CALGARY, May 5, 2015 /PRNewswire/ - Bankers Petroleum Ltd.
("Bankers" or the "Company") (TSX: BNK, AIM: BNK) is pleased to
provide its 2016 first quarter financial and operational
results.
During the first quarter, Bankers achieved a cash margin of
US$6.91 per barrel. All amounts
listed in this news release are in US dollars unless otherwise
stated.
"The first quarter was challenging for the Company. We
navigated the volatile and competitive heavy oil commodity markets
and maintained firm footing as a business. At the same time, it was
an exciting quarter, as the proposed acquisition by Geo-Jade
Petroleum Corporation ("Geo-Jade") brings forth the opportunity for
shareholders to crystallize value at a significant premium to the
prevailing market valuation," commented President and Chief
Executive Officer, David French.
"Bankers has been working alongside Geo-Jade to complete the
necessary steps to ensure a timely close of the proposed
transaction. Our Management team and Board of Directors remain in
full support of the transaction, and believe it to be in the best
interest of shareholders."
Results at a
Glance
|
Three Months
Ended
|
($000s, except as
noted)
|
March 31,
2016
|
December 31,
2015
|
March 31,
2015
|
Financial
|
|
|
|
|
Oil
revenue
|
33,091
|
56,880
|
72,404
|
|
Net operating
income
|
3,448
|
23,235
|
24,868
|
|
Net income
(loss)
|
(11,971)
|
(8,391)
|
879
|
|
|
Basic
(US$/share)
|
(0.05)
|
(0.04)
|
0.00
|
|
|
Diluted
(US$/share)
|
(0.05)
|
(0.04)
|
0.00
|
|
Funds generated from
operations
|
1,447
|
34,326
|
24,890
|
|
|
Basic
(US$/share)
|
0.01
|
0.13
|
0.10
|
|
Capital
expenditures
|
12,676
|
24,651
|
49,945
|
Operating
|
|
|
|
|
Average production
(bopd)
|
17,363
|
18,137
|
19,767
|
|
Average sales
(bopd)
|
17,280
|
18,558
|
20,283
|
|
Average Brent oil
price (US$/barrel)
|
33.94
|
43.76
|
53.94
|
|
Average realized
price (US$/barrel)
|
21.04
|
33.31
|
39.66
|
|
Netback
(US$/barrel)
|
2.19
|
13.60
|
13.62
|
|
Cash margin
(US$/barrel)
|
6.91
|
24.01
|
23.32
|
|
|
|
|
|
|
|
March 31,
2016
|
December 31,
2015
|
March 31,
2015
|
|
Cash and restricted
cash
|
52,996
|
69,141
|
57,842
|
|
Working
capital
|
144,211
|
159,868
|
174,209
|
|
Total
assets
|
1,238,380
|
1,261,390
|
1,264,256
|
|
Long-term
debt
|
95,188
|
98,628
|
98,872
|
|
Shareholders'
equity
|
708,318
|
719,294
|
718,552
|
Highlights
Bankers reached several key financial and operational
achievements during the first quarter of 2016 as described
below:
Arrangement Agreement:
- On March 20, 2016, Bankers
Petroleum Ltd. entered into a definitive agreement with an
affiliate of Geo-Jade Petroleum Corporation, for the purchase of
all the issued and outstanding common shares of the Company at a
cash price of C$2.20 per common share
of the Company. The transaction will be effected by way of a
plan of arrangement under the Business Corporations Act. This
transaction is subject to customary closing conditions, including
receipt of court, shareholder and regulatory approvals required
under the Investment Canada Act, the
People's Republic of China and the Republic of
Albania. The transaction is expected to close before
June 30, 2016.
- Materials have now been distributed to all Bankers Shareholders
for their vote at the Special Meeting to be held on May 31, 2016. All Directors and Officers of
Bankers remain committed to this transaction and recommend voting
in favor. The Circular and other documents are available at
www.bankerspetroleum.com or www.sedar.com.
