Bankers Petroleum Announces 2011 Second Quarter Financial and Operational Results

Record Quarter of Production and Financial Results

CALGARY, Aug. 11, 2011 /PRNewswire/ - Bankers Petroleum Ltd. ("Bankers" or the "Company") (TSX: BNK) (AIM: BNK) is pleased to provide its 2011 second 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.

Highlights for the quarter ended June 30, 2011 are:

• Production averaged 12,152 bopd, an increase of 24% compared to the same period in 2010.  Production at June 30, 2011 was 13,150 bopd.
  
  
• Revenue increased 17% to $85.2 million ($77.03/bbl) in the second quarter of 2011 from $72.7 million ($67.95/bbl) in the first quarter of 2011 and by 102% from $42.1 million ($47.12/bbl) in the second quarter of 2010.
  
  
• Net operating income (netback) increased 19% to $47.2 million ($42.72/bbl) in the second quarter of 2011 from $39.8 million ($37.22/bbl) during the first quarter of 2011 and by 132% from $20.4 million ($22.76/bbl) in the second quarter of 2010.
  
  
• Funds generated from operations increased by 42% to $42.9 million in the second quarter of 2011 from $30.3 million over the first quarter of 2011 and by 139% from $17.9 million in the second quarter of 2010.
  
  
• Capital expenditures for the second quarter of 2011 were $69.4 million and included drilling 18 horizontal wells and one (1) vertical water disposal well, as well as 14 reactivations and related infrastructure/expansion projects.  During the same period of 2010, capital expenditures were $28.7 million.
  
  
• The Company continues to maintain a strong financial position with cash of $81.4 million and working capital of $98.2 million at June 30, 2011.  Working capital for December 31, 2010 and June 30, 2010 was $130.9 million and $59.4 million, respectively.

Operational Update

Current production at the Patos-Marinza oilfield is 13,400 bopd. Of the 1,750 bopd of reported shut-in production in early July, 800 bopd have been put back on production and the additional oil inventory available for sale at the end of the second quarter was sold during the month of July reflecting record sales of 494,000 barrels. A new service rig was delivered in early August and another is due for delivery in October.

The thermal pilot program in the southwest area of the Patos-Marinza oilfield has now commenced. The vertical delineation well is drilling near total depth. Several cores have been cut and the rig will commence drilling the first of two horizontal thermal wells once casing has been set on the delineation well. The horizontal wells are targeting the thick Driza 1 sandstone where visual core inspection shows the zone to have excellent porosity and is fully saturated with oil. Steam injection is expected to commence in the fourth quarter of 2011 upon completion of the surface facilities construction.

Outlook

Despite the current equity sell off in financial markets and recent decline in oil prices, Bankers' financial position remains strong with $81 million in cash and minimal long-term debt of $31 million. In addition, Patos- Marinza crude sales agreements are based on Brent crude price which is currently at a 27% premium to WTI. Cash on hand and cash generated from operations are projected to be sufficient to fund Bankers capital program for 2011 and beyond, based on $100/bbl Brent price average for this year and $85/bbl for 2012 and beyond. The financial oil hedge agreements entered into by the Company earlier this year are an additional risk management protection strategy against declining commodity prices.

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

Caution Regarding Forward-looking Information

Information in this news release respecting matters such as the expected future production levels from wells, future prices and netback, work plans, anticipated total oil recovery of the Patos-Marinza and Kuçova oilfields constitute forward-looking information. Statements containing forward-looking information express, as at the date of this news release, the Company's plans, estimates, forecasts, projections, expectations, or beliefs as to future events or results and are believed to be reasonable based on information currently available to the Company. 

Exploration for oil is a speculative business that involves a high degree of risk. The Company's expectations for its Albanian operations and plans are subject to a number of risks in addition to those inherent in oil production operations, including: that Brent oil prices could fall resulting in reduced returns and a change in the economics of the project; availability of financing; delays associated with equipment procurement, equipment failure and the lack of suitably qualified personnel; the inherent uncertainty in the estimation of reserves; exports from Albania being disrupted due to unplanned disruptions; and changes in the political or economic environment.

Production and netback forecasts are based on a number of assumptions including that the rate and cost of well reactivations and well recompletions of the past will continue and success rates and production rates will be similar to those rates experienced for previous well recompletions and reactivations; continued availability of the necessary equipment, personnel and financial resources to sustain the Company's planned work program; continued political and economic stability in Albania; the existence of reserves as expected; the continued release by Albpetrol of areas and wells pursuant to the Plan of Development and Addendum; the absence of unplanned disruptions; the ability of the Company to successfully drill new wells and bring production to market; and general risks inherent in oil and gas operations.

Forward-looking statements and information are based on assumptions that financing, equipment and personnel will be available when required and on reasonable terms, none of which are assured and are subject to a number of other risks and uncertainties described under "Risk Factors" in the Company's Annual Information Form and Management's Discussion and Analysis, which are available on SEDAR under the Company's profile at www.sedar.com.

There can be no assurance that forward-looking statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. Readers should not place undue reliance on forward-looking information and forward looking statements.

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 Albania, Bankers operates and has the full rights to develop the Patos-Marinza heavy oilfield and has a 100% interest in the Kuçova oilfield, and a 100% interest in Exploration Block F.  Bankers' shares are traded on the Toronto Stock Exchange and the AIM Market in London, England under the stock symbol BNK.

SOURCE Bankers Petroleum Ltd.