BNP Letter to Shareholders Sep 2016Dear Shareholders: The purpose of this monthly letter is to bring BNP shareholders up to date since the last letter. 1. BNP Resources - Prepared an offer for an 11,000 barrel per day, heavy oil, tank terminal facility, held by a legacy producer, in the USA. The offer involved BNP accepting all corporate liabilities, including 80 miles of abandoned & idled pipelines and abandonment liabilities on a rail loading facility, in exchange for the asset. The offer was sent by FedEx Ground on Sep 12th. As of Sep 30th, the package has not yet been received at destination. My lesson learned is that Ill send by air next time, and not try to save shipping costs. Ill update shareholders next month on our progress. The offer benefits both buyer and seller, and if successful, this would be the growth vehicle for BNP Resources, going forward. As this is an unsolicited offer, we have no guarantee that the legacy company will consider our proposal. 2. BNP management are also working on the acquisition of the private company which now own the Jensen leases. This is a separate operation from BNP. Why would we work on this deal? The following are the reasons: (a) This private company owns the Jensen leases. BNP still has the liability for the Jensen wellbores. (b) Pending a successful offer / acceptance and financing, we will arrange the transfer of the Jensen wellbores from BNP to the private company. This will clean up our account with the AER by reducing our LMR liability, by about $200,000. We currently have a deposit of $360,000 with the AER. (c) We are proposing that a new holding company will be created to hold the private company, with the Jensen leases, plus a number of subsidiary companies. BNP will not be a shareholder of this company. One of the subsidiary companies will be capitalized to allow for the abandonment of wells, on a lump sum turn key basis. The first customer will be BNP Resources, for the surface abandonment of the 4 northern wells. We will attempt to enter an agreement with the AER to allow the abandonment of the BNP wellbores and surface leases, being paid out by the AER, upon completion, from the BNP deposits. Once all remaining BNP wellbores are either transferred or abandoned, our account with the AER will be closed in good standing. The remaining deposit, after transfer and abandonment, will be paid to the Canada Revenue Agency, to reduce our working capital deficiency. 3. Met with our corporate secretary, a director, our salesman and the new management team this month. Very busy month compared to recent activity. This is due to the tank terminal offer and the current efforts, on the private company acquisition. 4. Prior to seeking financing for the private company and acquisition, well need to get the terms and conditions documented and agreed to. This stage could take 3-4 weeks. We would then be able to start looking for funding. There is no guarantee that the target company management and board of directors will agree to our proposal. I have learned from previous CNRL and Crescent Point deals, to offer full and fair value, which we will. 5. We have been offered an opportunity, to make an equity investment, in a 600 MW power plant, in return for a natural gas power supply contract. This opportunity will be investigated for the new private company. 6. Oil prices closed the week at $48.05 US for WTI. Positive developments with OPEC. Issues are not yet resolved with Libya. I am following the US elections each week, watched the recent candidate debate and look forward to the October match up between Senator Clinton and Mr. Trump. Based on the polls, the race is close to a tie. This one will be tough to predict a winner. The situation in Syria is also escalating, which will be a concern for the next president, whomever it will be. If Senator Clinton is elected, coal will be phased out, and natural gas would benefit. With a Trump victory, coal will once again be used for power generation, to the disadvantage of wind and solar.