Operational Highlights:
- Average oil production for the three months ended March 31, 2016 was 17,363 barrels of oil per day
(bopd) compared to 18,137 bopd in the previous quarter and 19,767
bopd in the first quarter of 2015.
- Oil sales averaged 17,280 bopd for the first quarter of 2016
compared to 18,558 bopd for the previous quarter and 20,283 bopd
for the first quarter of 2015. Crude oil inventory at
March 31, 2016 increased to 260,000
barrels compared to 256,500 barrels at December 31, 2015.
- During the first quarter of 2016, capital expenditures were
$13 million. The Company did
not drill any wells during the quarter. Capital expenditures
were $25 million for the previous
quarter and $50 million for the first
quarter of 2015.
Product Margin Highlights:
- For the three months ended March 31,
2016, operating and sales and transportation (S&T)
costs, primarily originating from Albanian-based companies and
their employees, were $25 million
($16.16/bbl) compared to $26 million ($15.40/bbl) for the previous quarter and
$37 million ($20.48/bbl) for the first quarter of 2015.
- Net operating income (netback) in the first quarter of 2016 was
$3 million ($2.19/bbl) compared to $23
million ($13.60/bbl) for the
previous quarter and $25 million
($13.62/bbl) for the first quarter of
2015.
- Cash margin for the first quarter of 2016 was $6.91/bbl compared to $24.01/bbl in the previous quarter and
$23.32/bbl in the first quarter of
2015. Cash margin represents netback inclusive of the realized gain
on commodity contracts.
Financial Highlights:
- For the first quarter of 2016, revenue was $33 million ($21.04/bbl) compared to $57 million ($33.31/bbl) in the previous quarter and
$72 million ($39.66/bbl) in the first quarter of 2015.
Field price realization represented 62% of the Brent oil benchmark
price ($33.94/bbl) for the first
quarter of 2016 compared to 76% of the Brent oil benchmark price
($43.76/bbl) in the previous quarter
and 74% of the Brent oil benchmark price ($53.94/bbl) in the first quarter of 2015.
The reduction as a percentage of Brent compared to the previous
quarter and first quarter of 2015 was due to competitive pricing
differential pressure resulting from weakness in commodity
prices.
- Royalties to the Albanian Government and related entities
during the first quarter of 2016 were $4
million (13% of revenue) compared to $7 million (13% of revenue) for the previous
quarter and $10 million (14% of
revenue) for the first quarter of 2015.
- Funds generated from operations were $1
million ($0.01 per share) for
the first quarter of 2016 compared to $34
million ($0.13 per share) for
the previous quarter and $25 million
($0.10 per share) for the first
quarter of 2015.
- The Company continues to maintain a strong financial position
at March 31, 2016 with cash and
restricted cash of $53 million and
working capital of $144 million. At
March 31, 2016, the Company had drawn
$120 million of its approved credit
facilities, as compared to $119
million at the end of 2015. Working capital for December 31, 2015 and March 31, 2015 was $160
million and $174 million,
respectively.
- At March 31, 2016, Bankers has
hedged 5,000 bopd under costless collar contracts with an average
floor of $52.09/bbl and an average
ceiling of $54.64/bbl (all prices are
referenced to Dated Brent) for the balance of 2016. In the first
quarter of 2016 the hedge program generated proceeds of
$7.4 million. The remaining 2016
hedge program at March 31, 2016, is
valued at $16.2 million. These
contracts are designed to protect Bankers against further
volatility in oil prices in 2016. Subsequent to the end of March,
the Company added another 1,000 bopd costless collar contract for
the balance of 2016, thereby representing 6,000 bopd at an average
floor of $51.52/bbl and an average
ceiling of $53.78/bbl.
- During the quarter, the Company signed a formal binding
agreement with the Albanian National Agency for Natural Resources
(AKBN) and the Minister of Energy and Industry to engage
third-party international experts to assist in resolving the
outstanding cost recovery audit. The work by the independent
auditor and consultant has commenced and is expected to be
completed during the third quarter of 2016.
