BANKERS PETROLEUM LIMITED: 3rd Quarter Results

Bankers Petroleum Announces 2013 Third Quarter Financial and Operational
Results 
Accumulated Free Cash Flow of $32 Million and Q4 Average Production to Date
19,050 bopd 
CALGARY, Nov. 8, 2013 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the
"Company") (TSX: BNK, AIM: BNK) is pleased to provide its 2013 third quarter
financial and operational results.  During the quarter, Bankers achieved its
third consecutive quarter of free cash flow and record production levels. 
                               Three months ended                   Nine 
months ended 
Results at a Glance                September 30                         
September 30       
                                                                             
      
($000s, except as noted)           2013     2012    % change   2013     2012    
 % change  
                                                                             
      
Financial                                                                        


          
                                                                                


       
Oil revenue                     146,665  115,054 27%        411,065  316,309 
 30%       
                                                                             
       
Net operating income            82,725   58,159  42%        225,032  158,882 
 42%       
                                                                             
       
Net income                      19,507   12,274  59%        46,708   31,292  
 49%       


                                                                                
          


   Per share   - basic ($)     0.08     0.05    60%        0.18     0.12    
 50%       


                                                                                
          


               - diluted ($)   0.08     0.05    60%        0.18     0.12    
 50%       
                                                                             
       
Funds generated from operations 71,074   48,308  47%        198,210  139,539 
 42%       


                                                                                
          


   Per share   - basic ($)     0.28     0.19    47%        0.78     0.55    
 42%       
                                                                             
       
Capital expenditures            66,199   53,526  24%        165,915  168,859 
 (2%)      
                                                                             
      
Operating                                                                        


          
                                                                                


       
Average sales (bopd)            18,332   15,715  17%        17,655   14,393  
 23%       
                                                                             
       
Average price ($/barrel)        86.96    79.58   9%         85.29    80.21   
 6%        
                                                                             
       
Netback ($/barrel)              49.05    40.23   22%        46.69    40.29   
 16%       
                                                                             
       
Average Brent oil price ($/              109.50                               
       
barrel)                         110.29           1%         108.46   112.21  
 (3%)      


                                                                                
          
                                                                                
          
                                                                                
          


                                        September 30, 2013 December 31, 
2012 % change  
                                                                             
      
Cash and deposits                           40,659             38,740           
 5%        
                                                                             
      
Working capital                             121,973            88,799           
 37%       
                                                                             
      
Total assets                                971,587            825,816          
 18%       
                                                                             
      
Long-term debt                              98,153             97,158           
 1%        
                                                                             
      
Shareholders' equity                        542,655            483,032          
 12%       


                                                                                
          
    Highlights for the quarter and nine months ended September 30, 2013 are:

·         Average oil production for the three months ended September 30, 2013
was 18,541 barrels of oil per day (bopd), 4% higher as compared to 17,886 bopd
in the second quarter of 2013 and 19% higher than 15,616 bopd in the third
quarter of 2012.  Average oil production for the fourth quarter to-date is
approximately 19,050 bopd.

·         Oil sales averaged 18,332 bopd for the third quarter of 2013, an
increase of 2% compared to 18,008 bopd for the previous quarter and 17%
compared to 15,715 bopd for the third quarter of 2012.  For the nine months
ended September 30, 2013, oil sales were 17,655 bopd, an increase of 23%
compared to 14,393 bopd for the comparable 2012 period.

·         Revenue was $147 million ($86.96/bbl) for the third quarter of 2013,
an increase of 11% compared to $132 million ($80.45/bbl) in the previous
quarter and an increase of 27% from $115 million ($79.58/bbl) in the third
quarter of 2012.  Revenue for the third quarter of 2013 represented 79% of the
Brent oil price of $110/bbl, compared to 79% of the Brent oil price of $102/bbl
in the previous quarter and 73% of the Brent oil price of $110/bbl in the third
quarter of 2012.

