CAMARILLO, California,
July 31, 2014 /PRNewswire/ --
BNK Petroleum Inc. (the "Company") (TSX: BKX) is pleased
to announce that its indirect wholly owned subsidiary BNK Petroleum
(US) Inc. ("BNK US") has obtained a new US$100,000,000 credit facility ("new facility")
from Morgan Stanley Capital Group Inc. ("MSCGI"). The initial
commitment amount of the new reserve-based facility is US$15,900,000.
The proceeds from the new facility are intended to fund drilling
of Caney shale oil wells in the
Tishomingo field in Oklahoma. The new facility will bear interest
at a per annum rate equal to then three month LIBOR plus an
applicable margin ranging from 2% to 7% based on the ratio of
outstanding borrowings to present value of proved developed
producing reserves discounted at 9% ("PDP PV9"). The facility
provides for interest only payments until the July 2018 maturity date. Additional commitment
amounts will be subject to new reserve evaluations.
Commenting on the new facility, Wolf
Regener, President and CEO said "We are pleased to once
again be working with MSCGI, and appreciate their shared belief in
the potential of our assets. This facility has been structured to
grow with our future cash flow needs and to expand our planned
drilling program beyond the 3 Caney wells previously announced. Our
intention is to continue our Caney
drilling program throughout 2014 and 2015."
Oklahoma - Tishomingo
Field
The Company has completed drilling the Wiggins 11-2H well (93.4%
working interest) with a 5,050 foot treatable lateral section. The
Wiggins 11-2H, the first of three planned Caney formation wells previously announced,
was drilled vertically, had an extensive suite of logs run, was
subsequently plugged back and horizontally directionally drilled.
This lateral was placed in what the Company believes is the most
productive stratigraphic portion of the Caney, based on the analysis of previous well
results and the pilot hole. The fracture stimulation of the well is
expected to begin within the next two weeks. The drilling rig is
moving to the Hartgraves 1-5H location and is expected to begin
drilling within the week. The Hartgraves 1-5H well (100% working
interest) is expected to be drilled in less than 30 days as it will
not have a pilot hole.
After drilling the Hartgraves 1-5H well the Company's net
Caney acreage will have increased
to about 15,500 acres.
Poland
As previously announced, the Company successfully placed
proppant in 9 of the 20 stages attempted in its Gapowo B-1
horizontal well, and is continuing its recovery of the fracture
stimulation fluid ("fluid"). Mechanical issues with the artificial
lift equipment resulted in a fluid recovery rate that was slower
than anticipated. The mechanical issues were corrected late last
week, and fluid recovery re-commenced at higher rates. As of this
date, 21% of the fluid has been recovered, with continuous natural
gas being produced from the well.
The well has had gas rates spiking to over one million cubic
feet per day for short periods of time, and is currently averaging
between 200,000 to 400,000 cubic feet per day. These gas rates may
continue to increase as the well continues to unload fluid. The
preliminary flowback and gas production results obtained so far
indicate that the fracture stimulation may have achieved a lower
than desired effective permeability. The Company believes that only
a few of the 9 stages may have been successful in creating the
desired conductivity. Downhole pressure recorders were installed
which will provide further information during the continued
flowback. This data will also help in understanding the
stronger-than-expected build-up that occurred during the period
when the well was shut-in for mechanical repairs.
About BNK Petroleum Inc.
BNK Petroleum Inc. is an international oil and gas
exploration and production company focused on finding and
exploiting large, predominately unconventional oil and gas resource
plays. Through various affiliates and subsidiaries, the Company
owns and operates shale oil and gas properties and concessions in
the United States, Poland and Spain. Additionally the Company is utilizing
its technical and operational expertise to identify and acquire
additional unconventional projects. The Company's shares are traded
on the Toronto Stock Exchange under the stock symbol
BKX.
This news release contains short-term production rates.
Readers are cautioned that such production rates are not
necessarily indicative of long-term performance or of ultimate
recovery.
Caution Regarding Forward-Looking Information
Certain statements contained in this news release constitute
"forward-looking information" as such term is used in applicable
Canadian securities laws, including information regarding the
Company's use of proceeds from the new facility and Caney and Gapowo B-1 wells development,
including plans, anticipated results and timing. Forward-looking
information is based on plans and estimates of management and
interpretations of exploration information by the Company's
exploration team at the date the information is provided and is
subject to several factors and assumptions of management, including
that the indications of early results are reasonably accurate
predictors of the prospectiveness of the shale intervals, that
required regulatory approvals will be available when required, that
expected production from future wells can be achieved as modeled,
declines will match the modeling, future well production rates will
be improved over existing wells, that rates of return as modeled
can be achieved, that recoveries are consistent with management's
expectations, that additional wells are actually drilled and
completed, that no unforeseen delays, unexpected geological or
other effects, equipment failures, permitting delays or labor or
contract disputes are encountered, that the development plans of
the Company and its co-venturers will not change, that the demand
for oil and gas will be sustained, that the Company will continue
to be able to access sufficient capital through financings,
farm-ins or other participation arrangements to maintain its
projects, and that global economic conditions will not deteriorate
in a manner that has an adverse impact on the Company's business,
its ability to advance its business strategy and the industry as a
whole. Forward-looking information is subject to a variety of risks
and uncertainties and other factors that could cause plans,
estimates and actual results to vary materially from those
projected in such forward-looking information. Factors that could
cause the forward-looking information in this news release to
change or to be inaccurate include, but are not limited to, the
risk that any of the assumptions on which such forward looking
information is based vary or prove to be invalid, including that
the Company or its subsidiaries is not able for any reason to
obtain and provide the information necessary to secure required
approvals, that unexpected geological results are encountered, that
completion techniques require further optimization, that production
rates do not match the Company's assumptions, that very low or no
production rates are achieved, that the Company is unable to access
required capital, that occurrences such as those that are assumed
will not occur, do in fact occur, and those conditions that are
assumed will continue or improve, do not continue or improve, any
of which could result in delays, cessation in planned work or loss
of one or more concessions and have an adverse effect on the
Company and its financial condition. These risks as well as the
other risks and uncertainties applicable to exploration and
development activities and the Company's business as set forth in
the Company's management discussion and analysis and its annual
information form both of which are available for viewing under the
Company's profile
at http://www.sedar.com. The Company
undertakes no obligation to update these forward-looking
statements, other than as required by applicable law.
For further information:
Wolf E. Regener +1 (805)
484-3613
Email: investorrelations@bnkpetroleum.com
Website: http://www.bnkpetroleum.com
(BKX.)