REG-Bankers Petroleum Limited: 2016 second quarter financial and operational results <Origin Href="QuoteRef">BNK.TO</Origin>
11/08/2016 12:05
Bankers Petroleum announces 2016 second quarter financial and operational
results
CALGARY, Aug. 11, 2016 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the
"Company") (TSX: BNK, AIM: BNK) is pleased to provide its 2016 second quarter
financial and operational results.
During the second quarter, Bankers achieved a cash margin of US$11.03 per
barrel. All amounts listed in this news release are in US dollars unless
otherwise stated.
Results at a Glance Three months ended June 30 Six months ended June 30
(US$000s, except as noted) 2016 2015 2016 2015
Financial
Oil revenue 40,989 85,707 74,080 158,111
Net operating income 12,383 41,503 15,831 66,371
Net loss (21,827) (10,462) (33,798) (9,583)
Basic (US$/share) (0.08) (0.04) (0.13) (0.04)
Diluted (US$/share) (0.08) (0.04) (0.13) (0.04)
Funds generated from operations 5,387 50,230 6,834 75,120
Basic (US$/share) 0.02 0.19 0.03 0.29
Capital expenditures 7,371 37,567 20,047 87,512
Operating
Average production (bopd) 15,934 20,050 16,649 19,909
Average sales (bopd) 15,023 19,626 16,152 19,953
Average Brent oil price (US$/barrel) 45.59 61.88 39.81 57.84
Average realized price (US$/barrel) 29.98 47.99 25.20 43.78
Netback (US$/barrel) 9.05 23.24 5.39 18.38
Cash margin (US$/barrel) 11.03 29.52 8.84 26.39
June 30, 2016 December 31, 2015 June 30, 2015
Cash and restricted cash 26,080 69,141 39,589
Working capital 83,885 159,868 160,909
Total assets 1,192,977 1,261,390 1,257,837
Long-term debt 94,826 98,628 98,459
Shareholders' equity 686,064 719,294 710,245
Highlights for the period ended June 30, 2016 are:
Arrangement Agreement:
On March 19, 2016, Bankers Petroleum Ltd. entered into a definitive agreement
(the "Arrangement Agreement") with an affiliate of Geo-Jade Petroleum
Corporation ("Geo-Jade"), for the purchase of all the issued and outstanding
common shares of the Company ("Bankers Shares") at a cash price of C$2.20 per
Bankers Share. The transaction will be effected by the way of a plan
arrangement under the Business Corporations Act (Alberta). All Directors and
Officers of Bankers are committed to this transaction and have executed
support agreements. At a May 31, 2016 Special Meeting, Bankers shareholders
overwhelmingly approved the transaction, and subsequently, the Alberta Court
of Queen's Bench provided its authorization. Additional regulatory approvals
have been received pursuant to the Investment Canada Act, the People's
Republic of China and the Republic of Albania. The transaction is expected to
close before September 30, 2016 and remains subject to the regulatory approval
of the Chinese State Administration of Foreign Exchange ("SAFE"). Failure to
receive the SAFE approval by September 30, 2016 would entitle Bankers to the
US$20 million reverse termination fee should Bankers terminate the Arrangement
Agreement due to such failure. Following successful completion of the
transaction, Bankers Shares will be delisted from the Toronto Stock Exchange
("TSX") and the AIM market of the London Stock Exchange.
Operational Highlights:
* Average oil production for the three months ended June 30, 2016 was 15,934
barrels of oil per day ("bopd") compared to 17,363 bopd in the previous
quarter and 20,050 bopd in the second quarter of 2015. For the six months
ended June 30, 2016, average oil production was 16,649 bopd compared to 19,909
bopd for the same period in 2015.
* Oil sales for the second quarter of 2016 averaged 15,023 bopd compared to
17,280 bopd for the previous quarter and 19,626 bopd for the second quarter of
2015. Crude oil inventory at June 30, 2016 increased to 350,000 barrels
compared to 260,000 barrels at March 31, 2016. For the six months ended June
30, 2016, oil sales were 16,152 bopd compared to 19,953 bopd for the same
period in 2015.
* Capital expenditures during the second quarter of 2016 were $7 million. The
Company did not drill any wells during the quarter. Capital expenditures were
$13 million for the previous quarter and $38 million for the second quarter of
2015.
