BNK Petroleum Inc. Announces 4th Quarter 2010 Results

TSX ticker symbol: BKX

CAMARILLO, California, March 25, 2011 - All amounts are in U.S. Dollars unless otherwise indicated:

                                Fourth Quarter                 Year

                           2010     2009         %      2010       2009    %

    Earnings (Loss):
    $ Thousands            $900  ($2,673)        P      $299   ($12,588)   P
    $ per common share
    assuming dilution     $0.01   ($0.03)        P     $0.00     ($0.17)   P

    Capital Expenditures $5,288   $3,822        38%  $32,870    $15,161  117%

    Average Production
    (Boepd)               1,516      940        61%    1,216        939   29%
    Average Product      $43.60   $39.32        11%   $41.41     $29.48   40%
    Price per Barrel
    Average Netback      $32.24   $15.35       110%   $24.61     $12.97   90%
    per Barrel

                     12/31/2010           9/30/2010          12/31/2009

    Cash and Cash       $62,062             $10,115              $8,378
    Equivalents
    Working Capital     $63,503              $7,511            ($13,804)

BNK's President and CEO Wolf Regener commented:

"BNK delivered significantly improved financial and operating performance
for both the year and the fourth quarter ended December 31, 2010. For the
full year earnings were $299,000 in 2010 versus a loss of $12.6 million in
2009 driven by higher oil and gas revenues, higher gathering revenues, gains
from natural gas hedges, lower interest, stock based compensation, depletion
expenses and currency gains derived from a strong Canadian dollar. Oil and
gas revenues increased 78% to $18.4 million in 2010 versus $10.3 million a
year ago.

Fourth quarter earnings were $.9 million versus a loss in the fourth
quarter of 2009 of $2.7 million.

Average daily production in the fourth quarter totaled 1,516 barrels a
61% improvement versus the fourth quarter of 2009.

Additions to property, plant and equipment were $32.9 million in 2010
(including $12 million from the purchase of the overriding royalty and net
profits interest on our prior debt facility and $2.6 million spent in Europe)
versus $15.2 million in 2009. Working capital increased to $63.5 million at
December 31, 2010 versus a negative $13.8 million at December 31, 2009.

In Poland under the Saponis joint venture, the Wytowno #1 well was
drilled, cased and cemented on budget in the first quarter of 2011 while the
second well (Lebork #1) began drilling on March 11, 2011. The third well in
the Saponis venture, Starogard#1 currently has an anticipated start date in
the third quarter of 2011. In our wholly owned subsidiary, Indiana, core
analysis and geological work is ongoing and the Company plans to spud its
first well later this year.

In Germany the Company is currently analyzing shale samples gathered as
part of two field studies undertaken in 2010. Once this analysis is completed
a geological model will be further refined and 2D seismic work will commence
in 2011.

The Company has also made other concession applications, in other basins,
including France and is awaiting their potential grant.

Based on our most recent independent reserve evaluation of our oil and
gas properties in the United States before tax net present value of our
proved and probable reserves increased 31% to $315 million from $241 million
using a 10% discount factor while proved and probable reserves increased 5%
to 39.7 million boe."

FOURTH QUARTER HIGHLIGHTS

- The net earnings in the quarter were $900,000 versus a loss of
$2,673,000 in the fourth quarter of 2009.

- Oil and gas revenue increased 79% to $6,081,000 in the quarter

- Earnings per share was one cent versus a three cent per share loss last
year

- Capital expenditures were $5,288,000 in the quarter up 38% from the
fourth quarter of 2009

- Production per day averaged 1,516 boe or 61% higher than the fourth
quarter of 2009

- Oil production increased 119% to 371 barrels per day versus the fourth
quarter of 2009

- Natural gas production increased 46% to 3,263 mcf per day versus the
fourth quarter of 2009

- NGL's (Natural Gas Liquids) production increased 51% to 601 barrels per
day

- Production per day increased 38% from the third quarter of 2010 as
wells fracture stimulated in the third quarter went back on production in the
fourth quarter

- On October 19, 2010 the Company announced a private-placement of 26
million shares at a price per share of CAD $2.54 for gross proceeds of
$66,040,000. The placement closed in two tranches between October 27 and
November 8, 2010

- On October 27, 2010 the Company obtained a new lending facility with a
borrowing base of $23.8 million against which $20 million was borrowed and
together with cash of $3.5 million was used to pay off its then existing debt
facility

- Working Capital improved $55.6 million to $63,503,000 at December 31,
2010 from $7,511,000 at September 30, 2010 due to the $66 million private
placement in November

Fourth Quarter 2010 versus Fourth Quarter 2009

Oil and gas revenues less royalties were $4,940,000 up from $2,687,000 in
the fourth quarter of 2009. A 61% increase in average daily production
coupled with improved product pricing averaging $43.60 a barrel up from
$39.32 a barrel (an 11% increase) in the fourth quarter of 2009 caused the
increase in revenue between quarters.

