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Bankers Petroleum Announces 2013 Financial Results

March 13, 2014

$45 Million Free Cash Flow and 23% Increase in Oil Sales

CALGARY, March 13, 2014 /PRNewswire/ – Bankers Petroleum Ltd. (“Bankers” or the
“Company”) (TSX: BNK) (AIM: BNK) is pleased to provide its 2013
financial results.

In 2013, Bankers attained several key accomplishments including its
first year of free cash flow, record oil production and sales. The
Company invested $234 million in capital expenditures during 2013. All
amounts listed below are in US dollars unless otherwise stated.


    Results at a Glance                                             

    ($000s, except as noted)                      Year ended December 31

    Results at a Glance                           2013      2012      2011

    Financial                                                             

      Oil revenue                              566,386   432,138   339,918

      Net operating income                     316,558   218,246   169,653

      Net income                                61,743    34,413    35,996

        Per share - basic (US$)                   0.24      0.14      0.15

                  - diluted (US$)                 0.24      0.14      0.14

      Funds generated from operations          279,601   192,589   147,940

        Per share - basic (US$)                   1.10      0.76      0.60

      Capital expenditures                     234,243   222,663   242,754

    Operating                                                             

      Average sales (bopd)                      18,173    14,808    12,784

      Average Brent oil price ($/barrel)        108.66    111.67    111.26

      Average realized price ($/barrel)          85.39     79.73     72.84

      Netback ($/barrel)                         47.73     40.27     36.36

                                                          December 31

                                                  2013      2012      2011

    Cash and deposits                           31,706    38,740    54,013

    Working capital                            134,094    88,799    80,282

    Total assets                             1,007,148   825,816   661,216

    Long-term debt                              98,150    97,158    46,692

    Shareholders' equity                       564,675   483,032   412,679

Highlights

Bankers made several key financial and operational achievements during
2013:

Financial Highlights

        --  In 2013, revenue increased by 31% to $566 million ($85.39/bbl)
            from $432 million ($79.73/bbl) in 2012.  Field price
            realization represented 79% of the Brent oil benchmark price
            ($108.66/bbl) as compared to 71% of the Brent price
            ($111.67/bbl) in 2012.
        --  Royalties to the Albanian Government and related entities were
            $94 million (17% of revenue) compared to $78 million (18% of
            revenue) for 2012.
        --  Funds generated from operations were $280 million, a 45%
            increase compared to $193 million for 2012.  2013 represents
            the first year that funds generated from operations exceeded
            annual capital expenditures of $234 million.
        --  The Company continues to maintain a strong financial position
            at December 31, 2013 with cash of $32 million and working
            capital of $134 million.  Cash and working capital at December
            31, 2012 was $39 million and $89 million, respectively.
        --  In May 2013, both the International Finance Corporation (IFC)
            and European Bank for Reconstruction and Development (EBRD)
            approved an extension of the Company's existing credit facility
            to September 2020.  No repayments are required until September
            2017, from which time the facility amount will decrease by 25%
            annually.  Collectively, the revolving loan facilities have
            increased to $200 million from $100 million at year-end 2012.
        --  In July 2013, the Company entered into financial commodity
            contracts representing 6,000 bopd at a floor price of $80/bbl
            Brent for 2014.

Primary Drilling Program Highlights

        --  Average oil production from the Patos-Marinza oilfield was
            18,169 barrels of oil per day (bopd) in 2013, 21% higher than
            the 2012 average production of 15,020 bopd.  Average oil
            production for the first quarter of 2014 to-date is
            approximately 19,800 bopd.
        --  Oil sales averaged 18,173 bopd compared to 14,808 bopd in 2012,
            an increase of 23%, primarily as a result of the Company's
            ongoing horizontal drilling and recompletion programs, focused
            on bringing high productivity wells on stream.
        --  Capital expenditures were $234 million compared to $223 million
            in 2012.  A total of 146 wells were drilled, including 135
            horizontal production wells and 10 lateral re-drills in the
            Patos-Marinza field, plus one exploration well in Block "F".  A
            total of 128 wells were drilled in 2012.

