BANKERS PETROLEUM LIMITED: 2013 Financial Results

Bankers Petroleum Announces 2013 Financial Results 
$45 Million Free Cash Flow and 23% Increase in Oil Sales 
CALGARY, March 13, 2014 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the
"Company") (TSX: BNK) (AIM: BNK) is pleased to provide its 2013 financial
results. 
In 2013, Bankers attained several key accomplishments including its first year
of free cash flow, record oil production and sales. The Company invested $234
million in capital expenditures during 2013. All amounts listed below are in US
dollars unless otherwise stated. 
Results at a Glance                                               
                                                             
($000s, except as noted)              Year ended December 31      
                                                             
Results at a Glance                   2013       2012     2011    
                                                             
Financial                                                         
                                                             
 Oil revenue                          566,386    432,138  339,918 
                                                             
 Net operating income                 316,558    218,246  169,653 
                                                             
 Net income                           61,743     34,413   35,996  
                                                             
  Per share    - basic (US$)          0.24       0.14     0.15    


                                                                 
               - diluted (US$)        0.24       0.14     0.14   


                                                             
 Funds generated from operations      279,601    192,589  147,940 
                                                             
  Per share    - basic (US$)          1.10       0.76     0.60    
                                                             
 Capital expenditures                 234,243    222,663  242,754 
                                                             
Operating                                                         
                                                             
 Average sales (bopd)                 18,173     14,808   12,784  
                                                             
 Average Brent oil price ($/barrel)   108.66     111.67   111.26  
                                                             
 Average realized price ($/barrel)    85.39      79.73    72.84   
                                                             
 Netback ($/barrel)                   47.73      40.27    36.36   


                                                                 
                                      December 31                
                                                                 
                                      2013       2012     2011   


                                                             
Cash and deposits                     31,706     38,740   54,013  
                                                             
Working capital                       134,094    88,799   80,282  
                                                             
Total assets                          1,007,148  825,816  661,216 
                                                             
Long-term debt                        98,150     97,158   46,692  
                                                             
Shareholders' equity                  564,675    483,032  412,679 
                                                              
Highlights 
Bankers made several key financial and operational achievements during 2013: 
Financial Highlights 
- In 2013, revenue increased by 31% to $566 million ($85.39/bbl) from
$432 million ($79.73/bbl) in 2012. Field price realization represented 79% of
the Brent oil benchmark price ($108.66/bbl) as compared to 71% of the Brent
price ($111.67/bbl) in 2012. 
- Royalties to the Albanian Government and related entities were $94
million (17% of revenue) compared to $78 million (18% of revenue) for 2012. 
- Funds generated from operations were $280 million, a 45% increase
compared to $193 million for 2012. 2013 represents the first year that funds
generated from operations exceeded annual capital expenditures of $234 million. 
- The Company continues to maintain a strong financial position at
December 31, 2013 with cash of $32 million and working capital of $134 million.
Cash and working capital at December 31, 2012 was $39 million and $89 million,
respectively. 
- In May 2013, both the International Finance Corporation (IFC) and
European Bank for Reconstruction and Development (EBRD) approved an extension
of the Company's existing credit facility to September 2020. No repayments are
required until September 2017, from which time the facility amount will
decrease by 25% annually. Collectively, the revolving loan facilities have
increased to $200 million from $100 million at year-end 2012. 
- In July 2013, the Company entered into financial commodity contracts
representing 6,000 bopd at a floor price of $80/bbl Brent for 2014. 
Primary Drilling Program Highlights 
- Average oil production from the Patos-Marinza oilfield was 18,169
barrels of oil per day (bopd) in 2013, 21% higher than the 2012 average
production of 15,020 bopd. Average oil production for the first quarter of 2014
to-date is approximately 19,800 bopd. 
- Oil sales averaged 18,173 bopd compared to 14,808 bopd in 2012, an
increase of 23%, primarily as a result of the Company's ongoing horizontal
drilling and recompletion programs, focused on bringing high productivity wells
on stream. 
- Capital expenditures were $234 million compared to $223 million in
2012. A total of 146 wells were drilled, including 135 horizontal production
wells and 10 lateral re-drills in the Patos-Marinza field, plus one exploration
well in Block "F". A total of 128 wells were drilled in 2012. 
Expansion of Product Margin Highlights 
- Operating and sales and transportation costs, originating from
Albanian-based companies and their employees, were $156 million ($23.44/bbl)
compared to $136 million for 2012 ($25.00/bbl). 
- For the year ended December 31, 2013, the Company recorded net
operating income (netback) of $317 million ($47.73/bbl), an increase of 45%
compared to $218 million ($40.27/bbl) in 2012. 
- The average realized price in 2013 for Patos-Marinza crude oil was
79% of the Brent oil benchmark, an increase of 11% over the 2012 oil price of
71% of Brent. 
