BNK Petroleum Inc. Announces 3rd Quarter 2016 Results

Camarillo, California (ots/PRNewswire) -

All amounts are in U.S. Dollars unless otherwise indicated:

THIRD QUARTER HIGHLIGHTS:

- In October 2016, the Company completed an equity offering under
which it issued 70,000,000 shares at a price of C$0.20 per share
for gross proceeds of C$14,000,000. The Company intends to use
proceeds from this offering to fund a drilling program with an
expected start date in early December for the further development
of its Tishomingo Field, located in Oklahoma
- Operating cash flow from continuing operations was $2.0 million for
the third quarter of 2016 compared to $2.6 million in the third
quarter of 2015
- Average netbacks were $18.58 per BOE for the quarter, a decrease of
3% compared to the third quarter of 2015. If the realized gains
from the commodity contracts are included, the average netbacks for
the quarter increased by almost $10/barrel to $28.24 per BOE as
more than 75% of the Company's oil production was hedged at $64.82.
The Company has a comparable percentage of oil hedged at $64.88
for the fourth quarter of 2016 and $61.93 for 2017 based on its
forecasted existing production
- Revenue, net of royalties was $2.3 million for the third quarter of
2016 compared to $3.5 million in the third quarter of 2015 due to
lower production
- Average production was 1,024 barrels of oil equivalent per day
(BOEPD) for the third quarter of 2016, a decrease of 34% compared
to the third quarter 2015 production of 1,554 BOEPD due to the
completion of the Nickel Hill 36-3H well and the remaining portion
of the Emery 17-1H well in mid-2015
- During the third quarter, the Company made additional paydowns
totaling $2.1 million on its credit facility to reduce the
outstanding balance to $20.5 million. The Company has $3.9 million
available to borrow on the credit facility as the existing lenders
reaffirmed the Company's available borrowing capacity at $24.4
million subsequent to the end of the third quarter
- General & administrative expenses decreased by a further 6% in the
third quarter of 2016 compared to the third quarter of 2015 due to
the Company's ongoing cost cutting efforts
- Net loss was $0.8 million for the third quarter of 2016 compared to
a net income of $4.2 million in the third quarter of 2015. The
third quarter of 2015 included an unrealized gain on commodity
hedges totaling $4.3 million
- Cash and working capital totaled $1.7 million and $3.7 million
respectively at September 30, 2016

BNK's President and Chief Executive Officer, Wolf Regener
commented:

"With the recently announced completion of our equity offering, we
are moving ahead with a drilling program to further develop our
Tishomingo Field in Oklahoma. We are in negotiations with drilling
rig contractors and plan to begin drilling the first location, the
Chandler 8-6H well in which we have a 99.9% working interest, in
early December. The Chandler 8-6H well and subsequent locations in
the planned drilling program are in comparable geographic areas to
some of our best performing wells and we expect the wells to
significantly increase our cash flow as well as prove up additional
reserves.

"We continue to generate positive cash flow due to our cost
cutting efforts and the impact of our hedging program. The Company
generated over $2.0 million of operating cash flows from our
continuing operations in the third quarter of 2016, even though our
production was down 34% from the prior year quarter. In the first
nine months of 2016 we have generated $5.6 million of positive cash
flow from continuing operations.

"The Company's hedging program continued to increase our realized
prices above current market levels for a significant portion of our
production. The Company's commodity contract hedges generated $0.9
million in realized gains during the third quarter of 2016 as more
than 75% of our oil production was hedged at $64.82. We have a
comparable percentage of oil hedged at $64.88 for the fourth quarter
of 2016 and $61.93 for 2017 based on our forecasted existing
production.

"In order to reduce our interest expense, we have been using our
positive operating cash flow to make paydowns totaling $3.9 million
on our credit facility during 2016. Our current outstanding balance
on the credit facility is now $20.5 million. As announced last week,
our existing lenders reaffirmed our credit facility at its current
outstanding borrowing base of $24.4 million, so the Company has $3.9
million available to borrow in addition to the net proceeds from the
equity offering and operating cash flow.

"Our third quarter production decreased to 1,024 BOEPD, a decrease
of 34% compared to the prior year third quarter, due to the fracture
stimulation of the previously drilled Nickel Hill 36-3H well and the
remaining stages in the Emery 17-1H well in mid-2015.

