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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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