Bankers Petroleum Announces 2015 Second Quarter Financial and Operational Results

Second Quarter Cash Margin of US$29.52/bbl

CALGARY, Aug. 13, 2015 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the "Company") (TSX: BNK, AIM: BNK) is pleased to provide its 2015 second quarter financial and operational results. 

During the quarter, Bankers achieved a cash margin of US$29.52 per barrel and netback of US$23.24 per barrel. All amounts listed in this news release are in US dollars unless otherwise stated.

Results at a Glance

Three months ended June 30

Six months ended June 30

(US$000s, except as noted)

2015

2014

% change

2015

2014

% change

Financial







Oil revenue

85,707

170,531

(50%)

158,111

315,516

(50%)


Net operating income

41,503

106,019

(61%)

66,371

198,510

(67%)


Net income (loss)

(10,462)

27,196

(138%)

(9,583)

52,188

(118%)



Basic (US$/share)

(0.04)

0.11

(136%)

(0.04)

0.20

(120%)



Diluted (US$/share)

(0.04)

0.10

(140%)

(0.04)

0.20

(120%)


Funds generated from operations 

50,230

93,713

(46%)

75,120

176,822

(58%)



Basic (US$/share)

0.19

0.36

(47%)

0.29

0.69

(58%)



Basic (CAD$/share)

0.24

0.40

(40%)

0.36

0.75

(52%)


Capital expenditures

37,567

71,501

(47%)

87,512

131,366

(33%)

Operating








Average production (bopd)

20,050

20,630

(3%)

19,909

20,272

(2%)


Average sales (bopd)

19,626

21,620

(9%)

19,953

20,036

(0%)


Average Brent oil price (US$/barrel)

61.88

109.67

(44%)

57.84

108.93

(47%)


Average realized price (US$/barrel)

47.99

86.68

(45%)

43.78

87.00

(50%)


Netback (US$/barrel)

23.24

53.89

(57%)

18.38

54.74

(66%)


Cash margin (US$/barrel)

29.52

53.89

(45%)

26.39

54.74

(52%)











June 30, 2015

December 31, 2014

June 30, 2014

Cash and restricted cash



39,589

73,036

54,827

Working capital



160,909

201,325

191,023

Total assets



1,257,837

1,284,846

1,150,878

Long-term debt



98,459

98,276

98,198

Shareholders' equity



710,245

716,536

634,708















 

Highlights for the period ended June 30, 2015 are:

Operational Highlights:

  • Average oil production for the three months ended June 30, 2015 was 20,050 barrels of oil per day (bopd) compared to 19,767 bopd in the previous quarter and 20,630 bopd in the second quarter of 2014.  For the six months ended June 30, 2015, average oil production was 19,909 bopd compared to 20,272 bopd for the same period in 2014.
  • Oil sales for the second quarter of 2015 averaged 19,626 bopd compared to 20,283 bopd for the previous quarter and 21,620 bopd for the second quarter of 2014.  Crude oil inventory at June 30, 2015 increased to 307,000 barrels compared to 270,000 barrels at March 31, 2015.  For the six months ended June 30, 2015, oil sales were 19,953 bopd compared to 20,036 bopd for the same period in 2014.
  • Capital expenditures during the second quarter of 2015 were $38 million.  The Company drilled 12 wells during the quarter, comprised of 10 horizontal production wells, one water disposal well and one suspended well at the Patos-Marinza oilfield.  Capital expenditures were $50 million for the previous quarter and $72 million for the second quarter of 2014. 

