BNK Petroleum Inc. Announces 1st Quarter 2011 Results
By Bnk Petroleum Inc., PRNETuesday, May 24, 2011
CAMARILLO, California, May 25, 2011 -
2011 (a) 2010 (a) %
Earnings (Loss):
$ Thousands ($115) $289 L
$ per common share assuming - - L
dilution
Capital Expenditures $4,310 $1,323 226
Average production per day 1,327 1,085 22
(Boepd)
Average Product Price per $45.63 $47.49 (4)
Barrel
Average Netback per Barrel $26.16 $25.25 4
3/31/2011 (a) 12/31/2010 (a) 3/31/2010 (a)
Cash and Cash Equivalents $58,530 $62,062 $3,841
Working Capital $61,443 $63,503 ($14,538)
BNK's President and CEO Wolf Regener commented:
"BNK's average production per day increased 22% and its revenues
increased 18% in the first quarter of 2011 versus the first quarter of 2010.
The net loss of $.1 million in the current quarter versus net income of $.3
million in the first quarter of 2010 was the result of unrealized hedging
losses of $.8 million primarily on crude oil in the current quarter versus
unrealized hedging gains of $.5 million on natural gas in the first quarter
of 2010, higher general and administrative expenses (primarily payroll) of
$.4 million, lower exploration and evaluation expenditures of $.6 million
relating to the decision to abandon the Black Warrior Field in Alabama last
year, partially offset by currency gains of a net $1.2 million between
quarters due to the strong Canadian dollar. Production from the Tishomingo
field has been extremely consistent with virtually no decline in the last
three months. Production has been averaging over 1,350 boepd net to BNK since
the beginning of March. Beginning in June an additional hydraulic fracture
stimulation program will begin which will continue throughout the rest of the
year and is expected to increase production.
In Poland through Saponis Investments Sp z o.o. where the Company is
manager, we completed the drilling of the Wytowno #1 well in February and in
April completed the drilling of the Lebork S-1 vertical well. Completion
activity will not begin until core analysis and log interpretations are
completed and zones of interest will be fracture stimulated and flow tested.
The Starogard S-1 well currently has an anticipated drilling start date in
June 2011. The Company, through Saponis, has begun constructing the location
for the Starogard S-1 well, which is expected to spud in late June. The
Company is awaiting analysis of the Lebork S-1 and Wytowno #1 well cores from
the Lebork S-1 and Wytowno #1 wells from the 3rd party laboratories, which
has taken much longer than originally anticipated. BNK has heard from a
number of laboratories that turnaround time on core work is now normally four
months or more due to their volume of work. In Poland the Company is waiting
for approval to acquire about 650 km of 2D seismic on the six concessions in
Poland and hopes to be able to begin that acquisition later this summer. On
its 100% owned Indiana concessions the Company has negotiated 3 surface
locations where signed agreements are expected shortly for its first three
wells on those concessions.
In Germany, the Company initiated the bidding process for the 2D seismic
operations on its six concessions which will provide the necessary
information for its drilling program next year. The seismic acquisition is
planned for the late 2011/early 2012.
In Spain the Company through its wholly owned subsidiary Trofagas
Hidrocarburos, S.L. was awarded an oil and gas concession totaling 61,470
acres bringing BNK's total acreage in Europe to about 3.6 million net acres
in 5 separate basins. This summer the Company intends to conduct field work
which will consist of additional detailed outcrop work to characterize
original basin geometries and predict subsurface depositional trends. In
addition the company is currently working on incorporating existing 2D
seismic data into its basin model.
BNK's first quarter condensed interim consolidated financial statements
were prepared by management in accordance with International Accounting
Standard ("IAS") 34, "Interim Financial Reporting". As a result the company
recorded a non-cash adjustment to reduce the carrying value of property,
plant and equipment to accumulated deficit by $56.9 million effective January
1, 2010".
FIRST QUARTER HIGHLIGHTS
- Average production per day increased 22% to 1,327 boepd
- Comparative first quarter revenues increased 18% to $5,450,000 from
$4,637,000 in the first quarter of 2010
- Average per barrel netbacks increased 4% to $26.16 from $25.25 in the
first quarter of 2010
- Yearend reserves increased 31% to $315 million using an estimated
present value of 10% on future revenues
- Proved and probable reserves increased 5% to 39.7 million boe
- Cash and Working Capital totaled $58.5 million and $61.4 million
respectively
- As manager for Saponis Investments Sp z o.o. BNK completed drilling its
first well in Poland and began drilling its second well
- Plans were set in place to shoot 2D seismic in Germany in the second
half of this year
First Quarter 2011 versus First Quarter 2010
Oil and Gas revenues totaled $5,450,000 in the quarter versus $4,637,000
in the first quarter of 2010. Oil revenues increased $439,000 or 26% as oil
production per day increased 12% to 255 boepd while average oil prices
increased $10.11 per barrel or 12% to $91.83. Natural Gas Liquids (NGL's)
revenues increased $331,000 or 18% as NGL production increased 20% to 550
boepd while average NGL prices fell 2% or 83 cents to $44.29. Natural Gas
revenues increased $43,000 or 4% to $1,148,000 as natural gas production
increased by 731 metric cubic feet per day (mcf/d) to 3,132 while average
natural gas prices fell $1.04 an mcf or 20% to $4.07.
