Bankers Petroleum announces 2012 financial results
16% increase in Oil Sales and 30% increase in Cash Flow
CALGARY, March 15, 2013 /PRNewswire/ – Bankers Petroleum Ltd. (“Bankers” or the
“Company”) (TSX: BNK) (AIM: BNK) is pleased to provide its 2012
In 2012, Bankers accomplished several key achievements including record
production and cash flow. The Company also invested $222.7 million in
capital expenditures during 2012.
Results at a Glance(US$000, except as noted) Year ended December 31 Change 2012 2011 (%) Oil revenue 432,138 339,918 27 Net operating income 218,246 169,653 29 Net income 34,413 35,996 (4) Per share - basic ($) 0.136 0.146 (7) - diluted ($) 0.136 0.141 (4) Funds generated from 192,589 30 operations 147,940 Per share - basic ($) 0.763 0.559 36 Capital expenditures 222,663 242,754 (8) Average sales (bopd) 14,808 12,784 16 Average price ($/barrel) 79.73 72.84 9 Netback ($/barrel) 40.27 36.36 11 December 31 2012 2011 Cash and deposits 38,740 54,013 Working capital 88,799 80,282 Total assets 825,816 661,216 Long-term debt 97,158 46,692 Shareholders' equity 483,032 412,679
-- Average oil production was 15,020 barrels of oil per day (bopd) 15% higher than 2011 average production of 13,051 bopd. -- Oil sales averaged 14,808 bopd, compared to 12,784 bopd in 2011, an increase of 16%, primarily as a result of the Company's ongoing horizontal drilling program along with continuation of well reactivations. -- Revenue increased by 27% to $432.1 million ($79.73/bbl) from $339.9 million ($72.84/bbl) in 2011. Field price realization represented 71% of the Brent oil price ($112/bbl) as compared to 65% of the Brent price ($111/bbl) in 2011. -- Royalties to the Albanian Government and related entities were $78.4 million, 23% higher than $63.9 million for 2011. -- Operating and sales and transportation costs, originating from Albanian-based companies and their employees, were $135.5 million, compared with $106.3 million for 2011. -- The Company recorded net operating income (netback) of $218.2 million ($40.27/bbl), an increase of 29% compared to $169.7 million ($36.36/bbl) in 2011. -- Funds generated from operations were $192.6 million, a 30% increase compared to $147.9 million for 2011. The fourth quarter of 2012 represents the first time that funds generated from operations of $53.0 million, nearly covered capital expenditures of $53.8 million. -- The Original Oil in Place (OOIP) resource assessment in Albania at year-end was 5.4 billion barrels compared to 8.0 billion barrels in 2011. Reserves on a proved basis were 139.4 million barrels compared to 172.4 million barrels in 2011. On a proved plus probable basis, reserves were 225.7 million barrels compared to 267.1 million barrels in 2011. The corresponding net present value (NPV) after tax (discounted at 10%) of the proved plus probable reserves was $1.9 billion at year-end compared to $2.0 billion in 2011. -- Capital expenditures were $222.7 million compared to $242.8 million in 2011. A total of 128 wells were drilled, including 112 horizontal production wells, seven lateral re-drills, four vertical core delineation wells, and four water disposal wells in the Patos-Marinza field, plus one exploration well in Block "F". In 2011, 84 total wells were drilled. -- Several Patos-Marinza crude oil sales agreements, representing the majority of the export volumes for 2013 are priced at an average of 80% of the Brent oil benchmark, an increase of 14% over the 2012 oil price of 71% of Brent oil. -- Data collection and analysis for secondary and enhanced recovery planning continued in 2012 with the objective to identify the most suitable reservoir layers and areas of the field to initiate water flood, polymer flood and enhanced oil recovery programs, starting in 2013. -- With data collected from the first thermal pilot and additional information including special core analysis of the expanded 2012 coring program, prospect areas are being selected and evaluated to design a second thermal pilot. -- Block "F" contains several seismically defined structural and amplitude anomalies prospective for oil and natural gas. The first exploration well was drilled in 2012 and the second exploration location has been selected and site construction is underway and this