"The Company recorded net loss of $0.8 million in the third
quarter of 2016 compared to a net income of $4.2 million in the third
quarter of 2015. The third quarter of 2015 included an unrealized
gain on commodity hedges totaling $4.3 million compared to an
unrealized loss of $0.4 million in the third quarter of 2016.

"Average netbacks were $18.58 per BOE for the quarter, a decrease
of 3% compared to the third quarter of 2015. If the realized gains
from the commodity contracts are included, the average netbacks for
the quarter increase to $28.24 per BOE in the third quarter of 2016.

Third First
Quarter Nine
Months
2016 2015 % 2016 2015 %
Net Income
(Loss):
$ Thousands $(843) $4,197 - $(7,403) $(221) (3,250%)
$ per common $(0.01) $0.03 - $(0.05) $(0.00) -
share
assuming
dilution
Capital $209 $684 (69%) $746 $9,109 (92%)
Expenditures
Average 1,024 1,554 (34%) 1,174 1,432 (18%)
Production
(boepd)
Average $31.84 $31.65 1% $27.44 $35.75 (23%)
Price per
Barrel
Average $18.58 $19.24 (3%) $15.97 $22.37 (29%)
Netback per
Barrel
Average $41.50 $40.91 1% $38.47 $43.09 (11%)
Price per
Barrel
including
Commodity
Contracts
Average $28.24 $28.50 (1%) $27.00 $29.71 (9%)
Netback per
Barrel
including
Commodity
Contracts
September June December2015
2016 2016
Cash and $1,677 $2,442 $1,666
Cash
Equivalents
Working $3,748 $5,278 7,298
Capital

Third Quarter 2016 versus Third Quarter 2015

Oil and gas gross revenues totaled $3,001,000 in the third quarter
2016 versus $4,526,000 in the third quarter of 2015. Oil revenues
were $2,459,000 in the third quarter 2016 versus $3,693,000 in the
third quarter of 2015, a decrease of 33% as average oil production
decreased by 31%. Natural gas revenues decreased $196,000 or 47%, as
natural gas production decreased 44% compared to the third quarter of
2015. Natural Gas Liquid (NGL) revenue decreased $95,000 or 23% to
$317,000 as average production decreased 35% which was partially
offset by an average NGL price increase of 18%.

Production and operating expenses decreased $147,000 between
quarters. These costs declined from the prior year quarter due to
lower production volumes.

Depletion and depreciation expense decreased $998,000 between
quarters due to decreased production.

General and administrative expenses decreased $53,000 between
quarters due to the Company's cost cutting efforts which resulted in
lower salary and benefits, professional fees and travel costs.

Finance income decreased $4,711,000 due to an unrealized gain on
financial commodity contracts in 2015 of $4,286,000. Finance expense
increased $318,000 primarily due to an unrealized loss on financial
commodity contracts in 2016 of $445,000 offset by lower interest
expense.

FIRST NINE MONTHS 2016 HIGHLIGHTS

- In October 2016, the Company completed an equity offering under
which it issued 70,000,000 shares at a price of C$0.20 per share
for gross proceeds of C$14,000,000. The Company intends to use
proceeds from this offering to fund a drilling program for the
further development of its Tishomingo Field, located in Oklahoma
- Operating cash flow from continuing operations was $5.6 million for
the first nine months of 2016 compared to $6.6 million in the
comparable period in 2015
- General & administrative expenses decreased by 20% and operating
expenses decreased by 14% for the first nine months of 2016
compared to the first nine months of 2015 due to the Company's
continued cost cutting efforts
- Revenue, net of royalties was $6.8 million for the first nine
months of 2016 compared to $10.7 million in the first nine months
of 2015 due to lower prices and lower production in 2016 compared
to the comparable period in 2015
- Average production was 1,174 BOEPD for the first nine months of
2016, a decrease of 18% compared to the first nine months of 2015
production due to the completion of the Nickel Hill 36-3H well and
the remaining portion of the Emery 17-1H well in mid-2015
- Average netbacks were $15.97 per BOE for the first nine months of
2016, a decrease of 29% compared to the first nine months of 2015
due to lower prices in 2016. If the realized gains from the
commodity contracts are included, the average netbacks for the
first nine months increase by more than $11/barrel to $27.00 per
BOE
- During the first nine months of 2016, the Company made paydowns
totaling $3.9 million on its credit facility to reduce the
outstanding balance to $20.5 million. The Company has $3.9 million
available to borrow on the credit facility as the existing lenders
reaffirmed our available borrowing capacity at $24.4 million
subsequent to the end of the period
- Net loss was $7.4 million for the first nine months of 2016
compared to net loss of $221,000 in first nine months of 2015. The
first nine months of 2016 included an unrealized loss on commodity
contracts of $6.0 million.

