Bankers Petroleum Announces 2014 First Quarter Financial and Operational
Results
Record High Netback of $55.75/bbl and Q2 Average Production to Date 20,150 bopd
CALGARY, May 8, 2014 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the
"Company") (TSX: BNK, AIM: BNK) is pleased to provide its 2014 first quarter
financial and operational results.
During the quarter Bankers achieved record high netbacks of $55.75 per barrel,
and free cash flow of $23 million. All amounts listed below are in US dollars
unless otherwise stated.
Results at a Glance Three months ended March 31
($000s, except as noted) 2014 2013 % change
Financial
Oil revenue 144,985 132,562 9%
Net operating income 92,491 73,165 26%
Net income 24,992 14,177 76%
Basic and diluted ($/share) 0.10 0.06 73%
Funds generated from operations 83,109 65,419 27%
Basic ($/share) 0.32 0.26 23%
Capital expenditures 59,865 47,327 26%
Operating
Average production (bopd) 19,911 16,919 18%
Average sales (bopd) 18,435 16,605 11%
Average Brent oil price ($/ 108.21 112.57 (4%)
barrel)
Average realized price ($/ 87.39 88.70 (1%)
barrel)
Netback ($/barrel) 55.75 48.96 14%
March 31, December 31, 2013 March 31, 2013
2014
Cash and restricted cash 56,172 31,706 39,847
Working capital 160,346 134,094 108,497
Total assets 1,077,580 1,007,148 899,669
Long-term debt 98,374 98,150 99,488
Shareholders' equity 595,918 564,675 501,404
Highlights for the quarter ended March 31, 2014 are:
Primary Drilling Program Highlights:
· Average oil production for the three months ended March 31, 2014 was
19,911 barrels of oil per day (bopd), 3% higher as compared to 19,303 bopd in
the previous quarter and 18% higher than 16,919 bopd in the first quarter of
2013.
· For the first quarter of 2014, oil sales averaged 18,435 bopd
compared to 19,710 bopd for the previous quarter and 16,605 bopd for the first
quarter of 2013. Due to marine weather conditions, an export scheduled at the
end of March was delayed until early April resulting in crude oil inventory
increasing by 43% to 444,000 barrels at March 31, 2014.
· Capital expenditures were $60 million in the first quarter of 2014.
The Company drilled 34 wells during the quarter, comprised of 29 horizontal
production wells, three horizontal lateral re-drill wells and two water
disposal wells in the main area of the Patos-Marinza oilfield. Capital
expenditures were $68 million and $47 million for the previous quarter and the
first quarter of 2013, respectively.
Expansion of Product Margin Highlights:
· For the three months ended March 31, 2014, operating, sales and
transportation costs, originating from Albanian-based companies and their
employees, were $31 million ($18.41/bbl) as compared to $39 million ($21.59/
bbl) for the preceding quarter and $36 million ($24.14/bbl) for the first
quarter of 2013.
· Net operating income (netback) in the first quarter of 2014 and the
fourth quarter of 2013 remained consistent at $92 million, however, on a per
barrel basis, increased 10% to $55.75/bbl from $50.48/bbl. Compared to the
first quarter of 2013, net operating income for the first quarter of 2014
increased 26% from $73 million ($48.96/bbl).
Financial Highlights:
· Revenue for the first quarter of 2014 was $145 million ($87.39/bbl)
compared to $155 million ($85.66/bbl) in the previous quarter and $133 million
($88.70/bbl) in the first quarter of 2013. Field price realization represented
81% of the Brent oil benchmark price ($108.21/bbl) for the first quarter of
2014 compared to 78% of the Brent oil price ($109.24/bbl) in the previous
quarter and 79% of the Brent oil price ($112.57/bbl) in the first quarter of
2013.
· For the first quarter of 2014, royalties to the Albanian Government
and related entities were $22 million (15% of revenue) as compared to $25
million (16% of revenue) in the previous quarter and $23 million (18% of
revenue) for the first quarter of 2013.