Product Margin Highlights:

  • For the three months and six months ended June 30, 2015, operating costs and sales and transportation (S&T) costs, originating from Albanian-based companies and their employees, were $32 million ($17.86/bbl) and $69 million ($19.18/bbl), respectively, reduced from $39 million ($19.99/bbl) and $70 million ($19.27/bbl) for the same periods in 2014.  Operating and S&T costs improved by 13%, on a per barrel basis, from the first quarter of 2015 to the second quarter of 2015. 
  • In the second quarter of 2015, net operating income (netback) was $42 million ($23.24/bbl) compared to $25 million ($13.62/bbl) for the previous quarter and $106 million ($53.89/bbl) for the second quarter of 2014.  Net operating income for the six months ended June 30, 2015 was $66 million ($18.38/bbl) compared to $199 million ($54.74/bbl) for the same period in 2014.
  • Cash margin for the second quarter of 2015 was $29.52/bbl compared to $23.32/bbl in the previous quarter and $53.89/bbl in the second quarter of 2014.  Cash margin represents netback inclusive of the realized gain on commodity contracts and recovery against an outstanding accounts receivable balance.  Cash margin for the six months ended June 30, 2015 was $26.39/bbl compared to $54.74/bbl for the same period in 2014.

Financial Highlights:

  • Revenue was $86 million ($47.99/bbl) for the second quarter of 2015, compared to $72 million ($39.66/bbl) in the previous quarter and $171 million ($86.68/bbl) in the second quarter of 2014.  Field price realization represented 78% of the Brent oil benchmark price ($61.88/bbl) for the second quarter of 2015 compared to 74% of the Brent oil benchmark price ($53.94/bbl) in the previous quarter and 79% of the Brent oil benchmark price ($109.67/bbl) in the second quarter of 2014.  The increase, as a percentage of Brent, compared to the previous quarter was mainly due to higher export sales during the second quarter of 2015.  For the six months ended June 30, 2015, revenue was $158 million ($43.78/bbl) compared to $316 million ($87.00/bbl) for the same period in 2014.
  • Royalties to the Albanian Government and related entities during the second quarter of 2015 were $12 million (14% of revenue) compared to $10 million (14% of revenue) for the previous quarter and $25 million (15% of revenue) for the second quarter of 2014.  For the six months ended June 30, 2015, royalties were $22 million (14% of revenue) compared to $47 million (15% of revenue) for the same period in 2014.
  • Funds generated from operations for the second quarter of 2015 were $50 million (US$0.19 per share, CAD$0.24 per share) compared to $25 million (US$0.10 per share, CAD$0.12 per share) for the previous quarter and $94 million (US$0.36 per share, CAD$0.40 per share) for the second quarter of 2014.  Funds generated from operations for the six months ended June 30, 2015 were $75 million (US$0.29 per share, CAD$0.36 per share) compared to $177 million (US$0.69 per share, CAD$0.75 per share) for the same period in 2014.
  • The Company continues to maintain a strong financial position at June 30, 2015, with cash of $40 million and working capital of $161 million.  At June 30, 2015, the Company had drawn $114 million of its $223 million approved credit facilities.  Working capital for December 31, 2014 and June 30, 2014 was $201 million and $191 million, respectively.
  • Bankers recognized realized gains of $10 million ($5.52/bbl) and $24 million ($6.64/bbl) on financial commodity contracts during the three and six months periods ended June 30, 2015, respectively.  The financial commodity contracts represent 6,000 bopd at a floor price of $80/bbl of Dated Brent for 2015.  At June 30, 2015, the fair value of these contracts was $21 million.

OUTLOOK

The Company continues to carry out its 2015 capital program as planned based on an annual average oil price of $50/bbl of Dated Brent by managing spending to cash flow.  Bankers' activities in the third quarter focus on its three part strategy to deliver reliable and repeatable low cost horizontal wells through the primary drilling program, to expand its product margin through surface-level improvements and to accelerate the enhanced oil recovery program.

The 2015 third quarter-to-date average production is 19,500 bopd from the Patos-Marinza and Kuçova oilfields in Albania, slightly lower than the second quarter average of 20,050 bopd.  Twelve (12) horizontal production wells are scheduled for drilling in the third quarter in the main area of the Patos-Marinza oilfield.   

