CALGARY, Aug. 14 Bankers-Petroleum-Q2 2009 Horizontal Drilling Update CALGARY, Aug. 14 /PRNewswire-FirstCall/ - Bankers Petroleum Ltd. ("Bankers" or the "Company") (TSX: BNK, AIM: BNK) is pleased to announce today its financial and operating results for the period ended June 30th, 2009: ------------------------------------------------------------------------- Q2 - 2009 Q1 - 2009 Q2 - 2008 ------------------------------------------------------------------------- Capital Expenditures ($000) 6,126 2,835 17,100 ------------------------------------------------------------------------- Brent Oil Price $/bbl 58.79 44.40 121.51 ------------------------------------------------------------------------- Patos Marinza Oil Price $/bbl 34.63 24.73 64.36 ------------------------------------------------------------------------- Operating Costs $/bbl 9.90 10.44 14.03 ------------------------------------------------------------------------- Transportation $/bbl 3.45 2.70 3.27 ------------------------------------------------------------------------- Royalties $/bbl 9.28 6.61 12.43 ------------------------------------------------------------------------- Netback $/bbl 12.00 4.98 34.63 ------------------------------------------------------------------------- HIGHLIGHTS - Production averaged 6,383 bopd, an increase of 9% over the first quarter of 2009. - Revenue increased by 53% to $20.1 million ($34.63/bbl - 59% of Brent) in the second quarter of 2009 from $13.1 million ($24.73/bbl - 56% of Brent) in the first quarter. The fluctuation in the sales prices reflected the change in Brent prices, which averaged $58.79 for the second quarter of 2009. Comparatively, average Brent prices were $44.40 for the preceding quarter. - Net operating income (netbacks) increased to $7.0 million ($12.00/bbl) from $3.7 million ($4.98/bbl) over the first quarter of 2009. - Operating expenses have decreased to $9.90/bbl in the second quarter of 2009 from the preceding quarter of $10.44/bbl. - Funds generated from operations increased to $6.0 million in the second quarter of 2009 from $1.3 million over the previous quarter. - Capital expenditures were limited to $6.1 million to minimize balance sheet risk and to focus on forward planning in a stable oil price environment. - To strengthen its balance sheet, on May 7, Bankers completed a bought-deal equity issue with a syndicate of underwriters of 25,143,800 common shares of the Company at CAD$1.75 per common share, generating gross proceeds of CAD$44.0 million. - On May 8, Bankers announced it had finalized a $110.0 million reserve-based long-term credit facility with the International Finance Corporation (IFC), a member of the World Bank Group, and the European Bank for Reconstruction and Development (EBRD) to supplement the Company's existing $32.0 million credit facility with Raiffeisen Bank. - IFC and EBRD each received warrants in conjunction with the financing to purchase eight million common shares of the company at a price of CAD$1.50 per share. The warrants were exercised in July 2009 generating proceeds of CAD$24.0 million resulting in IFC and EBRD each having a 3.6% equity interest in the Company. - In July 2009, Bankers commenced export operations at the new Port of Vlore export terminal for the storage and handling of its oil in a 13,000 cubic meter Company-dedicated oil tank. The storage facility has significantly improved the Company's export operations and is expected to lead to additional export contracts. Results at a Glance Six months ended June 30 -------------------------- 2009 2008 ------------------------------------------------------------------------- Financial ($000s, except as noted) Oil revenue 33,159 58,833 Net operating income 9,595 31,144 Net income (loss) (4,171) 1,544 Basic and diluted earnings (loss) per share (0.022) 0.009 Funds generated from operations 7,263 26,241 June 30 -------------------------- 2009 2008 ------------------------------------------------------------------------- Cash and deposits 41,147 42,516 Working capital 28,161 27,918 Total assets 257,689 201,093 Bank loans 32,651 29,004 Other long-term liabilities 35,491 30,181 Shareholders' equity 174,640 119,964 PATOS MARINZA DRILLING UPDATE On July 8, 2009, Bankers initiated its 10 well horizontal drilling program for 2009 to follow-up on its successful first horizontal well (375 metre lateral section) which is currently producing at an average rate of 150 bopd and has produced in excess of 31,000 barrels since January 2009. The second horizontal well (475 metre lateral) was placed on production on August 3, 2009, and is currently producing at a rate of 160 bopd and improving. The third horizontal well was drilled and cased as an oil well (600 metre lateral) and is expected to be completed and commenced production on August 14. The drilling program is continuing with the spudding of the fourth horizontal well on August 12, 2009. The Company is planning to drill seven additional horizontal wells and three vertical locations before year-end 2009. With excellent horizontal well productivities and improved drilling time and well costs, the Company has solicited bid proposals for a second drilling rig and is currently evaluating several offers. Bankers expects to have the second rig on location by early 2010 and is planning a significant increase of the number of horizontal wells to be drilled in 2010 and beyond. The well re-activation and re-completion program of existing wells will continue simultaneously with the new well drilling program. Current production is 6,200 bopd with an additional 600 bopd from shut-in wells which we expect to bring back on production over the next few weeks as the Company continues with its full operational well service activities that were curtailed during the first half of 2009 due to low oil prices. Bankers second quarter results have now been incorporated into the corporate presentation and will be posted on Bankers website later today. Abby Badwi, President and Chief Executive Officer will host a conference call and webcast on Monday, August 17, 2009 at 9:00 a.m. MST. For complete details please go to www.bankerspetroleum.com. 