BNK Petroleum Inc. Announces 4th Quarter 2010 ResultsBy Bnk Petroleum Inc., PRNE
Thursday, March 24, 2011
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
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
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
- 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
- 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
- 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
- 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
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
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
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
- 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
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
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
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
For further information: Wolf E. Regener, President and Chief Executive Officer +1-805-484-3613 Email: firstname.lastname@example.org Website: www.bnkpetroleum.com
For further information: Wolf E. Regener, President and Chief Executive Officer +1-805-484-3613, Email: investorrelations at bnkpetroleum.com
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