- The Company continued to focus on key infrastructure projects aimed
at reducing cost and optimizing operations in the field, including maintenance
turnaround of major treating facilities. Several cascade tank systems on
individual well pads have been completed and both a new sludge handling and
satellite treating facility are in the final stages of construction and will
commence operation in 2014. Additional work on flow-lines, sour treatment
facilities and cascade systems continue. Optimization of the treating process
has significantly reduced the diluent blend and has improved the sales
specification of the crude oil. 
- The technical review, including route selection, surface land access
and social and environmental impact assessments for the second phase of the
crude oil pipeline from the Fier Hub to the export terminal at Vlore is
underway. Expansion of the Petrolifera Italo Albanese (PIA) Vlore Terminal is
under design for additional storage and shipping channel dredging. 
Other Highlights in 2013 
- In 2013, Bankers invested $6 million in environmental and social
initiatives; the Company has invested over $20 million in environmental and
social initiatives since 2009. 
- The Oil Initially in Place (OIIP) resource assessment in Albania at
year-end was 5.4 billion barrels, consistent with the OIIP at the end of 2012.
Reserves on a proved basis were 147 million barrels, 5% higher than 139 million
barrels at year-end 2012. On a proved plus probable basis, reserves were 232
million barrels, an increase of 3% compared to 226 million barrels at year-end
2012. The corresponding net present value (NPV) after tax (discounted at 10%)
of the proved plus probable reserves increased by 20% to $2.2 billion at
year-end compared to $1.9 billion in 2012. 
- The Company continues Enhanced Oil Recovery (EOR) techniques,
monitoring and expanding on its water flood and polymer flood patterns. Initial
production response in the Lower Driza (D5 reservoir sand) is expected in the
first half of 2014, as the first two polymer injectors commenced in this zone
early 2013. Injection performance has been maintained at target rates with no
premature breakthrough of fluids to offset producers, which is indicative of
good reservoir conformance. Reservoir pressure is rising and is following
current projection models. During 2013, Bankers implemented three water flood
injectors in the Upper Marinza and five polymer flood injectors in three
separate Lower Driza reservoir sands in the core area of the Patos-Marinza
field. Further plans to convert up to 14 additional wells for polymer and water
injection are underway in 2014. 
- Block "F" contains several seismically defined structural and
amplitude anomalies prospective for oil and natural gas. The second exploration
well was drilled in 2013, completing the Company's two well obligation on the
block. The well reached a total depth of 2,776 meters, however petrophysical
and geological information indicated that the well did not encounter any
hydrocarbon bearing zones that would merit testing and was suspended. Technical
evaluation of the block will continue and Bankers is reviewing several other
prospects including a 3D seismic program in 2014. 
Appointment of David French to the Board of Directors 
Bankers is pleased to announce the appointment of David French, President and
Chief Executive Officer (CEO) of Bankers Petroleum, to its Board of Directors,
effective immediately. 
Mr. French joined Bankers as President and CEO a year ago and has led the
Company to reach several milestones in that time, including record production,
free cash flow and operational efficiency improvements. Mr. French continues to
lead the Company with a disciplined approach to delivering consistent, reliable
growth to its shareholders. 
Robert Cross, Chairman of the Board commented "Mr. French's wide range of
international oil and gas experience and direct insight into the Company will
be a valuable asset to the Board. His strong leadership skills and
relationships in the investment community will continue to have a positive and
driving influence on the performance of the Company for many years to come". 
First Quarter Operational Update 
First quarter 2014 year-to-date average production is 19,800 bopd. Bankers
intends to issue the first quarter 2014 operational update and host a
conference call on Tuesday, April 8, 2014. 
Outlook 
The Company's capital program in 2014 will be $313 million, funded from
projected cash flow and existing cash based on an average $100 per barrel Brent
oil price. The work program and budget will include the following: 
- Drilling of 150 - 170 horizontal and vertical wells with 80 - 90% of
the wells focused on increasing production and 10 - 20% focused on delineation
and data collection for improved development and recovery performance in the
Patos-Marinza oilfield. 
- Expansion of the water flood and polymer flood programs with the
addition of up to 14 conversions as well as testing and evaluation of the
existing patterns implemented in 2013. 
- Continued focus on operational efficiencies in the field to expand
product margins including gas gathering, emulsion flow-lines, satellite
treating facilities, storage tanks, and field electrification. 
- Continued management of offset existing wellbores for observation,
water control, and suspension as well as expanding the water disposal system to
manage the increased development. 
- Planning and design of sales infrastructure expansion on the second
phase crude oil pipeline from the Fier Hub facilities to the Vlore Port and
increased storage and shipping channel dredging at the port. 
- Drilling of two horizontal wells at the Kuçova oilfield and
reactivation of existing vertical wells. 
- Acquisition of 100 km2 of 3D seismic with 20 km2 on Block "F" to
further evaluate prospects as part of the second exploration phase on the block
and 80 km2 in the central and northern region of the Patos-Marinza field to
further determine the deeper and extension potential of the field. 
- Investment of $7 million on environmental remediation and social
initiatives as part of a sustained long-term effort to improve the physical
environment, along with training programs and other community initiatives for
the residents near the Company's operations. 
Supporting Documents 
The full Management Discussion and Analysis (MD&A), Financial Statements and
updated March corporate presentation are available on www.bankerspetroleum.com.
The MD&A and Financial Statements will also be available on www.sedar.com. 
BANKERS PETROLEUM LTD.                                                          
                                                                           