Outlook:
Production in the second quarter to date is 16,704 bopd, 3.5%
lower than the first quarter average of 17,363 bopd. The
Company is focused on optimization of current production levels and
is monitoring the economic return of all wells in accordance with
the current oil price environment.
Activity in the second quarter includes 2 to 4 additional well
conversions to injection to expand the EOR program, completion of
the Pad D and Pad H vapor recovery units for gas conservation,
completion of the Pad D inlet expansion and west emulsion gathering
system to improve transportation costs and treating efficiency. The
producing water and polymer patterns continue to perform well and
Bankers continues to monitor production from the fifty-four (54)
existing patterns.
In the second half of the year, Bankers' activity focuses on
further expanding the EOR program with up to 12 additional injector
conversions, managing existing production and drilling new
horizontal wells as commodity price improvement allows.
Transaction Update:
Bankers and Geo-Jade continue to work together to complete the
necessary steps to ensure a timely close of the previously
announced corporate transaction ("Arrangement"). Bankers has filed
its Management Information Circular (the "Circular") and related
proxy materials on SEDAR and its website
(www.bankerspetroleum.com), in advance of the Company's special
meeting of shareholders to be held on May
31, 2016 (the "Special Meeting"). The purpose of the Special
Meeting is to seek shareholder approval of the Arrangement with
affiliates of Geo-Jade.
Benefits of the Arrangement include:
- Cash price of C$2.20 per Bankers
Share
- Bankers debt will be handled separately by the purchasing
Company and will not affect the stated purchase price of
$2.20 per Bankers Share
- The Arrangement is an opportunity for shareholders to
crystalize value representing a premium of 98% over Bankers'
closing share price on the TSX of C$1.11 on March 18,
2016, and 109% over the 30-trading day volume weighted
average trading price of Bankers Shares of C$1.05 per share ending on March 18, 2016
- The Arrangement has received the unanimous approval of the
Board of Directors of Bankers and carries the full support of
Bankers' Management team
Shareholder Voting:
Bankers' Board of Directors unanimously recommends that
shareholders vote in favor of the Arrangement.
Shareholders who have questions regarding the Arrangement or
require assistance with voting may contact the Proxy Solicitation
Agent below:
Laurel Hill Advisory Group
Toll Free:
1-877-452-7184
International: +1 416-304-0211 outside Canada and the US
By Email: assistance@laurelhill.com
Special Meeting for Shareholders:
The Special Meeting will be held at The Metropolitan Centre
(Strand/Tivoli Rm), 333 4th Avenue SW, Calgary, Alberta on Tuesday, May 31, 2016 at 3:00 p.m. (Calgary time).
Bankers will provide further information with respect to the
timing of closing of the Arrangement and the delisting of the
Bankers Shares from the TSX and AIM as updates become
available.
Supporting Documents:
The full Management Discussion and Analysis (MD&A),
Financial Statements and updated 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 (LOSS)
|
FOR THE THREE
MONTHS ENDED MARCH 31
|
(Unaudited,
expressed in thousands of US dollars, except per share
amounts)
|
|
|
2016
|
|
2015
|
Revenues
|
$
|
33,091
|
$
|
72,404
|
Royalties
|
|
(4,231)
|
|
(10,144)
|
Revenues, net of
royalties
|
|
28,860
|
|
62,260
|
Realized gain on
financial commodity contracts
|
|
7,423
|
|
14,130
|
Unrealized loss on
financial commodity contracts
|
|
(3,800)
|
|
(2,039)
|
Total operating
revenues
|
|
32,483
|
|
74,351
|
|
|
|
|
|
Operating
expenses
|
|
17,717
|
|
23,495
|
Sales and
transportation expenses
|
|
7,695
|
|
13,897
|
General and
administrative expenses
|
|
7,141
|
|
4,652
|
Contract settlement
expenses
|
|
-
|
|
355
|
Depletion and
depreciation
|
|
26,658
|
|
30,119
|
Share-based
compensation
|
|
252
|
|
1,182
|
Total
expenses
|
|
59,463
|
|
73,700
|
Operating income
(loss)
|
|
(26,980)
|
|
651
|
|
|
|
|
|
Net finance
expense
|
|
(164)
|
|
(8,888)
|
|
|
|
|
|
Loss before income
tax
|
|
(27,144)
|
|
(8,237)
|
Income tax
(expense) recovery
|
|
|
|
|
|
Current
|
|
(267)
|
|
-
|
|
Deferred
|
|
15,440
|
|
9,116
|
|
|
15,173
|
|
9,116
|
Net income (loss)
for the period
|
|
(11,971)
|
|
879
|
|
|
|
|
|
Other
comprehensive income (loss)
|
|
|
|
|
Currency translation
adjustment
|
|
476
|
|
(1,420)
|
Comprehensive loss
for the period
|
$
|
(11,495)
|
$
|
(541)
|
|
|
|
|
|
Basic earnings
(loss) per share
|
$
|
(0.046)
|
$
|
0.003
|
Diluted earnings
(loss) per share
|
$
|
(0.046)
|
$
|
0.003
|
BANKERS PETROLEUM
LTD.
