Bankers Petroleum net income soars

14 November 2011 13:58pm

StockMarketWire.com - Bankers Petroleum's third quarter net income jumped by 363% to $13.7m in the three months to the end of September.

Oil revenues were up 22% at $93.6m with average production up 39% at 13,667 barrels per day while the average price rose by 60% to $74.48 per barrel.

Net income for the first nine months rose by 506% to $35.7m.

At 1:58pm: (LON:BNK) share price was +5p at 322.5p


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Bankers Petroleum Announces 2011 Third Quarter Results

Record Financial and Operational Quarter

CALGARY, Nov. 11, 2011 /CNW/ - Bankers Petroleum Ltd. ("Bankers" or the "Company") (TSX: BNK) (AIM: BNK) is pleased to provide its 2011 third quarter financial and operational results. The complete reporting package, consisting of Management's Discussion and Analysis along with Financial Statements and Notes, is posted on the Company's website www.bankerspetroleum.com and SEDAR: www.sedar.com.

Results at a Glance
(US$000, except as noted)(1) Three months ended
September 30 Nine months ended

September 30
2011 2010 Change 2011 2010 Change
Oil revenue 93,650 42,135 122% 251,570 119,431 111%
Net operating income 44,898 19,646 129% 131,976 55,638 137%
Net income 13,696 2,958 363% 35,715 5,895 506%
Per share - basic ($) 0.055 0.012 358% 0.145 0.025 480%
- diluted ($) 0.054 0.012 350% 0.140 0.024 483%
Funds generated from operations 42,601 16,308 161% 115,773 48,063 141%
Per share - basic ($) 0.172 0.067 157% 0.469 0.205 129%
Capital expenditures 65,147 27,456 137% 186,465 82,350 126%
Average production (bopd) 13,667 9,826 39% 12,578 9,318 35%
Average price ($/barrel) 74.48 46.61 60% 73.26 46.95 56%
Royalties 14.68 9.16 60% 13.18 9.37 41%
Operating expenses 13.78 10.40 33% 12.69 10.31 23%
Sales and transportation 10.31 5.31 94% 8.96 5.40 66%
Netback ($/barrel) 35.71 21.74 64% 38.43 21.87 76%

(1) Effective January 1, 2011, and retroactive to January 1, 2010, the Company adopted International Financial Reporting Standards (IFRS). Previously, the Company prepared its Financial Statements in accordance with Canadian Generally Accepted Accounting Principles (GAAP). The transition has not resulted in any material variation from prior periods. Full details on the transition adjustments are contained in the Notes to the Consolidated Interim Financial Statements.

Highlights for the quarter ended September 30, 2011 are:

Production averaged 13,667 bopd, an increase of 39% compared to the same period in 2010. Current production is 14,750 bopd.

In the third quarter of 2011, revenue increased by 10% to $93.7 million ($74.48/bbl) from $85.2 million ($77.03/bbl) in the previous quarter and by 122% from $42.1 million ($46.61/bbl) in the third quarter of 2010.

Net operating income (netback) was $44.9 million ($35.71/bbl) in the third quarter of 2011, compared to $47.2 million ($42.72/bbl) during the second quarter of 2011 and $19.6 million ($21.74/bbl) in the third quarter of 2010.

Funds generated from operations were $42.6 million in the third quarter of 2011 compared to $42.9 million in the second quarter of 2011 and $16.3 million in the third quarter of 2010.

During the third quarter of 2011, capital expenditures were $65.1 million. The Company drilled sixteen (16) horizontal wells, a vertical cored delineation well, two (2) thermal horizontal wells, and two (2) water disposal wells, as well as reactivated 19 wells in addition to other related infrastructure/expansion projects. During the same period of 2010, capital expenditures were $27.5 million.

New export market agreements for 2012 have been agreed at higher average price levels than the current year crude oil contracts. ARMO, the Albanian refinery, also agreed to purchase Patos-Marinza crude in 2012 for a significant realized average price increase from the current year contract. The 2012 pricing agreements represent an average 7% increase over the 2011 Patos-Marinza oil price.

The Company continues to maintain a strong financial position with cash of $53.2 million and working capital of $73.5 million at September 30, 2011. Working capital for December 31, 2010 and September 30, 2010 was $130.9 million and $138.8 million, respectively.
Operational Update

Current production at the Patos-Marinza oilfield is 14,750 bopd. This volume represents an 8% increase from third quarter production average. Four (4) of the ten (10) wells drilled and completed in the first five weeks of the fourth quarter targeted reserves and delineation drilling outside the main field. The Driza 1 formation outpost drilling to the west of the main field continues to demonstrate excellent cold flow production in this area of the concession with the last two wells producing at a current average rate of 160 bopd. In addition, the first Gorani 4 horizontal well has been drilled and is currently producing at a rate of 230 bopd. This well is located in the southern portion of Area 1 and extends into Area 2, a part of the field that to date had limited reactivation operations. A second Gorani 4 horizontal well is currently drilling further south in Area 2. Several more wells are scheduled to be drilled in this area.

