Bankers Petroleum announces third quarter financial and operational results

Horizontal Drilling Update

CALGARY, November 13, 2009 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the "Company") (TSX: BNK, AIM: BNK) is pleased to announce its financial and operating results for the period ended September 30, 2009.

    
    -------------------------------------------------------------------------
                                         Q3 - 2009    Q2 - 2009    Q3 - 2008
    -------------------------------------------------------------------------
    Capital Expenditures ($000)             12,104        6,126       25,502
    -------------------------------------------------------------------------
    Brent Oil Price $/bbl                    68.27        58.79       114.78
    -------------------------------------------------------------------------
    Patos Marinza Oil Price $/bbl            40.71        34.63        62.08
    -------------------------------------------------------------------------
    Operating Costs $/bbl                    10.56         9.90        13.32
    -------------------------------------------------------------------------
    Transportation $/bbl                      4.76         3.45         3.57
    -------------------------------------------------------------------------
    Royalties $/bbl                           9.32         9.28        14.40
    -------------------------------------------------------------------------
    Netback $/bbl                            16.07        12.00        30.79
    -------------------------------------------------------------------------

    HIGHLIGHTS

        -  Production averaged 6,258 bopd, compared to second quarter
           production of 6,383 bopd. The slight drop in production was due to
           restricted production during July caused by water disposal
           infrastructure enhancements, which have since been completed.

        -  Current production is 7,100 bopd with 350 bopd shut-in pending
           well servicing.

        -  Revenue increased 17% to $23.4 million ($40,.71/bbl) in the third
           quarter of 2009 from $20.1 million ($34.63/bbl) during the second
           quarter.

        -  Net operating income (netbacks) increased 33% to $9.3 million
           ($16.07/bbl) in the third quarter from $7.0 million ($12.00/bbl)
           during the second quarter of 2009.

        -  Funds generated from operations increased 23% to $7.4 million in
           the third quarter of 2009 from $6.0 million in the second quarter
           of 2009.

        -  In July 2009, International Finance Corporation (IFC) and the
           European Bank for Reconstruction and Development (EBRD) exercised
           their warrants generating total proceeds of $21.9 million.

        -  Bankers maintained a strong balance sheet with working capital of
           $50.2 million at September 30, 2009 ($61.4 million in cash) as
           compared to working capital of $28.2 million at June 30, 2009.

        -  In July 2009, Bankers commenced export operations from the new
           Port of Vlore export terminal. This facility significantly
           enhances the Company's export operations, provides 80,000 barrels
           of storage capacity and will play a key role in Bankers'
           production growth.

        -  Subsequent to September 30, 2009, 2.7 million November 2009 series
           warrants were exercised generating total proceeds of CAD$6.8
           million. Bankers expects to receive approximately $10.0 million
           from BNK Petroleum Inc. as payment on the note receivable from
           their expected November 13, 2009 equity issue.


    Results at a Glance ($000)               Three months ended September 30
                                             --------------------------------
                                                           2009         2008
    -------------------------------------------------------------------------
    Oil revenue                                          23,441       33,543
    Net operating income                                  9,251       16,318
    Net income                                            1,708        4,876
    Basic and diluted earnings per share                  0.008  0.027/0.026
    Funds generated from operations                       7,371       14,795
    Additions to property, plant and equipment           12,104       25,502

                                                             September 30
                                             --------------------------------
                                                           2009         2008
    -------------------------------------------------------------------------
    Cash and deposits                                    61,386       33,668
    Working capital                                      50,188       17,543
    Total assets                                        292,212      216,978
    Bank loans                                           31,355       27,583
    Other long-term liabilities                          38,358       34,615
    Shareholders' equity                                203,007      131,262
    

Drilling Update

Commencing in July 2009, Bankers initiated its horizontal drilling program to follow up on its successful first horizontal well 5013 drilled in December 2008 that is currently producing at a steady rate of 135 bopd and has produced in excess of 42,000 barrels of oil.

Five horizontal wells have been drilled and completed during the quarter; four oil wells are currently producing at a combined total rate of 500 bopd. Well repairs to shut off crossflow problems adjacent to the fifth well have been completed and the well is currently producing at a rate of 24 bopd with high rates of water production. The Company expects that the oil cut will improve as the cross flow water dries up.

Upgrades on the current drilling rig have been completed and drilling operations resumed last month. Horizontal well 5015 (D4 zone - 440 metre lateral) was drilled and completed as an oil well and will be placed on production this week. The rig is currently drilling horizontal well 5021, moving northwards within the deeper part of the field where a recent vertical completion provided excellent production rates and indicated virgin reservoir pressures. After drilling well 5021, three additional horizontal wells are planned for the 4th quarter 2009. Due to the downtime necessary to upgrade the drilling rig, it is now anticipated that the vertical wells, planned to acquire core information to add in the thermal planning process, will be delayed until January 2010. The second drilling rig, Crosco Skytop 3, has been mobilized and is expected to be in Albania next month.

The Company will continue to drill test horizontal wells in different areas and zones to fully evaluate the field's reserves and production potential. In 2010, the horizontal development drilling program will focus on the highest productivity areas and zones in the field. Detailed mapping has outlined more than 400 horizontal drilling locations to be drilled at the Patos Marinza field over the next few years.

Bankers' third quarter results have now been incorporated into the corporate presentation and will be posted on Bankers' website by November 17, 2009.

Abby Badwi, President and Chief Executive Officer, will host a conference call and webcast on Friday, November 13, 2009 at 7:30 a.m. MDT. For complete details please go to www.bankerspetroleum.com.

    
                                  ---------
    

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 oil field and has a 100% interest in the Kucova oil field. Bankers' shares are traded on the Toronto Stock Exchange and the AIM Market in London, England under the stock symbol BNK.

    
                     MANAGEMENT'S DISCUSSION AND ANALYSIS
    

The following is management's discussion and analysis (MD&A) of Bankers Petroleum Ltd.'s (Bankers or the Company) operating and financial results for the three and nine months periods ended September 30, 2009 compared to the preceding quarter and the corresponding period in the prior year, as well as information and expectations concerning the Company's outlook based on currently available information. The MD&A should be read in conjunction with the unaudited interim financial statements for the three and nine months periods ended September 30, 2009 and the audited financial statements and MD&A for the year ended December 31, 2008. Additional information relating to Bankers, including its Annual Information Form, is on SEDAR at www.sedar.com and on the Company's website at www.bankerspetroleum.com. All dollar values are expressed in U.S. dollars, unless otherwise indicated, and are prepared in accordance with Canadian generally accepted accounting principles (GAAP).

The Company reports its heavy oil production in barrels.

This report is prepared as of November 13, 2009.

NON-GAAP MEASURES

Netback per barrel and its components are calculated by dividing revenue, royalties, operating and sales and transportation expenses by the gross production volume during the period. Netback per barrel is a non-GAAP measure and it is commonly used by oil and gas companies to illustrate the unit contribution of each barrel produced.

Net operating income is similarly a non-GAAP measure that represents revenue net of royalties and operating, sales and transportation expenses. The Company believes that net operating income is a useful supplemental measure to analyze operating performance and provides an indication of the results generated by the Company's principal business activities prior to the consideration of other income and expenses.

Funds generated from operations include all cash from operating activities and are calculated before change in non-cash working capital. Reconciliation to the GAAP measure is as follows:

    
                             Three months ended        Nine months ended
                                 September 30             September 30
                             ------------------------------------------------
    ($000s)                      2009         2008         2009         2008
    -------------------------------------------------------------------------
    Cash provided by
     (used in) operating
     activities                 5,012       13,124         (326)      39,522
    Change in non-cash
     working capital            2,359        1,671       14,960        1,852
                             ---------------------- -------------------------
    Funds generated from
     operations                 7,371       14,795       14,634       41,374
                             ---------------------- -------------------------
                             ---------------------- -------------------------
    

The non-GAAP measures referred to above do not have any standardized meaning prescribed by GAAP and therefore may not be comparable to similar measures used by other companies. Management uses these non-GAAP measurements for its own performance measures and to provide its shareholders and investors with a measurement of the Company's efficiency and of its ability to fund a portion of its future growth expenditures.

CAUTION REGARDING FORWARD-LOOKING INFORMATION

This MD&A offers our assessment of the Company's future plans and operations as of November 13, 2009 and contains forward-looking information. Such information is generally identified by the use of words such as "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward-looking statements. Statements relating to "reserves" or "resources" are also forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the resources and reserves described can be profitably produced in the future. All such statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Management believes the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this AIF should not be unduly relied upon. These statements speak only as of the date hereof.

In particular, this MD&A contains forward-looking statements pertaining to the following:

    
        -  performance characteristics of the Company's oil properties;
        -  crude oil production estimates and targets;
        -  the size of the oil reserves;
        -  capital expenditure programs and estimates;
        -  projections of market prices and costs;
        -  supply and demand for oil;
        -  expectations regarding the ability to raise capital and to
           continually add to reserves through acquisitions and development;
           and
        -  treatment under governmental regulatory regimes and tax laws.
    

These forward looking statements are based on a number of assumptions, including but not limited to: those set out herein and in the Company's Form 51-101F1 Statement of Reserves Data and Other Oil and Gas Information (NI 51-101 Report), availability of funds for capital expenditures, a consistent and improving success rate for well re-completions at Patos Marinza, increasing production as contemplated by the Plan of Development (PoD), stable costs, availability of equipment and personnel when required, continuing favourable relations with Albanian governmental agencies and continuing strong demand for oil.

Actual results could differ materially from those anticipated in these forward-looking statements as a result of the risks and uncertainties set forth below:

    
        -  volatility in market prices for oil and natural gas;
        -  risks inherent in oil and gas operations;
        -  uncertainties associated with estimating oil and natural gas
           reserves;
        -  competition for, among other things, capital, acquisitions of
           reserves, undeveloped lands and skilled personnel;
        -  the Company's ability to hold existing leases through drilling or
           lease extensions;
        -  incorrect assessments of the value of acquisitions;
        -  geological, technical, drilling and processing problems;
        -  fluctuations in foreign exchange or interest rates and stock
           market volatility;
        -  rising costs of labour and equipment;
        -  changes in income tax laws or changes in tax laws and incentive
           programs relating to the oil and gas industry.
    