|
CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION
|
(Unaudited,
expressed in thousands of US dollars)
|
ASSETS
|
|
|
March 31
2016
|
December 31,
2015
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
37,958
|
$
|
51,963
|
Restricted
cash
|
|
15,038
|
17,178
|
Accounts
receivable
|
|
53,752
|
56,592
|
Inventory
|
|
4,316
|
4,597
|
Deposits and prepaid
expenses
|
|
81,219
|
67,514
|
Financial commodity
contracts
|
|
16,200
|
20,000
|
|
|
208,483
|
217,844
|
Non-current
assets
|
|
|
|
Property, plant and
equipment
|
|
1,019,130
|
1,034,791
|
Exploration and
evaluation assets
|
|
10,767
|
8,755
|
|
$
|
1,238,380
|
$
|
1,261,390
|
LIABILITIES
|
Current
liabilities
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
40,604
|
$
|
39,156
|
|
Income tax
liability
|
|
1,032
|
765
|
|
Current portion of
long-term debt
|
|
22,636
|
18,055
|
|
|
64,272
|
57,976
|
Non-current
liabilities
|
|
|
|
Long-term
debt
|
|
95,188
|
98,628
|
Decommissioning
obligation
|
|
29,655
|
29,264
|
Deferred tax
liabilities
|
|
340,947
|
356,228
|
|
|
530,062
|
542,096
|
SHAREHOLDERS'
EQUITY
|
Share
capital
|
|
365,045
|
365,045
|
Contributed
surplus
|
|
94,818
|
94,299
|
Currency translation
reserve
|
|
1,993
|
1,517
|
Retained
earnings
|
|
246,462
|
258,433
|
|
|
708,318
|
719,294
|
|
$
|
1,238,380
|
$
|
1,261,390
|
|
BANKERS PETROLEUM
LTD.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
FOR THE THREE
MONTHS ENDED MARCH 31
|
(Unaudited,
expressed in thousands of US dollars)
|
|
|
2016
|
|
2015
|
Cash provided by
(used in):
|
|
|
|
|
|
Operating
activities
|
|
|
|
|
|
|
Net income (loss) for
the period
|
|
$
|
(11,971)
|
$
|
879
|
|
Depletion and
depreciation
|
|
|
26,658
|
|
30,119
|
|
Accretion of
long-term debt
|
|
|
220
|
|
250
|
|
Accretion of
decommissioning obligation
|
|
|
352
|
|
315
|
|
Unrealized foreign
exchange gain
|
|
|
(2,691)
|
|
(778)
|
|
Current income tax
expense
|
|
|
267
|
|
-
|
|
Deferred income tax
recovery
|
|
|
(15,440)
|
|
(9,116)
|
|
Share-based
compensation
|
|
|
252
|
|
1,182
|
|
Unrealized loss on
financial commodity contracts
|
|
|
3,800
|
|
2,039
|
|
|
|
1,447
|
|
24,890
|
|
Change in non-cash
working capital
|
|
|
2,918
|
|
7,839
|
|
|
|
4,365
|
|
32,729
|
Investing
activities
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
|
|
(10,664)
|
|
(49,818)
|
|
Additions to
exploration and evaluation assets
|
|
|
(2,012)
|
|
(127)
|
|
Restricted
cash
|
|
|
2,140
|
|
(591)
|
|
Change in non-cash
working capital
|
|
|
(9,237)
|
|
(5,718)
|
|
|
|
(19,773)
|
|
(56,254)
|
Financing
activities
|
