Bankers Petroleum Announces 2013 Financial Results
$45 Million Free Cash Flow and 23% Increase in Oil Sales
CALGARY, March 13, 2014 /CNW/ - 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 contracts (1,555) 556
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 liabilities $ 33,812 $ 38,787
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 equivalents 191 64
Decrease in cash and cash equivalents (9,143) (15,273)
Cash and cash equivalents, beginning of year 33,740 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.
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. BNK)