Expansion of Product Margin Highlights

        --  Operating and sales and transportation costs, originating from
            Albanian-based companies and their employees, were $156 million
            ($23.44/bbl) compared to $136 million for 2012 ($25.00/bbl).
        --  For the year ended December 31, 2013, the Company recorded net
            operating income (netback) of $317 million ($47.73/bbl), an
            increase of 45% compared to $218 million ($40.27/bbl) in 2012.
        --  The average realized price in 2013 for Patos-Marinza crude oil
            was 79% of the Brent oil benchmark, an increase of 11% over the
            2012 oil price of 71% of Brent.
        --  The Company continued to focus on key infrastructure projects
            aimed at reducing cost and optimizing operations in the field,
            including maintenance turnaround of major treating facilities.
            Several cascade tank systems on individual well pads have been
            completed and both a new sludge handling and satellite treating
            facility are in the final stages of construction and will
            commence operation in 2014.  Additional work on flow-lines,
            sour treatment facilities and cascade systems continue.
            Optimization of the treating process has significantly reduced
            the diluent blend and has improved the sales specification of
            the crude oil.
        --  The technical review, including route selection, surface land
            access and social and environmental impact assessments for the
            second phase of the crude oil pipeline from the Fier Hub to the
            export terminal at Vlore is underway.  Expansion of the
            Petrolifera Italo Albanese (PIA) Vlore Terminal is under design
            for additional storage and shipping channel dredging.

Other Highlights in 2013

        --  In 2013, Bankers invested $6 million in environmental and
            social initiatives; the Company has invested over $20 million
            in environmental and social initiatives since 2009.
        --  The Oil Initially in Place (OIIP) resource assessment in
            Albania at year-end was 5.4 billion barrels, consistent with
            the OIIP at the end of 2012.  Reserves on a proved basis were
            147 million barrels, 5% higher than 139 million barrels at
            year-end 2012.  On a proved plus probable basis, reserves were
            232 million barrels, an increase of 3% compared to 226 million
            barrels at year-end 2012.  The corresponding net present value
            (NPV) after tax (discounted at 10%) of the proved plus probable
            reserves increased by 20% to $2.2 billion at year-end compared
            to $1.9 billion in 2012.
        --  The Company continues Enhanced Oil Recovery (EOR) techniques,
            monitoring and expanding on its water flood and polymer flood
            patterns.  Initial production response in the Lower Driza (D5
            reservoir sand) is expected in the first half of 2014, as the
            first two polymer injectors commenced in this zone early 2013.
            Injection performance has been maintained at target rates with
            no premature breakthrough of fluids to offset producers, which
            is indicative of good reservoir conformance.  Reservoir
            pressure is rising and is following current projection models.
            During 2013, Bankers implemented three water flood injectors in
            the Upper Marinza and five polymer flood injectors in three
            separate Lower Driza reservoir sands in the core area of the
            Patos-Marinza field.  Further plans to convert up to 14
            additional wells for polymer and water injection are underway
            in 2014.
        --  Block "F" contains several seismically defined structural and
            amplitude anomalies prospective for oil and natural gas.  The
            second exploration well was drilled in 2013, completing the
            Company's two well obligation on the block.  The well reached a
            total depth of 2,776 meters, however petrophysical and
            geological information indicated that the well did not
            encounter any hydrocarbon bearing zones that would merit
            testing and was suspended.  Technical evaluation of the block
            will continue and Bankers is reviewing several other prospects
            including a 3D seismic program in 2014.

Appointment of David French to the Board of Directors

Bankers is pleased to announce the appointment of David French,
President and Chief Executive Officer (CEO) of Bankers Petroleum, to
its Board of Directors, effective immediately.

Mr. French joined Bankers as President and CEO a year ago and has led
the Company to reach several milestones in that time, including record
production, free cash flow and operational efficiency improvements. Mr.
French continues to lead the Company with a disciplined approach to
delivering consistent, reliable growth to its shareholders.

