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BANKERS PETROLEUM LIMITED: 3rd Quarter 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                Three months ended           Nine months 
ended      
(US$000, except 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 share     - basic ($)        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 share     - basic ($)        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 financial       (1,085)    4,998      (4,050)    
2,982   
commodity contracts                                                              
                                                                                 
                                          90,710     80,191     252,632    
209,278  


                                                                                
                                                                                    
                                                                                    


Operating expenses                        20,229     17,328     56,699     
43,562   
                                                                             
Sales and transportation expenses         13,407     12,967     41,101     
30,758   
                                                                             
General and administrative expenses       3,999      3,536      11,617     
9,974    
                                                                             
Depletion and depreciation                15,644     9,591      43,388     
26,983   
                                                                             
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 expense               (19,472)   (20,412)   (52,450)   
(48,749) 
                                                                             
Net income for the period                 12,274     13,696     31,292     
35,715   


                                                                                
                                                                                    
                                                                                    
    Other comprehensive income (loss)                                               
                                                                                    


  Currency translation adjustment         820        (2,626)    821        
(373)    
                                                                             
Comprehensive income for the period     $ 13,094   $ 11,070   $ 32,113   $ 
35,342   


                                                                                
                                                                                    
                                                                                    


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


                                                                                
                                                                                    
                                                                                    


Diluted earnings per share              $ 0.048    $ 0.054    $ 0.123    $ 
0.140    


                                                                                
                                                                                    
                                                                                    


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 equivalents            $ 21,695          49,013      
                                                   $              
                                                                  
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 obligation             15,360          13,561      
                                                                  
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 period                               $ 12,274   $ 13,696   
$ 31,292    $ 35,715     
                                                                             
                    
  Depletion and depreciation                                15,644     9,591    
  43,388      26,983     
                                                                             
                    
  Amortization of deferred financing costs                  -          -        
  -           734        
                                                                             
                    
  Accretion of long-term debt                               1,239      845      
  3,565       1,593      
                                                                             
                    
  Accretion of decommissioning obligation                   211        115      
  608         309        
                                                                             
                    
  Unrealized foreign exchange (gain) loss                   328        (77)     
  448         1,267      
                                                                             
                    
  Deferred income tax expense                               19,472     20,412   
  52,450      48,749     
                                                                             
                    
  Share-based payments                                      1,953      2,515    
  7,636       9,487      
                                                                             
                    
  Unrealized (gain) loss on financial commodity contracts   1,085      (4,998)  
  4,050       (2,982)    
                                                                             
                    
  Cash premiums paid for financial commodity contracts      (3,898)    -        
  (3,898)     (6,588)    


                                                                                
                        


                                                        48,308     42,099   
  139,539     115,267    
                                                                             
                    
  Change in non-cash working capital                        (16,153)   (15,352) 
  (28,767)    (18,011)   


                                                                                
                        


                                                        32,155     26,747   
  110,772     97,256     
                                                                             
                    
Investing activities                                                             


                        
                                                                                


                    
  Additions to property, plant and equipment                (53,526)   (65,147) 
  (168,859)   (186,465)  
                                                                             
                    
  Restricted cash                                           (13,417)   -        
  (13,417)    (5,000)    
                                                                             
                    
  Change in non-cash working capital                        736        5,095    
  (3,373)     15,637     


                                                                                
                        


                                                        (66,207)   (60,052) 
  (185,649)   (175,828)  
                                                                             
                    
Financing activities                                                             


                        
                                                                                


                    
  Issue of shares for cash                                  -          54       
  12,177      5,347      
                                                                             
                    
  Financing costs                                           -          -        
  (750)       (30)       
                                                                             
                    
  Increase in long-term debt                                290        6,579    
  36,107      14,519     
                                                                             
                    
  Share issue costs                                         -          (167)    
  -           (167)      


                                                                                
                        


                                                        290        6,466    
  47,534      19,669     
                                                                             
                    
Foreign exchange gain (loss) on cash and cash equivalents   160        (1,347)  
  25          (973)      
                                                                             
                    
Decrease in cash and cash equivalents                       (33,602)   (28,186) 
  (27,318)    (59,876)   
                                                                             
                    
Cash and cash equivalents, beginning of period              55,297     74,929   
  49,013      106,619    
                                                                             
                    
Cash and cash equivalents, end of period                  $ 21,695   $ 46,743   
$ 21,695    $ 46,743     


                                                                                
                        
                                                                                
                        
                                                                                


                    
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 December 31, 2010    244,794,990 $ 309,379 $     1,597 $        
28,135   $       6,094   $    1,062 $ 346,267 
Share-based payments                      -         -           -          
19,166               -            -    19,166
Options exercised                 2,721,779     8,303           -         
(2,956)               -            -     5,347
Share issue costs                         -     (167)           -               
-               -            -     (167)
Net income for the period                 -         -           -               
-               -       35,715    35,715
Currency translation                      -         -           -               
-           (373)            -     (373)
adjustment
Balance at September 30, 2011   247,516,769 $ 317,515 $     1,597 $        
44,345   $       5,721   $   36,777 $ 405,955 
Share-based payments                      -         -           -           
5,319               -            -     5,319
Options exercised                     6,667        45           -            
(13)               -            -        32
Warrants exercised                  174,333       461        (57)               
-               -            -       404
Net income for the period                 -         -           -               
-               -          281       281
Currency translation                      -         -           -               
-             688            -       688
adjustment
Balance at December 31, 2011    247,697,769 $ 318,021 $     1,540 $        
49,651   $       6,409   $   37,058 $ 412,679 
Share-based payments                      -         -           -          
14,938               -            -    14,938
Options exercised                   553,945     1,833           -           
(719)               -            -     1,114
Warrants exercised                4,672,991    12,596     (1,533)               
-               -            -    11,063
Warrants expired                          -         -         (7)               
7               -            -         -
Net income for the period                 -         -           -               
-               -       31,292    31,292
Currency translation                      -         -           -               
-             821            -       821
adjustment
Balance at September 30, 2012   252,924,705 $ 332,450 $         - $        
63,877   $       7,230   $   68,350 $ 471,907 
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. 
SOURCE: Bankers Petroleum Ltd. 
For further information: 
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 
(BNK., BNK) 

END 
-0- Nov/12/2012 13:01 GMT
 
 
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