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Bankers Petroleum Ltd.
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Bankers Petroleum announces 2016 second quarter financial and operational results

Publié le 11 août 2016

CALGARY, Aug. 11, 2016/CNW/ - Bankers Petroleum Ltd. ('Bankers' or the 'Company') (TSX: BNK, AIM: BNK) is pleased to provide its 2016 second quarter financial and operational results.

During the second quarter, Bankers achieved a cash margin of US$11.03per barrel. All amounts listed in this news release are in US dollars unless otherwise stated.

Results at a Glance

Three months ended June 30

Six months ended June 30

(US$000s, except as noted)

2016

2015

2016

2015

Financial

Oil revenue

40,989

85,707

74,080

158,111

Net operating income

12,383

41,503

15,831

66,371

Net loss

(21,827)

(10,462)

(33,798)

(9,583)

Basic (US$/share)

(0.08)

(0.04)

(0.13)

(0.04)

Diluted (US$/share)

(0.08)

(0.04)

(0.13)

(0.04)

Funds generated from operations

5,387

50,230

6,834

75,120

Basic (US$/share)

0.02

0.19

0.03

0.29

Capital expenditures

7,371

37,567

20,047

87,512

Operating

Average production (bopd)

15,934

20,050

16,649

19,909

Average sales (bopd)

15,023

19,626

16,152

19,953

Average Brent oil price (US$/barrel)

45.59

61.88

39.81

57.84

Average realized price (US$/barrel)

29.98

47.99

25.20

43.78

Netback (US$/barrel)

9.05

23.24

5.39

18.38

Cash margin (US$/barrel)

11.03

29.52

8.84

26.39

June 30, 2016

December 31, 2015

June 30, 2015

Cash and restricted cash

26,080

69,141

39,589

Working capital

83,885

159,868

160,909

Total assets

1,192,977

1,261,390

1,257,837

Long-term debt

94,826

98,628

98,459

Shareholders' equity

686,064

719,294

710,245

Highlights for the period ended June 30, 2016are:

Arrangement Agreement:

On March 19, 2016, Bankers Petroleum Ltd. entered into a definitive agreement (the 'Arrangement Agreement') with an affiliate of Geo-Jade Petroleum Corporation ('Geo-Jade'), for the purchase of all the issued and outstanding common shares of the Company ('Bankers Shares') at a cash price of C$2.20per Bankers Share. The transaction will be effected by the way of a plan arrangement under the Business Corporations Act (Alberta). All Directors and Officers of Bankers are committed to this transaction and have executed support agreements. At a May 31, 2016Special Meeting, Bankers shareholders overwhelmingly approved the transaction, and subsequently, the AlbertaCourt of Queen's Bench provided its authorization. Additional regulatory approvals have been received pursuant to the Investment Canada Act, the People's Republic of Chinaand the Republic of Albania. The transaction is expected to close before September 30, 2016and remains subject to the regulatory approval of the Chinese State Administration of Foreign Exchange ('SAFE'). Failure to receive the SAFE approval by September 30, 2016 would entitle Bankers to the US$20million reverse termination fee should Bankers terminate the Arrangement Agreement due to such failure. Following successful completion of the transaction, Bankers Shares will be delisted from the Toronto Stock Exchange ('TSX') and the AIM market of the London Stock Exchange.

Operational Highlights:

  • Average oil production for the three months ended June 30, 2016was 15,934 barrels of oil per day ('bopd') compared to 17,363 bopd in the previous quarter and 20,050 bopd in the second quarter of 2015. For the six months ended June 30, 2016, average oil production was 16,649 bopd compared to 19,909 bopd for the same period in 2015.
  • Oil sales for the second quarter of 2016 averaged 15,023 bopd compared to 17,280 bopd for the previous quarter and 19,626 bopd for the second quarter of 2015. Crude oil inventory at June 30, 2016increased to 350,000 barrels compared to 260,000 barrels at March 31, 2016. For the six months ended June 30, 2016, oil sales were 16,152 bopd compared to 19,953 bopd for the same period in 2015.
  • Capital expenditures during the second quarter of 2016 were $7 million. The Company did not drill any wells during the quarter. Capital expenditures were $13 millionfor the previous quarter and $38 millionfor the second quarter of 2015.