The Company from time to time updates its forward-looking information based on the events and circumstances that occurred during the period. As a consequence of the recent sharp declines in oil prices the Company has adjusted its capital expenditure program to ensure the commitments are funded by cash provided by operations, cash on hand and available credit.

Readers are cautioned that the foregoing lists of factors are not exhaustive. The forward-looking statements contained in this MD&A are expressly qualified by this cautionary statement.

    
    OVERVIEW & SELECTED QUARTERLY INFORMATION

                             Three months ended        Nine months ended
                                 September 30             September 30
                             ------------------------------------------------
    Results at a Glance
     ($000s, except as noted)    2009       2008*        2009       2008*
    -------------------------------------------------------------------------
    Financial
      Oil revenue              23,441       33,543       56,600       92,377
      Net operating income      9,251       16,318       18,846       47,463
      Net income (loss)         1,708        4,876       (2,463)       6,420
      Basic and diluted
       earnings (loss)
       per share                0.008  0.027/0.026       (0.012) 0.037/0.035
      Funds generated from
       operations               7,371       14,795       14,634       41,374
      Additions to property,
       plant and equipment     12,104       25,502       21,065       56,367
    Operating
      Average production
       (bopd)                   6,258        5,880        6,170        5,646
      Average price
       ($/barrel)               40.71        62.08        33.60        59.71
      Netback
       ($/barrel)               16.07        30.79        11.19        30.68

                                                              September 30
                                                    -------------------------
                                                           2009         2008
                                                    -------------------------
    Cash and deposits                                    61,386       33,668
    Working capital                                      50,188       17,543
    Total assets                                        292,212      216,978
    Bank loans                                           31,355       27,583
    Other long-term liabilities                          38,358       34,615
    Shareholders' equity                                203,007      131,262

    * Excludes results from discontinued U.S. operations.

    Highlights for the quarter ended September 30, 2009 are:

        -  Production averaged 6,258 bopd, an increase of 6% over the third
           quarter of 2008. Production for the nine months ended September
           30, 2009 averaged 6,170 bopd, a 9% increase from 5,646 bopd for
           the comparable 2008 period.

        -  Revenue increased 17% to $23.4 million ($40.71/bbl) in the third
           quarter of 2009 from 20.1 million ($34.63/bbl) during the second
           quarter.

        -  Net operating income (netbacks) increased 33% to $9.3 million
           ($16.07/bbl) in the 2009 third quarter from $7.0 million
           ($12.00/bbl) during the 2009 second quarter.

        -  Funds generated from operations increased 23% to $7.4 million in
           the third quarter of 2009 from $6.0 million over the second
           quarter of 2009.

        -  In July 2009, International Finance Corporation (IFC) and the
           European Bank for Reconstruction and Development (EBRD)
           collectively exercised warrants to purchase 16 million common
           shares of the Company, generating proceeds of $21.9 million.

        -  The Company continues to maintain a strong balance sheet with cash
           of $61 million and working capital of $50.2 million at September
           30, 2009 as compared to working capital of $28.1 million at June
           30, 2009 and $17.5 million at September 30, 2008, respectively.

        -  In July 2009, Bankers commenced export operations from the new
           Port of Vlore export terminal. This facility significantly
           enhances the Company's export operations, provides 80,000 barrels
           of storage capacity and will play a key role in Bankers'
           production growth.

        -  Commencing in July 2009, Bankers recommenced its horizontal
           drilling program to follow up on its successful first horizontal
           well drilled in December 2008. Five new horizontal oil wells were
           drilled during the quarter.


    QUARTERLY SUMMARY

    Below is a summary of Bankers' performance over the last eight quarters.
This summary excludes results from discontinued U.S. operations.

                           2008                          2009
                  -------------- --------------------------------------------
    ($000s, except       Fourth          First         Second          Third
     as noted)          Quarter        Quarter        Quarter        Quarter
    ---------------------------- --------------------------------------------
                          $/bbl          $/bbl          $/bbl          $/bbl
    ---------------------------- --------------------------------------------
    Average
     production
     (bopd)           6,561          5,864          6,383          6,258
    ---------------------------- --------------------------------------------
    Oil revenue   17,877  29.63  13,052  24.73  20,107  34.63  23,441  40.71
    Royalties      4,163   6.69   3,486   6.61   5,389   9.28   5,368   9.32
    Sales and
     transporta-
     tion          2,192   3.63   1,426   2.70   2,003   3.45   2,739   4.76
    Operating
     expenses      7,843  13.54   5,512  10.44   5,748   9.90   6,083  10.56
                 --------------- --------------------------------------------
    Net operating
     income        3,679   5.77   2,628   4.98   6,967  12.00   9,251  16.07
                 --------------- --------------------------------------------
                 --------------- --------------------------------------------



                           2007                          2008
                  -------------- --------------------------------------------
    ($000s, except       Fourth          First         Second          Third
     as noted)          Quarter        Quarter        Quarter        Quarter
    ---------------------------- --------------------------------------------
                          $/bbl          $/bbl          $/bbl          $/bbl
    ---------------------------- --------------------------------------------
    Average
     production
     (bopd)           5,429          5,218          5,826          5,880
    ---------------------------- --------------------------------------------
    Oil revenue   21,398  42.84  24,676  51.96  34,157  64.36  33,543  62.08
    Royalties      2,207   4.42   4,298   9.05   6,601  12.43   7,790  14.40
    Sales and
     transporta-
     tion          1,332   2.67   1,664   3.50   1,727   3.27   1,932   3.57
    Operating
     expenses      5,303  10.93   5,706  12.02   7,693  14.03   7,503  13.32
                 --------------- --------------------------------------------
    Net operating
     income       12,556  24.82  13,008  27.39  18,136  34.63  16,318  30.79
                 --------------- --------------------------------------------
                 --------------- --------------------------------------------



                                 2008                      2009
                             ---------  -------------------------------------
    ($000s, except             Fourth        First       Second        Third
     as noted)                Quarter      Quarter      Quarter      Quarter
                             ---------  -------------------------------------
    Financial
    Funds generated from
     operations                   339        1,265        5,998        7,371
    Net income (loss)          (8,007)      (2,492)      (1,679)       1,708
    Basic/diluted earnings
     (loss) per share(1)       (0.044)      (0.014)      (0.009)       0.008
    General and
     administrative             1,089        1,204        2,079        1,410
    Total assets              214,675      210,674      257,689      292,212
    Capital expenditures       22,011        2,835        6,126       12,104
    Bank loans                 28,125       26,948       32,651       31,355



                                 2007                      2008
                             ---------  -------------------------------------
    ($000s, except             Fourth        First       Second        Third
     as noted)                Quarter      Quarter      Quarter      Quarter
                             ---------  -------------------------------------
    Financial
    Funds generated from
     operations                 9,358        9,488       16,753       14,795
    Net income (loss)          (2,126)         539        1,005        4,876
    Basic/diluted earnings
     (loss) per share(1)       (0.014)       0.003   0.006/0.005       2,157
    General and
     administrative             2,667        2,091         2,034 0.027/0.026
    Basic/diluted earnings
     (loss) per share(1)       (0.014)       0.003   0.006/0.005       2,157
    Total assets              115,039      177,127       201,093     216,978
    Capital expenditures        8,357       13,764        17,100      25,502
    Bank loans                 30,850       30,218        29,004      27,583

    (1) On July 30, 2008, the Company completed the consolidation of its
        shares on the basis of one (1) new post-consolidation share for each
        three (3) pre-consolidation shares. The computations of basic and
        diluted earnings (loss) per share for all the periods presented are
        based on the new number of shares after giving effect to the share
        consolidation.

    DISCUSSION OF OPERATING RESULTS

    Production, Revenue and Netback

                              Three months ended        Nine months ended
                                  September 30             September 30
                          ------------------------- -------------------------
                                 2009         2008         2009         2008
    ----------------------------------------------- -------------------------
    Average production
     (bopd)                     6,258        5,880        6,170        5,646
    Oil revenue ($000)         23,441       33,543       56,600       92,377
      Netback ($/bbl)
    Average price               40.71        62.08        33.60        59.71
    Royalties                    9.32        14.40         8.46        12.08
    Sales and transportation     4.76         3.57         3.66         3.44
    Operating expenses          10.56        13.32        10.30        13.51
    Netback                     16.07        30.79        11.19        30.68
    

Active well counts increased 5% from 185 at the end of second quarter to 194 in September 2009. In addition, the Company took over 29 wells within the Company's areas of operations that were inactive and retained no pre-existing production burden as part of an area consolidation initiative. Average production increased 6% to 6,258 bopd during the third quarter of 2009 compared to 5,880 bopd during the same period in 2008. Production was 6,383 for the second quarter of 2009.

The Company received an average sale price of $40.71/bbl (60% of Brent) compared to $34.63/bbl (59% of Brent) for the second quarter of 2009 and $62.08/bbl (54% of Brent) for the same period in 2008. The benchmark Brent oil prices averaged $68.27/bbl for the third quarter of 2009, compared to $58.79/bbl for the second quarter and $114.78/bbl for the third quarter of 2008.

Oil revenue increased 17% from $20.1 million during previous quarter to $23.4 million in the third quarter of 2009, as a result of more favourable oil prices. Sales were $33.5 million for the third quarter of 2008.

The Company's netback (revenue less royalties, operating, sales and transportation expenses) increased 34% to $16.07/bbl ($40% of the wellhead price) compared to $12.00/bbl (35% of the wellhead price) in the second quarter of 2009. The netback for the third quarter of 2008 was $30.79. The changes in netback were primarily due to the fluctuation in commodity prices.

Royalties

Royalties in Albania are calculated pursuant to the Petroleum Agreement with Albpetrol and consist of a royalty based on Albpetrol's pre-existing production (PEP), a 1% gross overriding royalty (ORR) on new production and a 10% royalty tax on net production (RT). Overall royalties for the current quarter represented 23% of oil revenue, as compared to 27% for the preceding quarter and 19% for the third quarter of 2008. As a percent of revenue, the various royalty components currently represent 14% from PEP, 1% for the ORR and 8% for the RT. The average royalty rate declined during the quarter as more oil was produced from new production compared to the previous quarter. In addition, the increased capital program during the third quarter resulted in a higher capitalization level for the corresponding PEP royalty compared to the second quarter of 2009. Fluctuations in royalty on a per barrel basis are due to changes in the underlying oil prices.

