REG-Bankers Petroleum Limited: Bankers Petroleum 2014 Financial Results <Origin Href="QuoteRef">BNK.TO</Origin>
12/03/2015 11:00
Bankers Petroleum Announces 2014 Financial Results
Cash Position of $73 Million and 14% Increase in Oil Sales
CALGARY, March 12, 2015 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the
"Company") (TSX: BNK, AIM: BNK) is pleased to provide its 2014 financial
results. All amounts set out in this press release and listed in the tables
below are in US dollars unless otherwise stated.
In 2014, Bankers made several key accomplishments including record levels of
revenue of $583 million, adjusted funds generated from operations of $304
million, oil production of 20,690 barrels of oil per day (bopd) and capital
investment of $291 million.
Results at a Glance
($000s, except as noted) Year ended December 31
Results at a Glance 2014 2013 2012
Financial
Oil revenue 583,120 566,386 432,138
Net operating income 342,375 316,558 218,246
Net income 128,833 61,743 34,413
Basic (US$/share) 0.50 0.24 0.14
Diluted (US$/share) 0.49 0.24 0.14
Funds generated from operations 284,293 279,601 192,589
Adjusted funds generated from operations(1) 304,130 279,752 192,589
Basic (US$/share) 1.17 1.10 0.76
Capital expenditures 291,325 234,243 222,663
Operating
Average production (bopd) 20,690 18,169 15,020
Average sales (bopd) 20,679 18,173 14,808
Average Brent oil price (US$/barrel) 98.95 108.66 111.67
Average realized price (US$/barrel) 77.26 85.39 79.73
Netback (US$/barrel) 45.36 47.73 40.27
December 31
2014 2013 2012
Cash and restricted cash 73,036 31,706 38,740
Working capital 201,325 134,094 88,799
Total assets 1,284,846 1,007,148 825,816
Long-term debt 98,276 98,150 97,158
Shareholders' equity 716,536 564,675 483,032
1. Represents funds generated from operations before non-recurring contract
settlement expenses.
Highlights
Bankers reached several key financial and operational achievements during 2014
as described below:
Operational Highlights:
* Average oil production was 20,690 barrels of oil per day (bopd) in 2014,
14% higher than the 2013 average production of 18,169 bopd. Average oil
production for the 2015 year-to-date is approximately 19,500 bopd.
* Oil sales averaged 20,679 bopd in 2014, a 14% increase compared to 18,173
bopd in 2013. Crude oil inventory at December 31, 2014 increased to
315,500 barrels from 311,000 barrels at December 31, 2013.
* Capital expenditures in 2014 were $291 million, 24% higher compared to $234
million in 2013. A total of 160 wells were drilled including 149
horizontal production wells, seven lateral re-drills, two water disposal
wells and the Company's first multi-lateral well in the Patos-Marinza field
and its first horizontal well drilled in the Kuçova oilfield. A total of
146 wells were drilled in 2013.
* The Company continued the Enhanced Oil Recovery (EOR) program in 2014 with
monitoring and expansion of flood patterns. At the end of the year, 19
polymer flood and 4 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 20 to 30 additional
conversions in 2015.
* Bankers commenced Kuçova oilfield development in the Arreza pool with the
takeover of 59 wells from Albpetrol in August 2014, reactivation of three
wells and drilling of the first horizontal well in 2014.
Product Margin Highlights:
* Operating and Sales and Transportation (S&T) costs, primarily originating
from Albanian-based companies and their employees, were $155 million
($20.51/bbl) for 2014 compared to $156 million for 2013 ($23.44/bbl), an
improvement of 13% on a per barrel basis. Overall, operating and S&T costs
improved by 21%, on a per barrel basis, from 2013 to 2014, taking into
account the $1.91/bbl impact of excise tax for 2014.
* Net operating income (netback) in 2014 was $342 million ($45.36/bbl)
compared to $317 million ($47.73/bbl) in 2013.
* The Company focused on key infrastructure projects aimed at reducing costs
and optimizing operations in the Patos-Marinza oilfield. The field
electrification project continued in the northern and central areas of the
Patos-Marinza oilfield with realized energy cost savings. Construction of
the west water disposal line and northern flow line system started in
2014. These projects target reductions in trucked volumes within the
field. Other infrastructure activities in 2014 include the commissioning
of the Satellite 3 treating facility, installation of several Gas Oil Ratio
(GOR) skids for gas capturing and measurement, as well as completed
maintenance turnarounds of the main treating facilities.
Financial Highlights:
* Revenue in 2014 was $583 million ($77.26/bbl) compared to $566 million
($85.39/bbl) in 2013. Field price realization represented 78% of the Brent
oil benchmark price ($98.95/bbl) as compared to 79% of the Brent price
($108.66/bbl) in 2013. The reduction as a percentage of Brent compared to
the previous year was mainly due to the commencement of domestic sales
during 2014.