·         For the third quarter of 2013, royalties to the Albanian Government
and related entities were $25 million (17% of revenue) compared to $22 million
(16% of revenue) in the previous quarter and $23 million (20% of revenue) for
the same quarter of 2012.  Total royalties were $70 million (17% of revenue)
and $60 million (19% of revenue) for the nine months ended September 30, 2013
and 2012, respectively.

·         For the three and nine months periods ended September 30, 2013,
operating, sales and transportation costs, originating from Albanian-based
companies and their employees, were $39 million and $116 million, respectively,
compared to $34 million and $98 million for the comparable periods of 2012.

·         The Company recorded net operating income (netback) of $83 million
($49.05/bbl) in the third quarter of 2013, a 20% increase from $69 million
($42.19/bbl) in the previous quarter and 42% from $58 million ($40.23/bbl) in
the third quarter of 2012.  For the nine months ended September 30, 2013, net
operating income was $225 million ($46.69/bbl), a 42% increase compared to $159
million ($40.29/bbl) in the comparable 2012 period.

·         For the third quarter of 2013, funds generated from operations were
$71 million, a 15% increase compared to $62 million for the previous quarter
and a 47% increase compared to $48 million for the same period of 2012.

·         Capital expenditures were $66 million in the third quarter of 2013. 
The Company drilled 34 wells during the quarter, comprised of 32 horizontal
production wells and two horizontal lateral re-drill wells in the main area of
the Patos-Marinza field.  Capital expenditures were $52 million and $54 million
for the previous quarter and the same period in 2012, respectively.

·         The Company continues to maintain a strong financial position at
September 30, 2013 with cash of $41 million and working capital of $122
million.  At September 30, 2013, the Company had drawn $106 million of its $230
million approved credit facilities.  Working capital for December 31, 2012 and
September 30, 2012 was $89 million and $107 million, respectively.

Outlook  

The average fourth quarter 2013 production to date from the Patos-Marinza
oilfield in Albania continues steady growth at approximately 19,050 bopd, 3%
higher than the third quarter average.

The Company is pleased with the performance of the horizontal drilling program
with plans to drill an estimated thirty-four (34) horizontal wells and two (2)
water disposal service wells in the fourth quarter. Delineation activities in
the South Patos area and previously announced drilling and reactivations at
Kuçova have been deferred to accommodate permitting and rig availability,
however, the Company intends to proceed with these plans in early 2014.

Expansion plans of enhanced oil recovery (EOR), polymer flood and water flood
patterns are moving forward in the fourth quarter.  The Company continues to
monitor and assess pilot performance with initial results expected in the first
half of 2014.

In the third quarter, the Company increased spending to nearly $5 million on
facilities and infrastructure projects, nearly double the infrastructure
spending in the first half of the year with projections in the fourth quarter
to spend a similar amount.  Construction on a new satellite treatment facility
in the north central region of the Patos-Marinza field and sludge treatment
facility are in their final stages; both are scheduled to be operational in the
first quarter of 2014.  Other projects include existing well-pad retrofits, new
well-pad cascade treating facilities, and installation of updated fluid
measurement equipment.

"These are exciting times for Bankers. We began the year realizing our first
quarter of free cash flow and we have now hit our third consecutive quarter,
totalling $32 million free cash flow to date in 2013. We have built a solid
platform of reliable, disciplined growth through our drilling program and
expect to bring in a sixth rig by early 2014.  I have been very pleased with
the performance of the business, and our financial strength to grow within cash
flow gives us lots of options to balance validating EOR with steady drilling
growth." said David French, President and CEO of Bankers Petroleum.

