CAMARILLO, California, April 17, 2015 /PRNewswire/ --
BNK Petroleum Inc. (the "Company" or "BNK") (TSX: BKX) is providing an update on its Tishomingo Field, Caney shale oil operations in Oklahoma.
The Company has begun field operations to fracture stimulate 22 stages in the previously drilled Nickel Hill 36-3H (99.4% interest) to take advantage of the cost reductions in oilfield services. The completion costs for the Nickel Hill 36-3H well are estimated to be reduced by more than 30% over 2014 costs. The Company is anticipating production results from the well in late May. After the completion operations are finished, the Company intends to immediately move the equipment to complete the Emery 17-1H well (98.7% interest) where only 6 of 20 stages were originally completed when a mechanical issue was encountered. The Company estimates that at a $50 and $55 WTI oil price its netbacks, excluding the impact of hedges, would be approximately $24 and $27, respectively per barrel of oil equivalent.
The Company's existing Caney production is on forecast with the 2014 year end NI-51-101 report and in management's opinion is performing very well. The Company is continuing its cost cutting measures to further reduce overhead and costs.
The Company is also obtaining drilling and completion cost estimates for three additional wells.
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 Caney well completions including plans, anticipated costs, results, timing, prices received for products, operating costs and netback estimates.
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, 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 athttp://www.sedar.com, any of which could result in delays, cessation in planned work 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.
Netback per barrel and its components are calculated by dividing revenue less royalties and operating expenses by the Company's sales volume. Netback per barrel is a non-IFRS measure but it is commonly used by oil and gas companies to illustrate the unit contribution of each barrel produced. This is a useful measure for investors to compare the performance of one entity with another. However, non-IFRS measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures used by other companies.
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.