In the quarter four gross stages from two Company operated wells in its
Tishomingo field were fracture stimulated. The fracture stimulation work on
one of the wells (three stages) appears to be initially successful however
the fracture stimulation work on the other well (one stage) was followed by
mechanical issues, which caused the well to be shut in for repairs.

In the quarter the Company recorded an unrealized risk management loss on
its product hedges of $327,000 primarily related to projected increases in
future prices of natural gas compared to the previous quarter.

Operating expenses before a retroactive adjustment for production taxes
of $1,115,000 increased 15% to $1,559,000 due to higher gathering fees and
production taxes while general and administrative expenses increased $919,000
or 74% to $2,168,000 due to increased travel and professional fees relating
to our European operations and higher salary and professional fees in North
America.

Total interest expense in the quarter declined $147,000 or 27% to
$394,000 due to lower debt levels between quarters.

A foreign exchange gain of $995,000 was recorded in the quarter primarily
due to the strengthening of the Canadian dollar to the US dollar in the
fourth quarter of 2010. A $13,000 foreign exchange gain was recorded in the
fourth quarter of 2009.

Stock-based compensation expense totaled $809,000 in the quarter and was
203% higher than the fourth quarter of 2009 as more options were granted in
the fourth quarter of 2010 (770,000) than in the fourth quarter of 2009
(65,000).

Depletion, Accretion and Depreciation expense totaled $1,685,000 in the
quarter or 34% higher than the fourth quarter of 2009 due to an increase in
production of 61% offset by increased reserves decreasing the depletion rate
per barrel.

2010 versus 2009

Earnings for the year of $299,000 compared to the loss for 2009 of
$12,588,000, an increase of $13,029,000

2010 HIGHLIGHTS

- Earnings of $299,000 versus a $12.6 million loss in 2009.

- Additions to property, plant and equipment totals $32,870,000 versus
$15,161,000 last year. Excluding the $12,000,000 paid to Wells Fargo in the
second quarter to purchase the net profits and overriding royalty interests
from its senior lender net additions to PP&E totaled $20,870,000 in 2010 and
primarily relate to fracing and drilling costs in Oklahoma

- Average production per day increased 29% to 1,216 barrels per day

- Average product price increased 40% to $41.41 per barrel

- Oil and Gas revenue increased 78% to $18,378,000

- Cash and working capital were $62,062,000 and $63,503,000 respectively
at December 31, 2010 versus $8,378,000 and a negative $13,804,000
respectively at December 31, 2009.

- On January 26, 2010 the Company was awarded two additional concessions
of 770,000 acres in Germany

- On March 20, 2010 the Company was awarded three new concessions in
Poland totaling 880,000 acres

- On May 19, 2010 the Company was awarded an additional concession in
Germany totaling 840,000 acres bringing total gross acreage in Europe to 3.9
million acres (3.5 million net)

- On May 18, 2010 the Company closed a bought deal equity financing
raising $43,593,000 in gross proceeds issuing 15,800,000 common shares at a
price of CAD$2.85

- On May 19, 2010 the Company repaid its subordinated debt of $2,749,000

- On May 21, 2010 the Company purchased the net profits and overriding
royalty interests from its senior lender for $12,000,000

Oil and gas revenues net of royalties were $14,690,000 up from $8,208,000
in 2009. This 79% increase was caused by increased average production of
1,216 barrels per day or 29% versus 2009 and higher average product prices of
$41.41 versus $29.48 in 2009, an increase of 40%.

In 2010 64 gross stages from 13 wells were fracture stimulated in the
Tishomingo field. In all of 2009 32 gross stages were fracture stimulated.

In 2010 the Company recorded gathering revenue of $2,870,000 versus
$482,000 in the same period in 2009. However $1,150,000 of this year's
gathering income resulted from a correction of an accounting error that
related to 2009 and 2008.