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 both the Patos Marinza and the Kucova heavy oil fields. Bankers' shares are traded on the Toronto Stock Exchange and the AIM Market in London, England under the stock symbol BNK. MANAGEMENT'S DISCUSSION AND ANALYSIS The following is management's discussion and analysis (MD A) of Bankers Petroleum Ltd.'s (Bankers or the Company) operating and financial results for the three and six months periods ended June 30, 2009 compared to the preceding quarter and the corresponding period in the prior year, as well as information and expectations concerning the Company's outlook based on currently available information. The MD A should be read in conjunction with the unaudited interim financial statements for the three and six months periods ended June 30, 2009 and the audited financial statements and MD A for the year ended December 31, 2008. Additional information relating to Bankers, including its Annual Information Form, is on SEDAR at www.sedar.com and on the Company's website at www.bankerspetroleum.com. All dollar values are expressed in U.S. dollars, unless otherwise indicated, and are prepared in accordance with Canadian generally accepted accounting principles (GAAP). The Company reports its heavy oil production in barrels. This report is prepared as of August 13, 2009. NON-GAAP MEASURES Netback per barrel and its components are calculated by dividing revenue, royalties, operating and sales and transportation expenses by the gross production volume during the period. Netback per barrel is a non-GAAP measure and it is commonly used by oil and gas companies to illustrate the unit contribution of each barrel produced. Net operating income is similarly a non-GAAP measure that represents revenue net of royalties and operating, sales and transportation expenses. The Company believes that net operating income is a useful supplemental measure to analyze operating performance and provides an indication of the results generated by the Company's principal business activities prior to the consideration of other income and expenses. Funds generated from operations include all cash from operating activities and are calculated before change in non-cash working capital. Reconciliation to the GAAP measure is as follows: Three months ended Six months ended June 30 June 30 ---------------------------------------------------- ($000s) 2009 2008 2009 2008 ------------------------------------------------------------------------- Cash provided by (used in) operating activities (4,354) 15,208 (5,338) 26,060 Change in non-cash working capital 10,352 1,545 12,601 181 ------------------------- ------------------------- Funds generated from operations 5,998 16,753 7,263 26,241 ------------------------- ------------------------- ------------------------- ------------------------- The non-GAAP measures referred to above do not have any standardized meaning prescribed by GAAP and therefore may not be comparable to similar measures used by other companies. Management uses these non-GAAP measurements for its own performance measures and to provide its shareholders and investors with a measurement of the Company's efficiency and of its ability to fund a portion of its future growth expenditures. CAUTION REGARDING FORWARD-LOOKING INFORMATION This MD A offers our assessment of the Company's future plans and operations as of August 13, 2009 and contains forward-looking information. Such information is generally identified by the use of words such as "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward-looking statements. Statements relating to "reserves" or "resources" are also forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the resources and reserves described can be profitably produced in the future. All such statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Management believes the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this AIF should not be unduly relied upon. These statements speak only as of the date hereof. In particular, this MD&A contains forward-looking statements pertaining to the following: - performance characteristics of the Company's oil properties; - crude oil production estimates and targets; - the size of the oil reserves; - capital expenditure programs and estimates; - projections of market prices and costs; - supply and demand for oil; - expectations regarding the ability to raise capital and to continually add to reserves through acquisitions and development; and - treatment under governmental regulatory regimes and tax laws. These forward looking statements are based on a number of assumptions, including but not limited to: those set out herein and in the Company's Form 51-101F1 Statement of Reserves Data and Other Oil and Gas Information (NI 51-101 Report), availability of funds for capital expenditures, a consistent and improving success rate for well re-completions at Patos Marinza, increasing production as contemplated by the Plan of Development (PoD), stable costs, availability of equipment and personnel when required, continuing favourable relations with Albanian governmental agencies and continuing strong demand for oil. Actual results could differ materially from those anticipated in these forward-looking statements as a result of the risks and uncertainties set forth below: - volatility in market prices for oil and natural gas; - risks inherent in oil and gas operations; - uncertainties associated with estimating oil and natural gas reserves; - competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel; - the Company's ability to hold existing leases through drilling or lease extensions; - incorrect assessments of the value of acquisitions; - geological, technical, drilling and processing problems; - fluctuations in foreign exchange or interest rates and stock market volatility; - rising costs of labour and equipment; - changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry. The Company from time to time updates its forward-looking information based on the events and circumstances that occurred during the period. As a consequence of the recent sharp declines in oil prices the Company has adjusted its capital expenditure program to ensure the commitments are funded by cash provided by operations, cash on hand and available credit. Readers are cautioned that the foregoing lists of factors are not exhaustive. The forward-looking statements contained in this MD A are expressly qualified by this cautionary statement.

Source