Robert Cross, Chairman of the Board commented “Mr. French’s wide range
of international oil and gas experience and direct insight into the
Company will be a valuable asset to the Board. His strong leadership
skills and relationships in the investment community will continue to
have a positive and driving influence on the performance of the Company
for many years to come”.

First Quarter Operational Update

First quarter 2014 year-to-date average production is 19,800 bopd.
Bankers intends to issue the first quarter 2014 operational update and
host a conference call on Tuesday, April 8, 2014.

Outlook

The Company’s capital program in 2014 will be $313 million, funded from
projected cash flow and existing cash based on an average $100 per
barrel Brent oil price. The work program and budget will include the
following:

        --  Drilling of 150 - 170 horizontal and vertical wells with 80 -
            90% of the wells focused on increasing production and 10 - 20%
            focused on delineation and data collection for improved
            development and recovery performance in the Patos-Marinza
            oilfield.
        --  Expansion of the water flood and polymer flood programs with
            the addition of up to 14 conversions as well as testing and
            evaluation of the existing patterns implemented in 2013.
        --  Continued focus on operational efficiencies in the field to
            expand product margins including gas gathering, emulsion
            flow-lines, satellite treating facilities, storage tanks, and
            field electrification.
        --  Continued management of offset existing wellbores for
            observation, water control, and suspension as well as expanding
            the water disposal system to manage the increased development.
        --  Planning and design of sales infrastructure expansion on the
            second phase crude oil pipeline from the Fier Hub facilities to
            the Vlore Port and increased storage and shipping channel
            dredging at the port.
        --  Drilling of two horizontal wells at the Kuçova oilfield and
            reactivation of existing vertical wells.
        --  Acquisition of 100 km2 of 3D seismic with 20 km2 on Block "F"
            to further evaluate prospects as part of the second exploration
            phase on the block and 80 km2 in the central and northern
            region of the Patos-Marinza field to further determine the
            deeper and extension potential of the field.
        --  Investment of $7 million on environmental remediation and
            social initiatives as part of a sustained long-term effort to
            improve the physical environment, along with training programs
            and other community initiatives for the residents near the
            Company's operations. 

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 YEARS ENDED DECEMBER 31

         (Expressed in thousands of US dollars, except per share amounts)

                                                           2013        2012

    Revenues                                         $  566,386 $  432,138

    Royalties                                          (94,294)   (78,361)

                                                        472,092    353,777

    Realized loss on financial commodity contracts      (3,898)    (6,588)

    Unrealized gain (loss) on financial commodity       (1,555)        556
    contracts

                                                        466,639    347,745

    Operating expenses                                   88,510     77,953

    Sales and transportation expenses                    67,024     57,578

    General and administrative expenses                  21,363     16,050

    Depletion and depreciation                           99,554     65,937

    Share-based compensation                             11,527     11,205

                                                        287,978    228,723

                                                        178,661   119,022

    Net finance expense                                  18,712     19,594

    Income before income tax                            159,949     99,428

    Deferred income tax expense                        (98,206)   (65,015)

    Net income for the year                              61,743     34,413

    Other comprehensive income (loss)                                     

    Currency translation adjustment                     (1,017)        953

    Comprehensive income for the year                $   60,726 $   35,366

    Basic earnings per share                         $    0.243 $   0.136

    Diluted earnings per share                       $    0.241 $    0.136

                                     BANKERS PETROLEUM LTD.

                   CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

                                        AS AT DECEMBER 31

                         (Expressed in thousands of US dollars)

                                                 ASSETS

                                                 2013            2012

    Current assets                                                   

      Cash and cash equivalents             $    24,597     $  33,740

      Restricted cash                             7,109         5,000

      Accounts receivable                        53,981        35,603

      Inventory                                  38,025        23,517

      Deposits and prepaid expenses              44,956        30,265

      Financial commodity contracts                 734         1,550

                                                169,402       129,675

    Non-current assets                                               

      Long-term receivable                        7,019        11,150

      Property, plant and equipment             823,908       681,399

      Exploration and evaluation assets           6,819         3,592

                                            $ 1,007,148     $ 825,816

                                              LIABILITIES

    Current liabilities                                              

      Accounts payable and accrued          $    33,812     $  38,787
      liabilities

