REG-Bankers Petroleum Limited: Half-yearly Report <Origin Href="QuoteRef">BNK.TO</Origin>
13/08/2015 12:00
Bankers Petroleum Announces 2015 Second Quarter Financial and Operational
Results
Second Quarter Cash Margin of US$29.52/bbl
CALGARY, Aug. 13, 2015 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the
"Company") (TSX: BNK, AIM: BNK) is pleased to provide its 2015 second quarter
financial and operational results.
During the quarter, Bankers achieved a cash margin of US$29.52 per barrel and
netback of US$23.24 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$000s, except as noted) 2015 2014 % change 2015 2014 %
change
Financial
Oil revenue 85,707 170,531 (50%) 158,111 315,516 (50%)
Net operating income 41,503 106,019 (61%) 66,371 198,510 (67%)
Net income (loss) (10,462) 27,196 (138%) (9,583) 52,188 (118%)
Basic (US$/share) (0.04) 0.11 (136%) (0.04) 0.20 (120%)
Diluted (US$/ (0.04) 0.10 (140%) (0.04) 0.20 (120%)
share)
Funds generated from 50,230 93,713 (46%) 75,120 176,822 (58%)
operations
Basic (US$/share) 0.19 0.36 (47%) 0.29 0.69 (58%)
Basic (CAD$/share) 0.24 0.40 (40%) 0.36 0.75 (52%)
Capital expenditures 37,567 71,501 (47%) 87,512 131,366 (33%)
Operating
Average production (bopd) 20,050 20,630 (3%) 19,909 20,272 (2%)
Average sales (bopd) 19,626 21,620 (9%) 19,953 20,036 (0%)
Average Brent oil price 61.88 109.67 (44%) 57.84 108.93 (47%)
(US$/barrel)
Average realized price (US$ 47.99 86.68 (45%) 43.78 87.00 (50%)
/barrel)
Netback (US$/barrel) 23.24 53.89 (57%) 18.38 54.74 (66%)
Cash margin (US$/barrel) 29.52 53.89 (45%) 26.39 54.74 (52%)
June 30, 2015 December 31, 2014 June 30, 2014
Cash and restricted cash 39,589 73,036 54,827
Working capital 160,909 201,325 191,023
Total assets 1,257,837 1,284,846 1,150,878
Long-term debt 98,459 98,276 98,198
Shareholders' equity 710,245 716,536 634,708
Highlights for the period ended June 30, 2015 are:
Operational Highlights:
* Average oil production for the three months ended June 30, 2015 was 20,050
barrels of oil per day (bopd) compared to 19,767 bopd in the previous
quarter and 20,630 bopd in the second quarter of 2014. For the six months
ended June 30, 2015, average oil production was 19,909 bopd compared to
20,272 bopd for the same period in 2014.
* Oil sales for the second quarter of 2015 averaged 19,626 bopd compared to
20,283 bopd for the previous quarter and 21,620 bopd for the second quarter
of 2014. Crude oil inventory at June 30, 2015 increased to 307,000 barrels
compared to 270,000 barrels at March 31, 2015. For the six months ended
June 30, 2015, oil sales were 19,953 bopd compared to 20,036 bopd for the
same period in 2014.
* Capital expenditures during the second quarter of 2015 were $38 million.
The Company drilled 12 wells during the quarter, comprised of 10 horizontal
production wells, one water disposal well and one suspended well at the
Patos-Marinza oilfield. Capital expenditures were $50 million for the
previous quarter and $72 million for the second quarter of 2014.
Product Margin Highlights:
* For the three months and six months ended June 30, 2015, operating costs
and sales and transportation (S&T) costs, originating from Albanian-based
companies and their employees, were $32 million ($17.86/bbl) and $69
million ($19.18/bbl), respectively, reduced from $39 million ($19.99/bbl)
and $70 million ($19.27/bbl) for the same periods in 2014. Operating and S&
T costs improved by 13%, on a per barrel basis, from the first quarter of
2015 to the second quarter of 2015.
* In the second quarter of 2015, net operating income (netback) was $42
million ($23.24/bbl) compared to $25 million ($13.62/bbl) for the previous
quarter and $106 million ($53.89/bbl) for the second quarter of 2014. Net
operating income for the six months ended June 30, 2015 was $66 million
($18.38/bbl) compared to $199 million ($54.74/bbl) for the same period in
2014.
* Cash margin for the second quarter of 2015 was $29.52/bbl compared to
$23.32/bbl in the previous quarter and $53.89/bbl in the second quarter of
2014. Cash margin represents netback inclusive of the realized gain on
commodity contracts and recovery against an outstanding accounts receivable
balance. Cash margin for the six months ended June 30, 2015 was $26.39/bbl
compared to $54.74/bbl for the same period in 2014.
