Bankers Petroleum Announces 2012 Third Quarter Financial and Operational Results

Bankers Petroleum Announces 2012 Third Quarter Financial and Operational 
Results 
Record Quarter of Production and Cash Flows 
CALGARY, Nov. 12, 2012 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the 
"Company") (TSX: BNK, AIM: BNK) is pleased to provide its 2012 third quarter 
financial and operational results. The complete reporting package, 
consisting of Management's Discussion and Analysis along with the Financial 
Statements and Notes, is posted on the Company's website 
www.bankerspetroleum.com and on SEDAR: www.sedar.com. 
Results at a
Glance
(US$000, except          Three months ended        Nine months ended
as noted)                   September 30             September 30 


                     2012        2011   Change   2012    2011  Change

Oil revenue         115,054      93,650    23% 316,309 251,570     26%

Net operating
income               58,159      44,898    30% 158,882 131,976     20%

Net income           12,274      13,696  (10%)  31,292  35,715   (12%)

  Per   - basic
  share ($)           0.049       0.055  (11%)   0.124   0.145   (14%)
        - diluted
        ($)           0.048       0.054  (11%)   0.123   0.140   (12%)

Funds generated
from operations(
(1))              48,308( )      42,099    15% 139,539 115,267     21%

  Per   - basic
  share ($)           0.191       0.170    12%   0.554   0.467     19%

Capital
expenditures         53,526      65,147  (18%) 168,859 186,465    (9%)

Average sales
(bopd)               15,715      13,667    15%  14,393  12,578     14%

Average price
($/barrel)            79.58       74.48     7%   80.21   73.26      9%

Netback
($/barrel)            40.23       35.71    13%   40.29   38.43      5%

(1) Includes a $3.9 million payment for a financial commodity contract
in August 2012.
                                                                
                       September 30      December 31     September 30
                           2012              2011            2011

Cash and cash on
deposits                       40,112           54,013          53,243

Working capital               106,537           80,282          73,491

Total assets                  810,017          661,216         612,348

Long-term debt                 97,016           46,692          20,187

Shareholders'
equity                        471,907          412,679         405,955
                                       
                                       

