CAMARILLO, California, December 31, 2014 /PRNewswire/ --
BNK Petroleum Inc. (the "Company" or "BNK") (TSX: BKX) is providing an update on its Tishomingo Field, Caney shale oil operations in Oklahoma as well as its Polish shale gas project.
Tishomingo Field, Oklahoma
The Company has fracture stimulated 30 percent of the Emery 17-1H well (98.7% interest). The Company has decided to flowback the well at this time and fracture stimulate the rest of the lateral at a later date. The well began flowback today.
The Company has just finished drilling the Nickel Hill 36-3H well (99.4% interest) and has cemented the casing in place. The Company employed revised drilling practices on the Nickel Hill 36-3H that were successful in avoiding some issues encountered in the Emery 17-1H well. The Emery 17-1H issues impacted drilling time and cost and necessitates remedial work prior to fracture stimulation of the rest of the lateral. The Company expects to utilize these new drilling practices in future Caney wells and believes they will enable significant future savings. After drilling the Nickel Hill 36-3H well the Company's net acreage in the Tishomingo Field has increased to about 16,200 acres.
The Company's existing Caney production is declining at a slower rate than forecast in the reserves report for the year ended December 31, 2013 and in management's opinion is performing very well. However, given the oil price drop over the last few months, the Company is taking a conservative approach to capital expenditures. Accordingly, the Company has released the drilling rig and will postpone the completion of the Nickel Hill 36-3H well and the fracture stimulation of the rest of the Emery 17-1H well. The Company is also evaluating cost saving measures.
Gapowo B-1H Well, Poland
The previously announced reservoir model analysis for the Gapowo B-1H shale gas well in Poland has been completed. The model was prepared for the Company by a third party consulting firm that is a world leader in this field.
The model simulated flow rates and recoveries that would be achieved if another well is drilled near the Gapowo B-1H well, in various sub intervals of the Ordovician shale, and is successfully fracture stimulated along a full-length lateral with the modeled fracture design. It also assumes that the learnings from the Gapowo B-1H well and the modeling are incorporated in the new well design. As announced on June 5 and July 30, 2014, the fracture stimulation of the Gapowo B-1H well encountered challenges resulting in placement of proppant that was sub-optimal and did not achieve designed volumes. Flow back rates, data from pressure gauges and data analysis indicate that only 8 of the 20 stages were contributing to the flow.
The forecasted flow rates and estimated recoveries predicted by the numerical model for a full stimulated length lateral, in addition to the overpressure that was confirmed by the data collected from the Gapowo B-1H well, are encouraging and the Company believes further wells are warranted.
The detailed study report prepared by the third party consulting firm will be included in the information made available to potential joint venture partners. The Company has begun the process of providing potential partners with access to project data. The Company believes that the encouraging modeling results, strong natural gas prices in Europe, and the Company's large Polish acreage position will be attractive to joint venture partners with the capacity to advance this project.
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.
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 the Company's plans for development of its properties in Oklahoma and Poland, 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 indications of early results are reasonably accurate predictors of the prospectiveness of the shale intervals, that anticipated results and estimated costs will be consistent with managements' expectations, that new drilling and stimulation techniques will be successful, that the Company's geological analyses are accurate, that required regulatory approvals will be available when required, 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, 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 carry out its plans 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 anticipated results and estimated costs will not be consistent with managements' expectations, new drilling and completion techniques proving to be unsuccessful, the Company's geological analyses proving to be inaccurate, the Company or its subsidiaries is not 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, that equipment failures, permitting delays or labor or contract disputes or shortages 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, and 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, 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. The Company undertakes no obligation to update these forward-looking statements, other than as required by applicable law.
BOEs/boes (barrels of oil equivalent) 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.
The Company's disclosure contains peak and initial production rates and other short-term production rates. Readers are cautioned that initial production rates are preliminary in nature and are not necessarily indicative of long-term performance or of ultimate recovery.
SOURCE BNK Petroleum Inc