REG-Bankers Petroleum Limited: 2015 Financial Results <Origin Href="QuoteRef">BNK.TO</Origin>
10/03/2016 12:10
Bankers Petroleum Announces 2015 Financial Results
Cash Position of $69 Million and Balanced 2015 Capital Program
CALGARY, March 10, 2016 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the
"Company") (TSX: BNK, AIM: BNK) is pleased to provide its 2015 financial
results. All amounts set out in this press release and listed in the tables
below are in US dollars unless otherwise stated.
In 2015, Bankers prioritized the strength of its balance sheet by carrying out
a $144 million capital expenditure program fully-funded with 2015 funds
generated from operations and maintaining cash and restricted cash of $69
million.
Results at a Glance
($000s, except as noted) Year ended December 31
Results at a Glance 2015 2014 2013
Financial
Oil revenue 286,634 583,120 566,386
Net operating income 123,114 342,375 316,558
Net income (loss) (3,614) 128,833 61,743
Basic (US$/share) (0.01) 0.50 0.24
Diluted (US$/share) (0.01) 0.49 0.24
Funds generated from operations 151,529 284,293 279,601
Adjusted funds generated from 151,914 304,130 279,752
operations(1)
Basic (US$/share) 0.58 1.17 1.10
Capital expenditures 144,013 291,325 234,243
Operating
Average production (bopd) 19,385 20,690 18,169
Average sales (bopd) 19,545 20,679 18,173
Average Brent oil price (US$/ 52.39 98.95 108.66
barrel)
Average realized price (US$/barrel) 40.18 77.26 85.39
Netback (US$/barrel) 17.25 45.36 47.73
Cash margin (US$/barrel) 26.09 46.68 47.73
As at December 31
2015 2014 2013
Cash and restricted cash 69,141 73,036 31,706
Working capital 159,868 201,325 134,094
Total assets 1,261,390 1,284,846 1,007,148
Long-term debt 98,628 98,276 98,150
Shareholders' equity 719,294 716,536 564,675
1. Represents funds generated from operations before non-recurring contract
settlement expenses.
Highlights
Bankers reached several key financial and operational achievements during 2015
as described below:
Operational Highlights:
* Average oil production was 19,385 barrels of oil per day (bopd) in 2015, 6%
lower than the 2014 average production of 20,690 bopd. Average oil
production for 2016 year-to-date is approximately 17,425 bopd.
* Oil sales averaged 19,545 bopd in 2015, a 5% decrease compared to 20,679
bopd in 2014. Crude oil inventory at December 31, 2015 decreased to 256,500
barrels from 315,500 barrels at December 31, 2014.
* Capital expenditures in 2015 were $144 million, 51% lower compared to $291
million in 2014. A total of 61 wells were drilled including 52 horizontal
production wells, four lateral re-drills, two water disposal wells, one
multi-lateral well, one suspended well in the Patos-Marinza field and one
horizontal well drilled in the Kuçova oilfield. A total of 160 wells were
drilled in 2014.
* The Company continued the Enhanced Oil Recovery (EOR) program in 2015 with
monitoring and expansion of flood patterns. At the end of the year, 48
polymer flood and five water flood patterns were in place in the
Patos-Marinza oilfield and continue to perform to model expectations.
Reservoir pressure and production response are positive with good reservoir
flood conformance. The Company continues to be strongly encouraged by the
results to date and plans to move forward with 16 additional conversions in
2016.
Product Margin Highlights:
* Operating and Sales and Transportation (S&T) costs, primarily originating
from Albanian-based companies and their employees, were $123 million
($17.31/bbl) for 2015 compared to $155 million ($20.51/bbl) for 2014, an
improvement of 16% on a per barrel basis.
* Net operating income (netback) in 2015 was $123 million ($17.25/bbl)
compared to $342 million ($45.36/bbl) in 2014.
* Cash margin for December 31, 2015 was $26.09/bbl compared to $46.68/bbl in
2014. Cash margin represents netback inclusive of the realized gain on
commodity contracts and recovery against a legacy accounts receivable.
Financial Highlights:
* Revenue in 2015 was $287 million ($40.18/bbl) compared to $583 million
($77.26/bbl) in 2014. Field price realization represented 77% of the Brent
oil benchmark price ($52.39/bbl) as compared to 78% of the Brent price
($98.95/bbl) in 2014. The reduction as a percentage of Brent compared to
the previous year was mainly due to an increase in domestic sales during
2015.
* Royalties to the Albanian Government and related entities were $40 million
(14% of revenue) during 2015 compared to $86 million (15% of revenue) for
2014.
* During 2015, adjusted funds generated from operations were $152 million
($0.58 per share) compared to $304 million ($1.17 per share) for 2014.
* The Company continues to maintain a strong financial position at December
31, 2015 with cash and restricted cash of $69 million and working capital
of $161 million. At the end of 2015, the Company had drawn $119 million
from its credit facilities, as compared to $104 million at the end of 2014.