First Nine Months of 2016 versus First Nine Months of 2015

Oil and gas gross revenues totaled $8,826,000 in the first nine
months of 2016 versus $13,977,000 in the first nine months of 2015.
Oil revenues were $7,098,000 in the first nine months of 2016 versus
$11,812,000 in the first nine months of 2015, a decrease of 40% as
average oil prices decreased 21% or $10.31 a barrel for the period,
coupled by a decrease in production of 24%. Natural gas revenues
decreased $455,000 or 40%, in the first nine months of 2016 as
natural gas production decreased 20% and average natural gas prices
decreased 25% compared to the first nine months of 2015. NGL revenue
increased $18,000, or 2%, due to an increase in NGL production of 3%
which was partially offset by an average NGL price decrease of 2% in
the first nine months of 2016.

Production and operating expenses decreased $268,000 or 14% for
the first nine months of 2016 compared to the prior year first nine
months due to a decrease in total production.

Depletion and depreciation expense decreased $1,881,000 due to
decreased production.

General and administrative expenses decreased $711,000, or 20%,
due to the Company's cost cutting efforts which resulted in lower
salary and benefits, professional fees and travel costs.

Finance income decreased $1,748,000 due to an unrealized gain on
financial commodity contracts in 2015 of $2,374,000. Finance expense
increased $5,718,000 due to an unrealized loss on financial commodity
contracts in 2016 of $5,965,000.

BNK
PETROLEUM
INC.
CONDENSED
CONSOLIDATED
STATEMENTS
OF FINANCIAL
POSITION
(Unaudited,
Expressed in
Thousands of
United
States
Dollars)
September December
30, 31,
2016 2015
Current
assets
Cash and $ 1,677 $ 1,666
cash
equivalents
Trade and 1,624 2,905
other
receivables
Deposits 830 906
and prepaid
expenses
Fair value 1,919 4,459
of
commodity
contracts
6,050 9,936
Non-current
assets
Fair value - 2,802
of
commodity
contracts
Property, 132,562 136,233
plant and
equipment
Exploration 835 835
and
evaluation
assets
133,397 139,870
Total assets $ 139,447 $ 149,806
Current
liabilities
Trade and $ 2,302 $ 2,638
other
payables
2,302 2,638
Non-current
liabilities
Loans and 20,170 23,961
borrowings
Asset 735 788
retirement
obligations
Fair value 623 -
of
commodity
contracts
21,528 24,749
Equity
Share 279,859 279,859
capital
Contributed 22,072 21,471
surplus
Deficit (186,314) (178,911)
Total equity 115,617 122,419
Total equity $ 139,447 $ 149,806
and
liabilities

BNK PETROLEUM
INC.
CONDENSED
CONSOLIDATED
STATEMENT OF
OPERATIONS AND
COMPREHENSIVE
INCOME (LOSS)
(Unaudited,
expressed in
Thousands of
United States
dollars,
except per
share amounts)
Third First
Quarter Nine
Months
2016 2015 2016 2015
Oil and $ 2,321 $ 3,470 $ 6,828 $ 10,705
natural gas
revenue, net
Other income 1 1 2 6
2,322 3,471 6,830 10,711
Exploration - - - 44
and evaluation
expenditures
Production and 570 717 1,693 1,961
operating
expenses
Depletion and 1,286 2,284 4,381 6,262
depreciation
General and 872 925 2,902 3,613
administrative
expenses
Share based 144 127 506 455
compensation
2,872 4,053 9,482 12,335
Finance income 915 5,626 3,560 5,308
Finance (880) (562) (7,436) (1,718)
expense
Net income $ (515) $ 4,482 $ (6,528) $ 1,966
(loss) and
comprehensive
income (loss)
from
continuing
operations
Net loss and (328) (285) (875) (2,187)
comprehensive
loss from
discontinued
operations
Net income (843) 4,197 (7,403) (221)
(loss)
Net income $ (0.01) $ 0.03 $ (0.05) $ (0.00)
(loss) per
share