Two of the existing drilling rigs recently encountered mechanical issues and have been since been repaired and put back into service after eighteen days of combined down-time, The fifth drilling rig has arrived at the Patos-Marinza field and is currently rigging up and will spud its first well in the next few days.

The first Block F exploration well is now scheduled to spud in January 2012 as soon as we can free one of the current rigs focused on incremental production and reserves assessment drilling and move it to the Block F exploration area.

Surface facilities construction has been completed for the thermal pilot program at the Patos-Marinza oilfield. Steam injection into the first horizontal well is projected to commence later this month in the Driza 1 sandstone. The reservoir simulation model is being updated with new core data information. The steam cycle is planned for a period of 60 days following which the well will undergo a soak period for several days before being placed on production and at that time steam injection in the second horizontal well will begin.

Outlook

Current year-end capital expenditures estimate remains at $215 million, net of capital inventory. The Company plans to drill an additional 18 wells before the end of this 2011, including 17 horizontal and one water disposal well. Exit production target is 16,000 bopd; while this rate represents the low case projection, it is a 33% increase from the 2010 exit rate. The Company expects to release its 2011 reserves updates in February 2012.

The 2012 work program and budget is being finalized and its details will be announced in December after receiving necessary board of directors and government approvals. Bankers' continues to hold a strong financial position of $53 million in cash and minimal long-term debt of $31 million with $80 million remaining available within current credit facilities. With Patos-Marinza crude sales agreements being based on Brent crude oil pricing, the Company anticipates a strong cash flow projection for next year and will be able to deliver its most active capital program in 2012.

http://www.bankerspetroleum.com/

For additional information, please see an updated version of the Company's corporate presentation on www.bankerspetroleum.com.

Bankers Pet operational update:3rd Q

http://www.bankerspetroleum.com/

Keystone XL aftermath

The chase by Marty Cej:

"Hi, Kettle? Yeah, it's me, Pot. How are you? Me? Oh, I'm good, good. Just great, yeah, thanks. Anyhow…" The White House has been clear in its criticism of Europe's handling of the sovereign debt crisis, condemning the lack of leadership and will necessary to overcome the morass of local politics to find a lasting solution to a long-term systematic problem. Yesterday, with nary a wink or a nod, the White House said it would delay the permitting of the proposed Keystone XL pipeline until, ummmm, lemme check the ol' calendar here, ummm, yep, we'll put 'er on hold till after the 2012 election. Officially, the U.S. State Department's decision is meant to give the Obama administration more time to assess and analyze the impact of the pipeline on the "health and safety of the American people as well as the environment." Fine. Obama arrived at the White House with a promise to "free America from the tyranny of oil" so the decision is not necessarily out of left field. The guy is in a bind 'cause he's way behind and he's willing to make a deal. Unfortunately, while the battle for the White House rages over the next 12 months or so, American energy consumption habits are unlikely to change. So where to next? Let's talk angles…

TransCanada: How can the company overcome domestic politics to get this project done? How important is the project to the company's future? What does the company's growth strategy look like over the next 12 months in the absence of Keystone progress? What does the growth strategy look like without any Keystone at all? This is a terrific opportunity to get inside a company and see how it ticks.

TransCanada, the stock: Scotiabank says the stock still doesn't reflect the value of the Keystone XL project and reiterated its "outperform" rating. CIBC sees $2-$3 per share downside if the project is denied outright but thinks the pipeline will be approved eventually. CIBC rates the stock a "market perform." RBC is cutting its 2013 EPS estimate but still rates the stock "outperform." Let's make sure viewers get the full range of investment opinions from the Street.
Politics: a friend reminded me yesterday that policy doesn't matter to business until it does. Suddenly, policy matters. What are the next steps for Alberta's new premier? She's off to Washington with a burr under her saddle, but will it matter? What can Ottawa do? What should it do?
Alberta: What does the oil patch think of the decision? What does it do to the mood in Calgary? Edmonton? Fort Mac? Calgary Bureau Chief Brett Harris has the lead on this compelling story. Please keep him informed of any outstanding chases and new opinions.
Speaking of getting inside a company, Howard Green sits down at 1:00 with Michael McCain, CEO of Maple Leaf Foods, to talk about leadership during times of crisis and uncertainty. This is one that every manager and aspiring manager should tune in for.
We'll also sit down with the CFO of Canadian Tire, Marco Marrone, at 9:10 am Eastern. There are few companies with a better read on the Canadian consumer than this one. The company topped expectations with its earnings yesterday and raised its dividend. We'll find out whether that is a vote of confidence in the consumer.
Turning to Europe, well, you know the story. We continue to monitor developments and will report and progress and all the setbacks as they arise.
Today is also National Metal Day, by the way, and also marks Black Sabbath's first ever U.S. gig in 1970 at the Whisky A Go-Go in LA.