Financial Highlights:
* Revenue was $86 million ($47.99/bbl) for the second quarter of 2015,
compared to $72 million ($39.66/bbl) in the previous quarter and $171
million ($86.68/bbl) in the second quarter of 2014. Field price realization
represented 78% of the Brent oil benchmark price ($61.88/bbl) for the
second quarter of 2015 compared to 74% of the Brent oil benchmark price
($53.94/bbl) in the previous quarter and 79% of the Brent oil benchmark
price ($109.67/bbl) in the second quarter of 2014. The increase, as a
percentage of Brent, compared to the previous quarter was mainly due to
higher export sales during the second quarter of 2015. For the six months
ended June 30, 2015, revenue was $158 million ($43.78/bbl) compared to $316
million ($87.00/bbl) for the same period in 2014.
* Royalties to the Albanian Government and related entities during the second
quarter of 2015 were $12 million (14% of revenue) compared to $10 million
(14% of revenue) for the previous quarter and $25 million (15% of revenue)
for the second quarter of 2014. For the six months ended June 30, 2015,
royalties were $22 million (14% of revenue) compared to $47 million (15% of
revenue) for the same period in 2014.
* Funds generated from operations for the second quarter of 2015 were $50
million (US$0.19 per share, CAD$0.24 per share) compared to $25 million
(US$0.10 per share, CAD$0.12 per share) for the previous quarter and $94
million (US$0.36 per share, CAD$0.40 per share) for the second quarter of
2014. Funds generated from operations for the six months ended June 30,
2015 were $75 million (US$0.29 per share, CAD$0.36 per share) compared to
$177 million (US$0.69 per share, CAD$0.75 per share) for the same period in
2014.
* The Company continues to maintain a strong financial position at June 30,
2015, with cash of $40 million and working capital of $161 million. At June
30, 2015, the Company had drawn $114 million of its $223 million approved
credit facilities. Working capital for December 31, 2014 and June 30, 2014
was $201 million and $191 million, respectively.
* Bankers recognized realized gains of $10 million ($5.52/bbl) and $24
million ($6.64/bbl) on financial commodity contracts during the three and
six months periods ended June 30, 2015, respectively. The financial
commodity contracts represent 6,000 bopd at a floor price of $80/bbl of
Dated Brent for 2015. At June 30, 2015, the fair value of these contracts
was $21 million.
OUTLOOK
The Company continues to carry out its 2015 capital program as planned based on
an annual average oil price of $50/bbl of Dated Brent by managing spending to
cash flow. Bankers' activities in the third quarter focus on its three part
strategy to deliver reliable and repeatable low cost horizontal wells through
the primary drilling program, to expand its product margin through
surface-level improvements and to accelerate the enhanced oil recovery program.
The 2015 third quarter-to-date average production is 19,500 bopd from the
Patos-Marinza and Kuçova oilfields in Albania, slightly lower than the second
quarter average of 20,050 bopd. Twelve (12) horizontal production wells are
scheduled for drilling in the third quarter in the main area of the
Patos-Marinza oilfield.
Infrastructure and facilities projects in the third quarter include the final
stages of construction of the northern emulsion gathering flow line system, and
the inlet vessels at Satellite 3. When commissioned later in the third quarter,
this will complete the main facilities for the northern area of the oilfield.
The Company's second commercial polymer skid is expected to be commissioned
within the quarter, supporting the southernmost patterns of the secondary
recovery program. The vapor recovery units at Pad H and Pad D are planned to be
completed by the end of the quarter with commissioning in the fourth quarter.
These two projects will capture additional gas to be used to offset diesel,
propane and electricity costs. In addition, the Company expects to begin
construction of the high-voltage power line for the water disposal system which
will increase power reliability and support future expansion of the water
disposal system.
The Company will continue to expand on the polymer and water flood program with
one (1) water and five (5) polymer conversions in the third quarter.
The Company intends to issue the third quarter 2015 operational update and host
a conference call on Wednesday, October 7, 2015.
