REG-Bankers Petroleum Limited: 1st Quarter Results <Origin Href="QuoteRef">BNK.TO</Origin>
05/05/2016 12:05
Bankers Petroleum announces 2016 first quarter financial and operational
results
CALGARY, May 5, 2015 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the
"Company") (TSX: BNK, AIM: BNK) is pleased to provide its 2016 first quarter
financial and operational results.
During the first quarter, Bankers achieved a cash margin of US$6.91 per barrel.
All amounts listed in this news release are in US dollars unless otherwise
stated.
"The first quarter was challenging for the Company. We navigated the volatile
and competitive heavy oil commodity markets and maintained firm footing as a
business. At the same time, it was an exciting quarter, as the proposed
acquisition by Geo-Jade Petroleum Corporation ("Geo-Jade") brings forth the
opportunity for shareholders to crystallize value at a significant premium to
the prevailing market valuation," commented President and Chief Executive
Officer, David French. "Bankers has been working alongside Geo-Jade to complete
the necessary steps to ensure a timely close of the proposed transaction. Our
Management team and Board of Directors remain in full support of the
transaction, and believe it to be in the best interest of shareholders."
Results at a Glance Three Months Ended
($000s, except as noted) March 31, 2016 December 31, 2015 March 31, 2015
Financial
Oil revenue 33,091 56,880 72,404
Net operating income 3,448 23,235 24,868
Net income (loss) (11,971) (8,391) 879
Basic (US$/share) (0.05) (0.04) 0.00
Diluted (US$/share) (0.05) (0.04) 0.00
Funds generated from 1,447 34,326 24,890
operations
Basic (US$/share) 0.01 0.13 0.10
Capital expenditures 12,676 24,651 49,945
Operating
Average production (bopd) 17,363 18,137 19,767
Average sales (bopd) 17,280 18,558 20,283
Average Brent oil price (US$/ 33.94 43.76 53.94
barrel)
Average realized price (US$/ 21.04 33.31 39.66
barrel)
Netback (US$/barrel) 2.19 13.60 13.62
Cash margin (US$/barrel) 6.91 24.01 23.32
March 31, 2016 December 31, 2015 March 31, 2015
Cash and restricted cash 52,996 69,141 57,842
Working capital 144,211 159,868 174,209
Total assets 1,238,380 1,261,390 1,264,256
Long-term debt 95,188 98,628 98,872
Shareholders' equity 708,318 719,294 718,552
Highlights
Bankers reached several key financial and operational achievements during the
first quarter of 2016 as described below:
Arrangement Agreement:
* On March 20, 2016, Bankers Petroleum Ltd. entered into a definitive
agreement with an affiliate of Geo-Jade Petroleum Corporation, for the
purchase of all the issued and outstanding common shares of the Company at
a cash price of C$2.20 per common share of the Company. The transaction
will be effected by way of a plan of arrangement under the Business
Corporations Act. This transaction is subject to customary closing
conditions, including receipt of court, shareholder and regulatory
approvals required under the Investment Canada Act, the People's Republic
of China and the Republic of Albania. The transaction is expected to close
before June 30, 2016.
* Materials have now been distributed to all Bankers Shareholders for their
vote at the Special Meeting to be held on May 31, 2016. All Directors and
Officers of Bankers remain committed to this transaction and recommend
voting in favor. The Circular and other documents are available at http://
www.bankerspetroleum.com/ or http://www.sedar.com/.
Operational Highlights:
* Average oil production for the three months ended March 31, 2016 was 17,363
barrels of oil per day (bopd) compared to 18,137 bopd in the previous
quarter and 19,767 bopd in the first quarter of 2015.
* Oil sales averaged 17,280 bopd for the first quarter of 2016 compared to
18,558 bopd for the previous quarter and 20,283 bopd for the first quarter
of 2015. Crude oil inventory at March 31, 2016 increased to 260,000 barrels
compared to 256,500 barrels at December 31, 2015.
* During the first quarter of 2016, capital expenditures were $13 million.
The Company did not drill any wells during the quarter. Capital
expenditures were $25 million for the previous quarter and $50 million for
the first quarter of 2015.
Product Margin Highlights:
* For the three months ended March 31, 2016, operating and sales and
transportation (S&T) costs, primarily originating from Albanian-based
companies and their employees, were $25 million ($16.16/bbl) compared to
$26 million ($15.40/bbl) for the previous quarter and $37 million ($20.48/
bbl) for the first quarter of 2015.
* Net operating income (netback) in the first quarter of 2016 was $3 million
($2.19/bbl) compared to $23 million ($13.60/bbl) for the previous quarter
and $25 million ($13.62/bbl) for the first quarter of 2015.
