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Abonner BNK Petroleum Inc.

BNK Petroleum Inc.

BNK Petroleum inc. Reports Third Quarter 2010 Results

Calgary, Alberta, November 4 (ots/PRNewswire)

    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        $0.00    ($0.04)  100       ($0.01)     ($0.14)      93
    assuming dilution
    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  $37.47    $29.37    28       $40.43      $26.40       53
    Average
    Netback per
    Barrel      $21.13    $12.27    72       $19.97         $15       33
    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 #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 $3,223,000 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 2000
    - 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 preparation 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
frac-ing 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 $76.60 versus $48.34 in
2009, an increase of 58% 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
    Adminis-
    trative      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
                                       ($000 except as noted)
                                      3RD Quarter Nine Months
                                        2010   2009      2010    2009
    Oil revenue before royalties       1,654    753     4,605   2,740
    Gas revenue before royalties         825    347     2,858   1,745
    NGL revenue before royalties       1,326  1,048     4,834   2,433
    Oil and Gas revenue                3,805  2,148    12,297   6,918
    Cash flow provided by operating
    activities                         1,563   (67)     3,803 (1,284)
    Additions to property,
    plant & equipment                  8,607  4,722    25,918  11,868
    Advance to and investments
    in affiliates                        695      -     1,278 -
    Issue of Equity Investments            -  4,506    41,083   4,506
    Proceeds from Long-term debt           -  1,480         -  28,996
    Repayment of Long-term debt        1,343    478     4,678     478
    Repayment of Subordinated debt         -    416     2,749   2,028
    Statistics:
    Average natural gas production
    (mcf/d)                            2,456  2,133     2,319   2,040
    Average NGL production (Boepd)       485    375       466     477
    Average Oil production (Bopd)        220    208       245     164
    Average production (Boepd)         1,114    939     1,098     981
    Average natural gas price ($/mcf)  $4.26  $3.00     $3.87   $2.88
    Average NGL price ($/bbl)         $36.48 $22.29    $30.95  $25.68
    Average oil price ($/bbl)         $76.60 $48.34    $73.41  $65.35
    Average price per barrel          $40.43 $26.40    $37.67  $29.37
    Royalties per barrel                8.38   5.33      7.18    6.22
    Operating expenses per barrel      10.92   8.80     10.52    8.15
    Netback per barrel                $21.13 $12.27    $19.97  $15.00
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 http://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, contact:
    Wolf E. Regener, President and Chief Executive Officer
    +1-805-484-3613
    Email:  investorrelations@bnkpetroleum.com
    Website: http://www.bnkpetroleum.com

Contact:

CONTACT: For further information, contact: Wolf E. Regener,
President andChief Executive Officer, +1(805)484-3613,
Email:investorrelations@bnkpetroleum.com

Plus de actualités: BNK Petroleum Inc.
Plus de actualités: BNK Petroleum Inc.