|
|
|
|
|
|
Issue of shares for
cash
|
|
|
-
|
|
211
|
|
Change in long-term
debt
|
|
|
1,081
|
|
7,762
|
|
|
|
1,081
|
|
7,973
|
Foreign exchange
gain (loss) on cash and cash equivalents
|
|
322
|
|
(233)
|
Decrease in cash
and cash equivalents
|
|
|
(14,005)
|
|
(15,785)
|
Cash and cash
equivalents, beginning of period
|
|
|
51,963
|
|
68,036
|
|
|
|
|
|
|
Cash and cash
equivalents, end of period
|
|
$
|
37,958
|
$
|
52,251
|
|
|
|
|
|
|
Interest
paid
|
|
$
|
222
|
$
|
45
|
Interest
received
|
|
$
|
87
|
$
|
96
|
BANKERS PETROLEUM
LTD.
|
CONSOLIDATED
STATEMENT OF CHANGES IN EQUITY
|
(Unaudited,
expressed in thousands of US dollars, except number of common
shares)
|
|
Number of
common
shares
|
|
Share
capital
|
|
Contributed
surplus
|
|
Currency
translation
reserve
|
|
Retained
earnings
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31,
2014
|
261,084,393
|
$
|
363,670
|
$
|
86,409
|
$
|
4,410
|
$
|
262,047
|
$
|
716,536
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
-
|
|
-
|
|
2,346
|
|
-
|
|
-
|
|
2,346
|
Options
exercised
|
100,000
|
|
403
|
|
(192)
|
|
-
|
|
-
|
|
211
|
Net income for the
period
|
-
|
|
-
|
|
-
|
|
-
|
|
879
|
|
879
|
Currency translation
adjustment
|
-
|
|
-
|
|
-
|
|
(1,420)
|
|
-
|
|
(1,420)
|
Balance at March 31,
2015
|
261,184,393
|
$
|
364,073
|
$
|
88,563
|
$
|
2,990
|
$
|
262,926
|
$
|
718,552
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
-
|
|
-
|
|
6,197
|
|
-
|
|
-
|
|
6,197
|
Options
exercised
|
239,935
|
|
972
|
|
(461)
|
|
-
|
|
-
|
|
511
|
RSUs
exercised
|
133,056
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Net loss for the
period
|
-
|
|
-
|
|
-
|
|
-
|
|
(4,493)
|
|
(4,493)
|
Currency translation
adjustment
|
-
|
|
-
|
|
-
|
|
(1,473)
|
|
-
|
|
(1,473)
|
Balance at December 31,
2015
|
261,557,384
|
$
|
365,045
|
$
|
94,299
|
$
|
1,517
|
$
|
258,433
|
$
|
719,294
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
-
|
|
-
|
|
519
|
|
-
|
|
-
|
|
519
|
Net loss for the
period
|
-
|
|
-
|
|
-
|
|
-
|
|
(11,971)
|
|
(11,971)
|
Currency translation
adjustment
|
-
|
|
-
|
|
-
|
|
476
|
|
-
|
|
476
|
Balance at March 31,
2016
|
261,557,384
|
$
|
365,045
|
$
|
94,818
|
$
|
1,993
|
$
|
246,462
|
$
|
708,318
|
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 and
Eastern Europe. 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". In
2015 Bankers acquired an 85% interest in the rights to explore the
Püspökladány Block concession within the Pannonian Basin located in
north eastern Hungary. 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.