* Cash margin for the first quarter of 2016 was $6.91/bbl compared to $24.01/
bbl in the previous quarter and $23.32/bbl in the first quarter of 2015.
Cash margin represents netback inclusive of the realized gain on commodity
contracts.
Financial Highlights:
* For the first quarter of 2016, revenue was $33 million ($21.04/bbl)
compared to $57 million ($33.31/bbl) in the previous quarter and $72
million ($39.66/bbl) in the first quarter of 2015. Field price realization
represented 62% of the Brent oil benchmark price ($33.94/bbl) for the first
quarter of 2016 compared to 76% of the Brent oil benchmark price ($43.76/
bbl) in the previous quarter and 74% of the Brent oil benchmark price
($53.94/bbl) in the first quarter of 2015. The reduction as a percentage of
Brent compared to the previous quarter and first quarter of 2015 was due to
competitive pricing differential pressure resulting from weakness in
commodity prices.
* Royalties to the Albanian Government and related entities during the first
quarter of 2016 were $4 million (13% of revenue) compared to $7 million
(13% of revenue) for the previous quarter and $10 million (14% of revenue)
for the first quarter of 2015.
* Funds generated from operations were $1 million ($0.01 per share) for the
first quarter of 2016 compared to $34 million ($0.13 per share) for the
previous quarter and $25 million ($0.10 per share) for the first quarter of
2015.
* The Company continues to maintain a strong financial position at March 31,
2016 with cash and restricted cash of $53 million and working capital of
$144 million. At March 31, 2016, the Company had drawn $120 million of its
approved credit facilities, as compared to $119 million at the end of 2015.
Working capital for December 31, 2015 and March 31, 2015 was $160 million
and $174 million, respectively.
* At March 31, 2016, Bankers has hedged 5,000 bopd under costless collar
contracts with an average floor of $52.09/bbl and an average ceiling of
$54.64/bbl (all prices are referenced to Dated Brent) for the balance of
2016. In the first quarter of 2016 the hedge program generated proceeds of
$7.4 million. The remaining 2016 hedge program at March 31, 2016, is valued
at $16.2 million. These contracts are designed to protect Bankers against
further volatility in oil prices in 2016. Subsequent to the end of March,
the Company added another 1,000 bopd costless collar contract for the
balance of 2016, thereby representing 6,000 bopd at an average floor of
$51.52/bbl and an average ceiling of $53.78/bbl.
* During the quarter, the Company signed a formal binding agreement with the
Albanian National Agency for Natural Resources (AKBN) and the Minister of
Energy and Industry to engage third-party international experts to assist
in resolving the outstanding cost recovery audit. The work by the
independent auditor and consultant has commenced and is expected to be
completed during the third quarter of 2016.
Outlook:
Production in the second quarter to date is 16,704 bopd, 3.5% lower than the
first quarter average of 17,363 bopd. The Company is focused on optimization of
current production levels and is monitoring the economic return of all wells in
accordance with the current oil price environment.
Activity in the second quarter includes 2 to 4 additional well conversions to
injection to expand the EOR program, completion of the Pad D and Pad H vapor
recovery units for gas conservation, completion of the Pad D inlet expansion
and west emulsion gathering system to improve transportation costs and treating
efficiency. The producing water and polymer patterns continue to perform well
and Bankers continues to monitor production from the fifty-four (54) existing
patterns.
In the second half of the year, Bankers' activity focuses on further expanding
the EOR program with up to 12 additional injector conversions, managing
existing production and drilling new horizontal wells as commodity price
improvement allows.
Transaction Update:
Bankers and Geo-Jade continue to work together to complete the necessary steps
to ensure a timely close of the previously announced corporate transaction
("Arrangement"). Bankers has filed its Management Information Circular (the
"Circular") and related proxy materials on SEDAR and its website (http://
www.bankerspetroleum.com/), in advance of the Company's special meeting of
shareholders to be held on May 31, 2016 (the "Special Meeting"). The purpose of
the Special Meeting is to seek shareholder approval of the Arrangement with
affiliates of Geo-Jade.
Benefits of the Arrangement include:
* Cash price of C$2.20 per Bankers Share
* Bankers debt will be handled separately by the purchasing Company and will
not affect the stated purchase price of $2.20 per Bankers Share
* The Arrangement is an opportunity for shareholders to crystalize value
representing a premium of 98% over Bankers' closing share price on the TSX
of C$1.11 on March 18, 2016, and 109% over the 30-trading day volume
weighted average trading price of Bankers Shares of C$1.05 per share ending
on March 18, 2016
* The Arrangement has received the unanimous approval of the Board of
Directors of Bankers and carries the full support of Bankers' Management
team
Shareholder Voting:
Bankers' Board of Directors unanimously recommends that shareholders vote in
favor of the Arrangement.