      Current portion of long-term debt           1,496         2,089

                                                 35,308        40,876

    Non-current liabilities                                          

      Long-term debt                             98,150        97,158

      Decommissioning obligation                 22,806        16,747

      Deferred tax liabilities                  286,209       188,003

                                                442,473       342,784

                                      SHAREHOLDERS' EQUITY

    Share capital                               340,305       334,764

    Contributed surplus                          84,811        69,435

    Currency translation reserve                  6,345         7,362

    Retained earnings                           133,214        71,471

                                                564,675       483,032

                                            $ 1,007,148     $ 825,816

                                        BANKERS PETROLEUM LTD.

                             CONSOLIDATED STATEMENTS OF CASH FLOWS

                                  FOR THE YEARS ENDED DECEMBER 31

                            (Expressed in thousands of US dollars)

                                                         2013          2012

    Cash provided by (used in):                                            

    Operating activities                                                   

      Net income for the year                     $    61,743   $    34,413

      Depletion and depreciation                       99,554        65,937

      Accretion of long-term debt                       2,805         4,791

      Accretion of decommissioning obligation           1,019           829

      Unrealized foreign exchange (gain) loss           (756)           636

      Deferred income tax expense                      98,206        65,015

      Share-based compensation                         11,527        11,205

      Discount and revaluation of long-term
      receivable                                        4,687         7,629

      Realized loss on financial commodity
      contracts                                         3,898         6,588

      Unrealized (gain) loss on financial
      commodity contracts                               1,555         (556)

      Cash premiums paid for financial
      commodity contracts                             (4,637)       (3,898)

                                                      279,601       192,589

      Change in long-term receivable                    (556)      (18,779)

      Change in non-cash working capital             (54,403)      (12,064)

                                                      224,642       161,746

    Investing activities                                                   

      Additions to property, plant and
      equipment                                     (231,016)     (220,525)

      Additions to exploration and evaluation
      assets                                          (3,227)       (2,138)

      Restricted cash                                 (2,109)             -

      Change in non-cash working capital                1,851       (2,762)

                                                    (234,501)     (225,425)

    Financing activities                                                   

      Issue of shares for cash                          3,332        13,555

      Financing costs                                 (1,994)         (750)

      Change in long-term debt                          (813)        35,537

                                                          525        48,342

    Foreign exchange gain on cash and cash                191
    equivalents                                                          64

    Decrease in cash and cash equivalents             (9,143)      (15,273)

    Cash and cash equivalents, beginning of            33,740
    year                                                             49,013

    Cash and cash equivalents, end of year        $    24,597   $    33,740

    Interest paid                                 $     5,811   $     4,788

    Interest received                             $       159   $       438

                                                                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     247,697,769   $ 318,021   $   1,540   $    49,651   $     6,409   $  37,058 $ 412,679
    December 31,
    2011

    Share-based              -           -           -        21,432             -           -    21,432
    compensation

    Options          1,457,890       4,147           -       (1,655)             -           -     2,492
    exercised

    Warrants         4,672,991      12,596     (1,533)             -             -           -    11,063
    exercised

    Warrants                 -           -         (7)             7             -           -         -
    expired

    Net income               -           -           -             -             -      34,413    34,413
    for the year

    Currency                 -           -           -             -           953           -       953
    translation
    adjustment

    Balance at     253,828,650   $ 334,764   $       -   $    69,435   $     7,362   $  71,471 $ 483,032
    December 31,
    2012

    Share-based              -           -           -        17,585             -           -    17,585
    compensation

    Options          1,853,261       5,541           -       (2,209)             -           -     3,332
    exercised

    Net income               -           -           -             -             -      61,743    61,743
    for the year

    Currency                 -           -           -             -       (1,017)           -   (1,017)
    translation
    adjustment

    Balance at     255,681,911     340,305           -   $    84,811   $     6,345   $ 133,214 $ 564,675
    December 31,                 $           $
    2013

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.


Source: PR Newswire



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