Product Margin Highlights:

  • For the three months and six months ended June 30, 2016, operating costs and sales and transportation ('S&T') costs, originating from Albanian-based companies and their employees, were $23 million($16.58/bbl) and $48 million($16.35/bbl), respectively, reduced from $32 million($17.86/bbl) and $69 million($19.18/bbl) for the same periods in 2015.
  • In the second quarter of 2016, net operating income (netback) was $12 million($9.05/bbl) compared to $3 million($2.19/bbl) for the previous quarter and $42 million($23.24/bbl) for the second quarter of 2015. Net operating income for the six months ended June 30, 2016was $16 million($5.39/bbl) compared to $66 million($18.38/bbl) for the same period in 2015.
  • Cash margin for the second quarter of 2016 was $11.03/bbl compared to $6.91/bbl in the previous quarter and $29.52/bbl in the second quarter of 2015. Cash margin represents netback inclusive of the realized gain on commodity contracts. Cash margin for the six months ended June 30, 2016was $8.84/bbl compared to $26.39/bbl for the same period in 2015.

Financial Highlights:

  • Revenue was $41 million($29.98/bbl) for the second quarter of 2016, compared to $33 million($21.04/bbl) in the previous quarter and $86 million($47.99/bbl) in the second quarter of 2015. Field price realization represented 66% of the Brent oil benchmark price ($45.59/bbl) for the second quarter of 2016 compared to 62% of the Brent oil benchmark price ($33.94/bbl) in the previous quarter and 78% of the Brent oil benchmark price ($61.88/bbl) in the second quarter of 2015. The increase, as a percentage of Brent, compared to the previous quarter was mainly due to improvements in world commodity prices, therefore reducing the pressure of competitive pricing differential during the second quarter of 2016. For the six months ended June 30, 2016, revenue was $74 million($25.20/bbl) compared to $158 million($43.78/bbl) for the same period in 2015.
  • Royalties to the Albanian Government and related entities during the second quarter of 2016 were $6 million(14% of revenue) compared to $4 million(13% of revenue) for the previous quarter and $12 million(14% of revenue) for the second quarter of 2015. For the six months ended June 30, 2016, royalties were $10 million(14% of revenue) compared to $22 million(14% of revenue) for the same period in 2015.
  • Funds generated from operations for the second quarter of 2015 were $5 million($0.02per share) compared to $1 million($0.01per share) for the previous quarter and $50 million($0.19per share) for the second quarter of 2015. Funds generated from operations for the six months ended June 30, 2016were $7 million($0.03per share) compared to $75 million($0.29per share) for the same period in 2015.
  • The Company continues to maintain a stable financial position at June 30, 2016, with cash and restricted cash of $26 millionand working capital of $84 million. At June 30, 2016, the Company had drawn $109 millionof its approved credit facilities. Working capital for December 31, 2015and June 30, 2015was $160 millionand $161 million, respectively.
  • At June 30, 2016, Bankers hedged 6,000 bopd under costless collar contracts with an average floor of $50.84/bbl (all prices are referenced to Dated Brent) and an average ceiling of $52.90/bbl for the balance of 2016. In the second quarter of 2016, the hedge program generated proceeds of $2 millioncompared to $7 millionin the first quarter of 2016. The 2016 hedge program at June 30, 2016, is valued at $2 million. These contracts are designed to protect Bankers against further volatility in the oil prices in 2016.

Outlook:

Production in the third quarter of 2016 to date is 15,358 bopd, 3% lower than the second quarter average of 15,934 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.

In the third quarter, Bankers' infrastructure and facilities projects include commissioning the inlet system and vapor recovery unit at satellite facility Pad D, vapor recovery unit at Pad H and the west emulsion gathering system. In addition, the Company is focusing on design and implementation of a sour oil treating project aimed at sweetening sour production from various reservoir zones throughout the field.

Bankers continues to prioritize its polymer and water flood development, with an additional seven (7) well conversions planned throughout the remainder of 2016 to bring the total for the year to sixteen (16) conversions. The producing water and polymer patterns are performing well and Bankers is continuing to monitor production from the fifty-eight (58) polymer and four (4) water flood patterns implemented to date.

