CAMARILLO, California,
March 24, 2017 /PRNewswire/
-- BNK Petroleum Inc. (the "Company" or "BNK")
(TSX: BKX), is providing the results of its December 31, 2016 independent reserves
evaluation.
The evaluation of the Company's reserves in the Caney formation of the Tishomingo Field in
Oklahoma was conducted by
Netherland, Sewell & Associates, Inc. ("NSAI") in accordance
with National Instrument 51-101 – Standards of Disclosure for
Oil and Gas Activities.
2016 Gross Reserves Summary
- Total Proved Reserves 18 million Barrels of oil equivalent
(BOE)
- an increase of 1% over the December 31,
2015 estimate
- Proved plus Probable Reserves 42 million BOEs
- an increase of 2% over the December 31,
2015 estimate
- Proved plus Probable plus Possible Reserves 66.5 million BOEs
- a decrease of 4% from the December 31,
2015 estimate
Net Present Value of Reserves discounted at 10%
- Total Proved Reserves before tax of U.S. $149.9 million
- Proved plus Probable Reserves before tax of U.S. $370.7 million
- Proved plus Probable plus Possible Reserves before tax of U.S.
$695.4 million
The above total Proved reserves are attributed to 11 of the
Caney wells already drilled, four
Woodford wells (4.9% working
interest for the Company) and the drilling of 32.7 net additional
wells over the next 5 years. The Probable reserves are attributed
to the drilling of 40.99 net additional wells. The wells in
this report are planned at 107 acre spacing (6 wells per section)
on approximately 11,448 net acres. This is approximately 69
percent of the 16,650 net acres the Company has in this
project. The other 31 percent of the acreage is on the
easterly side of the Company's acreage and based on data from the
Company's historical drilling of the deeper Woodford formation wells, correlated with a 3D
seismic survey, the Company anticipates that future wells on its
easterly acreage will demonstrate that the Caney is also productive over this easterly
acreage.
Wolf Regener, President and CEO
commented. "We are very pleased with the way our existing
wells are performing. The estimated ultimate recovery from
the existing wells increased by 1.2 million barrels of oil
equivalent (BOE), as the existing producing wells once again
exceeded the previous year forecast. Our Proved and Probable
reserves increased this year as well. These increases do not
incorporate any of the wells from our 2017 drilling program, which
started in the 3rd week of December 2016. The
Company expects these wells to further increase the Proved and
Probable reserves, once the wells are brought online and a new
reserve report is generated."
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|
|
Summary of Oil
& Gas Reserves
|
|
Tight Oil
|
Shale Gas
|
Natural Gas
Liquids
|
MBOE's
|
Reserve
Category
|
BNK
Gross
(Mbbl)
|
Net
(Mbbl)
|
BNK
Gross
(MMcf)
|
Net
(MMcf)
|
BNK
(Mbbl)
|
Net
(Mbbl)
|
BNK
(Mbbl)
|
Net
(Mbbl)
|
Proved
|
|
|
|
|
|
|
|
|
|
Developed
Producing
|
1,474.0
|
1,139.2
|
2,351.5
|
1,819.9
|
556.6
|
430.8
|
2,422.5
|
1,873.3
|
|
Developed
Non-Producing
|
0.0
|
0.0
|
251.2
|
204.1
|
72.2
|
58.7
|
114.1
|
92.7
|
|
Undeveloped
|
10,686.1
|
8,373.0
|
11,777.5
|
9,180.1
|
2,787.9
|
2,173.1
|
15,436.9
|
12,076.1
|
Total
Proved
|
12,160.1
|
9,512.2
|
14,380.2
|
11,204.1
|
3,416.7
|
2,662.6
|
17,973.5
|
12,076.1
|
Probable
|
16,270.7
|
12,944.6
|
19,258.6
|
15,350.9
|
4,562.7
|
3,637.0
|
24,043.2
|
19,140.1
|
Total Proved Plus
Probable
|
28,430.9
|
22,456.8
|
33,638.8
|
26,555.1
|
7,979.6
|
6,299.6
|
42,017.0
|
33,182.3
|
Possible
|
16,461.2
|
13,183.6
|
19,935.5
|
15,899.9
|
4,726.0
|
3,769.4
|
24,509.8
|
19,603.0
|
Total Proved Plus
Probable Plus Possible
|
44,892.1
|
35,640.0
|
53,574.4
|
42,455.0
|
12,705.5
|
10,068.9
|
66,526.7
|
52,784.7
|
|
Net Present Value
of Future Net Revenue
|
As of December 31,
2016
|
Forecast Prices
& Costs
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Present Value of
Future Net Revenue ($ millions)
|
|
Before Income
Tax
|
After Income
Tax
|
Reserve
Category
|
0%
|
5%
|
10%
|
15%
|
20%
|
0%
|
5%
|
10%
|
15%
|
20%
|
United
States
|
|
|
|
|
|
|
|
|
|
|
Proved
|
|
|
|
|
|
|
|
|
|
|
|
Developed
Producing
|
57.7
|
43.5
|
34.9
|
29.2
|
25.2
|
57.7
|
43.5
|
34.9
|
29.2
|
25.2
|
|
Developed
Non-Producing
|
1.4
|
1.1
|
0.9
|
0.8
|
0.7
|
1.4
|
1.1
|
0.9
|
0.8
|
0.7
|
|
Undeveloped
|
314.9
|
185.9
|
114.1
|
70.4
|
42.1
|
236.8
|
147.2
|
92.8
|
57.7
|
34.2
|
Total
Proved
|
373.9
|
230.5
|
149.9
|
100.4
|
68.0
|
295.9
|
191.8
|
128.6
|
87.7
|
60.1
|
Probable
|
612.5
|
354.4
|
220.8
|
144.5
|
97.6
|
404.2
|
236.4
|
146.6
|
94.9
|
62.9
|
Total Proved Plus
Probable
|
986.4
|
584.9
|
370.7
|
245.0
|
165.8
|
700.1
|
428.2
|
275.2
|
182.6
|
123.0
|
Possible
|
846.4
|
497.0
|
324.7
|
228.6
|
169.8
|
558.7
|
327.6
|
215.2
|
153.7
|
116.6
|
Total Proved Plus
Probable plus Possible
|
1,832.8
|
1,081.9
|
695.4
|
473.5
|
335.5
|
1,258.8
|
755.8
|
490.4
|
336.3
|
239.6
|
|
Note: All dollar
values are expressed in U.S. dollars.