· Funds generated from operations for the first quarter of 2014 were
$83 million, a 2% increase compared to $81 million for the previous quarter and
a 27% increase compared to $65 million for the first quarter of 2013.
· The Company continues to maintain a strong financial position at
March 31, 2014, with cash of $56 million and working capital of $160 million.
At March 31, 2014, the Company had drawn $105 million of its $225 million
approved credit facilities. Working capital for December 31, 2013 and March 31,
2013 was $134 million and $108 million, respectively.
Outlook
The Company continues to execute on its three part strategy to deliver steady
and reliable growth through the primary drilling program, expanding its product
margin through surface-level improvements and validating the potential of
polymer and water flood in the field.
The second quarter 2014 quarter-to-date average production is 20,150 bopd from
the Patos-Marinza oilfield in Albania, 1.2% higher than the first quarter
average of 19,911 bopd. Focus in April has been development drilling in the
centre of the field with more wells per pad, leading to a deferral of some
production to the latter half of the quarter. The Company expects overall
production growth for the second quarter to be consistent with guidance.
All six drilling rigs are active in the main area of the oilfield. In the
second quarter, the Company will drill an estimated thirty-nine (39) horizontal
production wells and commence operation of both the third satellite facility
and the sludge treatment facility. Other infrastructure projects include
additional flow lines to reduce infield trucking, new well-pad cascade treating
facilities and construction of the new equipment warehouse.
Bankers will continue to expand on the polymer and water flood program as
planned with up to five (5) additional well conversions to injection in the
second quarter. Early-stage results of the first few patterns will be shared
with the investment community in June.
Effective April 1, 2014, excise tax becomes effective pursuant to the fiscal
changes proposed by the Government of Albania at the end of 2013. Based on the
current diluent blend rate and diesel usage, the expected financial impact will
add approximately $5.00/bbl to the operating and sales and transportation
costs. Mitigation discussions are ongoing with the Government as to how such
current costs will be reflected in cost recovery and offset within the profit
tax framework.
The Company intends to issue the second quarter 2014 operational update and
host a conference call on Tuesday, July 8, 2014.
Supporting Documents
The full Management Discussion and Analysis (MD&A), Financial Statements and
updated March corporate presentation are available on www.bankerspetroleum.com.
The MD&A and Financial Statements will also be available on www.sedar.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)
2014 2013
Revenues $ 144,985 $ 132,562
Royalties (21,948) (23,318)
123,037 109,244
Unrealized loss on financial commodity contracts (465) (1,374)
122,572 107,870
Operating expenses 20,170 21,154
Sales and transportation expenses 10,376 14,925
General and administrative expenses 6,044 5,955
Depletion and depreciation 26,693 23,197
Share-based compensation 1,468 3,258
64,751 68,489
57,821 39,381
Net finance expense (3,813) (1,940)
Income before income tax 54,008 37,441
Deferred income tax expense (29,016) (23,264)
Net income for the period 24,992 14,177
Other comprehensive loss
Currency translation adjustment (234) (352)
Comprehensive income for the period $ 24,758 $ 13,825
Basic earnings per share $ 0.097 $ 0.056
Diluted earnings per share $ 0.095 $ 0.055
BANKERS PETROLEUM LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited, expressed in thousands of US dollars)
ASSETS
March 31 December 31
2014 2013
Current assets
Cash and cash equivalents $ 51,172 $ 24,597
Restricted cash 5,000 7,109
Accounts receivable 66,966 53,981
Inventory 26,068 38,025
Deposits and prepaid expenses 56,386 44,956
Financial commodity contracts 269 734
205,861 169,402
Non-current assets
Long-term receivable 7,224 7,019
Property, plant and equipment 857,659 823,908
