Financial data
TIRANA, Nov.10 – Canadian petrochemical company Bankers Petroleum posted on its website an interim financial report showing significant improvement in its revenues. Previously the company had reported loss from operations in the Albanian oilfield. The most recent data nevertheless show a cut in these losses by 47 percent compared to last year. The company also emphasized that this was due to a strong pick up in revenue and net operating income.
The concrete developments and improvements were analyzed as follows:
Bankers Petroleum’s nine-month net operating income compared to last year more than tripled from $2.6 million for last year to $9.4 million (4.0 million euro) for the first three quarters of 2006. Oil and gas revenues rose to $22.3 million, a change of 146 percent compared to last year. Average sales volume reached 3,149 barrels of oil per day (bopd). Net operating income for the third quarter alone increased to $4.3 million, a rise of 207 percent compared to last year. For the same period revenue was 152 percent higher than last year, reaching $9.2 million. Total assets reached $127.1 million at the end of September, compared to $53.1 million a year earlier. Production figures for the third quarter show a level of 4,000 bopd compared to 3,193 bopd for the previous quarter, a rise of 123 percent higher from the same period last year. Exit production for September this year was approximately 4,210 bopd. Its exports account for 43 percent of the output in the third quarter of this year. The average price per barrel was $30.81. In the previous quarter the company exported 26 percent of its crude oil sales at an average price of $31.61 per barrel. The exports played positive role of exports in softening losses from declining oil prices, according to the company’s explanations on the report. Bankers Petroleum had 114 reactivated oil wells in the oilfield at the end of September, compared to 85 oil wells in the previous quarter. The company’s capital expenditure in Albania also rose from $13.1 million during the second quarter to $9.4 million in the third one.
The terrain
The Patos Marinze oilfield, located in the southern district of Fier, was originally discovered in 1926 and has over 2,500 wells. The field alone used to produce 13,000 barrels per day at its peak in the 1960s. Being one of the largest onshore oilfields in continental Europe, it is estimated to contain 1.96 billion barrels of original oil in place. Its reserves are estimated to account for 99.7 million barrels of gross oil up until December 2005. Bankers Petroleum Albania Ltd. is a wholly-owned subsidiary of Bankers Petroleum Ltd., a Canadian-based oil and gas exploration and production company focused on opportunities in unconventional petroleum assets. Bankers’ shares are traded on the Toronto Stock Exchange and the AIM Market in London, England under the ticker symbol BNK. Bankers Petroleum has operative bases in the U.S. in the Palo Duro basin, in the state of Texas. The company owns a subsidiary that drills the Albania’s Patos Marinze onshore oilfield. This daughter company is Saxon International Energy, which was granted a 25-year exploitation right on the oilfield by state-owned oil researcher, developer and producer Albpetrol in 2004. The license allows Saxon to redevelop the oilfield. Bankers Petroleum’s marketing agreement is with Albania’s sole oil refinery, the state-owned ARMO, under which Bankers Petroleum sells the crude it produces to in-country refineries. The agreement ends in 2010. Under the prerogatives of this contractual concord, it is allowed to export part or all of its crude output to markets outside the country. In February, Bankers Petroleum signed an export contract with an Italian refinery.
The future
Bankers Petroleum’s President Richard Wadsworth, commenting on the increase in the company’s production, revenues and funds from operations during the third quarter of 2006, said “Our results in Albania continue to improve due to the activities of our strong operational team.” The positive results seem to be coupled with serious feasibility and development strategies for the future. In March, Saxon presented a development plan for the oilfield under which the company will invest up to $213 million in the next five years. The plan includes a provision that enables the company to produce and sell oil under Albpetrol’s existing licence for a period of 25 years. The agreements can be extended for further five-year increments. The overall plan was approved by the Albanian Government. In September, Bankers Petroleum launched another study for a thermal enhanced oil recovery (EOR) pilot project in the oilfield aiming to increase total production above the current 15,000 bopd production target. In order to finance these ongoing projects, last week, the company borrowed $20 million from Raiffeisen Albania bank, the largest foreign-owned bank in the country. As far as concrete expectations are concerned, the company’ report predicts an average of 4,400 to 4,600 bopd, 2006 exit production rate. Finalizing the report, the company said, “We anticipate closing the year in a strong position. In addition, our enhanced oil pilot project study is progressing, which we believe can increase production and resource recovery beyond the primary development plan in place for the Patos Marinze oilfield.”
