BNP Resources Inc. V.BNX.A

BNP Letter to Shareholders - November 2016

[BNPResources]

RE: Nov 2016 - Monthly Letter to Shareholders

 
Dear Shareholders:
 
The purpose of this monthly letter is to bring BNP shareholders up to date since the last letter.
 

1. The TransMountain Pipeline was approved by Prime Minister Trudeau, this past week. This is positive for the Canadian economy and will put many of our contractors and trades back to work. Upon completion, Canadian oil producers will have a new outlet, for their oil. Petroleum price discounts should narrow, benefiting the industry.

 

2. This was a big week for OPEC, with an agreement to cut production. Oil prices spiked, and now trade at $51.68 US per WTI barrel.

 

3. Donald Trump won the presidential election against Hillary Clinton this November. One thing now lacking, is a peaceful transition of power. An effort in under way to recount votes in 3 states. It doesn’t appear to be about the votes but rather about disrupting the Electoral College vote, and subsequent transition of power. We now await the Electoral College vote on December 20^th. If President Elect Trump receives 270 votes, he would take over as president on January 20^th. If he doesn’t get 270 votes, there could be delays. I believe that if he receives the 270 votes, transfer of power will occur on January 20^th. It appears that the Keystone Pipeline approvals would follow shortly thereafter. I anticipate that the project could start up by July 2017. There will be construction of the Keystone Hardisty Tank Terminal, in Hardisty, Alberta, and a pipeline between Hardisty and the US border. The US section will be constructed from the border to Cushing, Oklahoma. Pipe, pump stations and materials have already been purchased. This is truly a shovel ready construction project. Overall, many jobs will be created in both Canada and the USA.

 

4. Other news out of Saudi Arabia, is that women will now be allowed to drive a car. This is very positive news, but could put a number of chauffeurs and taxi drivers out of business.

 

5. I have made contact with 3 separate “finders”. A “finder” is someone that introduces you to an investment fund or an agent, in consideration for a small fee, upon closing of the deal. Two of the “finders” have financial contacts in Canada, while the third has contacts in Toronto and New York. I’ll be forwarding the “private company” business plans this week. Once the first deal is funded, we’ll focus on funding for BNP Resources, based on a private company model, with two projects (Jensen & South Ferguson), with BNP holding 25%. Target dates are Q1-Q2 for 1^st round of private company funding, with BNP funding following later.

 

6. I’ve just moved to New York State, within a 45 minute train ride from New York City. If any shareholders are in the New York City area, please contact me and we could meet for coffee. Or, alternatively, call anytime. My office hours are 6:00 pm – 9:00 pm EST, which is 4:00 pm – 7:00 pm Calgary time. This is a great place to live if you like hockey, baseball and horse racing.

 

7. The scope of projects within the private company are evolving as follows, based on raising $100 million:

 

1. Yellowknife Pipeline project - $1.5 million
2. Orphan Well Abandonment company (5 BNP wells proposed for abandonment, paid by AER deposits) - $1.5 million
3. Acquisition of producing oil and gas properties - $92 million

 
Note: BNP is not a shareholder of this company but will work with this group to have 5 wells abandoned on a lump sum turn key basis, paid for by using the BNP AER deposits. This will leave us with the 4 Jensen wellbores for development (pending prior abandonment by the AER).
 

8. The following are a summary of potential projects for BNP Resources:

 

1. Develop Jensen leases (farm in from Privco) - $5 million, subject to farm in.
2. Develop South Ferguson farm in. Invest $5 million to develop 2 x DUC’s (drilled uncompleted wells).
3. Montana oil development project - Nisku and Lodgepole (with partners).
4. Montana Helium project (brought to us by a long term BNP shareholder). Requires a $7-$10 million budget.
5. Del Bonita Midstream and Oil Trucking Company – Disposal, separation and storage at oil leases, plus oil and emulsion trucking - $1.5 million
6. Del Bonita Power – Power generation and distribution, at oil leases - $1.5 million
7. New project (tentative with partners) - Power Generation and Distribution – Yellowknife (tentative and with partners) – If Yellowknife pipeline proceeds, there could be opportunities to provide power and distribution lines, for the 3 existing mines, located NE of Yellowknife, plus one new gold mine, currently in the exploration stage. Costs – TBA.
8. New project - Lead zinc mine reactivation opportunity (with partners) – If the Yellowknife Pipeline proceeds, an opportunity exists to reactivate an existing orebody. Compressed natural gas would be used as fuel for the heavy haul trucks, instead of diesel, reducing operating costs. Costs and share acquisition – TBA.
9. New Project – Purchase existing natural gas assets along Yellowknife pipeline project, right of way, to feed into pipeline (with partners). Costs – TBA.

 
This deal would follow the $100 million private company financing, and would be done in small stages. As always, subject to financing. This provides good project growth opportunities for BNP Resources (we just need the money).
 
I’ll be working to finalize business plans this week and will be contacting agents shortly thereafter. The OPEC agreement is a positive development for the industry which should allow prices to stabilize in the $45 - $55 WTI range throughout 2017.