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME                                 
                                                                           
FOR THE YEARS ENDED DECEMBER 31                                                 
                                                                           
(Expressed in thousands of US dollars, except per share amounts)                


                                                                               
                                                           2013       2012     


                                                                           
Revenues                                                 $ 566,386  $ 432,138   
                                                                           
Royalties                                                  (94,294)   (78,361)  


                                                                               
                                                           472,092    353,777  


                                                                           
Realized loss on financial commodity contracts             (3,898)    (6,588)   
                                                                           
Unrealized gain (loss) on financial commodity contracts    (1,555)        556   


                                                                               
                                                           466,639    347,745  


                                                                           
Operating expenses                                         88,510     77,953    
                                                                           
Sales and transportation expenses                          67,024     57,578    
                                                                           
General and administrative expenses                        21,363     16,050    
                                                                           
Depletion and depreciation                                 99,554     65,937    
                                                                           
Share-based compensation                                   11,527     11,205    


                                                                               
                                                           287,978    228,723  
                                                                               
                                                           178,661    119,022  


                                                                           
Net finance expense                                        18,712     19,594    
                                                                           
Income before income tax                                   159,949    99,428    
                                                                           
Deferred income tax expense                                (98,206)   (65,015)  
                                                                           
Net income for the year                                    61,743     34,413    
                                                                           
Other comprehensive income (loss)                                               
                                                                           
Currency translation adjustment                            (1,017)    953       
                                                                           
Comprehensive income for the year                        $ 60,726   $ 35,366    
                                                                           
Basic earnings per share                                 $ 0.243    $ 0.136     
                                                                           
Diluted earnings per share                               $ 0.241    $ 0.136     


                                                                               
    BANKERS PETROLEUM LTD.                                              


                                                                
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION                        
                                                                
AS AT DECEMBER 31                                                    
                                                                
(Expressed in thousands of US dollars)                               
                                                                
