/C O R R E C T I O N — BNK Petroleum Inc/
By Bnk Petroleum Inc, PRNEThursday, November 4, 2010
CALGARY, Alberta, November 5, 2010 - In the news release, "BNK Petroleum inc. Reports Third Quarter 2010 Results"
issued on 4 Nov 2010 06:15 GMT, by BNK Petroleum Inc TSX:BKX over PR
Newswire, we are advised by a representative of the company that errors
occurred in the 'Average Netback per Barrel' row of the Overview table as
well as in the Statistics table where the '3RD Quarter' and 'Nine Months'
column numbers were mismatched.
Complete, corrected release follows:
OVERVIEW
Three Months Ended Sept 30 Nine Months Ended Sept 30
(US$000) 2010 2009 % Change 2010 2009 % Change
-------- ----------------------------------------------------------
Earnings
(Loss):
$ Thousands ($30) ($3,224) 99 ($611) ($9,915) 94
$ per common
share assuming
dilution $0.00 ($0.04) 100 ($0.01) ($0.14) 93
Capital
Expenditures $8,067 $4,722 71 $25,918 $11,878 118
Average
Production
(Boepd) 1,098 981 12 1,114 939 19
Average Product
Price per
Barrel $37.67 $29.37 28 $40.43 $26.40 53
Average Netback
per Barrel $19.97 $15.00 33 $21.13 $12.27 72
As at 9/30/2010 6/30/2010 12/31/2009
----------- ----------- -----------
(US$000)
--------
Cash and Cash
Equivalents $10,081 $20,096 $8,372
Working Capital $7,963 ($8,640) ($13,771)
BNK's President and CEO Wolf Regener commented:
-----------------------------------------------
"Excellent progress has been made on our European concessions during the
quarter. Six 2D seismic lines were acquired and interpreted on our Baltic
Basin Project. The seismic lines were acquired to avoid encountering faults
in our test wells so that all targeted intervals can be properly evaluated.
Tendering for our first two wells is now nearly complete so that our 1st
well, the Wytowno No. 1 can be spudded near the end of November. In Germany
our geologic work continued with our team making excellent progress towards
further high-grading the concessions and achieving our goal of being able to
pursue farm down opportunities in the second quarter of 2011. Our team has
also been busy working on additional concessions in other basins within
Europe that we hope to be awarded in the future which would further diversify
our projects.
Our operating results in the U.S. also continued to improve and were
characterized by higher revenues resulting from improved product pricing on
increased production over last year with increased investment in property,
plant and equipment. The field work done in the third quarter has resulted in
our net production increasing further to over 1,300 barrels of oil equivalent
per day. The third quarter loss of $30,000 was only 1% of last year's third
quarter loss of $3.2 million. For the nine month period the loss was
$611,000, a 94% improvement as compared to a $9.9 million loss in the first
nine months of 2009".
"Working capital improved to a positive $8.0 million at September 30,
2010 versus negative working capital at June 30, 2010 and December 31, 2009
of $8.6 million and $13.8 million, respectively."
"The recently announced private placement will increase our cash and
working capital by a net $64 million once fully funded. $26.9 million of
these funds were received on October 27, 2010 and the second tranche is
expected to close in November 2010. This cash will allow us to fully pursue
our currently planned European exploration activities and give us flexibility
and options for our European projects."
"On October 27, 2010 the Company's US operating subsidiary, BNK Petroleum
(US) Inc., obtained a new revolving reserve based credit facility with an
initial borrowing base of $23.8 million against which $20 million of credit
was extended and used to partially pay off our former bank debt. The balance
owed inclusive of accrued interest of $3.5 million was paid from cash on
hand. Absent any reductions in the borrowing base this new three year
facility requires interest only payments versus required principal payments
under our former facility, which payments totaled $4,678,000 through the
first nine months of 2010. As a result the new facility will free up more
cash for operating needs".