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        


                                                                                
              
                                                     2013       2012       2013 
      2012    
                                                                                
              
                                                                                
              
                                                                                


          
Revenues                                           $ 146,665  $ 115,054  $ 
411,065  $ 316,309  
                                                                             
          
Royalties                                            (24,664)   (23,259)   
(69,655)   (59,627) 


                                                                                
              


                                                 122,001    91,795     
341,410    256,682  
                                                                             
          
Unrealized loss on financial commodity contracts     (2,208)    (1,085)    
(3,588)    (4,050)  


                                                                                
              


                                                 119,793    90,710     
337,822    252,632  


                                                                                
              
                                                                                
              
                                                                                


          
Operating expenses                                   22,000     20,229     
65,445     56,699   
                                                                             
          
Sales and transportation expenses                    17,276     13,407     
50,933     41,101   
                                                                             
          
General and administrative expenses                  4,434      3,999      
14,902     11,617   
                                                                             
          
Depletion and depreciation                           25,583     15,644     
73,218     43,388   
                                                                             
          
Share-based payments                                 1,692      1,953      
8,053      7,636    


                                                                                
              


                                                 70,985     55,232     
212,551    160,441  


                                                                                
              


                                                 48,808     35,478     
125,271    92,191   


                                                                                
              
                                                                                
              
                                                                                


          
Net finance expense                                  3,311      3,732      
8,867      8,449    


                                                                                
              
                                                                                
              
                                                                                


          
Income before income tax                             45,497     31,746     
116,404    83,742   
                                                                             
          
Deferred income tax expense                          (25,990)   (19,472)   
(69,696)   (52,450) 
                                                                             
          
Net income for the period                            19,507     12,274     
46,708     31,292   


                                                                                
              
                                                                                
              
                                                                                


          
Other comprehensive income (loss)                                                


              
                                                                                
              


Currency translation adjustment                  263        820        
(599)      821      
                                                                             
          
Comprehensive income for the period                $ 19,770   $ 13,094   $ 
46,109   $ 32,113   


                                                                                
              
                                                                                
              
                                                                                


          
Basic earnings per share                           $ 0.077    $ 0.049    $ 
0.184    $ 0.124    
                                                                             
          
Diluted earnings per share                         $ 0.076    $ 0.048    $ 
0.183    $ 0.123    


                                                                                
              
                                                                                
              
                                                                                
              
    BANKERS PETROLEUM LTD.                                                         


                                                                           
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION                                   
                                                                           
(Unaudited, expressed in thousands of US dollars)                               


                                                                               
                                                                               


                                                                           
ASSETS                                                                          


                                                                               
                                                  September 30      December 31
                                                  2013              2012       


                                                                           
Current assets                                                                  
                                                                            
Cash and cash equivalents                  $   33,550         $  33,740      
                                                                            
Restricted cash                                7,109             5,000       
                                                                            
Accounts receivable                            55,339            35,603      
                                                                            
Inventory                                      35,021            23,517      
                                                                            
Deposits and prepaid expenses                  45,349            30,265      
                                                                            
Financial commodity contract                   -                 1,550       


                                                                               
                                                  176,368           129,675    


                                                                           
Non-current assets                                                              
                                                                            
Long-term receivable                           10,261            11,150      
                                                                            
Financial commodity contracts                  2,599             -           
                                                                            
Property, plant and equipment                  775,766           681,399     
                                                                            
Exploration and evaluation assets              6,593             3,592       


                                                                               
                                              $   971,587       $   825,816    
                                                                               
                                                                               


                                                                           
LIABILITIES                                                                     
                                                                           
Current liabilities                                                             
                                                                            
Accounts payable and accrued               $   52,676         $  38,787      
liabilities                                                                  
                                                                            
Current portion of long-term debt              1,719             2,089       


                                                                               
                                                  54,395            40,876     


                                                                           
Non-current liabilities                                                         
                                                                            
Long-term debt                                 98,153            97,158      
                                                                            
Decommissioning obligation                     18,685            16,747      
                                                                            
Deferred tax liabilities                       257,699           188,003     


                                                                               
                                                  428,932           342,784    
                                                                               
                                                                               


                                                                           
SHAREHOLDERS' EQUITY                                                            
                                                                            
Share capital                                  338,041           334,764     
                                                                            
Contributed surplus                            79,672            69,435      
                                                                            
Currency translation reserve                   6,763             7,362       
                                                                            
Retained earnings                              118,179           71,471      


                                                                               
                                                  542,655           483,032    
                                                                               
                                               $  971,587       $   825,816    
                                                                               
    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          


                                                                                
                   