|
The Company's reserves are derived from non-conventional oil and
gas activities. The Company's reserves are contained in a
shale oil reservoir from which gas and natural gas liquids are
produced as by-products. "Tight oil" means crude oil (a)
contained in dense organic-rich rocks, including low-permeability
shales, siltstones and carbonates, in which the crude oil is
primarily contained in microscopic pore spaces that are poorly
connected to one another, and (b) that typically requires the use
of hydraulic fracturing to achieve economic production rates.
"Shale gas" means natural gas (a) contained in dense organic-rich
rocks, including low-permeability shales, siltstones and
carbonates, in which the natural gas is primarily adsorbed on the
kerogen or clay minerals, and (b) that usually requires the use of
hydraulic fracturing to achieve economic production rates.
These after income tax net present values reflect the tax burden
on the Company's Tishomingo Field interests on a standalone basis,
do not consider the business-entity-level tax situation, or tax
planning and do not provide an estimate of the value at the level
of the business entity, which may be significantly different. The
financial statements and the management's discussion and analysis
(MD&A) of the Company should be consulted for information at
the level of the business entity.
Readers are referred to the Company's Form 51-101F1 Statement of
Reserves Data and Other Oil & Gas Information for the year
ended December 31, 2016, which can be
accessed electronically from the SEDAR website at www.sedar.com,
for additional information.
"BOEs" refers to barrels of oil equivalent.
BOEs/boes may be misleading, particularly if used in
isolation. A boe conversion ratio of 6 Mcf:1 Bbl is based on an
energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the
wellhead. Possible reserves are those additional reserves that are
less certain to be recovered than probable reserves. There is a 10%
probability that the quantities actually recovered will equal or
exceed the sum of provided plus probable plus possible reserves.
The present value of estimated future net revenues referred to
herein does not represent fair market value and should not be
construed as the current market value of estimated crude oil and
natural gas reserves attributable to the Company's
properties.
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 in the United States. 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.
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 statements regarding
estimates of reserves and future net revenue, expectations
regarding additional reserves and statements regarding
Caney wells development,
including plans, anticipated results and timing.
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. Estimated reserves and
future net revenue have been independently evaluated by NSAI with
an effective date of December 31,
2016. This evaluation is based on a limited number of wells
with limited production history and includes a number of
assumptions relating to factors such as availability of capital to
fund required infrastructure, commodity prices, production
performance of the wells drilled, successful drilling of infill
wells, the assumed effects of regulation by government agencies and
future capital and operating costs. All of these
estimates will vary from actual results. Estimates of the
recoverable oil and natural gas reserves attributable to any
particular group of properties, classifications of such reserves
based on risk of recovery and estimates of future net revenues
expected therefrom, will vary. The Company's actual production,
revenues, taxes, development and operating expenditures with
respect to its reserves will vary from such estimates, and such
variances could be material. Estimates of after-tax
net present value are dependent on a number of factors including
utilization of tax-loss carry forwards. In addition to
the foregoing, other significant factors or uncertainties that may
affect either the Company's reserves or the future net revenue
associated with such reserves include material changes to
existing taxation or royalty rates and/or regulations, and changes
to environmental laws and regulations. Forward-looking
information regarding Caney wells development and
expectations regarding additional reserves are 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 required regulatory
approvals will be available when required, 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 no unforeseen delays, unexpected
geological or other effects, equipment failures, permitting delays
or labor or contract disputes or shortages are encountered, that
the development plans of the Company and its co-venturers will not
change, and 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, including that anticipated results and estimated costs
will not be consistent with managements' expectations, the Company
or its subsidiaries not being able for any reason to obtain and
provide the information necessary to secure required approvals or
that required regulatory approvals are otherwise not available when
required, that unexpected geological results are encountered and
that equipment failures, permitting delays or labor or contract
disputes or shortages are encountered.
Information on other important economic factors or
significant uncertainties that may affect components of the
reserves data and the other forward looking statements in this
release are contained in the Company's Form 51-101F1
Statement of Reserves Data and Other Oil & Gas Information for
the year ended December 31,
2016, the Company's Management Discussion and
Analysis and the Company's Annual Information Form under "Risk
Factors", which are available under the Company's profile at
www.SEDAR.com. The Company undertakes no obligation
to update 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:
www.bnkpetroleum.com