BNKJF/ Banker's Petroleum -
Canadian IOC with sole operations in Albania x 10yr. They secured a PSC with the Albanian NOC/ Albpetrol in 2004 to develop the Patos-Marinza (largest onshore oilfield in continental Europe @ 5.1B OIIP, 100% WI, 191M bbl 2P) and Kucova (much smaller @ 297M OIIP, 100% WI, 12M bbl 2P) for 25 years + option ext. The Patos-Marinza field had previously been developed by a number of IOCs as well as the Albanian NOC, but BNK went in and converted the legacy rigs to modern vertical wells installing PCP pumps which has boosted well productivity by 5-10x (5-10 bopd/ well -> 35-40 bopd/ well). So over the past 10 years they been taking groups of wells from Albpetrol each year and converting them (e.g. 545 active wells eo2014 vs 454 eo2013). In addition in 2008 they started drilling new horizontal wells between the existing vertical well bores to further boost field productivity. So that helps explain why they’ve grown output from 400 bopd in 2004 to 20,000+ bopd in 2014. So far they’ve taken over 1729 wells from Albpetrol (I’m still trying to find the total # of wells to be transferred under the PSA).
Cost per bbl: $20-25, on par with Middle East onshore, with room for a few bucks more in savings. Incredibly, they are still profitable below $50/ bbl although they are cash flow negative due to aggressive OpEx for the well conversion (reduce cap program this year to wait on Brent).
Cash/ Cap: 0.17
D/ E: 0.19
P/ TB: 0.86
EV/ Rev: 1.1
EV/ EBITDA: 2.3
EV/ FCF: -28
ROE: 16%
EBIT/ Interest: 26
PE ttm: 6.0
Rev 5 year growth: 48%
Rev 10 year growth: 69%
TBook 5 year growth: 27%
TBook 10 year growth: 43%
These are back-o-the-envelope, particularly wrt cash balance. I also expect to see CapEx come way down but didn’t assume that in these #s. They have some issues to work out including recent Albanian flooding and CO2 leak. As I’ve mentioned on all my E&P buys I’m waiting for drop of Brent to the mid to high 50s before I buy. I don’t have an exact buy price because I feel we’re already in value territory here, looking more at support.
Thoughts welcome,
Graham |