In 2010 an unrealized gain on risk management contracts of $610,000
versus a loss of $288,000 in 2009 relates to gains primarily on natural gas
hedges.

Operating expenses before a retroactive adjustment for production taxes
were $4,881,000 in 2010 or 35% higher than the comparable period in 2009 due
to higher gathering fees and repair work on producing wells.

General and Administrative expenses totaled $5,776,000 in 2010 versus
$3,983,000 in 2009, an increase of 45% due to higher salary, travel and
recruitment costs.

Interest in 2010 was $1,750,000 versus $3,145,000 in 2009, a decline of
44% due to lower debt levels.

Stock based compensation expense declined 27% to $2,542,000 due to lower
levels of options granted in 2010 than 2009.

Depletion, depreciation and accretion declined 17% to $5,260,000 due to
an increase in production of 29% offset by increased reserves decreasing the
depletion rate per barrel.

                          (US $000 Except as Noted)

                           Three months ended           Year ended
                               December 31              December 31
                            2010        2009         2010        2009
    Revenue

      Oil and gas         $6,081      $3,401      $18,378     $10,319
      Royalties           (1,141)       (714)      (3,688)     (2,111)
      Gathering              464        (338)       2,870         482
      Management fee         202           -          202           -

      Realized gain
      on risk management
      contracts              110          28          348          71

      Unrealized gain
      (loss) on risk
      management
      contracts             (327)         46          610        (288)

      Interest and other      16           2           42           7

      Expenses incurred
      on disposal of
      subsidiary               -        (436)           -        (436)

                           5,405       1,989      $18,762      $8,044

    Expenses

      Operating              444       1,360        3,766       3,616
      General and
      administrative       2,168       1,249        5,776       3,983
      Interest on
      long-term debt         394         454        1,691       2,586
      Interest on
      subordinated debt        -          87           59         559
      Foreign exchange
      (gain) loss           (995)        (13)        (631)         67
      Stock-based
      compensation           809         267        2,542       3,487
      Depletion,
      depreciation and     1,685       1,258        5,260       6,334
      accretion
                           4,505       4,662       18,463      20,632

    Net income (loss)
    and comprehensive
    income (loss) for
    the period               900      (2,673)         299     (12,588)
    Income (Loss)
    per share              $0.01      $(0.03)       $0.00      $(0.17)
    Average shares
    outstanding      117,404,930  82,763,422  120,178,685  76,192,594

                                BNK Petroleum Inc.
                            (US $000 except as noted)

                                   4th QUARTER              Year
                                 2010        2009      2010       2009

    Oil revenue before                      1,129     7,396      3,992
    royalties                   2,791
    Gas revenue before                        832     3,949      2,577
    royalties                   1,091
    NGL revenue before                      1,440     7,033      3,750
    royalties                   2,199

    Oil and Gas revenue         6,081       3,401    18,378     10,319

    Cash flow provided by
    operating activities        3,431      (1,195)    7,199     (2,479)
    Additions to property,
    plant & equipment           5,288       3,822    32,870     15,161

    Issue of Equity
    Investments                63,018      17,656   104,101     22,162
    Proceeds from Long-term
    debt                       19,486         121    19,486     29,117
    Repayment of Long term
    debt                       23,358         602    28,036      1,080
    Repayment of
    Subordinated debt               -       8,677     2,749     10,705

    Statistics:
    Average natural gas
    production (mcf/d)          3,263       2,229     2,659      2,157
    Average NGL production
    (Boepd)                       601         399       515        381
    Average Oil production
    (Bopd)                        371         169       258        198
    Average production
    (Boepd)                     1,516         940     1,216        939
    Average natural gas
    price ($/mcf)               $3.63       $4.06     $4.07      $3.27
    Average NGL price
    ($/bbl)                    $39.75      $39.24    $37.44     $26.76
    Average oil price
    ($/bbl)                    $81.79      $72.53    $78.48     $51.85

    Average price per barrel   $43.60      $39.32    $41.41     $29.48
    Royalties per barrel         8.18        8.24      8.31       6.03
    Operating expenses per
    barrel                       3.18       15.73      8.49      10.48
    Netback per barrel         $32.24      $15.35    $24.61     $12.97

Non-GAAP Measures

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-GAAP 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.

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 a U.S. based 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 and Germany. 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

For further information: Wolf E. Regener, President and Chief Executive Officer +1-805-484-3613, Email: investorrelations at bnkpetroleum.com