Operating Expenses

Operating expenses increased to $10.56/bbl in the third quarter of 2009 from the preceding quarter of $9.90/bbl, and are significantly lower than $13.32/bbl in the same period of 2008. The fluctuations are mainly due to fluctuations in commodity prices for fuel consumption and well servicing activity levels.

Sales and transportation costs for the quarter increased to $4.76/bbl compared to $3.45/bbl in the second quarter and $3.57/bbl during the same period in 2008 due to increased export sales. Exports accounted for 97% of the total sales in the quarter as compared to 81% in the prior quarter and 52% for the third quarter of 2008. For the current quarter, trucking costs ($2.28/bbl) increased commensurate with the increase in exports, blending costs ($1.28/bbl) increased as a result of using diesel versus diluent, and port fees were ($1.20/bbl) reflective of the new fee structure associated with using the new export facility.

General and Administrative Expenses

General and administrative expenses (G&A) for the quarter were $1.4 million compared to $2.0 million in the preceding quarter and $2.2 million for the same period in 2008. The reduction in G&A resulted from the absence of employee restructuring costs that were incurred in the second quarter of 2009 and the same period in 2008, currency fluctuations and reclassification of bank commitment fees for the period ending September 30, 2009.

During the quarter, the Company capitalized $0.4 million of general and administrative expenses as compared to $0.7 million for the preceding quarter and $0.8 million for the same period in 2008. These expenses were directly related to acquisition, exploration and development activities in Albania.

Non-cash stock-based compensation expense pertaining to options vested and/or granted to officers, directors, employees and service providers was $1.3 million compared to $2.3 million for the preceding quarter and $1.4 million for the same period in 2008. Of this amount $0.9 million was charged to earnings during this quarter, compared to $1.6 million and $1.1 million that were charged to earnings for the preceding period and the period ending September 30, 2008, respectively. The remainder was capitalized.

Depletion, Depreciation and Accretion

Depletion, depreciation and accretion expenses (DD&A) for the quarter ended September 30, 2009 were $3.9 million($6.79/bbl), consistent with $3.9 million ($6.81/bbl) for the preceding quarter and $3.3 million ($5.68/bbl) for the same period in 2008. DD&A expenses correspond to the respective production levels and the impact of capital expenditures relative to the depletable basis. The depletable base at September 30, 2009 includes a provision of $277.4 million for expected future capital programs.

Income Taxes

Future income tax liabilities result from the temporary differences between the carrying value and tax values of its Albanian assets and liabilities. As of September 30, 2009 the net book value of the Albania property, plant and equipment exceeded their tax value by $69.4 million, compared to $63.0 million on December 31, 2008. Applying a tax rate of 50%, the Company recorded a $34.7 million future income tax liability, compared to $31.5 million at the end of 2008. The Company recorded a future income tax expense of $2.6 million for the quarter compared to $1.7 million for the preceding quarter and $4.2 million for the quarter ended September 30, 2008. The fluctuation in future income taxes compared to the second quarter of 2009 and the same period in 2008 was mainly due to the change in net income incurred in the third quarter of 2009.

The cost recovery pool represents deductions for income tax purposes in Albania at a 50% income tax rate. Bankers is presently not required to pay cash taxes in any jurisdiction.

Net Loss and Funds Generated from Operations

The Company recorded net income of $1.8 million ($0.008 per share) during the quarter compared to a net loss of $1.7 million ($0.009 per share) for the second quarter and net income of $4.9 million ($0.027 per share) for the same period in 2008. The net loss for the nine months ended September 30, 2009 was $2.5 million ($0.12 per share) as compared to net income of $6.4 million ($0.037 per share) for the corresponding period in 2008.

Funds generated from operations were $7.4 million for the third quarter compared to $6.0 million in the second quarter and $14.8 million the third quarter of 2008. For the nine months ended September 30, 2009, funds generated from operations were $17.6 million and $41.4 million for the same period in 2008.

OPERATIONS UPDATE

Albania

    
    Patos Marinza Field
    -------------------
    

The Company's focus during the quarter shifted back to the capital development program as the oil price improved and stabilized at a Brent average level above $60 per barrel. Drilling operations were commenced in July with the first of five horizontal wells that were drilled in the quarter. The well re-activation program was initiated during the quarter with re-activation of 10 wells and workover of several other wells. The service rig fleet utilization was increased during the quarter to accommodate the increased activity level to seven service rigs with three of the rigs operating on twenty-four hours. Construction also commenced on the second train of the Central Treatment Facility in order to handle the extra throughput capacity projected for the 2010 development program.

The Company took over 29 in-active wells from Albpetrol during the quarter that did not have any associated pre-existing production burden. These wells are part of consolidation efforts to expand the Company's area of operations and enable focused development execution.

Capital expenditures were $12.1 million during the quarter, an increase of 98% from the previous quarter spending of $6.1 million, but still significantly less than the $25.5 million expenditure in the same quarter in 2008.

Operating expenditures increased marginally during the quarter by 6% to $6.1 million from $5.7 million in the previous quarter for an average production rate of 6,258 bopd. This is still 19% less than the $7.5 million operating expenditures for the same quarter in 2008 as the cost reduction initiatives undertaken in the first half of the year have carried forward into the third quarter of 2009.

In July 2009, Bankers commenced export operations from the new Port of Vlore export terminal. This facility significantly enhances the Company's export operations, provides 80,000 barrels of storage capacity and will play a key role in Bankers production growth. Additionally, utilizing this facility markedly improves the safety and environmental standards associated with exports.

    
    Kuçova Field
    ------------
    

Bankers has made a formal request to Albpetrol and the AKBN (the state regulatory agency) for revisions to the Kucova Licence and Petroleum Agreements to revise the scope of work to a pressure maintenance project and for a 12 month extension of the evaluation period. Approval for the proposed amendments was received from Albpetrol during the quarter, approval is pending from the AKBN.

During the third quarter, Bankers requested the takeover of the F-37 production satellite in the Ferma pool with 12 associated flowlined wells into that group for evaluation. Upon approval, expected in November, the work plan is to prepare one well for water injection, conducting operations to attain reservoir pressure data and conduct injectivity tests to establish reservoir permeability for secondary recovery application. Upon successful testing, injection facilities will be constructed, an injection pump will be ordered and about five wells will be prepared for production or as observation for a waterflood field trial, now likely to occur in early 2010.

Operations and health and safety personnel conducted two field visits of the intended start up area at Kucova Group F-37 in July to conduct a risk assessment of the proposed operations. The assessments included highway and field access routes to the Ferme field, well site assessments, safety and environmental issues, community impact and to provide initial logistics for planning field activity.

Fluid compatibility and fluid-reservoir rock compatibility evaluation work is complete, with acceptable water compatibility, and the core analysis showed good rock characteristic (additional clay mineralogy determination is required).

    
    CAPITAL EXPENDITURES

                                Three months ended        Nine months ended
                                   September 30              September 30
    -------------------------------------------------------------------------
    ($000s)                      2009         2008         2009         2008
    -------------------------------------------------------------------------
    Well re-activations         2,096        7,317        3,991       28,681
    Drilling programs           6,876        8,854        9,752       10,208
    Property acquisitions          98        1,472          216        3,740
    Base program                3,505        5,040        7,940       10,923
    Inventory change             (471)       2,819         (834)       2,815
                          ------------------------- -------------------------
                               12,104       25,502       21,065       56,367
                          ------------------------- -------------------------
                          ------------------------- -------------------------
    

Improvements in commodity prices and the Company's strong financial position, established confidence to re-commence drilling and increase the capital program. Overall, capital expenditures in the third quarter increased to $12.1 million from $6.1 million in the second quarter. During the quarter ended September 30, 2009, Bankers spent $2.1 million on well re-activations compared to $0.8 million during the preceding quarter and $7.3 million during the same period in 2008. The Company incurred $6.9 million on the drilling program (5 new wells) compared to $1.6 million on drilling operations during the second quarter of 2009 and $8.9 million incurred in the same period of 2008. In addition, during the third quarter, Bankers commenced production facility upgrades to accommodate future production increases. The balance represented maintenance-level capital projects and capitalized G&A. At September 30, 2009, the Company has capital inventory of $16.1 million for utilization in future drilling and reactivation programs.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2009, Bankers had working capital of $50.2 million (including cash, cash equivalents and deposits totalling $61.4 million) and long-term bank loans of $7.8 million. At December 31, 2008, the Company had a working capital deficiency of $7.4 million and long-term bank loan of $6.9 million.

Bankers has credit facilities totalling $141.8 million, of which only $31.4 million is currently being utilized. The majority represents a reserve-based long-term financing of $110.0 million from the IFC and EBRD, from which no advances have yet been drawn. The $31.4 million Raiffeisen facility includes a revolving operating loan of $19.6 million and term loans totalling $11.8 million. Repayments of $937,500 were made on the term loans during this quarter.

The Company's approach to managing liquidity is to ensure a balance between capital expenditure requirements and funds generated from operations, available credit facilities and working capital. In recognition of the improvement in the commodity prices and the Company's capital resources, the Company resumed its drilling program in July 2009.

During the nine months ended September 30, 2009, the Company has received total equity proceeds of $63.5 million, primarily from the equity financing in May 2009 ($38.3 million) along with $22.8 million from warrant and $2.3 million from option, exercises.

There were 225 million shares and 228 million shares outstanding as at September 30, 2009 and November 13, 2009 respectively. In addition, the Company has issued 12 million stock options as of September 30, 2009 and November 13, 2009. The outstanding warrants were 9 million and 6 million as of September 30, 2009 and November 13, 2009, respectively. Prior to their expiry on November 10, 2009, 2.7 million warrants (exercisable at CAD$2.49 per share) were exercised and generated proceeds of approximately CAD$6.8 million.

