Bankers Petroleum Announces 2015 First Quarter Financial and Operational
Results
Cash Margin of US$23.32/bbl and Q2 Average Production to Date 19,700 bopd
CALGARY, May 7, 2015 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the
"Company") (TSX: BNK, AIM: BNK) is pleased to provide its 2015 first quarter
financial and operational results.
During the quarter, Bankers achieved a cash margin for US$23.32 per barrel and
netback of US$13.62 per barrel. All amounts listed in this news release are in
US dollars unless otherwise stated.
Results at a Glance Three months ended March 31
(US$000s, except as noted) 2015 2014 % change
Financial
Oil revenue 72,404 144,985 (50%)
Net operating income 24,868 92,491 (73%)
Net income 879 24,992 (96%)
Basic (US$/share) 0.003 0.097 (97%)
Diluted (US$/share) 0.003 0.095 (97%)
Funds generated from 24,890 83,109 (70%)
operations
Basic (US$/share) 0.095 0.323 (71%)
Capital expenditures 49,945 59,865 (17%)
Operating
Average production (bopd) 19,767 19,911 (1%)
Average sales (bopd) 20,283 18,435 10%
Average Brent oil price (US$ 53.94 108.21 (50%)
/barrel)
Average realized price (US$/ 39.66 87.39 (55%)
barrel)
Netback (US$/barrel) 13.62 55.75 (76%)
March 31, December 31, 2014 March 31,
2015 2014
Cash and restricted cash 57,842 73,036 56,172
Working capital 174,209 201,325 160,346
Total assets 1,264,256 1,284,846 1,077,580
Long-term debt 98,872 98,276 98,374
Shareholders' equity 718,552 716,536 595,918
Highlights for the quarter ended March 31, 2015 are:
Operational Highlights:
* Average oil production for the three months ended March 31, 2015 was 19,767
barrels of oil per day (bopd) compared to 20,338 bopd in the previous
quarter and 19,911 bopd in the first quarter of 2014.
* Oil sales averaged 20,283 bopd for the first quarter of 2015 compared to
20,619 bopd for the previous quarter and 18,435 bopd for the first quarter
of 2014. Crude oil inventory at March 31, 2015 decreased to 270,000 barrels
compared to 315,500 barrels at December 31, 2014.
* During the first quarter of 2015, capital expenditures were $50 million.
The Company drilled 21 wells during the quarter, comprised of 20 horizontal
production wells and one lateral re-drill in the main area of the
Patos-Marinza oilfield. Capital expenditures were $72 million for the
previous quarter and $60 million for the first quarter of 2014. During the
first quarter of 2015, Bankers reduced its active rig count from three to
two in response to low commodity prices.
Product Margin Highlights:
* For the three months ended March 31, 2015, operating costs and sales and
transportation (S&T) costs, originating from Albanian-based companies and
their employees, were $37 million ($20.48/bbl) compared to $42 million
($21.92/bbl) for the previous quarter and $31 million ($18.41/bbl) for the
first quarter of 2014. Overall, operating and S&T costs improved by 5%, on
a per barrel basis, from the fourth quarter of 2014 to the first quarter of
2015, taking into account the $2.54/bbl impact of excise tax for the first
quarter of 2015 compared to $3.10/bbl for the previous quarter.
* Net operating income (netback) in the first quarter of 2015 was $25 million
($13.62/bbl) compared to $51 million ($27.01/bbl) for the previous quarter
and $92 million ($55.75/bbl) for the first quarter of 2014.
* Cash margin for the first quarter of 2015 was $23.32/bbl compared to $31.30
/bbl in the previous quarter and $55.75/bbl in the first quarter of 2014.
Cash margin represents netback inclusive of the realized gain on commodity
contracts and recovery against an outstanding accounts receivable balance.
Financial Highlights:
* For the first quarter of 2015, revenue was $72 million ($39.66/bbl)
compared to $109 million ($57.29/bbl) in the previous quarter and $145
million ($87.39/bbl) in the first quarter of 2014. Field price realization
represented 74% of the Brent oil benchmark price ($53.94/bbl) for the first
quarter of 2015 compared to 75% of the Brent oil benchmark price ($76.58/
bbl) in the previous quarter and 81% of the Brent oil benchmark price
($108.21/bbl) in the first quarter of 2014. The reduction as a percentage
of Brent compared to the first quarter of 2014 was mainly due to higher
domestic sales during the first quarter of 2015.