Due to continued pressure on oil prices, Bankers anticipates receiving average cash realizations equivalent to 67 to 68% of Dated Brent for the export market for the remainder of 2016. Additionally, Bankers is in discussion for potential domestic crude oil sales contracts for a portion of its volumes and expects to receive equivalent pricing to the export market after accounting for reduced transportation and export related fees.

Supporting Documents:

The full Management Discussion and Analysis ('MD&A'), Financial Statements and updated corporate presentation are available on our website, www.bankerspetroleum.com. The MD&A and Financial Statements will also be available on www.sedar.com.

BANKERS PETROLEUM LTD.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited, expressed in thousands of US dollars, except per share amounts)

Three months ended
June 30

Six months ended
June 30

2016

2015

2016

2015

Revenues

$

40,989

$

85,707

$

74,080

$

158,111

Royalties

(5,943)

(12,306)

(10,174)

(22,450)

Revenue, net of royalties

35,046

73,401

63,906

135,661

Realized gain on financial commodity contracts

2,713

9,856

10,136

23,986

Unrealized loss on financial commodity contracts

(14,031)

(20,798)

(17,831)

(22,837)

Total operating revenues

23,728

62,459

56,211

136,810

Operating expenses

16,748

22,132

34,465

45,627

Sales and transportation expenses

5,915

9,766

13,610

23,663

General and administrative expenses

7,514

5,188

14,655

9,840

Contract settlement expenses

-

40

-

395

Depletion and depreciation

24,640

30,830

51,298

60,949

Share-based compensation

169

721

421

1,903

Total expenses

54,986

68,677

114,449

142,377

Operating loss

(31,258)

(6,218)

(58,238)

(5,567)

Net finance expense

(4,174)

(1,590)

(4,338)

(10,478)

Loss before income tax

(35,432)

(7,808)

(62,576)

(16,045)

Income tax recovery (expense)

Current

1,032

-

765

-

Deferred

12,573

(2,654)

28,013

6,462

13,605

(2,654)

28,778

6,462

Net loss for the period

(21,827)

(10,462)

(33,798)

(9,583)

Other comprehensive income (loss)

Currency translation adjustment

(787)

115

(311)

(1,305)

Comprehensive loss for the period

$

(22,614)

$

(10,347)

$

(34,109)

$

(10,888)

Basic loss per share

$

(0.083)

$

(0.040)

$

(0.129)

$

(0.037)

Diluted loss per share

$

(0.083)

$

(0.040)

$

(0.129)

$

(0.037)

BANKERS PETROLEUM LTD.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Unaudited, expressed in thousands of US dollars)

ASSETS

June 30

2016

December 31

2015

Current assets

Cash and cash equivalents

$

20,018

$

51,963

Restricted cash

6,062

17,178

Accounts receivable

45,578

56,592

Income tax receivable

580

-

Inventory

6,082

4,597

Deposits and prepaid expenses

57,063

67,514

Financial commodity contracts

2,169

20,000

137,552

217,844

Non-current assets

Long-term deposits

42,593

-

Property, plant and equipment

1,001,731

1,034,791

Exploration and evaluation assets

11,101

8,755

$

1,192,977

$

1,261,390

LIABILITIES

Current liabilities

Accounts payable and accrued liabilities

$

42,134

$

39,156

Income tax liability

-

765

Current portion of long-term debt

11,533

18,055

53,667

57,976

Non-current liabilities

Long-term debt

94,826

98,628

Decommissioning obligation

30,025

29,264

Deferred tax liabilities

328,395

356,228

506,913

542,096

SHAREHOLDERS' EQUITY

Share capital

365,045

365,045

Contributed surplus

95,178

94,299

Currency translation reserve

1,206

1,517

Retained earnings

224,635

258,433

686,064

719,294

$

1,192,977

$

1,261,390

BANKERS PETROLEUM LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, expressed in thousands of US dollars)

Three months ended

June 30

Six months ended

June 30

2016

2015

2016

2015

Cash provided by (used in):

Operating activities

Net loss for the period

$

(21,827)

$

(10,462)

$

(33,798)

$

(9,583)

