BANKERS PETROLEUM ANNOUNCES 2013 SECOND QUARTER FINANCIAL AND OPERATIONAL RESULTS

Free Cash Flow of $9 Million and Q3 Average Production to Date 18,300 bopd. 
Bankers Petroleum provided on 14 August its 2013 second quarter financial and operational results. During the quarter, Bankers achieved its second consecutive quarter of free cash flow and record production levels.
Highlights for the quarter and six months ended June 30, 2013 are:
– Average oil production was 17,886 barrels of oil per day (bopd) for the three months ended June 30, 2013, 6% higher than 16,919 bopd in the first quarter of 2013 and 26% higher than 14,161 bopd in the second quarter of 2012. Average oil production for the third quarter to-date is approximately 18,300 bopd.
– Oil sales averaged 18,008 bopd for the second quarter of 2013, an increase of 8% compared to 16,605 bopd for the previous quarter and an increase of 27% compared to 14,169 bopd for the second quarter of 2012.
For the six months ended June 30, 2013, oil sales were 17,310 bopd, an increase of 26% compared to 13,724 bopd for the comparable 2012 period.
– For the second quarter of 2013, revenue was $132 million ($80.45/bbl) compared to $133 million ($88.70/bbl) in the previous quarter and $99 million ($76.46/bbl) in the second quarter of 2012. Revenue for the second quarter of 2013 represented 79% of the Brent oil price of $102/bbl, compared to 79% of the Brent oil price of $113/bbl in the previous quarter and 71% of the Brent oil price of $108/bbl in the second quarter of 2012.
– Royalties to the Albanian Government and related entities were $22 million (16% of revenue) for the second quarter of 2013 compared to $17 million (17% of revenue) for the same quarter of 2012. Total royalties were $45 million (17% of revenue) and $36 million (18% of revenue) for the six months ended
June 30, 2013 and 2012, respectively.
– For the three and six months periods ended June 30, 2013, operating, sales and transportation costs, originating from Albanian-based companies and their employees, were $41 million and $77 million, respectively, compared to $34 million and $64 million for the comparable periods of 2012.
– The Company recorded net operating income (netback) of $69 million ($42.19/bbl) in the second quarter of 2013, compared to $73 million ($48.96/bbl) in the previous quarter and $47 million ($36.65/bbl) in the second quarter of 2012. Net operating income was $142 million ($45.42/bbl) for the six months ended June 30, 2013, a 41% increase compared to $101 million ($40.33/bbl) in the comparable 2012 period.
– For the second quarter of 2013, funds generated from operations were $62 million, compared to $65 million for the previous quarter and $43 million for the same period of 2012.
– Capital expenditures were $52 million in the second quarter of 2013. The Company drilled 39 wells during the quarter, comprised of 35 horizontal production wells and four horizontal lateral re-drill wells in the main area of the Patos-Marinza field. In the second quarter of 2012, capital expenditures were $53 million.
– The Company continues to maintain a strong financial position at June 30, 2013 with cash of $33 million and working capital of $117 million. At June 30, 2013, the Company had drawn $115 million of its $230 million approved credit facilities. Working capital for December 31, 2012 and June 30, 2012 was $89 million and $112 million, respectively.
– Both the International Finance Corporation (IFC) and European Bank for Reconstruction and Development (EBRD) have 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 will increase to $200 million from the existing $100 million. Currently, $120 million is available and the additional $80 million will be available as the Company continues to maintain its proved and probable reserves base and is conditional upon Brent oil prices remaining above $70/bbl.
– The Company was successful in setting aside a separate assessment of excise tax on its importation and use of diluents. The Courts have also ruled in favor of the Company for other cases heard, including the carbon and circulation taxes on diluent imports, which resulted in assessments to the Company totalling approximately $25 million. The Company is now preparing to continue its defence at various levels of appeals.

Outlook

The average third quarter 2013 production to date from the Patos-Marinza oilfield in Albania is approximately 18,300 bopd, 2% higher than the second quarter average.
The Company is pleased with performance of the horizontal drilling program which continues to yield strong results. For the second half of 2013, the Company will continue to focus on development drilling in the North-Central areas of the Patos-Marinza field with an estimated 30 horizontal wells per quarter adding to production levels. Two water disposal wells are planned for late in the third quarter and into the fourth quarter to provide capacity expansion for growth. In addition, two (2) to four (4) wells are projected for delineation in the outlying areas of the field in the fourth quarter.
The expansion of water flood and polymer flood patterns continues with additional wells to be converted to injection in the second half of 2013. By year-end the Company will have three (3) water-flood patterns in the upper Marinza reservoir with up to seven (7) injectors and three (3) polymer-flood patterns in the lower Driza reservoir sands with up to six (6) injectors in place with response expected in 2014.
In the second half of 2013, the Company will ramp up spending on surface facilities including the addition of a satellite treatment facility and tank storage expansion to increase treatment capacity and construction of flowlines to reduce trucking within the field where justified.
Drilling of two (2) wells in Kucova is projected in the fourth quarter of 2013 to test production and collect fluid and reservoir information. In addition, existing adjacent wells are scheduled for take-over from Albpetrol for further evaluation.

“I continue to be pleased with the operational success of the company and our ability to meet or exceed our production guidance for five consecutive quarters. The Board has now approved the potential acquisition of a sixth drilling rig which, pending availability, should enable Bankers to affirm the high-end of our annual guidance. We look forward to continued reliable, disciplined growth,” said David French, President and CEO of Bankers Petroleum.

energjia.al, 15.08.2013