well is expected to spud in the second quarter of 2013. -- The central treatment facility (CTF) is being expanded with construction of third crude oil sales tank to increase storage capacity and improve operational flexibility in the Patos-Marinza field. -- Planning and construction for a new satellite facility in the north-central area of the field is also underway for scheduled completion in the third quarter of 2013. This facility, along with additional cascade treating facilities and in-field flow-lines, will improve crude oil treating performance in the field. -- Planning and application to gain preliminary approvals for the second phase of the crude oil sales pipeline, extending 35 kilometer from Fier to the export terminal at Vlore, is underway and will continue through 2013. -- Environmental legacy clean-up as part of the water control program continues to improve the condition of the oilfield and demonstrate improvement in oil rates and reduced water-cuts in wells and areas affected by water influx issues. Over 220 existing wells were isolated in 2012. -- The Company has initiated design and construction of a commercial scale sludge treatment operation to help reclaim oil from the sludge on old leases and from ecological pits in the production area as part of on-going lease clean-up activities. -- The Company continues to maintain a strong financial position at December 31, 2012 with cash of $38.7 million and working capital of $88.8 million. Cash and working capital for December 31, 2011 was $54.0 million and $80.3 million, respectively. -- The Company is in the final approval stages regarding its credit facility expansion with the International Finance Corporation (IFC) and European Bank for Reconstruction and Development (EBRD), its existing reserve-based lenders. It is expected that the new credit facility will envelope the existing $110 million facility, resulting in a new facility having similar terms as the original. The original 2009 facility had a six-year term with repayments scheduled in the latter three years. -- In August 2012, the Company entered into a financial commodity contract representing 4,000 bopd at a floor price of $80/bbl Brent for 2013. -- The Company continues to challenge assessments from the Albanian Government Tax Directorate through the Albanian Courts. In addition to the success in setting aside a recently introduced separate assessment of excise tax on the Company's importation and use of diluent, over the past few months, the Courts have ruled in favor of Bankers for all other cases heard, including the carbon and circulation taxes on diluent imports, which resulted in recent assessments to the Company totalling over $17 million. The Company is now preparing to continue its defense from various levels of appeals.
First quarter 2013 year-to-date average production is 16,850 bopd.
Bankers intends to issue the first quarter 2013 operational update and
host conference call on Friday, April 5, 2013.
The Company’s capital program in 2013 will be $247 million, fully funded
from projected cash flow based on an average $102.50 Brent oil price.
The work program and budget will include the following:
-- Drilling of approximately 120 horizontal and vertical wells with 70-80% of the wells focused on increasing production and 20-30% focused on data collection for improved secondary and tertiary recovery techniques in the Patos-Marinza oilfield. -- Continuing the water control and environmental clean-up program with over 200 legacy vertical well isolations to improve new well performance and expanding water disposal capacity with additional wells. -- Initiating water flood and polymer flood operations and drilling additional core wells for assessing future thermal development plans. -- Progressing with social and environmental impact assessments and preliminary approvals for construction of the 35 kilometer second phase of the 70,000 bopd crude oil sales pipeline from the Fier Hub to the Vlore export terminal. -- Drilling new wells and expanding water flood activities at the Kuçova oilfield. -- Drilling an exploration well on Block "F" and identification of further prospects. -- Continuing with the environmental stewardship and social initiatives in our area of operations.