THIRD QUARTER HIGHLIGHTS
- The net loss in the quarter was $30,000 versus $3,224,000 in the
third quarter of 2009
- Oil and gas revenue increased 77% to $3,805,000 in the quarter
compared to the same quarter in 2009
- Earnings per share was zero versus a four cent per share loss in the
same period last year
- Capital expenditures were $8,067,000 in the quarter up 71% from the
third quarter of 2009
- Production per day averaged 1,098 or 12% higher than the third
quarter of 2009
- Oil production increased 49% to 245 barrels per day versus the third
quarter of 2009
- Natural gas production increased 14% to 2,319 mcf per day versus the
third quarter of 2009
- NGL (Natural Gas Liquids) production declined 2% to 466 barrels per
day versus the third quarter of 2009
- Production per day declined 6% from the second quarter of 2010 as
three wells were shut in, preparing for fracing and the time
required for flowback after fracture stimulation
- Working capital improved $16.6 million to $7,963,000 at September 30,
2010 from a negative $8,640,000 at June 30, 2010
Third Quarter 2010 Compared to Third Quarter 2009
————————————————-
Oil and gas revenues net of royalties were $3,080,000 up from $1,681,000
in the third quarter of 2009. Improved product pricing averaging $37.67 a
barrel up from $29.37 a barrel (a 28% increase) in the third quarter of 2009
coupled with a 12% increase in average daily production caused the increase
in revenue between quarters.
During the quarter 27 gross stages from four Company operated wells in
its Tishomingo field were fracture stimulated. Three wells were shut in for
all or some of the quarter in preparation for fracing and the time required
for flowback after fracture stimulations.
In the quarter the Company recorded an unrealized risk management gain on
its product hedges of $380,000 primarily related to its hedges on natural gas
that benefit the Company if the price of natural gas declines.
Operating expenses increased 52% to $1,063,000 due to higher gathering
fees and production taxes while general and administrative expenses increased
64% to $1,317,000 due primarily to increased salaries and wages as the
company grows.
Interest in the quarter declined $173,000 or 31% to $390,000 due to lower
debt levels between quarters.
A foreign exchange gain of $653,000 was recorded in the quarter primarily
due to the strengthening of the Canadian dollar to the US dollar in the third
quarter of 2010. A $28,000 foreign exchange loss was recorded in the third
quarter of 2009.
Stock-based compensation expense totaled $673,000 in the quarter and was
51% lower than the third quarter of 2009 as more options were granted in the
third quarter of 2009 (6,740,000) than in the third quarter of 2010
(1,160,000).
Depletion, Accretion and Depreciation expense totaled $1,278,000 in the
quarter or 22% lower than the third quarter of 2009 due to increased reserves
decreasing the depletion rate per barrel.
First Nine Months of 2010 Compared to first Nine Months of 2009
—————————————————————
The loss for the first nine months of $611,000 was 94% lower than the
loss in the first nine months of 2009 of $9,915,000.
FIRST NINE MONTHS HIGHLIGHTS
- Losses declined 94% to $611,000
- Loss per share declined 93% to one cent per share from 14 cents per
share
- Additions to property, plant and equipment totals $25,918,000 versus
$11,868,000 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 property
plant and equipment totaled $13,918,000 in the first nine months of
2010 and primarily relate to fracing and drilling costs in Oklahoma
- Average production per day increased 19% to 1,114 barrels per day
- Average product price increased 53% to $40.43 per barrel
- Oil and Gas revenue increased 78% to $12,297,000
- 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 $9,750,000 up from $5,521,000
in the first nine months of 2009. This 77% increase was caused by higher
average product prices of $40.43 versus $26.40 in 2009, an increase of 53%
and increased average production of 1,114 barrels per day or 19% versus the
first nine months of 2009.
Through the first nine months of 2010, 60 gross stages from 11 wells have
been fracture stimulated in the Tishomingo field. In all of 2009, 32 gross
stages were fracture stimulated.
The Company has earned 8,400 out of a possible 40,000 net acres in the
Black Warrior Project .
Through the first nine months of 2010 the Company has recorded gathering
revenue of $2,406,000 versus $820,000 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.
Through the first nine months of 2010 an unrealized gain on risk
management contracts of $937,000 versus a loss of $334,000 in the same period
last year relates to gains primarily on natural gas hedges.
Operating expenses total $3,322,000 through the first nine months of 2010
or 47% higher than the comparable period in 2009 due to higher gathering fees
and production taxes resulting from increased production.
General and Administrative expenses totaled $3,586,000 through the first
nine months of 2010 versus $2,734,000 for the same period in 2009, an
increase of 31% due to higher salary and recruitment costs as the company
grows.
Interest through the first nine months of 2010 total $1,356,000 versus
$2,604,000, a decline of 48% due to lower debt levels.
Stock based compensation expense declined 46% to $1,733,000 due to lower
levels of options granted in 2010 than 2009.
Depletion, depreciation and accretion declined 30% to $3,575,000 due to
increased reserves decreasing the depletion rate per barrel.