* Royalties to the Albanian Government and related entities during the first
quarter of 2015 were $10 million (14% of revenue) compared to $16 million
(15% of revenue) for the previous quarter and $22 million (15% of revenue)
for the first quarter of 2014.
* Funds generated from operations were $25 million ($0.095 per share) for the
first quarter of 2015 compared to $23 million ($0.088 per share) for the
previous quarter and $83 million ($0.323 per share) for the first quarter
of 2014.
* The Company continues to maintain a strong financial position at March 31,
2015, with cash of $58 million and working capital of $174 million. At
March 31, 2015, the Company had drawn $111 million of its $224 million
approved credit facilities. Working capital for December 31, 2014 and March
31, 2014 was $201 million and $160 million, respectively.
* Bankers recognized a $14 million ($7.74/bbl) realized gain on financial
commodity contracts during the first quarter of 2015. The financial
commodity contracts represent 6,000 bopd at a floor price of $80/bbl of
Dated Brent for 2015. At March 31, 2015, the fair value of these contracts
was $42 million
OUTLOOK
The Company continues to execute on its three part strategy to deliver reliable
and repeatable low cost horizontal wells through the primary drilling program,
expanding its product margin through surface-level improvements and accelerate
the enhanced oil recovery program.
The second quarter 2015 quarter-to-date average production is 19,700 bopd from
the Patos-Marinza and Kuçova oilfields in Albania, consistent with the first
quarter average of 19,767 bopd.
Bankers intends to drill eleven (11) horizontal wells in the second quarter;
nine (9) horizontal production wells in the core of the Patos-Marinza field,
one (1) horizontal production well in Kuçova and one (1) horizontal water
disposal well.
Infrastructure and facilities projects in the second quarter include the
ongoing construction of the northern flow line system, scheduled to be
completed in the third quarter, the installation of vapor recovery units and
gas distribution systems to capture and utilize associated gas and the
electrification of well sites. Bankers expects to see further cost savings
throughout 2015 with the maturing of these projects.
The Company will continue to expand on the polymer and water flood program with
four (4) planned conversions in the second quarter. The pace of injector
conversions will be higher in the second half of 2015, following the
installation of associated facilities and pipelines, with up to 20 conversions
in the third and fourth quarters.
The Company intends to issue the second quarter 2015 operational update and
host a conference call on Tuesday, July 14, 2015.
Carbon Dioxide Release - Remediation and Prevention
Following the carbon dioxide release that occurred on April 1, 2015 during the
drilling of a horizontal well, Bankers is focused on two main objectives.
First, coordinate with local community officials to recover the affected area
and return residents to their normal lives through repair work and appropriate
compensation for any damages. Secondly, Bankers has undergone a thorough
technical evaluation of our drilling practices to ensure this does not happen
again. Bankers operates with world-class operational and safety standards; our
highest priority is the health and safety of our employees and the residents of
the communities in which we operate.