Directors and officers of the Company represent approximately nine percent ownership in the Company, on a fully diluted basis, as of September 30, 2009 and November 13, 2009. The strong ownership position of the directors and officers creates an alignment with shareholders and a team that is dedicated to activities that support future value creation.

In Albania, the Company considers any amounts greater than 60 days as past due. Of the total receivables of $27.1 million in Albania, approximately $14.0 million is due from one domestic customer of which $13.2 million is considered past due. In an effort to collect these receivables, the Company has regular dialogue with this customer; payments totalling $0.5 million were received during the quarter along with an additional $1.5 million in October. The Albanian government continues to own 15% of this customer; the remainder was privatized for $167 million in December 2008. The two refineries owned by this customer are the only ones in Albania and are strategically important to the country. Bankers' management has confidence that these amounts will be collected and has not recorded a loss provision. In the interim, Bankers, as the largest supplier of crude oil to these refineries, has reduced its delivery of oil to this customer and exported additional shipments to its foreign customers. Bankers has expanded its export capacity by way of the expanded shipping terminal completed during the quarter.

Plan of Development

Bankers has no capital expenditure commitment for the Patos Marinza oilfield under the Petroleum Agreement. Bankers annually submits a work program to AKBN which includes the nature and the amount of capital expenditures to be incurred during that year. Significant deviations in this annual program from the Plan of Development will be subject to AKBN approval. The Petroleum Agreement provides that disagreements between the parties will be referred to an independent expert whose decision will be binding. The Company has the right to relinquish a portion or all of the contract area. If only a portion of the contract area is relinquished then the Company will continue to conduct petroleum operations on the portion it retains and the future capital expenditures will be adjusted accordingly.

Commitments

The Company has long-term lease commitments in Canada and Albania. The minimum lease payments for the next four years are $533,000 as follows:

    
    ($000s)                    Canada      Albania        Total
    ------------------------------------------------------------
    2009                           48           40           88
    2010                          191           55          246
    2011                          191            -          191
    2012                            8            -            8
                          --------------------------------------
                                  438           95          533
                          --------------------------------------
                          --------------------------------------
    

The Company has two term loans with a European financial institution, totalling $11.8 million. The 2006 term loan is repayable in equal monthly instalments of $0.3 million ending on November 30, 2011. The principal payments for the 2009 term loan will commence in November 2009 in equal monthly instalments of $74,000 for a 54-month period. Of the amount outstanding, $4.6 million is classified as current and $7.2 million as long-term. Principal repayments of the term loan over the next five years are as follows:

    
    ($000s)
    ------------------------------------------------------------
    2009                                                  1,086
    2010                                                  4,639
    2011                                                  4,014
    2012                                                    889
    2013                                                    889
    2014                                                    296
                                                    ------------
                                                         11,813
                                                    ------------
                                                    ------------
    

PRINCIPAL BUSINESS RISKS

Bankers' business and results of operations are subject to a number of risks and uncertainties, including but not limited to the following:

Exploration, development, production and marketing of oil and natural gas involves a wide variety of risks which include but are not limited to the uncertainty of finding oil and gas in commercial quantities, securing markets for existing reserves, commodity price fluctuations, exchange and interest rate exposure and changes to government regulations, including regulations relating to prices, taxes, royalties and environmental protection. The oil and gas industry is intensely competitive and the Company competes with a large number of companies with greater resources.

Bankers' ability to increase its reserves in the future will depend not only on its ability to develop its current properties but also on its ability to acquire new prospects and producing properties. The acquisition, exploration and development of new properties also require that sufficient capital from outside sources will be available to the Company in a timely manner. The availability of equity or debt financing is affected by many factors many of which are beyond the control of the Company.

Bankers has a significant investment in Albania. There are a number of risks associated with conducting foreign operations over which the Company has no control, including political instability, potential and actual civil disturbances, ability to repatriate funds, changes in laws affecting foreign ownership and existing contracts, environmental regulations, oil and gas prices, production regulations, royalty rates, income tax law changes, potential expropriation of property without fair compensation and restriction on exports. Additional risks that may affect the Company and its operations are set out in its AIF filed under the Company's profile on www.sedar.com.

RELATED PARTY TRANSACTIONS

The Company has a note receivable from BNK Petroleum Inc. (BKX), a related party, in the amount of $11.3 million that is considered to be in the normal course of business. Bankers has no further obligation to increase the note, which is due on October 2012 and accrues interest at LIBOR plus 5.5%. At September 30, 2009, no principal or interest amounts were due. The Company is entitled to receive up to 50% of any future equity financing by BKX and 90% of any increase in BKX's borrowing base, as repayment of this note. During the quarter, the Company received $0.5 million in payment of accrued interest receivable of $0.2 million and principal on the note of $0.3 million. Subsequent to September 30, 2009, BKX expects to complete an equity financing and has agreed to repay approximately $10.0 million towards the note and accumulated interest.

NEW ACCOUNTING STANDARDS

    
    -   Goodwill (Section 3064) - This section applies to goodwill subsequent
        to initial recognition and establishes standards for the recognition,
        measurement, presentation and disclosure of goodwill and intangible
        assets. This new standard has not had a material impact on Bankers'
        consolidated financial statements.

    -   Transition to International Financial Reporting Standards (IFRS) - In
        February 2008 the Canadian Accounting Standards Board confirmed
        January 1, 2011 as the effective date for the requirement to report
        under IFRS along with conversion of comparative 2010 periods. The
        impact of IFRS on our results of operations and future financial
        position is not reasonably determinable at this time. The Company has
        supported staff training programs, has engaged external advisors to
        plan the IFRS initiative and is in the process of completing a
        preliminary assessment of transitional requirements to identify
        expected impacts on the Company. Regular reports on the IFRS
        transition status will be made to Management and the Audit Committee.

    -   Business combinations - In December 2008 the CICA issued the new
        accounting standard 1582, Business Combination replacing Section
        1581. This Section establishes principles and requirements for
        accounting for business combinations. Significant changes include
        determination of the purchase price based on the fair value of shares
        exchanged at the market price on the acquisition or closing date. The
        new guidance also requires that all acquisition related costs be
        expensed as incurred and contingent liabilities are to be measured at
        fair value at acquisition date and re-measured to fair value at each
        reporting period through earnings until settled. In addition,
        negative goodwill is required to be recognized in earnings on the
        acquisition date. The new Section will be applied prospectively
        effective January 1, 2011.
    

INTERNAL CONTROLS

The Company's President and Chief Executive Officer (CEO) and Vice President, Finance and Chief Financial Officer (CFO) are responsible for establishing and maintaining disclosure controls and procedures and internal controls over financial reporting as defined in NI 52-109.

Disclosure controls and procedures have been designed to ensure that information to be disclosed by the Company is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure. The Company's CEO and CFO have evaluated the effectiveness of the disclosure controls and procedures as at September 30, 2009 and have concluded that they provide reasonable assurance that all material information relating to the Company is disclosed in a timely manner.

Internal controls over financial reporting are designed to provide reasonable assurance regarding the reliability of the Company's financial reporting and compliance with generally accepted accounting principles. The CEO and CFO have evaluated the Company's internal controls over financial reporting as at September 30, 2009 based on the framework in "Internal Control Over Financial Reporting - Guidance for Smaller Public Companies" issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and have concluded they are designed and operating effectively to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with GAAP. During the quarter ended September 30, 2009 there have been no changes to the Company's internal controls over financial reporting that will, or are reasonably likely to, materially affect the internal controls over financial reporting.

Because of their inherent limitations, disclosure controls and procedures and internal controls over financial reporting may not prevent or detect misstatements, errors or fraud. Control systems, no matter how well conceived or operated, can provide only reasonable and not absolute assurance that the objectives of the control systems are met.

OUTLOOK

By year-end 2009, Bankers expects to have 11 horizontal wells on production, ten of which were drilled in the second half of 2009. Based on this successful horizontal drilling program, a contract for the second drill rig has now been finalized. The second rig will arrive in mid-December and be ready to commence drilling in January 2010. Bankers expects to drill up to 50 horizontal wells and 4 vertical wells from utilization of both drill rigs in 2010. Discussions are ongoing for the addition of a third rig in mid-2010.

The Company will continue to drill test horizontal wells in different areas and zones to fully evaluate the field's reserves and production potential. In 2010, the horizontal development drilling program will focus on the highest productivity areas and zones in the field. Detailed mapping has outlined more than 400 horizontal drilling locations to be drilled at the Patos Marinza field over the next few years. Full details of Bankers' 2010 capital expenditure program are expected to be released when fully ratified, expected by mid-December 2009.

Bankers is well positioned financially to accommodate its growth plans. At September 30, 2009, the Company has available cash resources of $61 million and $142 million of credit facilities that, in conjunction with expected cash flow from operations, will more than adequately fund its 2009 and 2010 development programs. For 2009, the projected $44 million capital expenditure program is expected to yield an exit production rate of approximately 8,000 bopd. The cash position has recently been supplemented with $6.5 million from warrant proceeds and an expected $10 million from collection of a related-party note by mid-November. The Company will continue to monitor oil prices and is prepared to make adjustments to its capital program if deemed necessary.

    
                           BANKERS PETROLEUM LTD.
                         CONSOLIDATED BALANCE SHEETS
        (Unaudited, expressed in thousands of United States dollars)
    -------------------------------------------------------------------------

                                   ASSETS
                                                   September 30  December 31
                                                           2009         2008
                                                    -------------------------

    Current assets
      Cash and cash equivalents (Note 11)           $    54,886  $    15,607
      Short-term deposits                                 5,000        3,000
      Restricted cash                                     1,500        1,500
      Investments                                           571          134
      Accounts receivable                                27,349       17,591
      Crude oil inventory                                 1,295        1,588
      Deposits and prepaid expenses                       3,186        1,231
                                                    -------------------------
                                                         93,787       40,651
    Note receivable (Note 3)                             11,342       13,000
    Deferred financing costs (Note 5)                    14,776            -
    Property, plant and equipment (Note 4)              172,307      161,024
                                                    -------------------------
                                                    $   292,212  $   214,675
                                                    -------------------------
                                                    -------------------------

                                 LIABILITIES

    Current liabilities
      Operating loan (Note 5)                       $    19,542  $    17,500
      Accounts payable and accrued liabilities           19,492       26,788
      Current portion of term loans (Note 5)              4,565        3,750
                                                    -------------------------
                                                         43,599       48,038
    Term loans (Note 5)                                   7,248        6,875
    Asset retirement obligations (Note 6)                 3,672        2,896
    Future income tax liability (Note 7)                 34,686       31,508

                            SHAREHOLDERS' EQUITY

    Share capital (Note 8)                              198,785      121,907
    Warrants (Note 8)                                     2,043        2,088
    Contributed surplus (Note 8)                         14,704       11,862
    Deficit                                             (12,962)     (10,499)
    Accumulated other comprehensive income                  437            -
                                                    -------------------------
                                                        203,007      125,358
                                                    -------------------------
                                                    $   292,212  $   214,675
                                                    -------------------------
                                                    -------------------------
    Commitments (Note 10)

    See accompanying notes to consolidated financial statements.