At December 31, 2014, cash and restricted cash was $73 million and working
capital was $201 million.
* During 2015, the Company entered into three costless collar hedging
contracts for 2016, representing 4,000 bopd at an average floor price of
$54.31/bbl and average ceiling price of $57.29/bbl of Dated Brent. At
December 31, 2015, the fair value of these contracts was $20 million. The
2015 hedge program represented a gain of $58 million, and comprised a good
portion of funds generated from operations.
* Subsequent to December 31, 2015, the Company has signed a formal binding
agreement with the Albanian National Agency for Natural Resources (AKBN)
and the Minister of Energy and Industry to engage a third-party
international auditor to assist in resolving the outstanding cost recovery
audit.
Other Highlights in 2015:
* The Oil Initially in Place (OIIP) resource assessment in Albania at
year-end 2015 was 5.8 billion barrels, compared to the 5.4 billion barrels
of OIIP resource assessment at the end of 2014. Reserves on a proved basis
were 126 million barrels compared to 125 million barrels at year-end 2014.
On a proved plus probable basis, reserves were 202 million barrels compared
to 203 million barrels at year-end 2014. The corresponding net present
value (NPV) after tax (discounted at 10%) of the proved plus probable
reserves was $1.4 billion at year-end 2015 compared to $1.8 billion at
December 31, 2014, representing CAD$7.49/share and CAD$8.57/share,
respectively.
* During 2015, the Company, through an open tender, acquired an 85% interest
in the rights to explore the Püspökladány concession within the Pannonian
Basin located in north eastern Hungary. The Company will operate the
license and fund its share of the work commitment, estimated at €12.3
million, over the next three and a half years. The work commitment includes
acquiring 200km2 of 3D seismic and drilling of three exploration wells.
Subsequent to the year end, this concession agreement was finalized with
the government of Hungary, represented by the Minister of National
Development.
Outlook
The 2016 capital program prioritizes management's strategy to maintain a strong
balance sheet during the current period of low oil prices, maximizing activity
to fit within cash flow. Bankers' activity will focus on maintaining the EOR
program, managing existing production and drilling new horizontal wells in the
second half of the year, if pricing allows. Base maintenance capital at the
Patos-Marinza oilfield would require capital expenditure of approximately $24
million, additional activities included in the 2016 capital program are
outlined as follows:
* Continuation of the EOR program with the additional 16 planned polymer
conversions;
* Facilities and infrastructure activities which include optimization of
existing wells and some improvements aimed at lowering operating costs,
improving treating capability and managing water handling needs;
* Drilling of 16 horizontal wells focused on continuing development in the
core area of the Patos-Marinza oilfield in the second half of the year as
pricing allows;
* Continued investment in environmental remediation and social initiatives as
part of a sustained long-term effort to improve the physical environment,
and to provide training programs and other community initiatives for the
residents near the Company's operations.
The 2016 capital budget and work program is based on an average annual Brent
oil price assumption of $46.25/bbl; $42.50/bbl in the first half of the year,
with some pricing improvement assumed for the second half average of $50.00/
bbl. Additionally, commencing in the second half of 2015, Bankers began to
build upon its 2016 hedging strategy by placing costless collar contracts with
an average floor of $52.09/bbl and an average ceiling of $54.64/bbl on 5,000
bopd for 2016 (all prices are referenced to Dated Brent).
First Quarter Operational Update
Bankers intends to announce its first quarter 2016 Operational update on
Tuesday, April 5, 2016.
Annual General Meeting
Bankers Petroleum will host its annual general meeting of shareholders of
Bankers Petroleum Ltd. at The Metropolitan Centre, Strand/Tivoli Room, on
Wednesday, May 18, 2016 at 3:00 pm MDT. The Metropolitan Centre is located at
333- 4th Avenue SW, Calgary, Alberta.
