 18,332 15,715 17% 17,655 14,393 23%
   Average price ($/barrel) 86.96 79.58 9% 85.29 80.21 6%
   Netback ($/barrel) 49.05 40.23 22% 46.69 40.29 16%
   Average Brent oil price ($/barrel) 110.29 109.50 1% 108.46 112.21 (3%)
           
        September 30, 2013 December 31, 2012 % change
Cash and deposits       40,659 38,740 5%
Working capital       121,973 88,799 37%
Total assets       971,587 825,816 18%
Long-term debt       98,153 97,158 1%
Shareholders' equity       542,655 483,032 12%

Highlights for the quarter and nine months ended September 30, 2013 are:

  • Average oil production for the three months ended September 30, 2013 was 18,541 barrels of oil per day (bopd), 4% higher as compared to 17,886 bopd in the second quarter of 2013 and 19% higher than 15,616 bopd in the third quarter of 2012.  Average oil production for the fourth quarter to-date is approximately 19,050 bopd.
  • Oil sales averaged 18,332 bopd for the third quarter of 2013, an increase of 2% compared to 18,008 bopd for the previous quarter and 17% compared to 15,715 bopd for the third quarter of 2012.  For the nine months ended September 30, 2013, oil sales were 17,655 bopd, an increase of 23% compared to 14,393 bopd for the comparable 2012 period.
  • Revenue was $147 million ($86.96/bbl) for the third quarter of 2013, an increase of 11% compared to $132 million ($80.45/bbl) in the previous quarter and an increase of 27% from $115 million ($79.58/bbl) in the third quarter of 2012.  Revenue for the third quarter of 2013 represented 79% of the Brent oil price of $110/bbl, compared to 79% of the Brent oil price of $102/bbl in the previous quarter and 73% of the Brent oil price of $110/bbl in the third quarter of 2012.
  • For the third quarter of 2013, royalties to the Albanian Government and related entities were $25 million (17% of revenue) compared to $22 million (16% of revenue) in the previous quarter and $23 million (20% of revenue) for the same quarter of 2012.  Total royalties were $70 million (17% of revenue) and $60 million (19% of revenue) for the nine months ended September 30, 2013 and 2012, respectively.
  • For the three and nine months periods ended September 30, 2013, operating, sales and transportation costs, originating from Albanian-based companies and their employees, were $39 million and $116 million, respectively, compared to $34 million and $98 million for the comparable periods of 2012.
  • The Company recorded net operating income (netback) of $83 million ($49.05/bbl) in the third quarter of 2013, a 20% increase from $69 million ($42.19/bbl) in the previous quarter and 42% from $58 million ($40.23/bbl) in the third quarter of 2012.  For the nine months ended September 30, 2013, net operating income was $225 million ($46.69/bbl), a 42% increase compared to $159 million ($40.29/bbl) in the comparable 2012 period.
  • For the third quarter of 2013, funds generated from operations were $71 million, a 15% increase compared to $62 million for the previous quarter and a 47% increase compared to $48 million for the same period of 2012.
  • Capital expenditures were $66 million in the third quarter of 2013.  The Company drilled 34 wells during the quarter, comprised of 32 horizontal production wells and two horizontal lateral re-drill wells in the main area of the Patos-Marinza field.  Capital expenditures were $52 million and $54 million for the previous quarter and the same period in 2012, respectively.
  • The Company continues to maintain a strong financial position at September 30, 2013 with cash of $41 million and working capital of $122 million.  At September 30, 2013, the Company had drawn $106 million of its $230 million approved credit facilities.  Working capital for December 31, 2012 and September 30, 2012 was $89 million and $107 million, respectively.

Outlook  

The average fourth quarter 2013 production to date from the Patos-Marinza oilfield in Albania continues steady growth at approximately 19,050 bopd, 3% higher than the third quarter average.