BNK
PETROLEUM
INC.
THIRD
QUARTER
2016
($000
except as
noted)
Third First
Quarter Nine
Months
2016 2015 2016 2015
Oil revenue $ 2,459 3,693 $ 7,098 11,812
before
royalties
Gas revenue 224 420 694 1,149
before
royalties
NGL revenue 317 412 1,034 1,016
before
royalties
Gross Oil $ 3,000 4,525 $ 8,826 13,977
and Gas
revenue
Cash Flow 2,016 2,561 5,560 6,616
from
continuing
operations
Additions (209) (685) (746) (9,081)
to
property,
plant &
equipment
Additions - - - (28)
to
exploration
and
evaluation
assets
Statistics:
Third First
Quarter Nine
Months
2016 2015 2016 2015
Average oil 628 904 681 895
production
(Bopd)
Average 1,001 1,799 1,293 1,613
natural gas
production
(mcf/d)
Average NGL 229 350 277 268
production
(Boepd)
Average 1,024 1,554 1,174 1,432
production
(Boepd)
Average oil $42.55 $44.41 $38.04 $48.35
price
($/bbl)
Average $2.43 $2.54 $1.96 $2.61
natural gas
price
($/mcf)
Average NGL $15.07 $12.78 $13.60 $13.88
price
($/bbl)
Average $31.84 $31.65 $27.44 $35.75
price per
barrel
Royalties 7.21 7.39 6.21 8.37
per barrel
Operating 6.05 5.02 5.26 5.01
expenses
per barrel
Netback per $18.58 $19.24 $15.97 $22.37
barrel
Average $41.50 $40.91 $38.47 $43.09
price per
barrel
including
commodity
contracts
Royalties 7.21 7.39 6.21 8.37
per barrel
Operating 6.05 5.02 5.26 5.01
expenses
per barrel
Netback per $28.24 $28.50 $27.00 $29.71
barrel
including
commodity
contracts

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, 2016 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 MEASURES

Netback per barrel, net operating income and funds from operations
(collectively, the "Company's Non-GAAP Measures") are not measures
recognized under Canadian generally accepted accounting principles
("GAAP") and do not have any standardized meanings prescribed by
GAAP.

The Company's Non-GAAP Measures are described and reconciled to
the GAAP measures in the management's discussion and analysis which
are available under the Company's profile at www.sedar.com.

Cautionary Statements

In this news release and the Company's other public disclosure:

(a) The Company's
natural gas
production is
reported in
thousands of
cubic feet ("
Mcfs"). The
Company also
uses
references to
barrels ("
Bbls") and
barrels of
oil
equivalent ("
Boes") to
reflect
natural gas
liquids and
oil
production
and sales.
Boes 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.
Given that
the value
ratio based
on the
current price
of crude oil
as compared
to natural
gas is
significantly
different
from the
energy
equivalency
of 6:1,
utilizing a
conversion on
a 6:1 basis
may be
misleading as
an indication
of value.
(b) Discounted
and
undiscounted
net present
value of
future net
revenues
attributable
to reserves
do not
represent
fair market
value.
(c) Possible
reserves are
those
additional
reserves that
are less
certain to be
recovered
than probable
reserves.
There is a
10%
probability
that the
quantities
actually
recovered
will equal or
exceed the
sum of proved
plus probable
plus possible
reserves.
(d) The Company
discloses
short-term
production
rates.
Readers are
cautioned
that such
production
rates are
preliminary
in nature and
are not
necessarily
indicative of
long-term
performance
or of
ultimate
recovery.