Product Margin Highlights:
* For the three months and six months ended June 30, 2016, operating costs and
sales and transportation ("S&T") costs, originating from Albanian-based
companies and their employees, were $23 million ($16.58/bbl) and $48 million
($16.35/bbl), respectively, reduced from $32 million ($17.86/bbl) and $69
million ($19.18/bbl) for the same periods in 2015.
* In the second quarter of 2016, net operating income (netback) was $12
million ($9.05/bbl) compared to $3 million ($2.19/bbl) for the previous
quarter and $42 million ($23.24/bbl) for the second quarter of 2015. Net
operating income for the six months ended June 30, 2016 was $16 million
($5.39/bbl) compared to $66 million ($18.38/bbl) for the same period in 2015.
* Cash margin for the second quarter of 2016 was $11.03/bbl compared to
$6.91/bbl in the previous quarter and $29.52/bbl in the second quarter of
2015. Cash margin represents netback inclusive of the realized gain on
commodity contracts. Cash margin for the six months ended June 30, 2016 was
$8.84/bbl compared to $26.39/bbl for the same period in 2015.
Financial Highlights:
* Revenue was $41 million ($29.98/bbl) for the second quarter of 2016,
compared to $33 million ($21.04/bbl) in the previous quarter and $86 million
($47.99/bbl) in the second quarter of 2015. Field price realization
represented 66% of the Brent oil benchmark price ($45.59/bbl) for the second
quarter of 2016 compared to 62% of the Brent oil benchmark price ($33.94/bbl)
in the previous quarter and 78% of the Brent oil benchmark price ($61.88/bbl)
in the second quarter of 2015. The increase, as a percentage of Brent,
compared to the previous quarter was mainly due to improvements in world
commodity prices, therefore reducing the pressure of competitive pricing
differential during the second quarter of 2016. For the six months ended June
30, 2016, revenue was $74 million ($25.20/bbl) compared to $158 million
($43.78/bbl) for the same period in 2015.
* Royalties to the Albanian Government and related entities during the second
quarter of 2016 were $6 million (14% of revenue) compared to $4 million (13%
of revenue) for the previous quarter and $12 million (14% of revenue) for the
second quarter of 2015. For the six months ended June 30, 2016, royalties were
$10 million (14% of revenue) compared to $22 million (14% of revenue) for the
same period in 2015.
* Funds generated from operations for the second quarter of 2015 were $5
million ($0.02 per share) compared to $1 million ($0.01 per share) for the
previous quarter and $50 million ($0.19 per share) for the second quarter of
2015. Funds generated from operations for the six months ended June 30, 2016
were $7 million ($0.03 per share) compared to $75 million ($0.29 per share)
for the same period in 2015.
* The Company continues to maintain a stable financial position at June 30,
2016, with cash and restricted cash of $26 million and working capital of $84
million. At June 30, 2016, the Company had drawn $109 million of its approved
credit facilities. Working capital for December 31, 2015 and June 30, 2015 was
$160 million and $161 million, respectively.
* At June 30, 2016, Bankers hedged 6,000 bopd under costless collar contracts
with an average floor of $50.84/bbl (all prices are referenced to Dated Brent)
and an average ceiling of $52.90/bbl for the balance of 2016. In the second
quarter of 2016, the hedge program generated proceeds of $2 million compared
to $7 million in the first quarter of 2016. The 2016 hedge program at June 30,
2016, is valued at $2 million. These contracts are designed to protect Bankers
against further volatility in the oil prices in 2016.
Outlook:
Production in the third quarter of 2016 to date is 15,358 bopd, 3% lower than
the second quarter average of 15,934 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.
In the third quarter, Bankers' infrastructure and facilities projects include
commissioning the inlet system and vapor recovery unit at satellite facility
Pad D, vapor recovery unit at Pad H and the west emulsion gathering system. In
addition, the Company is focusing on design and implementation of a sour oil
treating project aimed at sweetening sour production from various reservoir
zones throughout the field.
Bankers continues to prioritize its polymer and water flood development, with
an additional seven (7) well conversions planned throughout the remainder of
2016 to bring the total for the year to sixteen (16) conversions. The
producing water and polymer patterns are performing well and Bankers is
continuing to monitor production from the fifty-eight (58) polymer and four
(4) water flood patterns implemented to date.