Gathering revenues in the quarter totaled $501,000 versus $1,530,000 as
last years total benefited from a correction of an error in 2009 increasing
first quarter 2010 gathering revenue by $1,150,000
In the first quarter of 2011 BNK incurred unrealized hedging losses of
$842,000 of which $798,000 related to hedges on crude oil while in the first
quarter of 2010 BNK recorded unrealized hedging gains of $455,000 entirely
relating to natural gas
Operating expenses increased $120,000 or 10% to $1,303,000 due to higher
production taxes and field maintenance costs due to higher production. On a
per barrel basis operating expenses declined 10% to $10.91 per barrel from
$12.11 per barrel
Exploration and Evaluation Expenditures totaled $643,000 in the quarter
as BNK paid $500,000 in liquidated damages due to its decision to not drill a
third well in the Black Warrior acreage in Alabama
General and administrative expenses increased $382,000 or 23% primarily
due to higher payroll related costs.
In the quarter BNK recorded a $1,313,000 currency gain due to the rising
Canadian dollar versus the US Dollar
Capital expenditures in the quarter totaled $4,310,000 and related
primarily to frac, drilling and leasing costs in Oklahoma of $3,000,000 and
drilling costs in Poland of $1,000,000
Three months
ended March 31
($000's) 2011 2010
Oil and Gas Revenue net of Royalties $4,428 $3,648
Other Income 531 1,530
4,959 5,178
Exploration and Evaluation Expenditures 643 1,267
Production and Operating expenses 1,303 1,183
Depletion and Depreciation 1,189 836
General and Administrative Expenses 2,025 1,643
$5,160 $4,929
Results from Operations (201) 249
Finance Income 1,364 567
Finance Expense (1,278) (527)
Net Finance Income 86 40
Net Income (loss) and comprehensive Income
(loss)
for the period ($115) $289
Income (Loss) per share $0.00 $0.00
BNK Petroleum Inc.
($000 except as noted)
1st QUARTER
2011 2010
Oil revenue before royalties $2,110 $1,671
Gas revenue before royalties 1,148 1,105
NGL revenue before royalties 2,192 1,861
Oil and Gas revenue 5,450 4,637
Cash flow provided (used) by operating 2,843 (3,426)
activities
Additions to property, plant & equipment (4,310) (1,323)
Cash Proceeds of Stock Options Exercised 382 109
Repayment of Long term debt - (1,323)
Statistics:
Average natural gas production (mcf/d)
Average NGL production (Boepd) 3,132 2,401
Average Oil production (Bopd) 550 458
Average production (Boepd) 255 227
Average natural gas price ($/mcf) 1,327 1,085
Average NGL price ($/bbl) 4.07 5.11
Average oil price ($/bbl) 44.29 45.12
91.83 81.72
Average price per barrel
Royalties per barrel $45.63 $47.49
Operating expenses per barrel 8.56 10.13
Netback per barrel 10.91 12.11
$26.16 $25.25
($000's) March 31 December 31 March 31
2011 2010 2010
Cash $58,530 $62,062 $3,841
Trade and Other Receivables 19,009 18,398 5,380
Other Current Assets 1,036 1,079 1,777
Total Current Assets 78,575 81,539 10,998
Property, Plant and Equipment 134,770 132,413 108,369
Exploration and Evaluation Assets 3,220 2,345 1,325
Total Non-current assets 137,990 134,758 109,694
Total Assets $216,565 $216,297 $120,692
Trade and other payables $16,824 $18,036 $13,289
Current portion long-term debt - - 1,750
Other Current liabilities $308 - 10,497
Total Current Liabilities 17,132 18,036 25,536
Loans and Borrowings 19,518 19,486 16,216
Subordinated Debt - - 2,788
Other non-current liabilities 2,243 1,935 1,680
21,761 21,421 20,684
Share Capital 246,885 246,240 142,028
Contributed surplus 11,813 11,511 9,388
Deficit (81,026) (80,911) (76,944)
Total Equity 177,672 176,840 74,472
Total Equity and Liabilities $216,565 $216,297 $120,692
The information outlined above is extracted from and should be read in
conjunction with the Company's unaudited financial statements for the three
months ended March 31, 2011 and the related management's discussion and
analysis thereof, copies of which are available under the Company's profile
at www.sedar.com.
Non-IFRS Information
Netback per barrel and its components are calculated by dividing revenue,
royalties and operating expenses by the Company's sales volume during the
period. 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. The non-IFRS measures referred to above do not
have any standardized meaning prescribed by IFRS and therefore may not be
comparable to similar measures used by other companies.
The Company also uses the "barrels" (bbls) or "barrels of oil equivalent"
(boe) reference in this report to reflect natural gas liquids and oil
production and sales. All boe conversions are derived by converting gas to
oil in the ratio of six thousand cubic feet of gas to one barrel of oil,
representing the approximate energy equivalency.
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 information regarding the proposed timing and
expected results of exploratory work, commencement of drilling, and
concession applications. Forward-looking information is based on plans and
estimates of management at the date the information is provided and certain
factors and assumptions of management, including that all required permits
and approvals, funding from co-venturers and the necessary labor and
equipment will be obtained, provided or available, as applicable, when
required. Forward looking information is subject to a variety of risks and
uncertainties and other factors that could cause plans, estimates, timing 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 permits, approvals, equipment and/or funding are
delayed or available only on terms that are not acceptable to the Company,
political and currency risks and other risks associated with exploration and
development of oil and gas projects, including those set forth in the
Company's management's discussion and analysis and annual information form
filed under the Company's profile on www.sedar.com.
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 gas properties and
concessions in the United States, Poland, Germany and Spain. Additionally
the Company is utilizing its technical and operational expertise to identify
and acquire additional unconventional projects outside of North America. The
Company's shares are traded on the Toronto Stock Exchange under the stock
symbol BKX.
For further information:
Wolf E. Regener, President and Chief Executive Officer +1(805)484-3613
Email: investorrelations@bnkpetroleum.com
Website: www.bnkpetroleum.com
.
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