BNK Petroleum Inc. announces sale of Woodford assets; accelerates drilling in BNK's Caney formation
TSX ticker symbol; BKX
CAMARILLO, CA, March 17, 2013 /PRNewswire/ - BNK Petroleum Inc. (the "Company") (TSX: BKX) is pleased to announce that its indirect wholly owned subsidiary BNK Petroleum (US) Inc. ("BNK US") has entered into a Purchase and Sale Agreement with XTO Energy Inc. ("XTO"), a subsidiary of Exxon Mobil Corporation, for the sale by BNK US of its Tishomingo Field, Oklahoma assets other than the Caney and upper Sycamore formations, for US$147.5 million, subject to customary closing adjustments.
Subject to completion of customary conditions, the transaction is expected to close in late April. If the transaction is completed, the proceeds of the sale are expected to be used to accelerate the drilling of Caney wells in the Tishomingo field, the Company's ongoing exploration efforts in Europe and for repayment of the Company's credit facility.
Wolf Regener BNK's President and CEO, stated: "We are very pleased to announce this transaction, which is the culmination of the Company's efforts to maximize the value of our Woodford shale gas assets. The transaction is also structured to preserve our rights in the relatively undeveloped Caney and Upper Sycamore formations in the Tishomingo Field. We believe these intervals represent a promising opportunity to develop new oil reserves and production, in an area in which we have a successful operating history. If completed, this transaction will provide the Company with sufficient funds to accelerate our planned Caney development and flexibility to pursue our exciting European projects on our own or with partners."
Macquarie Capital Markets Canada Ltd. is the lead financial advisor to the Company in connection with this transaction, and has delivered an opinion to the Company's board of directors that, as of the date hereof and based upon and subject to the assumptions, limitations and qualifications set forth in the opinion, the consideration to be received by the Company pursuant to the transaction is fair, from a financial point of view, to the Company.
Update on Caney Development
A drilling rig is currently mobilizing to the next planned Caney well, the Barnes 6-3H well. Once it is rigged up, drilling is expected to begin immediately. The drilling rig has been contracted for two wells with the option for two additional wells.
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, Poland, Spain 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.
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 sale of the Company's Woodford shale, Tishomingo assets (the "Proposed Sale"), the anticipated use of proceeds from the Proposed Sale and Sycamore/Caney wells development. Forward-looking information is 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 the conditions to completion of the Proposed Sale will be satisfied and that the Proposed Sale will be completed as expected, that indications of early results are reasonably accurate predictors of the prospectiveness of the shale intervals, that required regulatory approvals will be available when required, 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 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, farm-ins or other participation arrangements to maintain its projects, and that global economic conditions will not deteriorate in a manner that has an adverse impact on the Company's business, its ability to advance its business strategy and the industry as a whole. 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 to change or to be inaccurate include, but are not limited to, the risk that any of the assumptions on which such forward looking information is based vary or prove to be invalid, including that the conditions to completion of the Proposed Sale will be not be satisfied or that the Proposed Sale is otherwise not completed in the anticipated timeframe or at all, 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 is unable to access required capital, 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 and uncertainties applicable to exploration and development activities and the Company's business as set forth in the Company's management discussion and analysis and its annual information form, both of which are available for viewing under the Company's profile at www.sedar.com, any of which could result in delays, cessation in planned work or loss of one or more concessions and have an adverse effect on the Company and its financial condition. The Company undertakes no obligation to update these forward-looking statements, other than as required by applicable law.
SOURCE BNK Petroleum Inc.