|
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$/share) |
|
0.003 |
0.095 |
(97%) |
|
Funds generated from operations |
|
24,890 |
83,109 |
(70%) |
|
|
Basic (US$/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$/barrel) |
|
53.94 |
108.21 |
(50%) |
|
Average realized price (US$/barrel) |
|
39.66 |
87.39 |
(55%) |
|
Netback (US$/barrel) |
|
13.62 |
55.75 |
(76%) |
|
|
|
|
|
|
|
|
|
|
|
March 31, 2015 |
December 31, 2014 |
March 31, 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
2015 |
|
December 31
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 capital |
|
surplus |
|
reserve |
|
earnings |
|
Total |
|
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.
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
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