Bankers Petroleum Announces 2013 Financial Results
$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
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
Bankers made several key financial and operational achievements during
-- 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.
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
-- 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.
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
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
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.