Caution Regarding Forward-Looking Information

This release contains forward-looking information including
information regarding the use of proceeds from the equity offering
completed in October 2016, the proposed timing and expected results
of exploratory and development work including production from the
Company's Tishomingo field, Oklahoma acreage, availability of funds
from the Company's reserves based loan facility and the Company's
strategy and objectives. The use of any of the words "target",
"plans", "anticipate", "continue", "estimate", "expect", "may",
"will", "project", "should", "believe" and similar expressions are
intended to identify forward-looking statements.

Such forward-looking information is based on management's
expectations and assumptions, including that the Company's geologic
and reservoir models and analysis will be validated, that indications
of early results are reasonably accurate predictors of the
prospectiveness of the shale intervals, that previous exploration
results are indicative of future results and success, that expected
production from future wells can be achieved as modeled, declines
will match the modeling, future well production rates will be
improved over existing wells, that rates of return as modeled can be
achieved, that recoveries are consistent with management's
expectations, that additional wells are actually drilled and
completed, that design and performance improvements will reduce
development time and expense and improve productivity, that
discoveries will prove to be economic, that anticipated results and
estimated costs will be consistent with managements' expectations,
that all required permits and approvals and the necessary labor and
equipment will be obtained, provided or available, as applicable, on
terms that are acceptable to the Company, when required, that no
unforeseen delays, unexpected geological or other effects, equipment
failures, permitting delays or labor or contract disputes are
encountered, that the development plans of the Company and its
co-venturers will not change, that the demand for oil and gas will be
sustained, that the Company will continue to be able to access
sufficient capital through financings, credit facilities, farm-ins or
other participation arrangements to maintain its projects, that the
Company will continue in compliance with the covenants under its
reserves-based loan facility and that the borrowing base will not be
reduced, that funds will be available from the Company's reserves
based loan facility when required to fund planned operations, that
the Company will not be adversely affected by changing government
policies and regulations, social instability or other political,
economic or diplomatic developments in the countries in which it
operates and that global economic conditions will not deteriorate in
a manner that has an adverse impact on the Company's business and its
ability to advance its business strategy.

Forward looking information involves significant known and unknown
risks and uncertainties, which could cause actual results to differ
materially from those anticipated. These risks include, but are not
limited to: any of the assumptions on which such forward looking
information is based vary or prove to be invalid, including that the
Company's geologic and reservoir models or analysis are not
validated, anticipated results and estimated costs will not be
consistent with managements' expectations, the risks associated with
the oil and gas industry (e.g. operational risks in development,
exploration and production; delays or changes in plans with respect
to exploration and development projects or capital expenditures; the
uncertainty of reserve and resource estimates and projections
relating to production, costs and expenses, and health, safety and
environmental risks), the risk of commodity price and foreign
exchange rate fluctuations, risks and uncertainties associated with
securing the necessary regulatory approvals and financing to proceed
with continued development of the Tishomingo Field, 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 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 will cease to be in compliance with
the covenants under its reserves-based loan facility and be required
to repay outstanding amounts or that the borrowing base will be
reduced pursuant to a borrowing base re-determination, that the
Company is unable to access required capital, that funding is not
available from the Company's reserves based loan facility at the
times or in the amounts required for planned operations, 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 identified in
the Company's most recent Annual Information Form under the "Risk
Factors" section, the Company's most recent management's discussion
and analysis and the Company's other public disclosure, available
under the Company's profile on SEDAR at www.sedar.com.

Although the Company has attempted to take into account important
factors that could cause actual costs or results to differ
materially, there may be other factors that cause actual results not
to be as anticipated, estimated or intended. There can be no
assurance that such statements will prove to be accurate as actual
results and future events could differ materially from those
anticipated in such statements. The forward-looking information
included in this release is expressly qualified in its entirety by
this cautionary statement. Accordingly, readers should not place
undue reliance on forward-looking information. The Company
undertakes no obligation to update these forward-looking statements,
other than as required by applicable law.

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.
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.

ots Originaltext: BNK Petroleum Inc.
Im Internet recherchierbar: http://www.presseportal.de

Contact:
Wolf E. Regener, President and Chief Executive Officer, +1 (805)
484-3613, Email: investorrelations@bnkpetroleum.com, Website:
www.bnkpetroleum.com

Original-Content von: BNK Petroleum Inc., übermittelt durch news aktuell