CAMARILLO, California,
March 14, 2018 /PRNewswire/ --
BNK Petroleum Inc. (the "Company" or "BNK")
(TSX: BKX), is providing the results of its December 31, 2017 independent reserves
evaluation.
The evaluation of the Company's reserves in the Caney formation of the Tishomingo Field in the
SCOOP area of Oklahoma was
conducted by Netherland, Sewell & Associates, Inc. ("NSAI") in
accordance with National Instrument 51-101 - Standards of
Disclosure for Oil and Gas Activities.
2017 Gross Reserves Summary
- Total Proved Reserves 25.2 million Barrels of oil equivalent
(BOE)
- an increase of 40% over the December 31,
2016 estimate
- Proved plus Probable Reserves 47.6 million BOEs
- an increase of 13% over the December 31,
2016 estimate
- Proved plus Probable plus Possible Reserves 70.6 million BOEs
- a increase of 6% from the December 31,
2016 estimate
Net Present Value of Reserves discounted at 10%
- Total Proved Reserves before tax of U.S. $259.5 million
- an increase of 73% over the December 31,
2016 estimate
- Proved plus Probable Reserves before tax of U.S. $486.4 million
- an increase of 31% over the December 31,
2016 estimate
- Proved plus Probable plus Possible Reserves before tax of U.S.
$764.4 million
- an increase of 10% over the December 31,
2016 estimate
The above total Proved reserves are attributed to 14 of the
Caney wells already drilled, four
Woodford wells (4.9% working
interest for the Company) and the drilling of 46.35 net additional
wells over the next 3 years. The Probable reserves are attributed
to the drilling of 35.5 net additional wells. The wells in
this report are planned at 107 acre spacing (6 wells per section)
on approximately 11,653 net acres. This is approximately 66
percent of the 17,680 net acres the Company has in this
project. The other 34 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 substantial proved reserve
increases this year which was mainly due to our 2017 drilling
program. Also noteworthy, is that the estimated ultimate recovery
from the existing wells increased, as the existing producing wells
once again exceeded the previous year forecast. This continued year
over year improvement demonstrates the favorable performance of our
wells and the long life we anticipate from our wells. These
increases to our reserves do not incorporate the wells in our 2018
drilling program which is in progress. The Glenn 16-2H well that is
currently being fracture stimulated, is still listed as a probable
location in the new reserve report and the WLC 14-2H well, that was
drilled this year, is entirely outside of the acreage that is
covered by the new reserve report. 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."
Summary of Oil & Gas Reserves
Tight Oil Shale Gas Natural Gas Liquids MBOE's
BNK BNK
Gross Net Gross Net BNK Net BNK Net
Reserve Category (Mbbl) (Mbbl) (MMcf) (MMcf) (Mbbl) (Mbbl (Mbbl) (Mbbl)
Proved
Developed Producing 2,350 1,823 3,398 2,646 735 571 3,651 2,836
Developed Non-Producing 0 0 0 0 0 0 0 0
Undeveloped 15,919 12,585 14,671 11,496 3,219 2,522 21,583 17,023
Total Proved 18,269 14,408 18,069 14,141 3,954 3,094 25,234 19,858
Probable 14,646 11,694 20,007 15,973 4,387 3,503 22,368 17,859
Total Proved Plus Probable 32,915 26,102 38,076 30,114 8,341 6,596 47,602 37,717
Possible 15,328 12,230 19,996 15,899 4,384 3,486 23,044 18,365
Total Proved Plus Probable
Plus Possible 48,243 38,332 58,072 46,013 12,724 10,082 70,646 56,082
Net Present Value of Future Net Revenue
As of December 31, 2017
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 107.8 77.0 59.8 49.2 42.0 107.8 77.0 59.8 49.2 42.0
Developed
Non-Producing 0 0 0 0 0 0 0 0 0 0
Undeveloped 558.7 323.0 199.7 127.5 81.6 424.8 260.4 164.3 104.6 65.7
Total Proved 666.5 400.0 259.5 176.6 123.5 532.6 337.4 224.1 153.8 107.7
Probable 636.4 357.5 226.9 155.5 112.0 472.6 274.7 174.3 118.5 84.7
Total Proved
Plus Probable 1,302.9 757.5 486.4 332.1 235.5 1,005.2 612.1 398.4 272.3 192.4
Possible 873.0 447.2 278.0 193.3 143.9 648.3 347.1 214.3 147.7 110.2
Total Proved Plus
Probable
plus Possible 2,175.8 1,204.8 764.4 525.4 379.4 1,653.5 959.2 612.7 420.0 302.6
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, 2017, which can be
accessed electronically from the SEDAR website
at http://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 and concessions 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 and on the OTCQX under the stock symbol
BNKPF.
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, 2017. 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, 2017, 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 http://www.SEDAR.com. The Company
undertakes no obligation to update forward-looking statements,
other than as required by applicable law.
Wolf E. Regener,
+1-(805)-484-3613, Email: investorrelations@bnkpetroleum.com,
Website: http://www.bnkpetroleum.com