BNK Petroleum Inc. : - Announces 2017 Year-End Reserves

CAMARILLO, CA, March 14, 2018 /PRNewswire/ - BNK Petroleum Inc. (the "Company" or "BNK") (TSX: BKX), is providing the results of its December 31, 2017 independent reserves evaluation.

The evaluation of the Company's reserves in the Caney formation of the Tishomingo Field in the SCOOP area of Oklahoma was conducted by Netherland, Sewell & Associates, Inc. ("NSAI") in accordance with National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities. 

2017 Gross Reserves Summary

• Total Proved Reserves 25.2 million Barrels of oil equivalent (BOE)
• an increase of 40% over the December 31, 2016 estimate
• Proved plus Probable Reserves 47.6 million BOEs
• an increase of 13% over the December 31, 2016 estimate
• Proved plus Probable plus Possible Reserves 70.6 million BOEs
• a increase of 6% from the December 31, 2016 estimate

Net Present Value of Reserves discounted at 10%

• Total Proved Reserves before tax of U.S. $259.5 million
• an increase of 73% over the December 31, 2016 estimate
• Proved plus Probable Reserves before tax of U.S. $486.4 million
• an increase of 31% over the December 31, 2016 estimate
• Proved plus Probable plus Possible Reserves before tax of U.S. $764.4 million
• an increase of 10% over the December 31, 2016 estimate

The above total Proved reserves are attributed to 14 of the Caney wells already drilled, four Woodford wells (4.9% working interest for the Company) and the drilling of 46.35 net additional wells over the next 3 years. The Probable reserves are attributed to the drilling of 35.5 net additional wells. The wells in this report are planned at 107 acre spacing (6 wells per section) on approximately 11,653 net acres. This is approximately 66 percent of the 17,680 net acres the Company has in this project. The other 34 percent of the acreage is on the easterly side of the Company's acreage and based on data from the Company's historical drilling of the deeper Woodford formation wells, correlated with a 3D seismic survey, the Company anticipates that future wells on its easterly acreage will demonstrate that the Caney is also productive over this easterly acreage.

Wolf Regener, President and CEO commented. "We are very pleased with the substantial proved reserve increases this year which was mainly due to our 2017 drilling program. Also noteworthy, is that the estimated ultimate recovery from the existing wells increased, as the existing producing wells once again exceeded the previous year forecast. This continued year over year improvement demonstrates the favorable performance of our wells and the long life we anticipate from our wells. These increases to our reserves do not incorporate the wells in our 2018 drilling program which is in progress. The Glenn 16-2H well that is currently being fracture stimulated, is still listed as a probable location in the new reserve report and the WLC 14-2H well, that was drilled this year, is entirely outside of the acreage that is covered by the new reserve report. The Company expects these wells to further increase the Proved and Probable reserves, once the wells are brought online and a new reserve report is generated."

The Company's reserves are derived from non-conventional oil and gas activities. The Company's reserves are contained in a shale oil reservoir from which gas and natural gas liquids are produced as by-products. "Tight oil" means crude oil (a) contained in dense organic-rich rocks, including low-permeability shales, siltstones and carbonates, in which the crude oil is primarily contained in microscopic pore spaces that are poorly connected to one another, and (b) that typically requires the use of hydraulic fracturing to achieve economic production rates. "Shale gas" means natural gas (a) contained in dense organic-rich rocks, including low-permeability shales, siltstones and carbonates, in which the natural gas is primarily adsorbed on the kerogen or clay minerals, and (b) that usually requires the use of hydraulic fracturing to achieve economic production rates.

These after income tax net present values reflect the tax burden on the Company's Tishomingo Field interests on a standalone basis, do not consider the business-entity-level tax situation, or tax planning and do not provide an estimate of the value at the level of the business entity, which may be significantly different. The financial statements and the management's discussion and analysis (MD&A) of the Company should be consulted for information at the level of the business entity.

Readers are referred to the Company's Form 51-101F1 Statement of Reserves Data and Other Oil & Gas Information for the year ended December 31, 2017, which can be accessed electronically from the SEDAR website at www.sedar.com, for additional information.

"BOEs" refers to barrels of oil equivalent. BOEs/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. 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 provided plus probable plus possible reserves. The present value of estimated future net revenues referred to herein does not represent fair market value and should not be construed as the current market value of estimated crude oil and natural gas reserves attributable to the Company's properties.

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 oil and 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 and on the OTCQX under the stock symbol BNKPF.

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 statements regarding estimates of reserves and future net revenue, expectations regarding additional reserves and statements regarding Caneywells development, including plans, anticipated results and timing. 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. Estimated reserves and future net revenue have been independently evaluated by NSAI with an effective date of December 31, 2017. This evaluation is based on a limited number of wells with limited production history and includes a number of assumptions relating to factors such as availability of capital to fund required infrastructure, commodity prices, production performance of the wells drilled, successful drilling of infill wells, the assumed effects of regulation by government agencies and future capital and operating costs. All of these estimates will vary from actual results. Estimates of the recoverable oil and natural gas reserves attributable to any particular group of properties, classifications of such reserves based on risk of recovery and estimates of future net revenues expected therefrom, will vary. The Company's actual production, revenues, taxes, development and operating expenditures with respect to its reserves will vary from such estimates, and such variances could be material. Estimates of after-tax net present value are dependent on a number of factors including utilization of tax-loss carry forwards. In addition to the foregoing, other significant factors or uncertainties that may affect either the Company's reserves or the future net revenue associated with such reserves include material changes to existing taxation or royalty rates and/or regulations, and changes to environmental laws and regulations. Forward-looking information regarding Caneywells development and expectations regarding additional reserves are based on plans and estimates of management and interpretations of exploration information by the Company's exploration team at the date the information is provided and is subject to several factors and assumptions of management, including that required regulatory approvals will be available when required, 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 no unforeseen delays, unexpected geological or other effects, equipment failures, permitting delays or labor or contract disputes or shortages are encountered, that the development plans of the Company and its co-venturers will not change, and 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, including that anticipated results and estimated costs will not be consistent with managements' expectations, the Company or its subsidiaries not being 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 and that equipment failures, permitting delays or labor or contract disputes or shortages are encountered.

Information on other important economic factors or significant uncertainties that may affect components of the reserves data and the other forward looking statements in this release are contained in the Company's Form 51-101F1 Statement of Reserves Data and Other Oil & Gas Information for the year ended December 31, 2017, the Company's Management Discussion and Analysis and the Company's Annual Information Form under "Risk Factors", which are available under the Company's profile at www.SEDAR.com. The Company undertakes no obligation to update forward-looking statements, other than as required by applicable law.

SOURCE BNK Petroleum Inc.