Due to continued pressure on oil prices, Bankers anticipates receiving average
cash realizations equivalent to 67 to 68% of Dated Brent for the export market
for the remainder of 2016. Additionally, Bankers is in discussion for
potential domestic crude oil sales contracts for a portion of its volumes and
expects to receive equivalent pricing to the export market after accounting
for reduced transportation and export related fees.
Supporting Documents:
The full Management Discussion and Analysis ("MD&A"), Financial Statements and
updated corporate presentation are available on our website,
http://www.bankerspetroleum.com/. The MD&A and Financial Statements will also
be available on http://www.sedar.com/.
BANKERS PETROLEUM LTD.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited, expressed in thousands of US dollars, except per share amounts)
Three months ended Six months ended
June 30 June 30
2016 2015 2016 2015
Revenues $ 40,989 $ 85,707 $ 74,080 $ 158,111
Royalties (5,943) (12,306) (10,174) (22,450)
Revenue, net of royalties 35,046 73,401 63,906 135,661
Realized gain on financial commodity contracts 2,713 9,856 10,136 23,986
Unrealized loss on financial commodity contracts (14,031) (20,798) (17,831) (22,837)
Total operating revenues 23,728 62,459 56,211 136,810
Operating expenses 16,748 22,132 34,465 45,627
Sales and transportation expenses 5,915 9,766 13,610 23,663
General and administrative expenses 7,514 5,188 14,655 9,840
Contract settlement expenses - 40 - 395
Depletion and depreciation 24,640 30,830 51,298 60,949
Share-based compensation 169 721 421 1,903
Total expenses 54,986 68,677 114,449 142,377
Operating loss (31,258) (6,218) (58,238) (5,567)
Net finance expense (4,174) (1,590) (4,338) (10,478)
Loss before income tax (35,432) (7,808) (62,576) (16,045)
Income tax recovery (expense)
Current 1,032 - 765 -
Deferred 12,573 (2,654) 28,013 6,462
13,605 (2,654) 28,778 6,462
Net loss for the period (21,827) (10,462) (33,798) (9,583)
Other comprehensive income (loss)
Currency translation adjustment (787) 115 (311) (1,305)
Comprehensive loss for the period $ (22,614) $ (10,347) $ (34,109) $ (10,888)
Basic loss per share $ (0.083) $ (0.040) $ (0.129) $ (0.037)
Diluted loss per share $ (0.083) $ (0.040) $ (0.129) $ (0.037)
BANKERS PETROLEUM LTD.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited, expressed in thousands of US dollars)
ASSETS
June 30 2016 December 31 2015
Current assets
Cash and cash equivalents $ 20,018 $ 51,963
Restricted cash 6,062 17,178
Accounts receivable 45,578 56,592
Income tax receivable 580 -
Inventory 6,082 4,597
Deposits and prepaid expenses 57,063 67,514
Financial commodity contracts 2,169 20,000
137,552 217,844
Non-current assets
Long-term deposits 42,593 -
Property, plant and equipment 1,001,731 1,034,791
Exploration and evaluation assets 11,101 8,755
$ 1,192,977 $ 1,261,390
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities $ 42,134 $ 39,156
Income tax liability - 765
Current portion of long-term debt 11,533 18,055
53,667 57,976
Non-current liabilities
Long-term debt 94,826 98,628
Decommissioning obligation 30,025 29,264
Deferred tax liabilities 328,395 356,228
506,913 542,096
SHAREHOLDERS' EQUITY
Share capital 365,045 365,045
Contributed surplus 95,178 94,299
Currency translation reserve 1,206 1,517
Retained earnings 224,635 258,433
686,064 719,294
$ 1,192,977 $ 1,261,390
BANKERS PETROLEUM LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, expressed in thousands of US dollars)
Three months ended June 30 Six months ended June 30
2016 2015 2016 2015
Cash provided by (used in):
Operating activities
Net loss for the period $ (21,827) $ (10,462) $ (33,798) $ (9,583)
Depletion and depreciation 24,640 30,830 51,298 60,949
Accretion of long-term debt 233 250 453 500
Accretion of decommissioning obligation 357 321 709 636
Unrealized foreign exchange (gain) loss 1,389 5,118 (1,302) 4,340
Current income tax recovery (1,032) - (765) -
Deferred income tax (recovery) expense (12,573) 2,654 (28,013) (6,462)
Share-based compensation 169 721 421 1,903
Unrealized loss on financial commodity contracts 14,031 20,798 17,831 22,837
5,387 50,230 6,834 75,120
Change in long-term deposits (42,593) - (42,593) -
Change in non-cash working capital 27,892 (26,856) 30,810 (19,017)
(9,314) 23,374 (4,949) 56,103
Investing activities
Additions to property, plant and equipment (7,037) (37,567) (17,701) (87,385)