Depletion and depreciation

24,640

30,830

51,298

60,949

Accretion of long-term debt

233

250

453

500

Accretion of decommissioning obligation

357

321

709

636

Unrealized foreign exchange (gain) loss

1,389

5,118

(1,302)

4,340

Current income tax recovery

(1,032)

-

(765)

-

Deferred income tax (recovery) expense

(12,573)

2,654

(28,013)

(6,462)

Share-based compensation

169

721

421

1,903

Unrealized loss on financial commodity contracts

14,031

20,798

17,831

22,837

5,387

50,230

6,834

75,120

Change in long-term deposits

(42,593)

-

(42,593)

-

Change in non-cash working capital

27,892

(26,856)

30,810

(19,017)

(9,314)

23,374

(4,949)

56,103

Investing activities

Additions to property, plant and equipment

(7,037)

(37,567)

(17,701)

(87,385)

Additions to exploration and evaluation assets

(334)

-

(2,346)

(127)

Restricted cash

8,976

(181)

11,116

(772)

Change in non-cash working capital

1,735

(7,216)

(7,502)

(12,934)

3,340

(44,964)

(16,433)

(101,218)

Financing activities

Issue of shares for cash

-

511

-

722

Change in long-term debt

(11,703)

2,505

(10,622)

10,267

(11,703)

3,016

(10,622)

10,989

Foreign exchange gain (loss) on cash and cash equivalents

(263)

140

59

(93)

Decrease in cash and cash equivalents

(17,940)

(18,434)

(31,945)

(34,219)

Cash and cash equivalents, beginning of period

37,958

52,251

51,963

68,036

Cash and cash equivalents, end of period

$

20,018

$

33,817

$

20,018

$

33,817

Interest paid

$

3,495

$

3,095

$

3,717

$

3,140

Interest received

$

158

$

55

$

244

$

151

BANKERS PETROLEUM LTD.

CONDENSED CONSOLIDATED STATEMENTS 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

-

-

3,875

-

-

3,875

Options exercised

339,935

1,375

(653)

-

-

722

Net loss for the period

-

-

-

-

(9,583)

(9,583)

Currency translation adjustment

-

-

-

(1,305)

-

(1,305)

Balance at June 30, 2015

261,424,328

$

365,045

$

89,631

$

3,105

$

252,464

$

710,245

Share-based compensation

-

-

4,668

-

-

4,668

RSUs exercised

133,056

-

-

-

-

-

Net income for the period

-

-

-

-

5,969

5,969

Currency translation adjustment

-

-

-

(1,588)

-

(1,588)

Balance at December 31, 2015

261,557,384

$

365,045

$

94,299

$

1,517

$

258,433

$

719,294

Share-based compensation

-

-

879

-

-

879

Net loss for the period

-

-

-

-

(33,798)

(33,798)

Currency translation adjustment

-

-

-

(311)

-

(311)

Balance at June 30, 2016

261,557,384

$

365,045

$

95,178

$

1,206

$

224,635

$

686,064

The information communicated in this announcement is inside information for the purposes of Article 7 of Market Abuse Regulation 596/2014 ('MAR').

Caution Regarding Forward-looking Information

Certain information set forth in this press release, including information and statements which may contain words such as 'could', 'plans', 'intends' 'should', 'anticipate', 'expects', 'will', 'propose', 'opportunity', 'future', 'continue', and similar expressions and statements relating to matters that are not historical facts, contain forward-looking statements, including but not limited to statements regarding: the proposed transaction and the anticipated timing of closing, the timing of receipt of required regulatory approvals and the delisting of the Bankers Shares following completion of the transaction. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Bankers' control. Completion of the Arrangement is subject to a number of conditions, including receipt of the approvals required by the People's Republic of China, and other conditions which are typical for transactions of this nature. Failure to satisfy any of these conditions or the emergence of a superior proposal may result in the termination of the Arrangement Agreement. The foregoing list is not exhaustive. Additional information on these and other risks that could affect completion of the Arrangement is set forth in the Management Information Circular of the Company dated April 19, 2016, which is available on SEDAR at www.sedar.com. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. The actual results, performance or achievement of Bankers could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that Bankers will derive therefrom. Bankers disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.

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 Albaniaand 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, Englandunder the stock symbol BNK.

SOURCE Bankers Petroleum Ltd.

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