* Royalties to the Albanian Government and related entities were $86 million
(15% of revenue) during 2014 compared to $94 million (17% of revenue) for
2013.
* During 2014, adjusted funds generated from operations were $304 million
($1.17 per share), a 9% increase compared to $280 million ($1.10 per share)
for 2013.
* The Company continues to maintain a strong financial position at December
31, 2014 with cash and restricted cash of $73 million and working capital
of $201 million. At December 31, 2014, the Company had drawn $104 million
of its $224 million approved credit facilities. At December 31, 2013, cash
and restricted cash was $32 million and working capital was $134 million.
* In August 2014, Bankers commenced delivery of crude oil to the domestic
refinery, which is now under new ownership and management. Bankers agreed
to sell oil to an affiliate of this domestic refinery on a monthly basis
until December 31, 2014 at 73% of Dated Brent (FOB Vlore equivalent) plus
$40/tonne or approximately $6/bbl recovery against an outstanding accounts
receivable balance.
* In April 2014, the Company paid a $3 million premium to enter into
financial commodity contracts representing 6,000 bopd at a floor price of
$80/bbl of Dated Brent for 2015. At December 31, 2014, the fair value of
these contracts was $44 million.
Other Highlights in 2014:
* The Oil Initially in Place (OIIP) resource assessment in Albania at
year-end was 5.4 billion barrels, consistent with the OIIP resource
assessment at the end of 2013. Reserves on a proved basis were 125 million
barrels compared to 147 million barrels at year-end 2013. On a proved plus
probable basis, reserves were 203 million barrels compared to 232 million
barrels at year-end 2013. The corresponding net present value (NPV) after
tax (discounted at 10%) of the proved plus probable reserves was $1.8
billion at year-end compared to $2.2 billion in 2013, representing CAD$8.57
/share and CAD$9.72/share, respectively.
Fiscal Terms Mitigation:
* Bankers and the Government of Albania worked together to reach an agreement
on mitigation of the 2014 fiscal changes. The terms of the agreement were
approved by Albpetrol and AKBN, and were ratified by the Council of
Ministers on November 2, 2014. The agreement is structured to allow excise
and any applicable carbon and circulation taxes to be deducted from revenue
and eligible for inclusion in the cost recovery pool for the Patos-Marinza
concession to determine the Company's taxable position. This mechanism
enables the near term impact on cash flow to be fully offset through a
deferred and reduced profit tax burden which keeps the net asset value of
the project whole and the economics of future investment consistent with
the pre-2013 fiscal regime.
OUTLOOK
The Company's reduced capital program in 2015 will be $153 million, funded from
projected cash flow (based on an average $50/bbl Brent oil price) and existing
cash resources. Additionally, the Company's 2015 hedge program, representing
6,000 bopd at $80/bbl Brent, will ensure sufficient funding to maintain a
balanced program. The work program and budget include the following items:
* Drilling of 60 horizontal wells focused on continuing development in the
core area of the Patos-Marinza oilfield;
* Continuation of the EOR program with the addition of 20 to 30 polymer and
water injector conversions. The focus of the conversions planned is
expansion of existing patterns, with several conversions testing new areas
of the oilfield including higher viscosity fluids and thicker reservoir
sands;
* Continued focus on operational efficiencies in the field to expand product
margins including the construction of emulsion flow-lines to reduce
trucking costs, electrification and expansion of the gas gathering system
to reduce energy costs and emissions, and a review of well construction and
artificial lift design to improve well performance;
* Expansion of the water disposal system to accommodate increased fluid
handling requirements for the primary and EOR programs;
* Drilling of one well in Kuçova and implementation of a flood pattern to
commence EOR techniques in the oilfield;
* Continued investment on 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.
First Quarter Operational Update
Bankers intends to announce its first quarter 2015 Operational update on
Tuesday, April 7, 2015.
Supporting Documents
The full Management Discussion and Analysis (MD&A), Financial Statements and
updated March corporate presentation are available on www.bankerspetroleum.com.
The MD&A and Financial Statements will also be available on www.sedar.com.
BANKERS PETROLEUM LTD.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31
(Expressed in thousands of US dollars, except per share amounts)
2014 2013
Revenues $ 583,120 $ 566,386
Royalties (85,966) (94,294)
497,154 472,092
Realized loss on financial commodity contracts (1,188) (3,898)
Unrealized gain (loss) on financial commodity 45,226 (1,555)
contracts
541,192 466,639
Operating expenses 95,317 88,510
Sales and transportation expenses 59,462 67,024
General and administrative expenses 22,189 21,212
Contract settlement expenses 19,837 151
Depletion and depreciation 116,458 99,554
Share-based compensation 5,721 11,527
318,984 287,978
222,208 178,661
Net finance expense (6,182) (18,712)
Income before income tax 216,026 159,949
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