                                                    2013       2012       
2013        2012      
                                                                             
               
Cash provided by (used in):                                                      


                   
                                                                                


               
Operating activities                                                             


                   
                                                                                


               
  Net income for the period                           $ 19,507   $ 12,274   $ 
46,708    $ 31,292    
                                                                             
               
  Depletion and depreciation                            25,583     15,644     
73,218      43,388    
                                                                             
               
  Accretion of long-term debt                           424        1,239      
2,402       3,565     
                                                                             
               
  Accretion of decommissioning obligation               259        211        
750         608       
                                                                             
               
  Unrealized foreign exchange (gain) loss               48         328        
(400)       448       
                                                                             
               
  Deferred income tax expense                           25,990     19,472     
69,696      52,450    
                                                                             
               
  Share-based payments                                  1,692      1,953      
8,053       7,636     
                                                                             
               
  Unwinding of discount of long-term receivable         (681)      -          
(2,122)     -         
                                                                             
               
  Revaluation loss of long-term receivable              681        -          
954         -         
                                                                             
               
  Unrealized loss on financial commodity contracts      2,208      1,085      
3,588       4,050     
                                                                             
               
  Cash premiums paid for financial commodity            (4,637)    (3,898)    
(4,637)     (3,898)  
  contracts                                                                      


                   
                                                                                
                   


                                                    71,074     48,308     
198,210     139,539   
                                                                             
               
  Change in long-term receivable                        -          -          
2,057       -         
                                                                             
               
  Change in non-cash working capital                    5,722      (16,153)   
(39,227)    (28,767)  


                                                                                
                   


                                                    76,796     32,155     
161,040     110,772   
                                                                             
               
Investing activities                                                             


                   
                                                                                


               
  Additions to property, plant and equipment            (63,879)   (53,506)   
(162,914)   (166,957) 
                                                                             
               
  Additions to exploration and evaluation assets        (2,320)    (20)       
(3,001)     (1,902)   
                                                                             
               
  Restricted cash                                       -          (13,417)   
(2,109)     (13,417)  
                                                                             
               
  Change in non-cash working capital                    5,260      736        
6,792       (3,373)   


                                                                                
                   


                                                    (60,939)   (66,207)   
(161,232)   (185,649) 
                                                                             
               
Financing activities                                                             


                   
                                                                                


               
  Issue of shares for cash                              545        -          
1,955       12,177    
                                                                             
               
  Financing costs                                       -          -          
(1,994)     (750)     
                                                                             
               
  Change in long-term debt                              (9,191)    290        
10          36,107    


                                                                                
                   


                                                    (8,646)    290        
(29)        47,534    
                                                                             
               
Foreign exchange gain on cash and cash equivalents      67         160        
31          25        
                                                                             
               
Increase (decrease) in cash and cash equivalents        7,278      (33,602)   
(190)       (27,318)  
                                                                             
               
Cash and cash equivalents, beginning of period          26,272     55,297     
33,740      49,013    
                                                                             
               
Cash and cash equivalents, end of period              $ 33,550   $ 21,695   $ 
33,550    $ 21,695    


                                                                                
                   
                                                                                
                   
                                                                                


               
Interest paid                                         $ 44       $ 253      $ 
2,832     $ 1,975     
                                                                             
               
Interest received                                     $ 26       $ 43       $ 
145       $ 321       
                                                                             
                
Supporting Documents 
The full Management Discussion and Analysis (MD&A), Financial Statements and
updated November corporate presentation are available on 
www.bankerspetroleum.com. The MD&A and Financial Statements will also be
available on www.sedar.com. 
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:

David French
President and Chief Executive Officer
(403) 513-6930

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
+44 207 523 8000

AIM BROKER:
FirstEnergy Capital LLP
Hugh Sanderson / David van Erp
+44 0 207 448 0200

(BNK.)                                                                         
                                                                               



END 
-0- Nov/08/2013 13:00 GMT