The Company is pleased with the performance of the horizontal drilling program with plans to drill an estimated thirty-four (34) horizontal wells and two (2) water disposal service wells in the fourth quarter. Delineation activities in the South Patos area and previously announced drilling and reactivations at Kuçova have been deferred to accommodate permitting and rig availability, however, the Company intends to proceed with these plans in early 2014.

Expansion plans of enhanced oil recovery (EOR), polymer flood and water flood patterns are moving forward in the fourth quarter.  The Company continues to monitor and assess pilot performance with initial results expected in the first half of 2014.

In the third quarter, the Company increased spending to nearly $5 million on facilities and infrastructure projects, nearly double the infrastructure spending in the first half of the year with projections in the fourth quarter to spend a similar amount.  Construction on a new satellite treatment facility in the north central region of the Patos-Marinza field and sludge treatment facility are in their final stages; both are scheduled to be operational in the first quarter of 2014.  Other projects include existing well-pad retrofits, new well-pad cascade treating facilities, and installation of updated fluid measurement equipment.

"These are exciting times for Bankers. We began the year realizing our first quarter of free cash flow and we have now hit our third consecutive quarter, totalling $32 million free cash flow to date in 2013. We have built a solid platform of reliable, disciplined growth through our drilling program and expect to bring in a sixth rig by early 2014.  I have been very pleased with the performance of the business, and our financial strength to grow within cash flow gives us lots of options to balance validating EOR with steady drilling growth." said David French, President and CEO of Bankers Petroleum.

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
      2013   2012   2013   2012
                   
Revenues   $ 146,665 $ 115,054 $ 411,065 $ 316,309
Royalties     (24,664)   (23,259)   (69,655)   (59,627)
      122,001   91,795   341,410   256,682
Unrealized loss on financial commodity contracts     (2,208)   (1,085)   (3,588)   (4,050)
      119,793   90,710   337,822   252,632
                   
Operating expenses     22,000   20,229   65,445   56,699
Sales and transportation expenses     17,276   13,407   50,933   41,101
General and administrative expenses     4,434   3,999   14,902   11,617
Depletion and depreciation      25,583   15,644   73,218   43,388
Share-based payments     1,692   1,953   8,053   7,636
      70,985   55,232   212,551   160,441
      48,808   35,478   125,271   92,191
                   
Net finance expense     3,311   3,732   8,867   8,449
                   
Income before income tax     45,497   31,746   116,404   83,742
Deferred income tax expense     (25,990)   (19,472)   (69,696)   (52,450)
Net income for the period     19,507   12,274   46,708   31,292
                   
Other comprehensive income (loss)                  
  Currency translation adjustment     263   820   (599)   821
Comprehensive income for the period   $ 19,770 $ 13,094 $ 46,109 $ 32,113
                   
Basic earnings per share   $ 0.077 $ 0.049 $ 0.184 $ 0.124
Diluted earnings per share   $ 0.076 $ 0.048 $ 0.183 $ 0.123
                   

BANKERS PETROLEUM LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited, expressed in thousands of US dollars)
 
ASSETS
      September 30 2013   December 31 2012
Current assets           
  Cash and cash equivalents     $ 33,550   $ 33,740
  Restricted cash     7,109    5,000
  Accounts receivable     55,339    35,603
  Inventory     35,021    23,517
  Deposits and prepaid expenses     45,349    30,265
  Financial commodity contract     -    1,550
      176,368    129,675
Non-current assets           
  Long-term receivable     10,261    11,150
  Financial commodity contracts     2,599    -
  Property, plant and equipment     775,766    681,399
  Exploration and evaluation assets     6,593    3,592
     $ 971,587  $ 825,816
 
LIABILITIES
Current liabilities           
   Accounts payable and accrued liabilities    $ 52,676   $  38,787
   Current portion of long-term debt     1,719    2,089
      54,395    40,876
Non-current liabilities           
  Long-term debt     98,153    97,158
  Decommissioning obligation     18,685    16,747
  Deferred tax liabilities     257,699     188,003
      428,932    342,784
 