                           BANKERS PETROLEUM LTD.
     CONSOLIDATED STATEMENT OF CHANGES IN DEFICIT, COMPREHENSIVE INCOME
          (LOSS) AND ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
        (Unaudited, Expressed in thousands of United States dollars)
    -------------------------------------------------------------------------

                                Three months ended         Nine months ended
                                    September 30              September 30
                                 2009         2008         2009         2008
                          ---------------------------------------------------
    Deficit
      Balance, beginning
       of period          $   (14,670) $    (9,404) $   (10,499) $    (8,324)
      Net income (loss)
       for the period           1,708        4,876       (2,463)       6,232
      Discontinued
       operations                   -        2,396            -        2,396
      Restructuring costs           -         (360)           -       (2,796)
                          ---------------------------------------------------
      Balance, end of
       period             $   (12,962) $    (2,492) $   (12,962) $    (2,492)
                          ---------------------------------------------------
                          ---------------------------------------------------

    Comprehensive income
     (loss)
      Net income (loss)
       for the period     $     1,708  $     4,876  $    (2,463) $     6,232
      Unrealized gain
       (loss) on
       investments                432       (1,454)         437         (296)
                          ---------------------------------------------------
      Comprehensive
       income (loss)      $     2,140  $     3,422  $    (2,026)       5,936
                          ---------------------------------------------------
                          ---------------------------------------------------

    Accumulated other
     comprehensive
     income (loss)
      Balance, beginning
       of period          $         5  $     1,158  $         -  $         -
      Unrealized gain
       (loss) on
       investments                432       (1,454)         437         (296)
                          ---------------------------------------------------
      Balance, end of
       period             $       437  $      (296) $       437  $      (296)
                          ---------------------------------------------------
                          ---------------------------------------------------

    See accompanying notes to consolidated financial statements.



                           BANKERS PETROLEUM LTD.
                    CONSOLIDATED STATEMENT OF OPERATIONS
             (Unaudited, expressed in thousands of United States
                     dollars, except per share amounts)
    -------------------------------------------------------------------------

                                 Three months ended        Nine months ended
                                    September 30              September 30
                                 2009         2008         2009         2008
                          ---------------------------------------------------
    Revenue
      Oil revenue         $    23,441  $    33,543  $    56,600  $    92,377
      Royalties                (5,368)      (7,790)     (14,243)     (18,689)
      Interest                    216          541          697        1,141
                          ---------------------------------------------------
                               18,289       26,294       43,054       74,829
                          ---------------------------------------------------
    Expenses
      Operating                 6,083        7,503       17,343       20,902
      Sales and
       transportation           2,739        1,932        6,168        5,323
      General and
       administrative           1,410        2,157        4,693        6,282
      Interest and bank
       charges                    685          361        1,283          897
      Interest on term loans      205          184          552          812
      Foreign exchange
       (gain) loss             (2,638)         661       (3,670)         876
      Stock-based
       compensation (Note 8)      923        1,137        3,083        5,922
      Amortization of
       deferred financing costs
       (Note 5)                   692            -        1,128            -
      Depletion, depreciation
       and accretion            3,877        3,327       11,759        9,367
                          ---------------------------------------------------
                               13,976       17,262       42,339       50,381
                          ---------------------------------------------------
    Income from
     continuing operations
     before income tax          4,313        9,032          715       24,448
    Future income tax
     expense (Note 7)          (2,605)      (4,156)      (3,178)     (18,028)
                          ---------------------------------------------------
    Income (loss) from
     continuing operations      1,708        4,876       (2,463)       6,420
      Discontinued operations       -            -            -         (188)
                          ---------------------------------------------------
    Net income (loss) for
     the period           $     1,708  $     4,876  $    (2,463) $     6,232
                          ---------------------------------------------------
                          ---------------------------------------------------
    Basic earnings (loss)
     per share -
     continuing
     operations           $     0.008  $     0.027  $    (0.012) $     0.037
                          ---------------------------------------------------
                          ---------------------------------------------------
    Diluted earnings
     (loss) per share -
     continuing
     operations           $     0.008  $     0.026  $    (0.012) $     0.035
                          ---------------------------------------------------
                          ---------------------------------------------------
    Basic and diluted
     earnings (loss) per
     share - discontinued
     operations           $         -  $         -  $         -  $    (0.001)
                          ---------------------------------------------------
                          ---------------------------------------------------

    See accompanying notes to consolidated financial statements.



                           BANKERS PETROLEUM LTD.
                    CONSOLIDATED STATEMENT OF CASH FLOWS
        (Unaudited, expressed in thousands of United States dollars)
    -------------------------------------------------------------------------

                                 Three months ended        Nine months ended
                                    September 30              September 30
    -------------------------------------------------------------------------
                                 2009         2008         2009         2008
                          ---------------------------------------------------
    Cash provided by (used in):
    Continuing operations:
      Net income (loss)
       from continuing
       operations         $     1,708  $     4,876  $    (2,463) $     6,420
    Items not involving cash:
      Depletion,
       depreciation and
       accretion                3,877        3,327       11,759        9,367
      Amortization of
       deferred financing
       costs                      692            -        1,128            -
      Future income tax
       expense                  2,605        4,156        3,178       18,028
      Stock-based
       compensation               923        1,137        3,083        5,922
      Unrealized foreign
       exchange (gain)
      loss                     (2,434)       1,299       (2,051)       1,637
                          ---------------------------------------------------
                                7,371       14,795       14,634       41,374
      Change in non-cash
       working capital
       (Note 11)               (2,359)      (1,671)     (14,960)      (1,852)
                          ---------------------------------------------------
                                5,012       13,124         (326)      39,522
                          ---------------------------------------------------
    Cash used in operating
     activities of
     discontinued operations        -            -            -       10,470
                          ---------------------------------------------------
    Investing activities
      Additions to property,
       plant and equipment    (12,104)     (25,502)     (21,065)     (56,367)
      Additions to property,
       plant and equipment
       of discontinued
       operations                   -            -            -      (25,465)
      Increase in restricted
       cash                         -            -            -       (1,500)
      Change in non-cash
       working capital
       (Note 11)                1,140        2,564       (3,756)       4,540
                          ---------------------------------------------------
                              (10,964)     (22,938)     (24,821)     (78,792)
                          ---------------------------------------------------
    Financing activities
      Issue of shares          24,952        6,852       63,475       79,914
      Share issue costs             -           (5)      (2,220)      (1,490)
      Note receivable             323       (2,465)       1,658      (13,000)
      Short-term deposits       2,000            -       (2,000)           -
      Restructuring costs           -         (360)           -       (2,796)
      Deferred financing costs   (222)           -       (1,768)           -
      Increase (decrease) in
       operating loan            (359)        (484)       2,042          215
      Increase (decrease) in
       term loans                (937)        (937)       1,188       (3,437)
      Change in non-cash
       working capital
       (Note 11)                    -       (1,836)           -          600
                          ---------------------------------------------------
                               25,757          765       62,375       60,006
                          ---------------------------------------------------

    Foreign exchange gain
     (loss) on cash and
     cash equivalents held
     in foreign currencies      2,434       (1,299)       2,051       (1,637)
                          ---------------------------------------------------
    Increase (decrease) in
     cash and cash
     equivalents               22,239      (10,348)      39,279       29,569
    Cash and cash
     equivalents, beginning of
     period                    32,647       42,516       15,607        2,599
                          ---------------------------------------------------
    Cash and cash
     equivalents, end of
     period (Note 11)     $    54,886  $    32,168  $    54,886  $    32,168
                          ---------------------------------------------------
                          ---------------------------------------------------

    See accompanying notes to consolidated financial statements.



    Notes to the Consolidated Financial Statements
    (Unaudited, Expressed in U.S. dollars)
    -------------------------------------------------------------------------


    1.  BASIS OF PRESENTATION

        The interim consolidated financial statements have been prepared in
        accordance with Canadian generally accepted accounting principles
        (GAAP). Certain information and note disclosures normally included in
        financial statements prepared in accordance with Canadian GAAP have
        been condensed or omitted. These interim consolidated financial
        statements should be read together with the audited consolidated
        financial statements and the accompanying notes for the year ended
        December 31, 2008. In the opinion of the Company, its unaudited
        interim consolidated financial statements contain all adjustments
        necessary in order to present a fair statement of the results of the
        interim periods presented. The preparation of interim financial
        statements is based on accounting principles and practices consistent
        with those used in the preparation of annual financial statements,
        except for the following changes in accounting policies:

        Goodwill (Section 3064) - This section applies to goodwill subsequent
        to initial recognition and establishes standards for the recognition,
        measurement, presentation and disclosure of goodwill and intangible
        assets. This new standard does not have an impact on Bankers'
        consolidated financial statements.

        The unaudited consolidated financial statements include the accounts
        of the Company and its wholly-owned operating subsidiaries - Bankers
        Petroleum Albania Ltd. (BPAL), Bankers Petroleum International Ltd.
        and Sherwood International Petroleum Ltd.

        Unless where otherwise noted, the unaudited interim consolidated
        financial statements are presented in thousands of United States
        dollars.

