Big Banc Split Corp T.BNK

Really quick question - What is the production cost / barrel

[Quanadien]

EOM.
Thank you guys

[Markzilla]

According to the third quarter financial and operational report of November 6, 2015... During the quarter, Bankers achieved a cash margin of US$27.50 per barrel and netback of US$18.46 per barrel. https://www.bankerspetroleum.com/investing/news-releases/bankers-petroleum-announces-2015-third-quarter-financial-and-operational

[Quanadien]

OK thank you. But what is the difference between cash margin and netback? I read online that netback is what remains in your pocket after all expenses... but what about that cash margin? I don't get why they make 18.46$US per barrel (profit), but margin is 27.50$US Would you care to explain? Thank you

[grantoue]

After we get through this fiasco, Bankers should quit spending money to develop the field and start taking profits. this seems like a logical move in my view.

[braincloud]

Like any oil deposit, you need to invest in the field to stem the natural decline rates. One thing that BNK has been doing with EOR has made this very efficient in that its contributing to overall production without spending the same amount of money. So what you suggest just doesn't work.

[Markzilla]

Netback = Revenue - Operating Costs - Royalties and is expressed per barrel.  Found this definition for cash margin in the oil industry... Cash Margin per BOE  is a performance measure we calculate as a ratio, the numerator of which is net income adjusted for the special items: depreciation, depletion and amortization; dry hole costs; impairments; and corporate and other segment

[Quanadien]

Thank you very much. It's good to know they make great money from production. It seems most producers are having a hard time with those low cost, but BNK still has room for lower price environment, which is kind of positive when you take a look at how the price of oil commodity could stay that low for still some time.

[Markzilla]

No problem! Aside from this tax inbroglio, it's definitely a value buy with a P/E today of 4.9, a sound cash position, good management team, solid cash flow and little debt proportional to the industry. This episode is somewhat unnerving, so I may have to just not look at it for a while. ;) OPEC meets tomorrow and I think there may be a strong possibility of a decrease in production given