Shareholders who have questions regarding the Arrangement or require assistance
with voting may contact the Proxy Solicitation Agent below:
Laurel Hill Advisory Group
Toll Free: 1-877-452-7184
International: +1 416-304-0211 outside Canada and the US
By Email: assistance@laurelhill.com
Special Meeting for Shareholders:
The Special Meeting will be held at The Metropolitan Centre (Strand/Tivoli Rm),
333 4th Avenue SW, Calgary, Alberta on Tuesday, May 31, 2016 at 3:00 p.m.
(Calgary time).
Bankers will provide further information with respect to the timing of closing
of the Arrangement and the delisting of the Bankers Shares from the TSX and AIM
as updates become available.
Supporting Documents:
The full Management Discussion and Analysis (MD&A), Financial Statements and
updated corporate presentation are available on http://www.bankerspetroleum.com
/. The MD&A and Financial Statements will also be available on http://
www.sedar.com/.
BANKERS PETROLEUM LTD.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR THE THREE MONTHS ENDED MARCH 31
(Unaudited, expressed in thousands of US dollars, except per share amounts)
2016 2015
Revenues $ 33,091 $ 72,404
Royalties (4,231) (10,144)
Revenues, net of royalties 28,860 62,260
Realized gain on financial commodity contracts 7,423 14,130
Unrealized loss on financial commodity contracts (3,800) (2,039)
Total operating revenues 32,483 74,351
Operating expenses 17,717 23,495
Sales and transportation expenses 7,695 13,897
General and administrative expenses 7,141 4,652
Contract settlement expenses - 355
Depletion and depreciation 26,658 30,119
Share-based compensation 252 1,182
Total expenses 59,463 73,700
Operating income (loss) (26,980) 651
Net finance expense (164) (8,888)
Loss before income tax (27,144) (8,237)
Income tax (expense) recovery
Current (267) -
Deferred 15,440 9,116
15,173 9,116
Net income (loss) for the period (11,971) 879
Other comprehensive income (loss)
Currency translation adjustment 476 (1,420)
Comprehensive loss for the period $ (11,495) $ (541)
Basic earnings (loss) per share $ (0.046) $ 0.003
Diluted earnings (loss) per share $ (0.046) $ 0.003
BANKERS PETROLEUM LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited, expressed in thousands of US dollars)
ASSETS
March 31 2016 December 31, 2015
Current assets
Cash and cash equivalents $ 37,958 $ 51,963
Restricted cash 15,038 17,178
Accounts receivable 53,752 56,592
Inventory 4,316 4,597
Deposits and prepaid expenses 81,219 67,514
Financial commodity contracts 16,200 20,000
208,483 217,844
Non-current assets
Property, plant and equipment 1,019,130 1,034,791
Exploration and evaluation assets 10,767 8,755
$ 1,238,380 $ 1,261,390
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities $ 40,604 $ 39,156
Income tax liability 1,032 765
Current portion of long-term debt 22,636 18,055
64,272 57,976
Non-current liabilities
Long-term debt 95,188 98,628
Decommissioning obligation 29,655 29,264
Deferred tax liabilities 340,947 356,228
530,062 542,096
SHAREHOLDERS' EQUITY
Share capital 365,045 365,045
Contributed surplus 94,818 94,299
Currency translation reserve 1,993 1,517
Retained earnings 246,462 258,433
708,318 719,294
$ 1,238,380 $ 1,261,390
BANKERS PETROLEUM LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31
(Unaudited, expressed in thousands of US dollars)
2016 2015
Cash provided by (used in):
Operating activities
Net income (loss) for the period $ (11,971) $ 879
Depletion and depreciation 26,658 30,119
Accretion of long-term debt 220 250
Accretion of decommissioning obligation 352 315
Unrealized foreign exchange gain (2,691) (778)
Current income tax expense 267 -
Deferred income tax recovery (15,440) (9,116)
Share-based compensation 252 1,182
Unrealized loss on financial commodity contracts 3,800 2,039
1,447 24,890
Change in non-cash working capital 2,918 7,839
4,365 32,729
Investing activities
Additions to property, plant and equipment (10,664) (49,818)
Additions to exploration and evaluation assets (2,012) (127)
Restricted cash 2,140 (591)
Change in non-cash working capital (9,237) (5,718)
(19,773) (56,254)
Financing activities
Issue of shares for cash - 211
Change in long-term debt 1,081 7,762
1,081 7,973
Foreign exchange gain (loss) on cash and cash equivalents 322 (233)
Decrease in cash and cash equivalents (14,005) (15,785)
Cash and cash equivalents, beginning of period 51,963 68,036
Cash and cash equivalents, end of period $ 37,958 $ 52,251
Interest paid $ 222 $ 45
Interest received $ 87 $ 96
BANKERS PETROLEUM LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(Unaudited, expressed in thousands of US dollars, except number of common
shares)
Number of Share Contributed Currency Retained Total
common capital surplus translation earnings
shares reserve
Balance at December 31, 2014 261,084,393 $ 363,670 $ 86,409 $ 4,410 $ 262,047 $ 716,536
Share-based compensation - - 2,346 - - 2,346
Options exercised 100,000 403 (192) - - 211