Highlights for the quarter and nine months ended September 30, 2012 are:
    --  For the third quarter of 2012, oil sales averaged 15,715 bopd,
        an increase of 15% compared to 13,667 bopd for the same period
        in 2011 and an increase of 11% compared to 14,169 bopd for the
        preceding quarter.  For the nine months ended September 30,
        2012, oil sales increased 14% to 14,393 bopd from 12,578 bopd
        for the comparable 2011 period.
    --  Revenue for the third quarter of 2012 increased by 23% to
        $115.1 million ($79.58/bbl) from $93.7 million ($74.48/bbl) in
        the same period of 2011.  Revenue for the third quarter of 2012
        represented 73% of the Brent oil price of $110/bbl.  Revenue
        for the nine month 2012 period totalled $316.3 million
        ($80.21/bbl), an increase of 26% from $251.6 million
        ($73.26/bbl) for the same period of 2011.
    --  Royalties to the Albanian Government and related entities were
        $23.3 million and $18.5 million for the third quarter of 2012
        and 2011, respectively (both representing 20% of total
        revenue).  Total royalties were $59.6 million and $45.3 million
        for the nine months ended September 30, 2012 and 2011,
        respectively.
    --  Operating, sales and transportation costs in the third quarter
        of 2012, originating from Albanian-based companies and their
        employees, were $33.6 million, compared with $30.3 million for
        the third quarter of 2011.
    --  The Company recorded net operating income (netback) of $58.2
        million ($40.23/bbl) in the third quarter of 2012, an increase
        of 30% compared to $44.9 million ($35.71/bbl) in the same
        period of 2011.  For the nine months ended September 30, 2012,
        net operating income totalled $158.9 million ($40.29/bbl), a
        20% increase from $132.0 million ($38.43/bbl) for the same
        period in 2011.
    --  Funds generated from operations for the third quarter of 2012
        were $48.3 million, a 15% increase compared to $42.1 million
        for the third quarter of 2011.  For the nine months ended
        September 30, 2012, funds generated from operations were $139.5
        million as compared to $115.3 million for the nine months ended
        September 30, 2011. Included in funds generated from operations
        is a payment of $3.9 million for a financial commodity contract
        in August 2012.
    --  Capital expenditures in the third quarter of 2012 were $53.5
        million.  The Company drilled 34 wells during the quarter,
        comprised of 31 horizontal wells, one lateral re-drill
        sidetrack well, and two core wells in the southern area of the
        field.  Re-activation and re-completion work continued during
        the quarter.  During the same period of 2011, capital
        expenditures were $65.1 million.  For the nine months ended
        September 30, 2012, capital expenditures totalled $168.9
        million, a reduction of 9% from $186.5 million for the
        comparable 2011 period.
    --  During the third quarter of 2012, Bankers participated in the
        bid evaluation process for the privatization of the Albanian
        national oil company "Albpetrol Sh.A".  Although Bankers'
        participation was unsuccessful, the winning bid value of EUR
        850 million attributed to Albpetrol's assets enhances Bankers
        oilfields' valuation and also demonstrates the Company's
        commitment to expand its business activities in Albania.
    --  At September 30, 2012, total deposits and prepaid expenses were
        $29.2 million compared to $17.5 million at the end of December
        2011, of which $16.6 million and $1.2 million, respectively, is
        paid to the Albanian court as deposits for procedure purposes
        on several legal cases.  The recoverability of these amounts is
        dependent on the outcome of these cases.  As of September 30,
        2012, these amounts were considered recoverable.
    --  The Company is in the process of challenging assessments from
        the Albanian Government Tax Director negating the previous
        exemption relief from carbon and circulation taxes on diluent
        imports.  These assessments represent a total of $15 million
        covering the last five years. The Company was successful in
        setting aside a recently introduced separate excise tax
        assessment amounting to $8 million on the Company's importation
        and use of diluent.  Other audits have also resulted in an
        additional assessment of previously exempted Value Added Taxes
        for some of Bankers' subcontractors.  Bankers has urged the
        Government of Albania to re-consider its position before
        proceeding with implementation of this assessment and is
        hopeful that these contractual exemptions will continue to be
        applied.
    --  The Company continues to maintain a strong financial position
        at September 30, 2012 with cash of $40.1 million and working
        capital of $106.5 million.  Working capital for December 31,
        2011 and September 30, 2011 was $80.3 million and $73.5
        million, respectively.

Financial Update

Bankers has commenced discussions with EBRD and IFC, its reserve-based 
lenders, for an increase to its $110 million credit facility and a term 
extension that would extend existing repayments, currently scheduled to 
commence in October 2013. The existing 2009 facility was based on 2008 
year-end reserves; subsequent reserve increases have significantly expanded 
the Company's borrowing base.

Operational Update and Outlook

The average fourth quarter 2012 production to date from the Patos-Marinza 
oilfield in Albania was 16,100 barrels of oil per day ("bopd"), 3% higher than 
the third quarter average.

The Company has made several improvements to address operational challenges 
associated with mature heavy oilfield development including interference from 
old well bores, sand production, and water disposal capacity. Five (5) 
previously drilled wells that were shut-in due to liner failure in late 2011 
have been re-drilled with a lateral sidetrack through the cased section of the 
wellbore and a new higher grade steel liner with redesigned slot configuration 
for additional strength has been run in the new lateral legs. The wells were 
successfully completed and are currently producing at a cumulative production 
rate of 500 bopd (average of 100 bopd per well). Additional candidate wells 
are being prepared for lateral re-drilling and installation of improved 
tubulars with three (3) re-drill sidetracks planned for the remainder of the 
fourth quarter and several more in the first half of next year to restore 
shut-in production from similar wells that have demonstrated good production 
capability, but are restricted due to liner failure concerns.

The Company continues to be pleased with the results of the horizontal 
drilling program, along with the results of lateral section re-drills 
initiated in the third quarter and continuing into the fourth quarter and 
first part of 2013.

For additional information, please see an updated version of the Company's 
November corporate presentation on www.bankerspetroleum.com.