Exploration and evaluation assets 6,836 6,819
$ 1,077,580 $ 1,007,148
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities $ 44,315 $ 33,812
Current portion of long-term debt 1,200 1,496
45,515 35,308
Non-current liabilities
Long-term debt 98,374 98,150
Decommissioning obligation 22,548 22,806
Deferred tax liabilities 315,225 286,209
481,662 442,473
SHAREHOLDERS' EQUITY
Share capital 346,716 340,305
Contributed surplus 84,885 84,811
Currency translation reserve 6,111 6,345
Retained earnings 158,206 133,214
595,918 564,675
$ 1,077,580 $ 1,007,148
BANKERS PETROLEUM LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31
(Unaudited, expressed in thousands of US dollars)
2014 2013
Cash provided by (used in):
Operating activities
Net income for the period $ 24,992 $ 14,177
Depletion and depreciation 26,693 23,197
Accretion of long-term debt 451 1,149
Accretion of decommissioning obligation 274 241
Unrealized foreign exchange gain (45) (180)
Deferred income tax expense 29,016 23,264
Share-based compensation 1,468 3,258
Discount and revaluation of long-term receivable (205) (1,061)
Unrealized loss on financial commodity contracts 465 1,374
83,109 65,419
Change in long-term receivable - 1,855
Change in non-cash working capital (2,759) (37,812)
80,350 29,462
Investing activities
Additions to property, plant and equipment (59,848) (47,193)
Additions to exploration and evaluation assets (17) (134)
Restricted cash 2,109 -
Change in non-cash working capital 804 564
(56,952) (46,763)
Financing activities
Issue of shares for cash 3,848 101
Financing costs (433) -
Change in long-term debt (296) 18,337
3,119 18,438
Foreign exchange gain (loss) on cash and cash equivalents 58 (30)
Increase in cash and cash equivalents 26,575 1,107
Cash and cash equivalents, beginning of period 24,597 33,740
Cash and cash equivalents, end of period $ 51,172 $ 34,847
Interest paid $ 73 $ 222
Interest received $ 222 $ 45
BANKERS PETROLEUM LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(Unaudited, expressed in thousands of US dollars, except number of common
shares)
Number of Currency
common Share Contributed translation Retained
shares capital surplus reserve earnings Total
Balance at 253,828,650 $ 334,764 $ 69,435 $ 7,362 $ 71,471 $ 483,032
December 31,
2012
Share-based - - 4,446 - - 4,446
compensation
Options 43,334 171 (70) - - 101
exercised
Net income - - - - 14,177 14,177
for the
period
Currency - - - (352) - (352)
translation
adjustment
Balance at 253,871,984 $ 334,935 $ 73,811 $ 7,010 $ 85,648 $ 501,404
March 31,
2013
Share-based - - 13,139 - - 13,139
compensation
Options 1,809,927 5,370 (2,139) - - 3,231
exercised
Net income - - - - 47,566 47,566
for the
period
Currency - - - (665) - (665)
translation
adjustment
Balance at 255,681,911 $ 340,305 $ 84,811 $ 6,345 $ 133,214 $ 564,675
December 31,
2013
Share-based - - 2,637 - - 2,637
compensation
Options 1,649,694 5,634 (2,344) - - 3,290
exercised
Warrants 200,000 777 (219) - - 558
exercised
Net income - - - - 24,992 24,992
for the
period
Currency - - - (234) - (234)
translation
adjustment
Balance at 257,531,605 $ 346,716 $ 84,885 $ 6,111 $ 158,206 $ 595,918
March 31,
2014
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 takeovers, well reactivations and well
recompletions of the past will continue and success rates will be similar to
those rates experienced for previous well recompletions/reactivations/
development; that further wells taken over and recompleted will produce at
rates similar to the average rate of production achieved from wells
recompletions/reactivations/development in the past; 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, 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:
David French
President and Chief Executive Officer
403-513-6930
Doug Urch
Executive VP, Finance and Chief Financial Officer
403-513-2691
Laura Bechtel
Investor Relations Analyst
403-513-3428
Email: investorrelations@bankerspetroleum.com
Website: www.bankerspetroleum.com
AIM NOMAD:
Canaccord Genuity Limited
Henry Fitzgerald-O'Connor
+44 0 207 523 8000
AIM BROKER:
FirstEnergy Capital LLP
Hugh Sanderson / David van Erp
+44 0 207 448 0200
(BNK.)