Three months ended Nine months ended
September 30 September 30
------------------------- -------------------------
2010 2009 2010 2009
------------ ------------ ------------ ------------
Revenue
Oil and gas $3,805 $2,148 $12,297 $6,918
Royalties (725) (467) (2,547) (1,397)
Gathering 464 313 2,406 820
Realized gain on risk
management contracts 122 31 238 43
Unrealized gain
(loss) on risk
management contracts 380 (146) 937 (334)
Interest and other 14 - 26 5
Equity loss on
investment (22) - (43) -
------------ ------------ ------------ ------------
4,038 1,879 13,314 6,055
------------ ------------ ------------ ------------
Expenses
Operating 1,063 698 3,322 2,256
General and
administrative 1,317 803 3,586 2,734
Interest on long-term
debt 390 479 1,297 2,132
Interest on
subordinated debt - 84 59 472
Foreign exchange
(gain) loss (653) 28 353 80
Stock-based
compensation 673 1,376 1,733 3,220
Depletion,
depreciation and
accretion 1,278 1,635 3,575 5,076
------------ ------------ ------------ ------------
4,068 5,103 13,925 15,970
------------ ------------ ------------ ------------
Net loss and
comprehensive loss
for the period (30) (3,224) (611) (9,915)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Loss per share $(0.00) $(0.04) $(0.01) $(0.14)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Average shares
outstanding 117,404,930 82,763,422 109,428,482 76,145,521
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
BNK Petroleum Inc.
Third Quarter 2010
($000 except as noted)
3RD Quarter Nine Months
2010 2009 2010 2009
------------------------- -------------------------
Oil revenue before
royalties 1,654 753 4,605 2,740
Gas revenue before
royalties 825 347 2,858 1,745
NGL revenue before
royalties 1,326 1,048 4,834 2,433
------------------------- -------------------------
Oil and Gas revenue 3,805 2,148 12,297 6,918
Funds from (used in)
operations 1,563 (67) 3,803 (1,285)
Additions to
property, plant
& equipment 8,067 4,722 25,918 11,868
Advances to and
investments in
affiliates 695 - 1,278 -
Issue of equity
instruments - 4,506 41,083 4,506
Proceeds from
long-term debt - 1,480 - 28,996
Repayment of
long-term debt 1,343 478 4,678 478
Repayment of
subordinated debt - 416 2,749 2,028
Statistics:
3RD Quarter Nine Months
2010 2009 2010 2009
Average natural gas
production (mcf/d) 2,319 2,040 2,456 2,133
Average NGL
production (Boepd) 466 477 485 375
Average Oil
production (Bopd) 245 164 220 208
Average production
(Boepd) 1,098 981 1,114 939
Average natural gas
price ($/mcf) $3.87 $2.88 $4.26 $3.00
Average NGL price
($/bbl) $30.95 $25.68 $36.48 $22.29
Average oil price
($/bbl) $73.41 $65.35 $76.60 $48.34
Average price per
barrel $37.67 $29.37 $40.43 $26.40
Royalties per barrel 7.18 6.22 8.38 5.33
Operating expenses
per barrel 10.52 8.15 10.92 8.80
------------------------- -------------------------
Netback per barrel $19.97 $15.00 $21.13 $12.27
------------------------- -------------------------
------------------------- -------------------------
The information outlined above is extracted from and should be read in
conjunction with the Company's unaudited financial statements for the nine
months ended September 30, 2010 and the related management's discussion and
analysis thereof, copies of which are available under the Company's profile
at www.sedar.com.
Non-GAAP 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-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. The non-GAAP measures referred to above do not
have any standardized meaning prescribed by GAAP 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 expected closing of the
second tranche of the private placement and timing thereof, expectations that
the funds from the private placement will be sufficient to fund the Company's
planned exploration expenditures in Europe, and work plans and timing of same
in the United States and Europe. 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 conditions
to closing of the second tranche of the private placement will be fulfilled
that costs of planned exploration activities in Europe will be as currently
anticipated and that the Company will not need to use the funds for other
purposes, that the capital, equipment and approvals required to conduct the
proposed work will be available when required. 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 respecting the private
placement to change or to be inaccurate include, but are not limited to, the
risk that regulatory approval of the private placement will be delayed or not
obtained, that the Company could experience a material adverse effect, that
the costs of equipment and labor are higher than budgeted, that unexpected
events and contingencies could occur that require a diversion of funds to
other purposes, that the required capital, equipment, regulatory and third
party approvals are not available when required or at all.
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: 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, contact: Wolf E. Regener, President and Chief Executive Officer, +1(805)484-3613, Email: investorrelations at bnkpetroleum.com
Tags: Alberta, Bnk Petroleum Inc, Calgary, canada, November 5