Supporting Documents
The full Management Discussion and Analysis (MD&A), Financial Statements and
updated March 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 YEARS ENDED DECEMBER 31
(Expressed in thousands of US dollars, except per share amounts)
2015 2014
Revenues $ 286,634 $ 583,120
Royalties (40,070) (85,966)
Revenues, net of royalties 246,564 497,154
Realized gain (loss) on financial commodity contracts 58,151 (1,188)
Unrealized gain (loss) on financial commodity contracts (21,323) 45,226
Total operating revenues 283,392 541,192
Operating expenses 84,667 95,317
Sales and transportation expenses 38,783 59,462
General and administrative expenses 20,992 22,189
Contract settlement expenses 385 19,837
Depletion and depreciation 119,534 116,458
Share-based compensation 4,213 5,721
Provision for bad debt expense 17,099 -
Total expenses 285,673 318,984
Operating income (loss) (2,281) 222,208
Net finance expense (17,375) (6,182)
Income (loss) before income tax (19,656) 216,026
Income tax (expense) recovery
Current (765) -
Deferred 16,807 (87,193)
16,042 (87,193)
Net income (loss) for the year (3,614) 128,833
Other comprehensive loss
Currency translation adjustment (2,893) (1,935)
Comprehensive income (loss) for the year $ (6,507) $ 126,898
Basic earnings (loss) per share $ (0.014) $ 0.497
Diluted earnings (loss) per share $ (0.014) $ 0.486
BANKERS PETROLEUM LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS AT DECEMBER 31
(Expressed in thousands of US dollars)
ASSETS
2015 2014
Current assets
Cash and cash equivalents $ 51,963 $ 68,036
Restricted cash 17,178 5,000
Accounts receivable 56,592 81,612
Inventory 4,597 10,008
Deposits and prepaid expenses 67,514 62,984
Financial commodity contracts 20,000 44,170
217,844 271,810
Non-current assets
Property, plant and equipment 1,034,791 1,004,508
Exploration and evaluation assets 8,755 8,528
$ 1,261,390 $ 1,284,846
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities $ 39,156 $ 69,285
Income tax liability 765 -
Current portion of long-term debt 18,055 1,200
57,976 70,485
Non-current liabilities
Long-term debt 98,628 98,276
Decommissioning obligation 29,264 26,147
Deferred tax liabilities 356,228 373,402
542,096 568,310
SHAREHOLDERS' EQUITY
Share capital 365,045 363,670
Contributed surplus 94,299 86,409
Currency translation reserve 1,517 4,410
Retained earnings 258,433 262,047
719,294 716,536
$ 1,261,390 $ 1,284,846
BANKERS PETROLEUM LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31
(Expressed in thousands of US dollars)
2015 2014
Cash provided by (used in):
Operating activities
Net income (loss) for the year $ (3,614) $ 128,833
Depletion and depreciation 119,534 116,458
Accretion of long-term debt 961 1,350
Accretion of decommissioning obligation 1,308 1,139
Unrealized foreign exchange (gain) loss 3,900 (649)
Current income tax expense 765 -
Deferred income tax expense (recovery) (16,807) 87,193
Share-based compensation 4,213 5,721
Discount and revaluation gain of long-term - (12,316)
receivable
Provision for bad debt expense 17,099 -
Realized loss on financial commodity contracts 2,847 4,637
Unrealized (gain) loss on financial commodity 21,323 (45,226)
contracts
Cash premiums paid for financial commodity contracts - (2,847)
151,529 284,293
Change in long-term receivable - 19,335
Change in non-cash working capital (8,985) 2,767
142,544 306,395
Investing activities
Additions to property, plant and equipment (143,786) (289,616)
Additions to exploration and evaluation assets (227) (1,709)
Restricted cash (12,178) 2,109
Change in non-cash working capital (17,734) 15,064
(173,925) (274,152)
Financing activities
Issue of shares for cash 722 13,923
Financing costs - (435)
Change in long-term debt 15,655 (1,496)
16,377 11,992
Foreign exchange loss on cash and cash equivalents (1,069) (796)
Increase (decrease) in cash and cash equivalents (16,073) 43,439
Cash and cash equivalents, beginning of year 68,036 24,597
Cash and cash equivalents, end of year $ 51,963 $ 68,036
Interest paid $ 6,742 $ 6,530
Interest received $ 256 $ 409
BANKERS PETROLEUM LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(Expressed in thousands of US dollars, except number of common shares)
Number of Share capital Contributed Currency Retained Total
common shares surplus translation earnings
reserve
Balance at December 31, 2013 255,681,911 $ 340,305 $ 84,811 $ 6,345 $ 133,214 $ 564,675
Share-based compensation - - 11,040 - - 11,040
Options exercised 5,002,482 21,804 (9,004) - - 12,800
Warrants exercised 400,000 1,561 (438) - - 1,123
Net income for the year - - - - 128,833 128,833
Currency translation - - - (1,935) - (1,935)
adjustment
Balance at December 31, 2014 261,084,393 $ 363,670 $ 86,409 $ 4,410 $ 262,047 $ 716,536
Share-based compensation - - 8,543 - - 8,543
Options exercised 339,935 1,375 (653) - - 722
RSUs exercised 133,056 - - - - -
Net income (loss) for the - - - - (3,614) (3,614)
year
Currency translation - - - (2,893) - (2,893)
adjustment
Balance at December 31, 2015 261,557,384 $ 365,045 $ 94,299 $ 1,517 $ 258,433 $ 719,294
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 Officer, (403) 513-6930; Doug Urch,
Executive VP, Finance and Chief Financial Officer, (403) 513-2691; Laura
Bechtel, Investor Relations Analyst, (403) 513-3428; Email:
investorrelations@bankerspetroleum.com; Website: www.bankerspetroleum.com; AIM
NOMAD: Canaccord Genuity Limited, Henry Fitzgerald-O'Connor / Wei Loon Yap, +44
0 207 523 8000; AIM BROKER: FirstEnergy Capital LLP, Hugh Sanderson / David van
Erp, +44 0 207 448 0200
END
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