Bankers Petroleum is expanding and has several exciting career opportunities 
available for both Calgary and Albania. Please visit our website for full 
details on these career opportunities and to see how to apply.
                                    BANKERS PETROLEUM LTD.
                  CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
    (Unaudited, expressed in thousands of US dollars, except per share
                                amounts)
                              Three months ended     Nine months ended
                                 September 30          September 30
                                 2012       2011       2012       2011
                                                                       

Revenues                    $  115,054 $   93,650 $  316,309 $  251,570

Royalties                     (23,259)   (18,457)   (59,627)   (45,274)
                                91,795     75,193    256,682    206,296

Unrealized gain (loss) on      (1,085)      4,998    (4,050)      2,982
financial commodity
contracts
                                90,710     80,191    252,632    209,278
                                                                       

Operating expenses              20,229     17,328     56,699     43,562

Sales and transportation        13,407     12,967     41,101     30,758
expenses

General and                      3,999      3,536     11,617      9,974
administrative expenses

Depletion and                   15,644      9,591     43,388     26,983
depreciation 

Share-based payments             1,953      2,515      7,636      9,487
                                55,232     45,937    160,441    120,764
                                35,478     34,254     92,191     88,514
                                                                       

Net finance expense              3,732        146      8,449      4,050
                                                                       

Income before income tax        31,746     34,108     83,742     84,464

Deferred income tax           (19,472)   (20,412)   (52,450)   (48,749)
expense

Net income for the period       12,274     13,696     31,292     35,715
                                                                       

Other comprehensive                                                    
income (loss)

  Currency translation             820    (2,626)        821      (373)
  adjustment

Comprehensive income for    $   13,094 $   11,070 $   32,113 $   35,342
the period
                                                                       

Basic earnings per share    $    0.049 $    0.055 $    0.124 $    0.145
                                                                

Diluted earnings per        $    0.048 $    0.054 $    0.123 $    0.140
share
                                                                       
                                    BANKERS PETROLEUM LTD.
                   CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                (Unaudited, expressed in thousands of US dollars)
                                                   ASSETS
                                          September 30      December 31
                                              2012             2011

Current assets                                                         


Cash and cash                        $       21,695    $      49,013 
equivalents  


    Restricted cash                              18,417            5,000
    Accounts receivable                          75,646           56,006
    Inventory                                    11,912           14,412


Deposits and prepaid                         29,162           17,463 
expenses 
Financial commodity                               2            3,684 
contracts 
                                           156,834          145,578 
Non-current assets                                                      
Financial commodity                           3,530                - 
contract 
Property, plant and                         649,653          515,638 
equipment 
                                    $      810,017    $     661,216 
                                            LIABILITIES 
Current liabilities                                                     
Accounts payable and                 $       48,808   $       52,109 
accrued liabilities 
Current portion of                            1,489           13,187 
long-term debt 


                                                50,297           65,296

Non-current liabilities                                                
    Long-term debt                               97,016           46,692


Decommissioning                              15,360           13,561 
obligation 


    Deferred tax liabilities                    175,437          122,988
                                               338,110          248,537
                                         SHAREHOLDERS' EQUITY

Share capital                                  332,450          318,021

Warrants                                             -            1,540

Contributed surplus                             63,877           49,651

Currency translation reserve                     7,230            6,409

Retained earnings                               68,350           37,058
                                               471,907          412,679
                                        $      810,017    $     661,216
                                                             
                                        BANKERS PETROLEUM LTD.
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
               (Unaudited, expressed in thousands of US dollars)
                                                              
                           Three months ended       Nine months ended
                              September 30            September 30
                              2012       2011       2012        2011

Cash provided by (used                                                
in):

Operating activities                                                  

  Net income for the     $   12,274 $   13,696 $    31,292 $    35,715
  period

  Depletion and              15,644      9,591      43,388      26,983
  depreciation

  Amortization of                 -          -           -         734
  deferred financing
  costs

  Accretion of long-term      1,239        845       3,565       1,593
  debt

  Accretion of                  211        115         608         309
  decommissioning
  obligation

  Unrealized foreign            328       (77)         448       1,267
  exchange (gain) loss

  Deferred income tax        19,472     20,412      52,450      48,749
  expense

  Share-based payments        1,953      2,515       7,636       9,487

  Unrealized (gain) loss      1,085    (4,998)       4,050     (2,982)
  on financial commodity
  contracts

  Cash premiums paid for    (3,898)          -     (3,898)     (6,588)
  financial commodity
  contracts
                             48,308     42,099     139,539     115,267

  Change in non-cash       (16,153)   (15,352)    (28,767)    (18,011)
  working capital
                             32,155     26,747     110,772      97,256