Net income for the period - - - - 879 879
Currency translation adjustment - - - (1,420) - (1,420)
Balance at March 31, 2015 261,184,393 $ 364,073 $ 88,563 $ 2,990 $ 262,926 $ 718,552
Share-based compensation - - 6,197 - - 6,197
Options exercised 239,935 972 (461) - - 511
RSUs exercised 133,056 - - - - -
Net loss for the period - - - - (4,493) (4,493)
Currency translation adjustment - - - (1,473) - (1,473)
Balance at December 31, 2015 261,557,384 $ 365,045 $ 94,299 $ 1,517 $ 258,433 $ 719,294
Share-based compensation - - 519 - - 519
Net loss for the period - - - - (11,971) (11,971)
Currency translation adjustment - - - 476 - 476
Balance at March 31, 2016 261,557,384 $ 365,045 $ 94,818 $ 1,993 $ 246,462 $ 708,318
Caution Regarding Forward-looking Information
Information in this news release respecting matters such as the expected future
production levels from wells, future prices and netback, work plans,
anticipated total oil recovery of the Patos-Marinza and Kuçova oilfields
constitute forward-looking information. Statements containing forward-looking
information express, as at the date of this news release, the Company's plans,
estimates, forecasts, projections, expectations, or beliefs as to future events
or results and are believed to be reasonable based on information currently
available to the Company.
Exploration for oil is a speculative business that involves a high degree of
risk. The Company's expectations for its Albanian operations and plans are
subject to a number of risks in addition to those inherent in oil production
operations, including: that Brent oil prices could fall resulting in reduced
returns and a change in the economics of the project; availability of
financing; delays associated with equipment procurement, equipment failure and
the lack of suitably qualified personnel; the inherent uncertainty in the
estimation of reserves; exports from Albania being disrupted due to unplanned
disruptions; and changes in the political or economic environment.
Production and netback forecasts are based on a number of assumptions including
that the rate and cost of well takeovers, well reactivations and well
recompletions of the past will continue and success rates will be similar to
those rates experienced for previous well recompletions/reactivations/
development; that further wells taken over and recompleted will produce at
rates similar to the average rate of production achieved from wells
recompletions/reactivations/development in the past; continued availability of
the necessary equipment, personnel and financial resources to sustain the
Company's planned work program; continued political and economic stability in
Albania; the existence of reserves as expected; the continued release by
Albpetrol of areas and wells pursuant to the Plan of Development and Addendum;
the absence of unplanned disruptions; the ability of the Company to
successfully drill new wells and bring production to market; and general risks
inherent in oil and gas operations.
Forward-looking statements and information are based on assumptions that
financing, equipment and personnel will be available when required and on
reasonable terms, none of which are assured and are subject to a number of
other risks and uncertainties described under "Risk Factors" in the Company's
Annual Information Form and Management's Discussion and Analysis, which are
available on SEDAR under the Company's profile at http://www.sedar.com/.
There can be no assurance that forward-looking statements will prove to be
accurate. Actual results and future events could differ materially from those
anticipated in such statements. Readers should not place undue reliance on
forward-looking information and forward looking statements.
About Bankers Petroleum Ltd.
Bankers Petroleum Ltd. is a Canadian-based oil and gas exploration and
production company focused on developing large oil and gas reserves in Albania
and Eastern Europe. In Albania, Bankers operates and has the full rights to
develop the Patos-Marinza heavy oilfield, has a 100% interest in the Kuçova
oilfield, and a 100% interest in Exploration Block "F". In 2015 Bankers
acquired an 85% interest in the rights to explore the Püspökladány Block
concession within the Pannonian Basin located in north eastern Hungary.
Bankers' shares are traded on the Toronto Stock Exchange and the AIM Market in
London, England under the stock symbol BNK.
David French, President and Chief Executive Office, (403) 513-6930; Doug Urch,
Executive VP, Finance and Chief Financial Officer, (403) 513-2691; Laura
Bechtel, Investor Relations & Corporate Communications Specialist, (403)
513-3428, Email: investorrelations@bankerspetroleum.com, Website:
www.bankerspetroleum.com; AIM NOMAD: Canaccord Genuity Limited, Henry
Fitzgerald-O'Connor, +44 0 207 523 8000; AIM BROKER: FirstEnergy Capital LLP,
Hugh Sanderson / David van Erp, +44 0 207 448 0200
END
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