SHAREHOLDERS' EQUITY
  Share capital        338,041    334,764
  Contributed surplus       79,672    69,435
  Currency translation reserve       6,763    7,362
  Retained earnings       118,179    71,471
          542,655    483,032
        $ 971,587  $ 825,816

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
      2013   2012   2013   2012
Cash provided by (used in):                  
Operating activities                  
  Net income for the period   $ 19,507 $ 12,274 $ 46,708 $ 31,292
  Depletion and depreciation     25,583   15,644   73,218   43,388
  Accretion of long-term debt     424   1,239   2,402   3,565
  Accretion of decommissioning obligation     259   211   750   608
  Unrealized foreign exchange (gain) loss     48   328   (400)   448
  Deferred income tax expense     25,990   19,472   69,696   52,450
  Share-based payments     1,692   1,953   8,053   7,636
  Unwinding of discount of long-term receivable     (681)   -   (2,122)   -
  Revaluation loss of long-term receivable     681   -   954   -
  Unrealized loss on financial commodity contracts     2,208   1,085   3,588   4,050
  Cash premiums paid for financial commodity contracts     (4,637)   (3,898)   (4,637)   (3,898)
        71,074   48,308   198,210   139,539
  Change in long-term receivable     -   -   2,057   -
  Change in non-cash working capital     5,722   (16,153)   (39,227)   (28,767)
        76,796   32,155   161,040   110,772
Investing activities                  
  Additions to property, plant and equipment     (63,879)   (53,506)   (162,914)   (166,957)
  Additions to exploration and evaluation assets     (2,320)   (20)   (3,001)   (1,902)
  Restricted cash     -   (13,417)   (2,109)   (13,417)
  Change in non-cash working capital     5,260   736   6,792   (3,373)
        (60,939)   (66,207)   (161,232)   (185,649)
Financing activities                  
  Issue of shares for cash     545   -   1,955   12,177
  Financing costs     -   -   (1,994)   (750)
  Change in long-term debt     (9,191)   290   10   36,107
      (8,646)   290   (29)   47,534
Foreign exchange gain on cash and cash equivalents     67   160   31   25
Increase (decrease) in cash and cash equivalents     7,278   (33,602)   (190)   (27,318)
Cash and cash equivalents, beginning of period     26,272   55,297   33,740   49,013
Cash and cash equivalents, end of period   $ 33,550 $ 21,695 $ 33,550 $ 21,695
                   
Interest paid   $ 44 $ 253 $ 2,832 $ 1,975
Interest received   $ 26 $ 43 $ 145 $ 321

Supporting Documents

The full Management Discussion and Analysis (MD&A), Financial Statements and updated November corporate presentation are available on www.bankerspetroleum.com. The MD&A and Financial Statements will also be available on www.sedar.com.

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> David French<br/> President and Chief Executive Officer<br/> (403) 513-6930 </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">investorrelations@bankerspetroleum.com</a><br/> Website: <a href="http://www.bankerspetroleum.com/">www.bankerspetroleum.com</a> </p> <p> <b><i>AIM NOMAD:</i></b><br/> Canaccord Genuity Limited<br/> Henry Fitzgerald-O'Connor<br/> +44 207 523 8000 </p> <p> <b><i>AIM BROKER:</i></b><br/> FirstEnergy Capital LLP<br/> Hugh Sanderson / David van Erp<br/> +44 0 207 448 0200 </p>

Products
  • Globe Unlimited

    Digital all access pass across devices. subscribe

  • The Globe and Mail Newspaper

    Newspaper delivered to your doorstep. subscribe

  • Globe2Go

    The digital replica of our newspaper. subscribe

  • Globe eBooks

    A collection of articles by the Globe. subscribe

See all Globe Products

Advertise with us

GlobeLink.ca

Your number one partner for reaching Canada's Influential Achievers. learn more

The Globe at your Workplace
Our Company
Customer Service
Globe Recognition
Mobile Apps
NEWS APP
INVESTING APP
Other Sections