Supporting Documents
The full Management Discussion and Analysis (MD&A), Financial Statements and
updated 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 (LOSS)
FOR THE THREE MONTHS ENDED MARCH 31
(Unaudited, expressed in thousands of US dollars, except per share amounts)
2015 2014
Revenues $ 72,404 $ 144,985
Royalties (10,144) (21,948)
62,260 123,037
Realized gain on financial commodity contracts 14,130 -
Unrealized loss on financial commodity contracts (2,039) (465)
74,351 122,572
Operating expenses 23,495 20,170
Sales and transportation expenses 13,897 10,376
General and administrative expenses 4,652 5,872
Contract settlement expenses 355 172
Depletion and depreciation 30,119 26,693
Share-based compensation 1,182 1,468
73,700 64,751
651 57,821
Net finance expense (8,888) (3,813)
Income (loss) before income tax (8,237) 54,008
Deferred income tax recovery (expense) 9,116 (29,016)
Net income for the period 879 24,992
Other comprehensive loss
Currency translation adjustment (1,420) (234)
Comprehensive income (loss) for the period $ (541) $ 24,758
Basic earnings per share $ 0.003 $ 0.097
Diluted earnings per share $ 0.003 $ 0.095
BANKERS PETROLEUM LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited, expressed in thousands of US dollars)
ASSETS
March 31 December 31
2015 2014
Current assets
Cash and cash equivalents $ 52,251 $ 68,036
Restricted cash 5,591 5,000
Accounts receivable 61,415 81,612
Inventory 6,343 10,008
Deposits and prepaid expenses 62,312 62,984
Financial commodity contracts 42,131 44,170
230,043 271,810
Non-current assets
Property, plant and equipment 1,025,558 1,004,508
Exploration and evaluation assets 8,655 8,528
$ 1,264,256 $ 1,284,846
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities $ 46,872 $ 69,285
Current portion of long-term debt 8,962 1,200
55,834 70,485
Non-current liabilities
Long-term debt 98,872 98,276
Decommissioning obligation 26,712 26,147
Deferred tax liabilities 364,286 373,402
545,704 568,310
SHAREHOLDERS' EQUITY
Share capital 364,073 363,670
Contributed surplus 88,563 86,409
Currency translation reserve 2,990 4,410
Retained earnings 262,926 262,047
718,552 716,536
$ 1,264,256 $ 1,284,846
BANKERS PETROLEUM LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31
(Unaudited, expressed in thousands of US dollars)
2015 2014
Cash provided by (used in):
Operating activities
Net income for the period $ 879 $ 24,992
Depletion and depreciation 30,119 26,693
Accretion of long-term debt 250 451
Accretion of decommissioning obligation 315 274
Unrealized foreign exchange gain (778) (45)
Deferred income tax recovery (expense) (9,116) 29,016
Share-based compensation 1,182 1,468
Discount and revaluation of long-term receivable - (205)
Unrealized loss on financial commodity contracts 2,039 465
24,890 83,109
Change in non-cash working capital 7,839 (2,759)
32,729 80,350
Investing activities
Additions to property, plant and equipment (49,818) (59,848)
Additions to exploration and evaluation assets (127) (17)
Restricted cash (591) 2,109
Change in non-cash working capital (5,718) 804
(56,254) (56,952)
Financing activities
Issue of shares for cash 211 3,848
Financing costs - (433)
Change in long-term debt 7,762 (296)
7,973 3,119
Foreign exchange gain (loss) on cash and cash equivalents (233) 58
Increase (decrease) in cash and cash equivalents (15,785) 26,575
Cash and cash equivalents, beginning of period 68,036 24,597
Cash and cash equivalents, end of period $ 52,251 $ 51,172
Interest paid $ 45 $ 73
Interest received $ 96 $ 222
BANKERS PETROLEUM LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited, expressed in thousands of US dollars, except number of common
shares)
Number of Currency
common Contributed translation Retained
shares Share surplus reserve earnings Total
capital
Balance at December 31, 2013 255,681,911 $ 340,305 $ 84,811 $ 6,345 $ 133,214 $ 564,675
Share-based compensation - - 2,637 - - 2,637
Options exercised 1,649,694 5,634 (2,344) - - 3,290
Warrants exercised 200,000 777 (219) - - 558
Net income for the period - - - - 24,992 24,992
Currency translation adjustment - - - (234) - (234)
Balance at March 31, 2014 257,531,605 $ 346,716 $ 84,885 $ 6,111 $ 158,206 $ 595,918
Share-based compensation - - 8,403 - - 8,403
Options exercised 3,352,788 16,170 (6,660) - - 9,510
Warrants exercised 200,000 784 (219) - - 565
Net income for the period - - - - 103,841 103,841
Currency translation adjustment - - - (1,701) - (1,701)
Balance at December 31, 2014 261,084,393 $ 363,670 $ 86,409 $ 4,410 $ 262,047 $ 716,536
Share-based compensation - - 2,346 - - 2,346
Options exercised 100,000 403 (192) - - 211
Net income for the period - - - - 879 879
Currency translation adjustment - - - (1,420) - (1,420)
Balance at March 31, 2015 261,184,393 $ 364,073 $ 88,563 $ 2,990 $ 262,926 $ 718,552
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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.
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