Infrastructure and facilities projects in the third quarter include the final stages of construction of the northern emulsion gathering flow line system, and the inlet vessels at Satellite 3.  When commissioned later in the third quarter, this will complete the main facilities for the northern area of the oilfield.  The Company's second commercial polymer skid is expected to be commissioned within the quarter, supporting the southernmost patterns of the secondary recovery program.  The vapor recovery units at Pad H and Pad D are planned to be completed by the end of the quarter with commissioning in the fourth quarter.  These two projects will capture additional gas to be used to offset diesel, propane and electricity costs.  In addition, the Company expects to begin construction of the high-voltage power line for the water disposal system which will increase power reliability and support future expansion of the water disposal system.

The Company will continue to expand on the polymer and water flood program with one (1) water and five (5) polymer conversions in the third quarter. 

The Company intends to issue the third quarter 2015 operational update and host a conference call on Wednesday, October 7, 2015.

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)

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




Three months ended
June 30


Six months ended
June 30




2015


2014


2015


2014











Revenues


$

85,707

$

170,531

$

158,111

$

315,516

Royalties



(12,306)


(25,178)


(22,450)


(47,126)




73,401


145,353


135,661


268,390

Realized gain on financial commodity contracts



9,856


-


23,986


-

Unrealized loss on financial commodity contracts



(20,798)


(2,307)


(22,837)


(2,772)




62,459


143,046


136,810


265,618











Operating expenses



22,132


24,808


45,627


44,978

Sales and transportation expenses



9,766


14,526


23,663


24,902

General and administrative expenses



5,188


6,097


9,840


11,969

Contract settlement expenses



40


347


395


519

Depletion and depreciation 



30,830


27,983


60,949


54,676

Share-based compensation



721


999


1,903


2,467




68,677


74,760


142,377


139,511




(6,218)


68,286


(5,567)


126,107











Net finance expense



(1,590)


(3,994)


(10,478)


(7,807)











Income (loss) before income tax



(7,808)


64,292


(16,045)


118,300

Deferred income tax recovery (expense)



(2,654)


(37,096)


6,462


(66,112)

Net income (loss) for the period



(10,462)


27,196


(9,583)


52,188











Other comprehensive income (loss)










Currency translation adjustment



115


434


(1,305)


200

Comprehensive income (loss) for the period


$

(10,347)

$

27,630

$

(10,888)

$

52,388











Basic earnings (loss) per share


$

(0.040)

$

0.105

$

(0.037)

$

0.202

Diluted earnings (loss) per share


$

(0.040)

$

0.102

$

(0.037)

$

0.197






















 


BANKERS PETROLEUM LTD.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Unaudited, expressed in thousands of US dollars)


ASSETS







June 30
2015


December 31
2014

Current assets









Cash and cash equivalents 





$

33,817

$

68,036

Restricted cash






5,772


5,000

Accounts receivable






87,161


81,612

Inventory






6,132


10,008

Deposits and prepaid expenses






61,226


62,984

Financial commodity contracts






21,333


44,170







215,441


271,810

Non-current assets









Property, plant and equipment






1,033,741


1,004,508

Exploration and evaluation assets






8,655


8,528






$

1,257,837

$

1,284,846


LIABILITIES

Current liabilities










Accounts payable and accrued liabilities





$

42,465

$

69,285


Current portion of long-term debt






12,067


1,200







54,532


70,485

Non-current liabilities









Long-term debt






98,459


98,276

Decommissioning obligation






27,661


26,147

Deferred tax liabilities






366,940


373,402







547,592


568,310


SHAREHOLDERS' EQUITY

Share capital






365,045


363,670

Contributed surplus






89,631


86,409

Currency translation reserve






3,105


4,410

Retained earnings






252,464


262,047







710,245


716,536






$

1,257,837

$

1,284,846













 


BANKERS PETROLEUM LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, expressed in thousands of US dollars)