ASSETS                                                               


                                                                    
                                              2013         2012     


                                                                
Current assets                                                       
                                                                
 Cash and cash equivalents                  $ 24,597     $ 33,740    
                                                                
 Restricted cash                              7,109        5,000     
                                                                
 Accounts receivable                          53,981       35,603    
                                                                
 Inventory                                    38,025       23,517    
                                                                
 Deposits and prepaid expenses                44,956       30,265    
                                                                
 Financial commodity contracts                734          1,550     


                                                                    
                                              169,402      129,675  


                                                                
Non-current assets                                                   
                                                                
 Long-term receivable                         7,019        11,150    
                                                                
 Property, plant and equipment                823,908      681,399   
                                                                
 Exploration and evaluation assets            6,819        3,592     


                                                                    
                                            $ 1,007,148  $ 825,816  


                                                                
LIABILITIES                                                          
                                                                
Current liabilities                                                  
                                                                
 Accounts payable and accrued liabilities   $ 33,812     $ 38,787    
                                                                
 Current portion of long-term debt            1,496        2,089     


                                                                    
                                              35,308       40,876   


                                                                
Non-current liabilities                                              
                                                                
 Long-term debt                               98,150       97,158    
                                                                
 Decommissioning obligation                   22,806       16,747    
                                                                
 Deferred tax liabilities                     286,209      188,003   


                                                                    
                                              442,473      342,784  


                                                                
SHAREHOLDERS' EQUITY                                                 
                                                                
Share capital                                 340,305      334,764   
                                                                
Contributed surplus                           84,811       69,435    
                                                                
Currency translation reserve                  6,345        7,362     
                                                                
Retained earnings                             133,214      71,471    


                                                                    
                                              564,675      483,032  
                                                                    
                                            $ 1,007,148  $ 825,816  
                                                                    
    BANKERS PETROLEUM LTD.                                                          
                                                                                

CONSOLIDATED STATEMENTS OF CASH FLOWS                                           
                                                                                

FOR THE YEARS ENDED DECEMBER 31                                                 
                                                                                

(Expressed in thousands of US dollars)                                          
                                                                                
                                                        2013         2012       
                                                                                

Cash provided by (used in):                                                     
                                                                                

Operating activities                                                            
                                                                                

 Net income for the year                                $ 61,743     $ 34,413   
                                                                                

 Depletion and depreciation                               99,554       65,937   
                                                                                

 Accretion of long-term debt                              2,805        4,791    
                                                                                

 Accretion of decommissioning obligation                  1,019        829      
                                                                                

 Unrealized foreign exchange (gain) loss                  (756)        636      
                                                                                

 Deferred income tax expense                              98,206       65,015   
                                                                                

 Share-based compensation                                 11,527       11,205   
                                                                                

 Discount and revaluation of long-term receivable         4,687        7,629    
                                                                                

 Realized loss on financial commodity contracts           3,898        6,588    
                                                                                

 Unrealized (gain) loss on financial commodity                                  

 contracts                                                1,555        (556)    
                                                                                

 Cash premiums paid for financial commodity contracts     (4,637)      (3,898)  
                                                                                
                                                          279,601      192,589  
                                                                                

 Change in long-term receivable                           (556)        (18,779) 
                                                                                

 Change in non-cash working capital                       (54,403)     (12,064) 
                                                                                
                                                          224,642      161,746  
                                                                                

Investing activities                                                            
                                                                                

 Additions to property, plant and equipment               (231,016)    
(220,525)
                                                                                

 Additions to exploration and evaluation assets           (3,227)      (2,138)  
                                                                                

 Restricted cash                                          (2,109)      -        
                                                                                

 Change in non-cash working capital                       1,851        (2,762)  
                                                                                


                                                      (234,501)    
(225,425) 
                                                                             
Financing activities                                                             
                                                                             
 Issue of shares for cash                                 3,332        13,555    
                                                                             
 Financing costs                                          (1,994)      (750)     


                                                                                

 Change in long-term debt                                 (813)        35,537   
                                                                                
                                                          525          48,342   
                                                                                

Foreign exchange gain on cash and cash equivalents        191          64       
                                                                                

Decrease in cash and cash equivalents                     (9,143)      (15,273) 
                                                                                

Cash and cash equivalents, beginning of year              33,740       49,013   
                                                                                

Cash and cash equivalents, end of year                  $ 24,597     $ 33,740   
                                                                                

Interest paid                                           $ 5,811      $ 4,788    
                                                                                

Interest received                                       $ 159        $ 438      
                                                                                
    BANKERS PETROLEUM LTD.                                                          
                
                                                                                


            
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY                                      


                
                                                                                


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


                
                                                                                


            
Share-based   -              -          -          21,432       -            -   
   21,432   
compensation                                                                     


                
                                                                                


            
Options       1,457,890      4,147      -          (1,655)      -            -   
   2,492    
exercised                                                                        