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 YEARS ENDED DECEMBER 31 (Expressed in thousands of US dollars, except per share amounts) 2012 2011 Revenues $ 432,138 $ 339,918 Royalties (78,361) (63,941) 353,777 275,977 Realized loss on financial commodity contracts (6,588) - Unrealized gain (loss) on financial commodity contracts 556 (2,904) 347,745 273,073 Operating expenses 77,953 60,864 Sales and transportation expenses 57,578 45,460 General and administrative expenses 16,050 13,773 Depletion and depreciation 65,937 40,367 Share-based payments 11,205 11,041 228,723 171,505 119,022 101,568 Net finance expense 19,594 6,223 Income before income tax 99,428 95,345 Deferred income tax expense (65,015) (59,349) Net income for the year 34,413 35,996 Other comprehensive income Currency translation adjustment 953 315 Comprehensive income for the year $ 35,366 $ 36,311 Basic earnings per share $ 0.136 0.146 Diluted earnings per share $ 0.136 $ 0.141
BANKERS PETROLEUM LTD. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS AT DECEMBER 31 (Expressed in thousands of US dollars) ASSETS 2012 2011 Current assets Cash and cash equivalents $ 33,740 $ 49,013 Restricted cash 5,000 5,000 Accounts receivable 35,603 56,006 Inventory 23,517 14,412 Deposits and prepaid expenses 30,265 17,463 Financial commodity contracts 1,550 3,684 129,675 145,578 Non-current assets Long-term receivable 11,150 - Property, plant and equipment 681,399 514,184 Exploration and evaluation assets 3,592 1,454 $ 825,816 $ 661,216 LIABILITIES Current liabilities Accounts payable and accrued liabilities $ 38,787 $ 52,109 Current portion of long-term debt 2,089 13,187 40,876 65,296 Non-current liabilities Long-term debt 97,158 46,692 Decommissioning obligation 16,747 13,561 Deferred tax liabilities 188,003 122,988 342,784 248,537 SHAREHOLDERS' EQUITY Share capital 334,764 318,021 Warrants - 1,540 Contributed surplus 69,435 49,651 Currency translation reserve 7,362 6,409 Retained earnings 71,471 37,058 483,032 412,679 $ 825,816 $ 661,216
BANKERS PETROLEUM LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31 (Expressed in thousands of US dollars) 2012 2011 Cash provided by (used in): Operating activities Net income for the year $ 34,413 $ 35,996 Depletion and depreciation 65,937 40,367 Amortization of deferred financing - costs 734 Accretion of long-term debt 4,791 2,555 Accretion of decommissioning 829 obligation 460 Unrealized foreign exchange loss 636 1,122 Deferred income tax expense 65,015 59,349 Share-based payments 11,205 11,041 Discount of long-term receivable 7,629 - Realized loss on financial commodity 6,588 contracts - Unrealized (gain) loss on financial (556) commodity contracts 2,904 Cash premiums paid for financial (3,898) commodity contracts (6,588) 192,589 147,940 Change in long-term receivable (18,779) - Change in non-cash working capital (12,064) (15,743) 161,746 132,197 Investing activities Additions to property, plant and (220,525) equipment (241,300) Additions to exploration and (2,138) evaluation assets (1,454) Restricted cash - (3,500) Change in non-cash working capital (2,762) 6,786 (225,425) (239,468) Financing activities Issue of shares for cash 13,555 5,783 Financing costs (750) (30) Increase in long-term debt 35,537 44,543 Share issue costs - (167) 48,342 50,129 Foreign exchange gain (loss) on cash and cash equivalents 64 (464) Decrease in cash and cash equivalents (15,273) (57,606) Cash and cash equivalents, beginning of year 49,013 106,619 Cash and cash equivalents, end of year $ 33,740 $ 49,013 Interest paid $ 4,788 $ 2,362 Interest received $ 438 $ 574
BANKERS PETROLEUM LTD. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Expressed in thousands of US dollars, except number of common shares) Number of Currency common Share Contributed translation Retained shares capital Warrants surplus reserve earnings Total Balance at 309,379 28,135 $ $ 1,062 $ 346,267 December 31, 2010 244,794,990 $ $ 1,597 $ 6,094 Share-based - 24,485 - 24,485 payments - - - Options 8,348 (2,969) - 5,379 exercised 2,728,446 - - Warrants 461 - - 404 exercised 174,333 (57) - Share issue (167) - - - (167) costs - - Net income - - - 35,996 35,996 for the year - - Currency - - - 315 translation adjustment - - 315 Balance at 318,021 49,651 $ $ 37,058 $ 412,679 December 31, 2011 247,697,769 $ $ 1,540 $ 6,409 Share-based - 21,432 - 21,432 payments - - - Options 4,147 (1,655) - 2,492 exercised 1,457,890 - - Warrants 12,596 - - 11,063 exercised 4,672,991 (1,533) - Warrants - 7 - - expired - (7) - Net income - - 34,413 34,413 for the year - - - Currency - - - 953 translation adjustment - - 953 Balance at 334,764 69,435 $ $ 71,471 $ 483,032 December 31, 2012 253,828,650 $ $ - $ 7,362
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
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
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
Review by Qualified Person
This release was reviewed by Suneel Gupta, Executive Vice President and
COO of Bankers Petroleum Ltd., who is a “qualified person” under the
rules and policies of AIM in his role with the Company and due to his
training as a professional petroleum engineer (member of APEGGA) with
over 20 years’ experience in domestic and international oil and gas
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.