Three months ended
June 30


Six months ended
June 30




2015


2014


2015


2014

Cash provided by (used in):










Operating activities











Net income (loss) for the period


$

(10,462)

$

27,196

$

(9,583)

$

52,188


Depletion and depreciation



30,830


27,983


60,949


54,676


Accretion of long-term debt



250


598


500


1,049


Accretion of decommissioning obligation



321


272


636


546


Unrealized foreign exchange loss



5,118


109


4,340


64


Deferred income tax (recovery) expense



2,654


37,096


(6,462)


66,112


Share-based compensation



721


999


1,903


2,467


Discount and revaluation of long-term receivable



-


-


-


(205)


Unrealized loss on financial commodity contracts



20,798


2,307


22,837


2,772


Cash premiums paid for financial commodity contracts



-


(2,847)


-


(2,847)




50,230


93,713


75,120


176,822


Change in non-cash working capital



(26,856)


(33,979)


(19,017)


(36,738)




23,374


59,734


56,103


140,084

Investing activities











Additions to property, plant and equipment



(37,567)


(71,250)


(87,385)


(131,098)


Additions to exploration and evaluation assets



-


(251)


(127)


(268)


Restricted cash



(181)


(5,000)


(772)


(2,891)


Change in non-cash working capital



(7,216)


1,694


(12,934)


2,498




(44,964)


(74,807)


(101,218)


(131,759)

Financing activities











Issue of shares for cash



511


9,212


722


13,060


Financing costs



-


(2)


-


(435)


Change in long-term debt



2,505


(600)


10,267


(896)




3,016


8,610


10,989


11,729

Foreign exchange gain (loss) on cash and cash equivalents



140


118


(93)


176

Increase (decrease) in cash and cash equivalents



(18,434)


(6,345)


(34,219)


20,230

Cash and cash equivalents, beginning of period



52,251


51,172


68,036


24,597

Cash and cash equivalents, end of period


$

33,817

$

44,827

$

33,817

$

44,827











Interest paid


$

3,095

$

3,358

$

3,140

$

3,431

Interest received


$

55

$

52

$

151

$

274












 

BANKERS PETROLEUM LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited, expressed in thousands of US dollars, except number of common shares)



Number of
common
 shares


Share capital


Contributed

 surplus


Currency

 translation

 reserve


Retained

earnings


Total

Balance at December 31, 2013


255,681,911

$

340,305

$

84,811

$

6,345

$

133,214

$

564,675














Share-based compensation


-


-


4,587


-


-


4,587

Options exercised


4,613,648


20,312


(8,377)


-


-


11,935

Warrants exercised


400,000


1,561


(438)


-


-


1,123

Net income for the period


-


-


-


-


52,188


52,188

Currency translation adjustment


-


-


-


200


-


200

Balance at June 30, 2014


260,695,559

$

362,178

$

80,583

$

6,545

$

185,402

$

634,708














Share-based compensation


-


-


6,453


-


-


6,453

Options exercised


388,834


1,492


(627)


-


-


865

Net income for the period


-


-


-


-


76,645


76,645

Currency translation adjustment


-


-


-


(2,135)


-


(2,135)

Balance at December 31, 2014


261,084,393

$

363,670

$

86,409

$

4,410

$

262,047

$

716,536














Share-based compensation


-


-


3,875


-


-


3,875

Options exercised


339,935


1,375


(653)


-


-


722

Net loss for the period


-


-


-


-


(9,583)


(9,583)

Currency translation adjustment


-


-


-


(1,305)


-


(1,305)

Balance at June 30, 2015


261,424,328

$

365,045

$

89,631

$

3,105

$

252,464

$

710,245

 

------------

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/Wei Loon Yap, +44 0 207 523 8000; AIM BROKER: FirstEnergy Capital LLP, Hugh Sanderson / David van Erp, +44 0 207 448 0200

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