Investing activities                                                  

  Additions to property,   (53,526)   (65,147)   (168,859)   (186,465)
  plant and equipment

  Restricted cash          (13,417)          -    (13,417)     (5,000)

  Change in non-cash            736      5,095     (3,373)      15,637
  working capital
                           (66,207)   (60,052)   (185,649)   (175,828)

Financing activities                                                  

  Issue of shares for             -         54      12,177       5,347
  cash

  Financing costs                 -          -       (750)        (30)

  Increase in long-term         290      6,579      36,107      14,519
  debt

  Share issue costs               -      (167)           -       (167)
                                290      6,466      47,534      19,669

Foreign exchange gain           160    (1,347)          25       (973)
(loss) on cash and cash
equivalents

Decrease in cash and       (33,602)   (28,186)    (27,318)    (59,876)
cash equivalents

Cash and cash                55,297     74,929      49,013     106,619
equivalents, beginning
of period

Cash and cash            $   21,695 $   46,743 $    21,695 $    46,743
equivalents, end of
period
                                                                      

Interest paid            $      253 $      197 $     1,975 $     1,349

Interest received        $       43 $       80 $       321 $       443
                                                              
                                                             BANKERS PETROLEUM LTD.
                                             CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                 (Unaudited, expressed in thousands of US dollars, except number of common shares)
               Number of                                              Currency                  
                common         Share                 Contributed     translation     Retained
                shares        capital   Warrants       surplus         reserve       earnings     Total

Balance at    244,794,990   $ 309,379 $    1,597   $      28,135   $       6,094   $    1,062  $ 346,267
December
31, 2010
                                                                                                        

Share-based             -           -          -          19,166               -            -     19,166
payments

Options         2,721,779       8,303          -         (2,956)               -            -      5,347
exercised

Share issue             -       (167)          -               -               -            -      (167)
costs

Net income              -           -          -               -               -       35,715     35,715
for the
period

Currency                -           -          -               -           (373)            -      (373)
translation
adjustment

Balance at    247,516,769   $ 317,515 $    1,597   $      44,345   $       5,721   $   36,777  $ 405,955
September
30, 2011
                                                                                                        

Share-based             -           -          -           5,319               -            -      5,319
payments

Options             6,667          45          -            (13)               -            -         32
exercised

Warrants          174,333         461       (57)               -               -            -        404
exercised

Net income              -           -          -               -               -          281        281
for the
period

Currency                -           -          -               -             688            -        688
translation
adjustment

Balance at    247,697,769   $ 318,021 $    1,540   $      49,651   $       6,409   $   37,058  $ 412,679
December
31, 2011
                                                                                                        

Share-based             -           -          -          14,938               -            -     14,938
payments

Options           553,945       1,833          -           (719)               -            -      1,114
exercised

Warrants        4,672,991      12,596    (1,533)               -               -            -     11,063
exercised

Warrants                -           -        (7)               7               -            -          -
expired

Net income              -           -          -               -               -       31,292     31,292
for the
period

Currency                -           -          -               -             821            -        821
translation
adjustment

Balance at    252,924,705   $ 332,450 $        -   $      63,877   $       7,230   $   68,350  $ 471,907
September
30, 2012
                                                                                                  

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 reactivations and well recompletions 
of the past will continue and success rates and production rates will be 
similar to those rates experienced for previous well recompletions and 
reactivations; 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 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 and 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.

Abby Badwi President and Chief Executive Officer (403) 513-2694

Doug Urch Executive VP, Finance and Chief Financial Officer (403) 513-2691

Mark Hodgson VP, Business Development (403) 513-2695

Email:investorrelations@bankerspetroleum.com 
Website:www.bankerspetroleum.com

AIM NOMAD: Canaccord Genuity Limited Henry Fitzgerald-O'Connor +44 20 7050 8000

AIM JOINT BROKERS: Canaccord Genuity Limited Henry Fitzgerald-O'Connor +44 20 
7050 8000

Macquarie Capital Advisors Paul Connolly +44 20 3037 5639

SOURCE: Bankers Petroleum Ltd.

To view this news release in HTML formatting, please use the following URL: 
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CO: Bankers Petroleum Ltd.
ST: Alberta
NI: OIL ERN 

-0- Nov/12/2012 13:00 GMT


 
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