    2.  FUTURE ACCOUNTING CHANGES

        International Financial Reporting Standards

        In February 2008, the Canadian Accounting Standards Board confirmed
        January 1, 2011 as the effective date for the requirement to report
        under International Financial Reporting Standards (IFRS) with
        comparative 2010 periods converted as well.

        In order to meet the requirement to transition to IFRS the Company
        has appointed internal staff to lead the conversion project along
        with sponsorship from an executive steering committee. The Company
        involves the external auditors and external consultants, as required,
        during the conversion project. The Company has provided training to
        key employees, completed a preliminary analysis of the accounting
        differences and is monitoring the impact of the transition on its
        business practices, information systems and internal control over
        financial reporting. During the Company's preliminary analysis,
        accounting implementation for certain areas was identified as having
        the greatest potential impact to the Company's consolidated
        statements in terms of complexity and effort. The Company has
        determined that accounting for property, plant and equipment,
        impairment testing, asset retirement obligations, stock-based
        compensation and income taxes will be significantly impacted by the
        conversion to IFRS. The precise impact of IFRS on the Company's
        consolidated financial statements is not reasonably determinable at
        this time.

    3.  NOTE RECEIVABLE

        The note receivable of $11.3 million (December 31, 2008 - $13.0
        million) represents the amount due from BNK Petroleum Inc. (BKX).
        The note, which is due in October 2012, accrues interest at London
        InterBank Offered Rate (LIBOR) plus 5.5% and is secured by a floating
        charge debenture and a general security agreement. At September 30,
        2009 no principal or interest amounts were due. The outstanding
        accrued interest receivable pertaining to this note was $0.2 million
        (December 31, 2008 - $0.4 million) and is included in accounts
        receivable as at September 30, 2009. The Company is entitled to
        receive up to 50% of any future equity financing by BKX and 90% of
        any increase in BKX's borrowing base as repayment of this note. The
        Company has no further obligation to increase the note. BKX is
        considered a related party as BKX and the Company have common
        directors. Subsequent to September 30, 2009, BKX announced an equity
        financing, expected to close on November 13, 2009 and expects to
        repay approximately $10.0 million of the subordinated loan and
        interest outstanding. The above transaction is considered to be in
        the normal course of business and has been measured at the exchange
        amount being the amounts agreed to by both the parties.

    4.  PROPERTY, PLANT AND EQUIPMENT

        The following table summarizes the Company's property, plant and
        equipment as at September 30, 2009 and December 31, 2008:

                                               September 30, 2009
        ---------------------------------------------------------------------
                                                    Accumulated
                                                      Depletion
                                                            and     Net Book
        ($000s)                              Cost  Depreciation        Value
        ---------------------------------------------------------------------

        Oil properties                $   209,260   $    38,963  $   170,297
        Equipment, furniture
         and fixtures                       3,611         1,601        2,010
                                     ----------------------------------------
                                      $   212,871   $    40,564  $   172,307
                                     ----------------------------------------
                                     ----------------------------------------


                                                December 31, 2008
        ---------------------------------------------------------------------
                                                    Accumulated
                                                      Depletion
                                                            and     Net Book
        ($000s)                              Cost  Depreciation        Value
        ---------------------------------------------------------------------

        Oil properties                $   186,650   $    27,812  $   158,838
        Equipment, furniture
         and fixtures                       3,400         1,214        2,186
                                     ----------------------------------------
                                      $   190,050   $    29,026  $   161,024
                                     ----------------------------------------
                                     ----------------------------------------

        The depletion expense calculation for the three months ended
        September 30, 2009, excluded $4.0 million (2008 - $2.0 million)
        relating to undeveloped and non-producing properties in Albania.

        Depletable assets for the depletion calculation for the three months
        ended September 30, 2009 included $277.4 million (2008 - $183.0
        million) for estimated future development costs associated with
        proved undeveloped reserves in Albania.

        The Company capitalized general and administrative expenses and
        stock- based compensation of $0.8 million and $2.6 million during the
        three and nine months periods ended September 30, 2009, respectively
        ($0.8 million and $2.6 million for the corresponding periods in 2008)
        that were directly related to exploration and development activities
        in Albania.

    5.  LONG TERM AND OPERATING LOAN FACILITIES

        The Company has credit facilities with three international banks,
        including Raiffeisen Bank, the European Bank for Reconstruction and
        Development (EBRD) and the International Finance Corporation (IFC),
        as summarized below:

                                        Facility
        ($000s)                           Amount          Outstanding Amount
        ---------------------------------------------------------------------
                                                 September 30,   December 31,
                                                         2009           2008
                                                -----------------------------
        Raiffeisen Bank
        ---------------
          Operating loan (a)          $   20,000   $   19,542    $    17,500
          Term loan - 2006 (b)             7,813        7,813         10,625
          Term loan - 2009 (c)             4,000        4,000              -
        EBRD and IFC*
        ---------------
          Environmental term loan (d)     10,000            -              -
          Revolving loan - Tranche 1 (e)  50,000            -              -
          Revolving loan - Tranche 2 (e)  50,000            -              -
                                     ----------------------------------------
                                      $  141,813   $   31,355    $    28,125
                                     ----------------------------------------
                                     ----------------------------------------

        * all facilities are equally funded

        These facilities are secured by all of the assets of BPAL, assignment
        of proceeds from the Albanian domestic and export crude oil sales
        contracts, a pledge of the common shares of BPAL and a guarantee by
        the Company. The credit facilities are subject to certain covenants
        requiring the maintenance of certain financial ratios, all of which
        were met as at September 30, 2009.

        (a) Operating Loan

        The operating loan consists of a one year facility, renewable
        annually (March), bearing interest at a rate relative to the bank's
        refinancing rate plus 3.5%.

        (b) Term Loan - 2006

        This term loan bears interest at the bank's financing rate plus 4.5%
        and is repayable in equal monthly instalments of $0.3 million ending
        on October 31, 2011. As at September 30, 2009 the entire term loan
        was utilized. Of the amount outstanding, $3.8 million is classified
        as current and $4.0 million as long-term. Principal repayments of the
        term loan over the next three years are:

        ($000s)
        ---------------------------------------------------------------------
        2009                                                     $       938
        2010                                                           3,750
        2011                                                           3,125
                                                                 ------------
                                                                 $     7,813
                                                                 ------------
                                                                 ------------

        (c) Term Loan - 2009

        In March 2009, the Company obtained a new $4.0 million five-year term
        facility bearing interest at the bank's refinancing rate plus 4.65%.
        Principle repayments commence in November 2009 in equal monthly
        instalments of $74,000 for a 54-month period. As at September 30,
        2009, the entire facility was utilized. Of the amount outstanding,
        $0.8 million is classified as current and $3.2 million as long-term.
        Principal repayments of the term loan over the next six years are:

        ($000s)
        ---------------------------------------------------------------------
        2009                                                     $       148
        2010                                                             889
        2011                                                             889
        2012                                                             889
        2013                                                             889
        2014                                                             296
                                                                 ------------
                                                                 $     4,000
                                                                 ------------
                                                                 ------------

        (d) Environmental Term Loan

        An eight-year $10.0 million term loan commenced in May 2009 and is
        available for environmental and social programs pertinent to the
        Company's activities in Albania. The interest rate is based on LIBOR
        plus 4.5%. A standby fee of 0.5% is charged on the unutilized
        portion. At September 30, 2009 none of the facility was drawn.
        Principal repayments commence in April 2013 in bi-annual instalments
        of $0.5 million with maturity on October 15, 2017.

        (e) Revolving loans

        In May 2009, the Company finalized a six-year revolving facility,
        funded equally by EBRD and IFC, that consists of two $50.0 million
        tranches. Tranche I became available to the Company during the third
        quarter of 2009 and Tranche II becomes available subject to mutual
        agreement among the Company, IFC and EBRD, when production exceeds
        10,000 barrels of oil per day and the Brent oil price exceeds $62 per
        barrel for twenty consecutive trading days. The interest rate is
        based on LIBOR plus 4.5%. A standby fee of 2.0% is charged on the
        unutilized Tranche I portion and Tranche II portion, when it becomes
        available. At September 30, 2009 none of the facility was drawn. For
        each of Tranche I and Tranche II, the amounts decline to $16.5
        million on October 15, 2013, $8.3 million on October 14, 2014 with
        final repayment due on October 15, 2015. Setup costs of $15.9 million
        (December 31, 2008 - nil) pertaining to these facilities, including
        the value attributed to the share purchase warrants (Note 8(b)), have
        been recorded as deferred financing costs and are amortized over the
        life of the revolving facilities.

    6.  ASSET RETIREMENT OBLIGATIONS

        In Albania, the Company estimated the total undiscounted amount
        required to settle the asset retirement obligations at September 30,
        2009 at $23.9 million (December 31, 2008 - $21.4 million). These
        obligations will be settled at the end of the Company's 25-year
        license of which 22 years are remaining. The liability has been
        discounted using a credit-adjusted risk-free interest rate of 10%
        (December 31, 2008 - 10%) and an inflation rate of 2.5% (December 31,
        2008 - 2.5%) to arrive at asset retirement obligations of $3.7
        million as at September 30, 2009.

        ($000s)
        ---------------------------------------------------------------------
        Asset retirement obligations, December 31, 2008          $     2,896
        Liabilities incurred during the period                           556
        Accretion                                                        220
                                                                 ------------
        Asset retirement obligations, September 30, 2009         $     3,672
                                                                 ------------
                                                                 ------------

    7.  INCOME TAXES

        Future income tax expense relates to the Albanian operations and
        results from the following:

                                                 September 30    December 31
        ($000s)                                          2009           2008
        ---------------------------------------------------------------------
        Net book value of property, plant
         and equipment, net of asset
         retirement obligations                   $   164,692    $   151,972
        Cost recovery pool                            (95,320)       (88,956)
                                                -----------------------------
        Timing difference                         $    69,372    $    63,016
                                                -----------------------------
                                                -----------------------------
        Future income tax liability at 50%        $    34,686    $    31,508
                                                -----------------------------
                                                -----------------------------

        The cost recovery pool represents deductions for income tax purposes
        in Albania at 50% income tax rate.

