Bankers Petroleum Announces 2012 First Quarter Financial and Operational Results

Record Quarter of Revenue, Netback and Cash Flow

CALGARY, May 14, 2012 /PRNewswire/ - Bankers Petroleum Ltd. ("Bankers" or the "Company") (TSX: BNK, AIM: BNK) is pleased to provide its 2012 first quarter financial and operational results.  During the quarter, Bankers achieved several key milestones, including record revenue, netback and cash flow.

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 March 31, 2012 are:

• Oil sales averaged 13,279 bopd, an increase of 12% compared to 11,894 bopd for the same period in 2011, and 13,399 bopd during the previous quarter.
  
  
• Revenue increased by 16% to $102.7 million ($84.96/bbl) from $88.3 million ($71.67/bbl) in the previous quarter and by 41% from $72.7 million ($67.95/bbl) in the first quarter of 2011. Revenue represented 72% of the Brent oil price of $119 per barrel.
  
  
• Royalties in favor of the Albanian Government and related entities, totalled $19.1 million for the quarter, up from $13.8 million for the first quarter of 2011.  Total royalties for 2011 were $64 million, representing 19% of revenue.
  
  
• Operating, sales and transportation costs were $30 million in the first quarter, which include Albanian based companies and their employees.  This compares with $19 million for the first quarter of 2011 and $106 million for 2011.
  
  
• The Company recorded net operating income (netback) of $53.5 million ($44.24/bbl) in the first quarter of 2012, compared to $37.7 million ($30.56/bbl) during the previous quarter and $39.8 million ($37.22/bbl) in the same period of 2011.
  
  
• In the first quarter of 2012, funds generated from operations were $48.1 million, an increase of 47% from the preceding quarter of $32.7 million and an increase of 61% from $29.9 million in the first quarter of 2011.
  
  
• Capital expenditures were $62.7 million in the first quarter of 2012. The Company drilled 27 wells during the quarter, of which 24 were horizontal production wells and 3 were water disposal wells. Reactivation and recompletion work continued with 7 new reactivations and recompletions.  During the same period of 2011, capital expenditures were $51.9 million.
  
  
• Equity proceeds from warrant and option exercises during the period raised $12.1 million.
  
  
• The Company continues to maintain a strong financial position at March 31, 2012 with cash of $77.2 million and working capital of $119.0 million.  Working capital for December 31, 2011 and March 31, 2011 was $80.3 million and $92.8 million, respectively.
  
  

Operational Update and Outlook

Average second quarter production to date is 13,600 bopd. Flat production over the last few months is primarily due to operational challenges associated with mature heavy oilfield development including interference from old well bores, sand production, and water disposal capacity, all of which are impacting new well performance and the overall production growth rate. The Company is undertaking several technical and operational initiatives to enhance well and field performance as it continues to implement the necessary actions required to mitigate or lessen these operational challenges.

Over the next few months, the Company will focus its development drilling campaign in high impact areas of the Patos-Marinza oilfield along with reviewing secondary pressure support programs in the Gorani and Driza formations. Steam injection at the thermal pilot will resume shortly and a new drilling location is being finalized for the exploration of Block F.

The Company will be releasing an operational update on the morning of June 4, 2012, followed immediately by a Company hosted Capital Markets day in Calgary to present a detailed description of its development activities for the remainder of this year. Further details on time and venue will be announced closer to the event.

Bankers' Annual General Meeting will be held at The Metropolitan Centre, 333 - 4 Avenue SW, Calgary, Alberta, on June 27, 2012 at 3:00 p.m. (Calgary time).

For additional information, please see an updated version of the Company's May 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.