albanian-oil-worker-pointing

Bankers employee in Albania (Source Bankers Petroleum)

Bankers Petroleum (TSX:BNK) is one of the first oil companies to provide operational third quarter results to the market. Oil production continues to grow with 6% production growth since the second quarter. Production in the third quarter averaged 21,865 bopd which is a quarterly record for the company.

All production comes from the Patos-Marinza oil field which is the largest onshore oil field in Europe. Bankers holds a 100% working interest in the field which boasts 2P reserves of 220 million barrels. The field was acquired in 2004 and was producing 400 bopd at the the time. Management has been extremely successful at increasing production over the last 10 years from 400 - 21,800 bopd by modernizing the 80 year old field and drilling new wells.

The company's balance sheet is clean and Bankers generates strong cash flow to continue driving growth in the years to come. Financial results have yet to be released but Q2 earnings were impressive at $27.19 million. Operational performance is at an all time high and cost savings are being realized. At $100 Brent Oil the company generates a net-back of ~$40 per barrel which provides cash flow for capital expenditures.

The price of oil is down considerably in the past several weeks and fell 5% last week due to a rising US dollar and ample supply. On this morning's conference call Bankers management mentioned that they are putting a hedging program in place. They have also confirmed that growth will not slow at current prices but they do have the flexibility to reduce operations if needed.

Three interesting facts about Bankers:

  1. They drill 1/3 of all the wells in Continental Europe;
  2. Bankers is the largest direct foreign investor in Albania;
  3. A new well is drilled every 3 days.

Bankers plans to nearly double production at Patos Mirenza to 40,000 bopd by 2020, and appears sufficiently managed and capitalized to realize that growth.

Share Price: $5.06
Shares outstanding: 261.02 M
Market  Cap: $1.3 B

One of Bankers' co-founders was resource financier Frank Giustra, who has returned to Albania for another oil and gas venture. Giustra sits on the board of Petromanas Energy (PMI.v) which is drilling the sub-thrust Molisht-1 well less than 100km from Patos Mirenza, with results expected later this year or early next.

I own no shares in any of the companies mentioned in this article, although fellow CEO.ca writers are shareholders in Petromanas (Tommy Humphreys). As alway,s do your own due diligence.

READ:  Bankers Petroleum Operational Update for the Third Quarter 2014