        The provision for income taxes reported differs from the amounts
        computed by applying the cumulative Canadian federal and provincial
        income tax rates to the loss before tax provision due to the
        following:


                                       Three months ended  Nine months ended
                                             September 30       September 30
        ---------------------------------------------------------------------
                                             2009    2008       2009    2008
        ---------------------------------------------------------------------
        Income before
         income taxes                       4,313   9,032        715  24,448
        Statutory tax rate                 29.00%  29.50%     29.00%  29.50%
                                   ------------------------------------------
                                            1,251   2,664        207   7,212
        Difference in tax rates between
         Albania and Canada                   855   2,440        697   6,937
        Non-deductible expenses               268     335        894   1,902
        Valuation allowance and
         other                                231  (1,283)     1,380   1,977
                                   ------------------------------------------
        Future income tax expense           2,605   4,156      3,178  18,028
                                   ------------------------------------------
                                   ------------------------------------------

    8.  SHAREHOLDERS' EQUITY

        (a) Share Capital

        Authorized

        Unlimited number of common shares with no par value.

        Issued
                                                   Number of
                                               Common Shares    Amount ($000)
        ---------------------------------------------------------------------
        Balance, December 31, 2007               452,509,492    $    136,513

          Consolidation adjustment*           (301,672,997)              -
          Discontinued operations                          -         (97,472)
          Prospectus issue                        22,222,222          59,749
          Stock options exercised                  6,179,624          15,038
          Warrants exercised                       3,301,838           9,569
          Share issuance costs                             -          (1,490)
                                      ---------------------------------------
        Balance, December 31, 2008               182,540,179         121,907
          Prospectus issue                        25,143,800          38,349
          Warrants exercised                      16,407,924          36,979
          Stock options exercised                  1,291,239           3,770
          Share issuance costs                             -          (2,220)
                                      ---------------------------------------
        Balance, September 30, 2009              225,383,142    $    198,785
                                      ---------------------------------------
                                      ---------------------------------------

        * On July 30, 2008, the Company's shares, warrants and options were
            consolidated on a one-for-three (1:3) basis, as approved by the
            shareholders

        In May 2009, the Company completed an equity offering with a
        syndicate of underwriters and issued an aggregate of 25,143,800
        common shares at a price of CAD$1.75 per common share on a bought-
        deal basis, resulting in proceeds of $36.1 million net of commissions
        and share issue expenses.

        In July 2009, EBRD and IFC exercised warrants to purchase 16 million
        common shares of the Company at a price of CAD$1.50 per share,
        generating proceeds of approximately $21.9 million.

        The following table summarizes the calculation of basic and diluted
        weighted average number of common shares:

                                Three months ended         Nine months ended
                                    September 30              September 30
        ---------------------------------------------------------------------
                                 2009         2008         2009         2008
        ---------------------------------------------------------------------
        Weighted-average
         number of common
         shares
         outstanding
         -  basic         220,615,444  182,237,294  200,225,147  174,250,384
        Dilution effect
         of stock
         options(xx)        4,452,078    3,063,227            -    3,286,036
        Dilution effect
         of  warrants(xx)   2,449,106    3,812,929            -    4,131,498
                         ----------------------------------------------------
        Weighted-average
         number of
         common shares
         outstanding
         - diluted        227,516,628  189,113,450  200,225,147  181,667,918
                         ----------------------------------------------------
                         ----------------------------------------------------

        (xx) Due to net loss for the nine months period ended September 30,
             2009, the effect is anti-dilutive.

        (b) Warrants

        A summary of the changes in warrants is presented below:

                                                                      Amount
                                            Number of Warrants         ($000)
        ---------------------------------------------------------------------
        Balance, December 31, 2007                  38,323,452    $    2,539
        Consolidation adjustment*                (25,548,968)            -
                                        -------------------------------------
                                                    12,774,484         2,539
          Issued                                       240,729           255
          Transferred to share
           capital on exercise                      (3,301,838)         (706)
                                        -------------------------------------
        Balance, December 31, 2008                   9,713,375         2,088
          Issued                                    16,000,000        14,136
          Transferred to share capital
            on exercise                            (16,407,924)      (14,181)
                                        -------------------------------------
        Balance, September 30, 2009                  9,305,451    $    2,043
                                        -------------------------------------
                                        -------------------------------------

        * On July 30, 2008, the Company's shares, warrants and options were
            consolidated on a one-for-three (1:3) basis, as approved by the
            shareholders

        In May 2009, the Company reserved for issuance 16 million common
        share purchase warrants, eight million for each of the two
        international banks (EBRD and IFC) in relation to the reserve based
        long-term facility described in Note 5(d).  Each warrant entitled the
        holder to purchase one common share of the Company at a price of
        CAD$1.50 when the Brent oil price is above $55 per barrel for ten
        consecutive trading days until the earlier of i) one year from such
        date or ii) 45 days after the date on which the Company has notified
        that its common shares close at or above the exercise price for
        twenty consecutive trading days.  The Company determined the fair
        value of the warrants as CAD$1.01 per warrant using the Black-Scholes
        option pricing model.  As a result, a value of $14.1 million was
        allocated to warrants. All the above warrants were exercised during
        the three months ended September 30, 2009.

        Subsequent to September 30, 2009, 2.7 million of the November 2009
        warrants were exercised generating proceeds of CAD$6.8 million.
        Approximately 428,000 November 2009 warrants remained unexercised at
        their expiry on November 10, 2009 and have been cancelled.

        The following table summarizes the outstanding and exercisable
        warrants at September 30, 2009:
        ---------------------------------------------------------------------
                                                                    Weighted
                                                                     Average
                                             Number of Warrants     Exercise
                                                Outstanding and        Price
                            Expiry Date             exercisable        (CAD$)
        ---------------------------------------------------------------------
                      November 10, 2009               3,165,117         2.49
                      November 15, 2010               1,266,667         2.63
                          March 1, 2012               4,873,667         2.37
                                        -------------------------------------
                                                      9,305,451         2.45
                                        -------------------------------------
                                        -------------------------------------

        (c) Stock Options

        The Company has established a "rolling" Stock Option Plan.  The
        number of shares reserved for issuance may not exceed 10% of the
        total number of issued and outstanding shares and, to any one
        optionee, may not exceed 5% of the issued and outstanding shares on a
        yearly basis or 2% if the optionee is engaged in investor relations
        activities or is a consultant.  The exercise price of each option
        shall not be less than the market price of the Company's stock at the
        date of grant.

        A summary of the changes in stock options is presented below:

                                                                    Weighted
                                                                     Average
                                                                    Exercise
                                                                       Price
                                              Number of Options        (CAD$)
        ---------------------------------------------------------------------
        Balance, December 31, 2008                   11,936,128         2.26
          Granted                                     3,030,000         1.83
          Exercised                                  (1,291,239)        1.99
          Forfeited                                  (1,372,442)        2.77
                                        -------------------------------------
        Balance, September 30, 2009                  12,302,447         2.24
                                        -------------------------------------
                                        -------------------------------------

        (d) Stock-based Compensation

        Using the fair value method for stock-based compensation, the Company
        calculated stock-based compensation expense for the three and nine
        months periods ended September 30, 2009 as $1.3 million and $4.3
        million, respectively ($1.4 million and $7.0 million for the same
        periods in 2008) for the stock options vested and/or granted to
        officers, directors, employees and service providers. Of these
        amounts, $0.9 million and $3.1 million ($1.1 million and $5.9 million
        for the same periods in 2008) were charged to earnings and $0.4
        million and $1.2 million ($0.4 million and $1.1 million for the same
        periods in 2008) were capitalized. The Company determined these
        amounts using the Black-Scholes option pricing model assuming no
        dividends were paid.  The weighted average fair market value per
        option granted in the three and nine months periods ended September
        30, 2009 and 2008 and the assumptions used in their determination
        were as follows:

                                       Three months ended  Nine months ended
                                             September 30       September 30
        ---------------------------------------------------------------------
                                             2009    2008       2009    2008
        ---------------------------------------------------------------------
        Weighted average fair  value
         per option(CAD$)                       -    2.24       1.55    2.49
        Risk-free interest rate (%)             -    3.09       2.33    3.28
        Average volatility (%)                  -      74        125      72
        Expected life (years)                   -       5          5       5

        (e) Contributed Surplus

        The following table summarizes the changes in contributed surplus as
        of September 30, 2009 and December 31, 2008:

        ($000s)                                          2009           2008
        ---------------------------------------------------------------------
        Balance, beginning of period              $    11,862    $     8,308
          Stock-based compensation                      4,284          9,136
          Discontinued operations                           -         (1,591)
          Transferred to share capital
           on exercise                                 (1,442)        (3,991)
                                              -------------------------------
        Balance, end of period                    $    14,704    $    11,862
                                              -------------------------------
                                              -------------------------------

    9.  SEGMENTED INFORMATION

        The Company defined its reportable segments based on geographic
        locations.

