CALGARY, Feb. 27 /PRNewswire-FirstCall/ - BNK Petroleum Inc. (the "Company" or "BNK")/(TSX: BKX) is pleased to announce a 182% increase of its Tishomingo shale gas field reported proved and probable reserves ("2P") to 37.9 million boe from 13.5 million boe at year end 2008. Proved and Probable reserves as of December 31, 2009 were U.S.$241.2 million, up from 2008 year end of U.S.$187.8 million, calculated at a 10% pre-tax present value ("NPV") of future net revenue. Proved reserves ("1P") were up 198% to 24.9 million boe from 8.4 million boe at year end 2008. Unless otherwise stated, reserves refer to reserves of natural gas, natural gas liquids and crude oil expressed in barrels of oil equivalent ("boe"). Certain amounts cited herein have been rounded for presentation purposes.
The 2008 and 2009 year-end reports were both prepared by MHA Petroleum Consultants, LLC. ("MHA"), independent petroleum engineering consultants of Lakewood, Colorado. As a result of the Company's planned drilling and completion program on its existing properties in the Tishomingo Field, Oklahoma, all reserves that had been classified as probable reserves in the 2008 year-end report have been converted to proved reserves in the updated report, also prepared by MHA (the "2009 Year End Report"). All updated reserve estimates are effective as at December 31, 2009.
In December, 2008, BNK applied for and received approval to drill three additional wells in one of its sections at an 80-acre spacing pattern. An 80-acre spacing pattern would allow for eight wells per section which could allow for over 340 total gross wells for this project. To date the Company has drilled and participated in 39 gross wells in this project.
Forecast Price Case - Pre Tax
Category Gross Net Gross Net Gross Net Net NPV
Oil Oil Gas Gas NGL NGL Mboes 10%
(Mbbls) (Mbbls) (Mmcf) (Mmcf) (Mbbls) (Mbbls) (US$000's)
Proved
Developed 482 380 13,614 10,738 2,686 2,119 4,288 45,109
Producing
Proved 4,272 3,369 59,377 46,831 11,927 9,407 20,581 127,270
Undeveloped
Total
Proved 4,753 3,749 72,991 57,568 14,613 11,525 24,869 172,380
Probable 2,708 2,136 37,639 29,686 7,560 5,963 13,046 68,815
Total
Proved &
Probable 7,461 5,885 110,630 87,254 22,173 17,488 37,915 241,195
Future net revenue is calculated after deduction of forecast royalties, operating expenses, capital expenditures and abandonment costs but before corporate overhead or other indirect costs, including interest and income taxes.
The 2009 Year End Report was prepared in accordance with National Instrument 51-101 using assumptions and methodology guidelines outlined in the Canadian Oil and Gas Evaluation Handbook and the Sproule Oil & Natural Gas Forecast effective January 1, 2010 as set forth below. Proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is 90% likely that the actual remaining quantities recovered will exceed the estimated proved reserves. Probable reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.
Sproule Forecast as of January 1, 2010
--------------------------------------
---------------------------------------
WTI, Henry Hub,
Year $US/Bbl $US/MMBtu
---------------------------------------
2010 $77.59 $5.70
---------------------------------------
2011 $82.77 $6.48
---------------------------------------
2012 $85.15 $6.70
---------------------------------------
2013 $88.40 $7.43
---------------------------------------
2014 $90.17 $8.12
---------------------------------------
2015 $91.97 $8.28
---------------------------------------
2016 $93.81 $8.45
---------------------------------------
2017 $95.69 $8.62
---------------------------------------
2018 $97.60 $8.79
---------------------------------------
2019 $99.55 $8.96
---------------------------------------
2020 $101.54 $9.14
---------------------------------------
All references to 'boe' (barrel of oil equivalent) are calculated on the basis of 6 mcf:1 bbl. Readers are cautioned that the conversion used in calculating barrels of oil equivalent is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Furthermore, boes may be misleading if used in isolation. Future net revenues disclosed herein do not represent fair market value.
BNK is continuing its pursuit of additional shale gas concessions in both Eastern and Western Europe. The Company has acquired 2.1 million gross acres in Europe to date, which are located in 4 basins. The Company continues to apply for concession grants and is awaiting other potential concession approvals.
About BNK Petroleum Inc.
BNK Petroleum Inc. is a U.S. based oil and gas exploration and production company focused on finding and exploiting large predominately unconventional oil and gas resource plays. The Company holds and operates shale gas wells in the United States. Additionally the Company is utilizing its technical and operational expertise to identify and acquire unconventional projects outside of North America. The Company's shares are traded on the Toronto Stock Exchange under the stock symbol BKX.
Estimations of reserves and net present values of future net revenue in this press release constitute forward-looking information. See "Forward Looking Information" below. The reserve data in this release is subject to and should be read in conjunction with the entire Form 51-101F1 - Statement of Reserves Data and Other Oil and Gas Information which the Company expects to file on or before March 31, 2010 and which will be available by electronic access under the Company's profile at www.sedar.com and on the Company's website.
Forward-looking Information
Information in this news release respecting estimations of reserves and net present values of future net revenue and the Company's plans and future activities constitutes 'forward-looking information' and as such is based on certain assumptions and subject to risk and uncertainties which could cause actual results to differ materially from those anticipated. Such information is based on information available to the Company at the date of this news release and which it believes to be reasonable. The reserves and future pre-tax net revenue in this press release represent estimates only. The reserves and future pre-tax net revenue from the company's properties have been independently evaluated by MHA with effective dates of December 31, 2009 and December 31, 2008, respectively. This evaluation includes a number of assumptions relating to factors such as initial production rates, production decline rates, ultimate recovery of reserves, timing and amount of capital expenditures, marketability of production, future prices of crude oil and natural gas, operating costs, abandonment and salvage values, royalties and other government levies that may be imposed during the producing life of the reserves. These assumptions were based on the Sproule Oil & Natural Gas Forecast from the 2009 Year End Report as at the dates of the report and many of these assumptions are subject to change and are beyond the control of the Company. Actual production, sales and cash flows derived therefrom will vary from the evaluation and such variations could be material. The present value of estimated future net revenues referred to herein should not be construed as the current market value of estimated crude oil and natural gas reserves attributable to the Company's properties. Risks and uncertainties that could affect the forward looking information include, but are not limited to: the risks associated with the oil and gas industry and BNK's ability to identify suitable drilling locations (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), risk associated with equipment procurement and equipment failure, risks related to international operations and doing business in foreign jurisdictions, the risk of commodity price and foreign exchange rate fluctuations, risks related to future royalty rate changes and risks and uncertainties associated with securing and maintaining necessary regulatory approvals. In addition, the current financial crisis has resulted in severe economic uncertainty and resulting illiquidity in credit and capital markets which increases the risk that actual results will vary from forward looking expectations and these variations may be material. Additional risks and uncertainties are described in detail in BNK's most recent Annual Information Form, which is available at www.sedar.com. The Corporation assumes no obligation to update or revise the forward-looking information to reflect new events or circumstances, except as required by law.
The TSX does not accept responsibility for the adequacy or accuracy of this news release.
SOURCE BNK Petroleum Inc.
WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?
Newsrooms &
Influencers
Digital Media
Outlets
Journalists
Opted In
Share this article