Low oil prices hurt sales, volumes at Bankers Petroleum

Low oil prices were continuing to hurt sales and volumes at Canadian oil firm Bankers Petroleum, which revealed drops for both figures in its first quarter update on Tuesday.

The AIM-traded company achieved an average production of 17,363 barrels of oil per day during the quarter, 4% below the Q4 2015 average of 18,137 bopd. Bankers’ board said that, during the quarter, it continued to optimise current production levels and monitor the economic return of its wells based on the current low oil price environment.

Its sales in the first quarter averaged 17,280 bopd, compared with fourth quarter sales of 18,558 bopd. The company’s crude inventory on 31 March totalled 266,000 barrels of oil, compared with 258,000 barrels on 31 December.

Prices also suffered, with Bankers reporting a first quarter average oil price of $21.07 per barrel, 62% of the Brent price of $33.89. In the fourth quarter of 2015, the sales price averaged $33.62, or 77% of the $43.69 quoted Brent price.

The company’s board confirmed it hedged 5,000 bopd under costless collar contracts with an average floor of $52.09 per barrel and an average ceiling of $54.64 per barrel. It generated $7.4m in the first quarter through the hedging, with the programme valued at $16.2m for the rest of the year.

As a result of the low oil price environment, Bankers had deferred drilling activity at the start of the year to protect the strength of its balance sheet. It confirmed drilling would resume as and when pricing improved.