                
                                                                                


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


                
                                                                                


            
Warrants      -              -          (7)        7            -            -   
   -        
expired                                                                          


                
                                                                                


            
Net income    -              -          -          -            -            
34,413    34,413   
for the year                                                                     


                
                                                                                


            
Currency      -              -          -          -            953          -   
   953      
translation                                                                      
            
adjustment                                                                       


                
                                                                                


            
Balance at    253,828,650  $ 334,764  $ -        $ 69,435     $ 7,362      $ 
71,471  $ 483,032  
December 31,                                                                     
            
2012                                                                             


                
                                                                                


            
Share-based   -              -          -          17,585       -            -   
   17,585   
compensation                                                                     


                
                                                                                


            
Options       1,853,261      5,541      -          (2,209)      -            -   
   3,332    
exercised                                                                        


                
                                                                                


            
Net income    -              -          -          -            -            
61,743    61,743   
for the year                                                                     


                
                                                                                


            
Currency      -              -          -          -            (1,017)      -   
   (1,017)  
translation                                                                      
            
adjustment                                                                       


                
                                                                                


            
Balance at    255,681,911  $ 340,305  $ -        $ 84,811     $ 6,345      $ 
133,214 $ 564,675  
December 31,                                                                     
            
2013                                                                             


                
                                                                                
                

Caution Regarding Forward-looking Information

Information in this news release respecting matters such as the expected future
production levels from wells, future prices and netback, work plans,
anticipated total oil recovery of the Patos-Marinza and Kuçova oilfields
constitute forward-looking information. Statements containing forward-looking
information express, as at the date of this news release, the Company's plans,
estimates, forecasts, projections, expectations, or beliefs as to future events
or results and are believed to be reasonable based on information currently
available to the Company.

Exploration for oil is a speculative business that involves a high degree of
risk. The Company's expectations for its Albanian operations and plans are
subject to a number of risks in addition to those inherent in oil production
operations, including: that Brent oil prices could fall resulting in reduced
returns and a change in the economics of the project; availability of
financing; delays associated with equipment procurement, equipment failure and
the lack of suitably qualified personnel; the inherent uncertainty in the
estimation of reserves; exports from Albania being disrupted due to unplanned
disruptions; and changes in the political or economic environment.

Production and netback forecasts are based on a number of assumptions including
that the rate and cost of well takeovers, well reactivations and well
recompletions of the past will continue and success rates will be similar to
those rates experienced for previous well recompletions/reactivations/
development; that further wells taken over and recompleted will produce at
rates similar to the average rate of production achieved from wells
recompletions/reactivations/development in the past; continued availability of
the necessary equipment, personnel and financial resources to sustain the
Company's planned work program; continued political and economic stability in
Albania; the existence of reserves as expected; the continued release by
Albpetrol of areas and wells pursuant to the Plan of Development and Addendum;
the absence of unplanned disruptions; the ability of the Company to
successfully drill new wells and bring production to market; and general risks
inherent in oil and gas operations.

Forward-looking statements and information are based on assumptions that
financing, equipment and personnel will be available when required and on
reasonable terms, none of which are assured and are subject to a number of
other risks and uncertainties described under "Risk Factors" in the Company's
Annual Information Form and Management's Discussion and Analysis, which are
available on SEDAR under the Company's profile at www.sedar.com.

There can be no assurance that forward-looking statements will prove to be
accurate. Actual results and future events could differ materially from those
anticipated in such statements. Readers should not place undue reliance on
forward-looking information and forward looking statements.

About Bankers Petroleum Ltd.

Bankers Petroleum Ltd. is a Canadian-based oil and gas exploration and
production company focused on developing large oil and gas reserves. In
Albania, Bankers operates and has the full rights to develop the Patos-Marinza
heavy oilfield, has a 100% interest in the Kuçova oilfield, and a 100% 
interest
in Exploration Block "F". Bankers' shares are traded on the Toronto Stock
Exchange and the AIM Market in London, England under the stock symbol BNK.

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

Laura Bechtel
Investor Relations Analyst
(403) 513-3428

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

AIM NOMAD:
Canaccord Genuity Limited
Henry Fitzgerald-O'Connor
+44 0 207 523 8000

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

(BNK. BNK)
    END

-0- Mar/13/2014 11:00 GMT


 
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