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)
(Unaudited, expressed in thousands of US dollars, except per share amounts)
Three months ended Six months ended
June 30 June 30
2015 2014 2015 2014
Revenues $ 85,707 $ 170,531 $ 158,111 $ 315,516
Royalties (12,306) (25,178) (22,450) (47,126)
73,401 145,353 135,661 268,390
Realized gain on financial 9,856 - 23,986 -
commodity contracts
Unrealized loss on financial (20,798) (2,307) (22,837) (2,772)
commodity contracts
62,459 143,046 136,810 265,618
Operating expenses 22,132 24,808 45,627 44,978
Sales and transportation 9,766 14,526 23,663 24,902
expenses
General and administrative 5,188 6,097 9,840 11,969
expenses
Contract settlement expenses 40 347 395 519
Depletion and depreciation 30,830 27,983 60,949 54,676
Share-based compensation 721 999 1,903 2,467
68,677 74,760 142,377 139,511
(6,218) 68,286 (5,567) 126,107
Net finance expense (1,590) (3,994) (10,478) (7,807)
Income (loss) before income tax (7,808) 64,292 (16,045) 118,300
Deferred income tax recovery (2,654) (37,096) 6,462 (66,112)
(expense)
Net income (loss) for the (10,462) 27,196 (9,583) 52,188
period
Other comprehensive income
(loss)
Currency translation adjustment 115 434 (1,305) 200
Comprehensive income (loss) for $ (10,347) $ 27,630 $ (10,888) $ 52,388
the period
Basic earnings (loss) per share $ (0.040) $ 0.105 $ (0.037) $ 0.202
Diluted earnings (loss) per $ (0.040) $ 0.102 $ (0.037) $ 0.197
share
BANKERS PETROLEUM LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited, expressed in thousands of US dollars)
ASSETS
June 30 December 31
2015 2014
Current assets
Cash and cash equivalents $ 33,817 $ 68,036
Restricted cash 5,772 5,000
Accounts receivable 87,161 81,612
Inventory 6,132 10,008
Deposits and prepaid expenses 61,226 62,984
Financial commodity contracts 21,333 44,170
215,441 271,810
Non-current assets
Property, plant and equipment 1,033,741 1,004,508
Exploration and evaluation assets 8,655 8,528
$ 1,257,837 $ 1,284,846
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities $ 42,465 $ 69,285
Current portion of long-term debt 12,067 1,200
54,532 70,485
Non-current liabilities
Long-term debt 98,459 98,276
Decommissioning obligation 27,661 26,147
Deferred tax liabilities 366,940 373,402
547,592 568,310
SHAREHOLDERS' EQUITY
Share capital 365,045 363,670
Contributed surplus 89,631 86,409
Currency translation reserve 3,105 4,410
Retained earnings 252,464 262,047
710,245 716,536
$ 1,257,837 $ 1,284,846
BANKERS PETROLEUM LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, expressed in thousands of US dollars)
Three months ended Six months ended
June 30 June 30
2015 2014 2015 2014
Cash provided by (used in):
Operating activities
Net income (loss) for the $ (10,462) $ 27,196 $ (9,583) $ 52,188
period
Depletion and depreciation 30,830 27,983 60,949 54,676
Accretion of long-term debt 250 598 500 1,049
Accretion of decommissioning 321 272 636 546
obligation
Unrealized foreign exchange 5,118 109 4,340 64
loss
Deferred income tax (recovery) 2,654 37,096 (6,462) 66,112
expense
Share-based compensation 721 999 1,903 2,467
Discount and revaluation of - - - (205)
long-term receivable
Unrealized loss on financial 20,798 2,307 22,837 2,772
commodity contracts
Cash premiums paid for - (2,847) - (2,847)
financial commodity contracts
50,230 93,713 75,120 176,822
Change in non-cash working (26,856) (33,979) (19,017) (36,738)
capital
23,374 59,734 56,103 140,084
Investing activities
Additions to property, plant (37,567) (71,250) (87,385) (131,098)
and equipment
Additions to exploration and - (251) (127) (268)
evaluation assets
Restricted cash (181) (5,000) (772) (2,891)
Change in non-cash working (7,216) 1,694 (12,934) 2,498
capital
(44,964) (74,807) (101,218) (131,759)
Financing activities
Issue of shares for cash 511 9,212 722 13,060
Financing costs - (2) - (435)
Change in long-term debt 2,505 (600) 10,267 (896)
3,016 8,610 10,989 11,729
Foreign exchange gain (loss) on 140 118 (93) 176
cash and cash equivalents
Increase (decrease) in cash and (18,434) (6,345) (34,219) 20,230
cash equivalents
Cash and cash equivalents, 52,251 51,172 68,036 24,597
beginning of period
Cash and cash equivalents, end $ 33,817 $ 44,827 $ 33,817 $ 44,827
of period
Interest paid $ 3,095 $ 3,358 $ 3,140 $ 3,431
Interest received $ 55 $ 52 $ 151 $ 274
BANKERS PETROLEUM LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited, expressed in thousands of US dollars, except number of common
shares)
Number of Share capital Contributed Currency Retained Total
common surplus translation earnings
shares reserve
Balance at 255,681,911 $ 340,305 $ 84,811 $ 6,345 $ 133,214 $ 564,675
December 31,
2013
Share-based - - 4,587 - - 4,587
compensation
Options 4,613,648 20,312 (8,377) - - 11,935
exercised
Warrants 400,000 1,561 (438) - - 1,123
exercised
Net income - - - - 52,188 52,188
for the
period
Currency - - - 200 - 200
translation
adjustment
Balance at 260,695,559 $ 362,178 $ 80,583 $ 6,545 $ 185,402 $ 634,708
June 30,
2014
Share-based - - 6,453 - - 6,453
compensation
Options 388,834 1,492 (627) - - 865
exercised
Net income - - - - 76,645 76,645
for the
period
Currency - - - (2,135) - (2,135)
translation
adjustment
Balance at 261,084,393 $ 363,670 $ 86,409 $ 4,410 $ 262,047 $ 716,536
December 31,
2014
Share-based - - 3,875 - - 3,875
compensation
Options 339,935 1,375 (653) - - 722
exercised
Net loss for - - - - (9,583) (9,583)
the period
Currency - - - (1,305) - (1,305)
translation
adjustment
Balance at 261,424,328 $ 365,045 $ 89,631 $ 3,105 $ 252,464 $ 710,245
June 30,
2015
------------
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, 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". 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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