Additions to exploration and evaluation assets (334) - (2,346) (127)
Restricted cash 8,976 (181) 11,116 (772)
Change in non-cash working capital 1,735 (7,216) (7,502) (12,934)
3,340 (44,964) (16,433) (101,218)
Financing activities
Issue of shares for cash - 511 - 722
Change in long-term debt (11,703) 2,505 (10,622) 10,267
(11,703) 3,016 (10,622) 10,989
Foreign exchange gain (loss) on cash and cash equivalents (263) 140 59 (93)
Decrease in cash and cash equivalents (17,940) (18,434) (31,945) (34,219)
Cash and cash equivalents, beginning of period 37,958 52,251 51,963 68,036
Cash and cash equivalents, end of period $ 20,018 $ 33,817 $ 20,018 $ 33,817
Interest paid $ 3,495 $ 3,095 $ 3,717 $ 3,140
Interest received $ 158 $ 55 $ 244 $ 151
BANKERS PETROLEUM LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited, expressed in thousands of US dollars, except number of common shares)
Number of common shares Share capital Contributed surplus Currency translation reserve Retained earnings Total
Balance at December 31, 2014 261,084,393 $ 363,670 $ 86,409 $ 4,410 $ 262,047 $ 716,536
Share-based compensation - - 3,875 - - 3,875
Options exercised 339,935 1,375 (653) - - 722
Net loss for the period - - - - (9,583) (9,583)
Currency translation adjustment - - - (1,305) - (1,305)
Balance at June 30, 2015 261,424,328 $ 365,045 $ 89,631 $ 3,105 $ 252,464 $ 710,245
Share-based compensation - - 4,668 - - 4,668
RSUs exercised 133,056 - - - - -
Net income for the period - - - - 5,969 5,969
Currency translation adjustment - - - (1,588) - (1,588)
Balance at December 31, 2015 261,557,384 $ 365,045 $ 94,299 $ 1,517 $ 258,433 $ 719,294
Share-based compensation - - 879 - - 879
Net loss for the period - - - - (33,798) (33,798)
Currency translation adjustment - - - (311) - (311)
Balance at June 30, 2016 261,557,384 $ 365,045 $ 95,178 $ 1,206 $ 224,635 $ 686,064
The information communicated in this announcement is inside information for
the purposes of Article 7 of Market Abuse Regulation 596/2014 ("MAR").
Caution Regarding Forward-looking Information
Certain information set forth in this press release, including information and
statements which may contain words such as "could", "plans", "intends"
"should", "anticipate", "expects", "will", "propose", "opportunity", "future",
"continue", and similar expressions and statements relating to matters that
are not historical facts, contain forward-looking statements, including but
not limited to statements regarding: the proposed transaction and the
anticipated timing of closing, the timing of receipt of required regulatory
approvals and the delisting of the Bankers Shares following completion of the
transaction. By their nature, forward-looking statements are subject to
numerous risks and uncertainties, some of which are beyond Bankers' control.
Completion of the Arrangement is subject to a number of conditions, including
receipt of the approvals required by the People's Republic of China, and other
conditions which are typical for transactions of this nature. Failure to
satisfy any of these conditions or the emergence of a superior proposal may
result in the termination of the Arrangement Agreement. The foregoing list is
not exhaustive. Additional information on these and other risks that could
affect completion of the Arrangement is set forth in the Management
Information Circular of the Company dated April 19, 2016, which is available
on SEDAR at http://www.sedar.com/. Readers are cautioned that the assumptions
used in the preparation of such information, although considered reasonable at
the time of preparation, may prove to be imprecise and, as such, undue
reliance should not be placed on forward-looking statements. The actual
results, performance or achievement of Bankers could differ materially from
those expressed in, or implied by, these forward-looking statements and,
accordingly, no assurance can be given that any of the events anticipated by
the forward-looking statements will transpire or occur, or if any of them do
so, what benefits that Bankers will derive therefrom. Bankers disclaims any
intention or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise, except as
required by applicable securities laws.
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 & 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
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