        Nine months ended September 30,
         2009 ($000s)                      Albania       Canada        Total
        ---------------------------------------------------------------------
        Revenue
          Oil revenue                  $    56,600  $         -  $    56,600
          Royalties                        (14,243)           -      (14,243)
          Interest                               1          696          697
                                     ----------------------------------------
                                            42,358          696       43,054
                                     ----------------------------------------
        Expenses
          Operating                         17,343            -       17,343
          Sales and transportation           6,168            -        6,168
          General and administrative         2,257        2,436        4,693
          Interest and bank charges            860          423        1,283
          Interest on term loan                552            -          552
          Foreign exchange (gain) loss         (56)      (3,614)      (3,670)
          Stock-based compensation             247        2,836        3,083
          Amortization of deferred
           financing costs                       -        1,128        1,128
          Depletion, depreciation
           and accretion                    11,666           93       11,759
                                     ----------------------------------------
                                            39,037        3,302       42,339
                                     ----------------------------------------
        Income (loss) before
         income taxes                        3,321       (2,606)         715
        Future income tax expense           (3,178)           -       (3,178)
                                     ----------------------------------------
        Net income (loss) for
         the period                    $       143  $    (2,606) $    (2,463)
                                     ----------------------------------------
                                     ----------------------------------------

        Assets, September 30, 2009     $   203,291  $    88,921  $   292,212
                                     ----------------------------------------
                                     ----------------------------------------
        Additions to property,
         plant and equipment           $    21,008  $        57  $    21,065
                                     ----------------------------------------
                                     ----------------------------------------


        Nine months ended September 30,
         2008 ($000s)                      Albania       Canada        Total
        ---------------------------------------------------------------------
        Revenue
          Oil revenue                  $    92,377  $         -  $    92,377
          Royalties                        (18,689)           -      (18,689)
          Interest                               -        1,141        1,141
                                     ----------------------------------------
                                            73,688        1,141       74,829
                                     ----------------------------------------
        Expenses
          Operating                         20,902            -       20,902
          Sales and transportation           5,323            -        5,323
          General and administrative         2,468        3,814        6,282
          Interest and bank charges            897            -          897
          Interest on term loans               812            -          812
          Foreign exchange (gain) loss        (412)       1,288          876
          Stock-based compensation             611        5,311        5,922
          Depletion, depreciation
           and accretion                     9,248          119        9,367
                                     ----------------------------------------
                                            39,849       10,532       50,381
                                     ----------------------------------------
        Income (loss) from
         continuing operations
         before income taxes                33,839       (9,391)      24,448
        Future income tax expense          (18,028)           -      (18,028)
                                     ----------------------------------------
        Income (loss) from
         continuing operations         $    15,811  $    (9,391)       6,420
                                     ---------------------------
                                     ---------------------------
        Discontinued operations                                         (188)
                                                                 ------------
        Net income for the period                                $     6,232
                                                                 ------------
                                                                 ------------

        Assets, September 30, 2008     $   166,257  $    50,721  $   216,978
                                     ----------------------------------------
                                     ----------------------------------------
        Additions to property,
         plant and equipment           $    56,304  $        63  $    56,367
                                     ----------------------------------------
                                     ----------------------------------------


        Three months ended September 30,
          2009 ($000s)                     Albania       Canada        Total
        ---------------------------------------------------------------------
        Revenue
          Oil revenue                  $    23,441  $         -  $    23,441
          Royalties                         (5,368)           -       (5,368)
          Interest                               -          216          216
                                     ----------------------------------------
                                            18,073          216       18,289
                                     ----------------------------------------
        Expenses
          Operating                          6,083            -        6,083
          Sales and transportation           2,739            -        2,739
          General and administrative           689          721        1,410
          Interest and bank charges            262          423          685
          Interest on term loan                205            -          205
          Foreign exchange (gain) loss         107       (2,745)      (2,638)
          Stock-based compensation              72          851          923
          Amortization of deferred
           financing costs                       -          692          692
          Depletion, depreciation
           and accretion                     3,846           31        3,877
                                     ----------------------------------------
                                            14,003          (27)      13,976
                                     ----------------------------------------
        Income before income taxes           4,070          243        4,313
        Future income tax expense           (2,605)           -       (2,605)
                                     ----------------------------------------

        Income for the period          $     1,465  $       243  $     1,708
                                     ----------------------------------------
                                     ----------------------------------------
        Additions to property,
         plant and equipment           $    12,097  $         7  $    12,104
                                     ----------------------------------------
                                     ----------------------------------------


        Three months ended September 30,
          2008 ($000s)                     Albania       Canada        Total
        ---------------------------------------------------------------------
        Revenue
          Oil revenue                  $    33,543  $         -  $    33,543
          Royalties                         (7,790)           -       (7,790)
          Interest                               -          541          541
                                     ----------------------------------------
                                            25,753          541       26,294
                                     ----------------------------------------
        Expenses
          Operating                          7,503            -        7,503
          Sales and transportation           1,932            -        1,932
          General and administrative           851        1,306        2,157
          Interest and bank charges            361            -          361
          Interest on term loan                184            -          184
          Foreign exchange (gain) loss        (387)       1,048          661
          Stock-based compensation             118        1,019        1,137
          Depletion, depreciation
           and accretion                     3,286           41        3,327
                                     ----------------------------------------
                                            13,848        3,414       17,262
                                     ----------------------------------------
        Income (loss) from continuing
         operations before income taxes     11,905       (2,873)       9,032
        Future income tax expense           (4,156)           -       (4,156)
                                     ----------------------------------------
        Net income (loss) for
         the period                    $     7,749  $    (2,873) $     4,876
                                     ----------------------------------------
                                     ----------------------------------------

        Additions to property,
         plant and equipment           $    25,493  $         9  $    25,502
                                     ----------------------------------------
                                     ----------------------------------------


    10. COMMITMENTS

        The Company leases office premises, requiring minimum lease payments
        of:

        ($000s)                            Albania       Canada        Total
        ---------------------------------------------------------------------
        2009                           $        48  $        40  $        88
        2010                                   191           55          246
        2011                                   191            -          191
        2012                                     8            -            8
                                     ----------------------------------------
                                       $       438  $        95  $       533
                                     ----------------------------------------
                                     ----------------------------------------

        The Company has debt repayment commitments as disclosed in Note 5.

    11. SUPPLEMENTAL CASH FLOW INFORMATION

                                Three months ended         Nine months ended
                                    September 30              September 30
        ---------------------------------------------------------------------
                                 2009         2008         2009         2008
        ---------------------------------------------------------------------
        Operating activities
        (Increase) decrease
         in current assets
          Accounts
           receivable      $   (4,206)  $      971   $   (9,758)  $   (4,809)
          Crude oil
           inventory              327         (750)         293       (1,219)
         Deposit and
          prepaid
          expenses             (1,925)      (2,738)      (1,955)      (3,098)
        (Decrease) increase
          in current
          liabilities
           Accounts payable
            and accrued
            liabilities         3,445          846       (3,540)       7,274
                          ---------------------------------------------------
                           $   (2,359)  $   (1,671)  $  (14,960)  $   (1,852)
                          ---------------------------------------------------
                          ---------------------------------------------------
        Investing
         activities
        (Decrease)
          increase
          in current
          liabilities
           Accounts payable
            and accrued
            liabilities    $    1,140   $    2,564   $   (3,756)  $    4,540
                          ---------------------------------------------------
                          ---------------------------------------------------
        Financing
         activities
        (Decrease)
          increase in
          current
          liabilities
        Accounts
         payable
         and accrued
         liabilities       $        -   $   (1,836)  $        -   $      600
                          ---------------------------------------------------
                          ---------------------------------------------------
        Interest paid      $      467   $      454   $    1,412   $    1,709
                          ---------------------------------------------------
                          ---------------------------------------------------
        Interest received  $      226   $      541   $    1,004   $    1,141
                          ---------------------------------------------------
                          ---------------------------------------------------

                                                 September 30,   December 31,
                                                         2009           2008
        ---------------------------------------------------------------------
        Cash and cash equivalents
          Cash                                     $    1,598     $      933
          Fixed income investments                     53,288         14,674
                                                 ----------------------------
                                                   $   54,886     $   15,607
                                                 ----------------------------
                                                 ----------------------------

    12. FINANCIAL RISK MANAGEMENT

        Credit risk

        Credit risk is the risk of financial loss to the Company if a
        customer or counterparty to a financial instrument fails to meet its
        contractual obligations, and arises principally from the Company's
        receivables from petroleum refineries relating to accounts
        receivable. As at September 30, 2009, the Company's receivables
        consisted of $27.1 million (December 31, 2008 - $16.9 million) of
        receivables from petroleum refineries and $0.2 million (December 31,
        2008 - $0.7 million) of other trade receivables as summarized below:

                                 30 -         61 -         Over
        ($000s)  Current      60 days      90 days      90 days        Total
        ---------------------------------------------------------------------
        Albania $ 13,952    $       -    $   3,502    $   9,687     $ 27,141
        Canada       208            -            -            -          208
                -------------------------------------------------------------
                $ 14,160    $       -    $   3,502    $   9,687     $ 27,349
                -------------------------------------------------------------
                -------------------------------------------------------------

        In Albania, the Company considers any amounts greater than 60 days as
        past due. The accounts receivable, included in the table, past due
        or not past due are not impaired. They are from counterparties with
        whom the Company has a history of timely collection and the Company
        considers the accounts receivable collectible. Domestic receivables
        from a petroleum refinery are due by the end of the month following
        production. Export receivables are collected within 30 days from the
        date of the shipment. The Company's policy to mitigate credit risk
        associated with these balances is to establish marketing
        relationships with large purchasers. Of the total receivables of
        $27.1 million in Albania, approximately $14.0 million (December 31,
        2008 - $13.6 million) is due from one domestic customer of which
        $13.2 million is considered past due. The Company received $0.5
        million from this customer as payments on account of sales during the
        quarter and received $1.5 million subsequent to September 30, 2009.
        The Company is in discussion with its Albanian legal counsel and the
        senior management of this customer towards reaching a payment plan.
        Bankers has the support of the Albanian government who confirm the
        validity of these outstanding amounts. In Canada, no amounts are
        considered impaired.

        The carrying amount of accounts receivable represents the maximum
        credit exposure. As of September 30, 2009 and December 31, 2008, the
        Company does not have an allowance for doubtful accounts and did not
        provide for any doubtful accounts nor was it required to write-off
        any receivables.

        The Company also has credit risk with respect to the $11.3 million
        Note Receivable from BKX and regularly monitors the operations and
        financial condition of the borrower (See Note 3). Subsequent to
        September 30, 2009, BKX expects to complete an equity financing on
        November 13, 2009 and has agreed to repay approximately $10.0 million
        of the note and interest outstanding.
    

For further information: For further information: Abby Badwi, President and Chief Executive Officer, (403) 513-2694; Doug Urch, VP, Finance and Chief Financial Officer, (403) 513-2691; Email: investorrelations@bankerspetroleum.com, Website: www.bankerspetroleum.com; AIM NOMAD: Canaccord Adams Limited, Ryan Gaffney, Henry Fitzgerald-O'Connor, +44 20 7050 6500; AIM JOINT BROKERS: Canaccord Adams Limited, Ryan Gaffney, Henry Fitzgerald-O'Connor, +44 20 7050 6500; Macquarie Capital Advisors, Paul Connolly, Ben Colegrave, +44 (0) 20 3037 2000

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