BNP Resources Inc. V.BNX.A

BNP Resources - August 2016 Letter to Shareholders

[2511MacDonald]

RE: August 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. Met with one source of funding in Toronto, by telephone. We will be providing some financial information, on the acquisition property, prior to having further discussions.

2. Our property salesman, has been on vacation from mid July through to early September. Discussions will begin again after labour day.

3. Obtaining financing will be the primary effort ahead of us. We’ll be working with one financing broker at a time. We’ll also have to get the property acquisition offers submitted and signed. Our specific terms and conditions also need to be negotiated, which will take time. We will only deal with brokers that will accept a commission payment, after the deal is completed. Some brokers have requested upfront cash payments.

4. One of our shareholders provided us with a lead on a potential Helium project, located in Montana. We don’t have the $3 million funding at this time, but will keep the details on file for future considerations. Thanks to our long term shareholder, Mr. A.

5. We have been is discussions with another shareholder that has provided us with a lead on a potential natural gas supply contract for a SE Alberta power plant. BNP will follow through with discussions. This would allow us to investigate the purchase a producing gas field, financed by a long term gas supply contract. Thanks to Calgary shareholder Mr. T.

6. ExxonMobil have put their Billings refinery, terminals and pipeline up for sale (Reuters news release dated August 30^th). These assets are priced at $500 – 700 million US. Although this is above our price point, we’ll continue to monitor the M&A space. This refinery buys Canadian heavy crudes at a discount and is very profitable. If the Keystone Pipeline gets built, heavy oil prices would increase, and the Billings refining margins would narrow. Canadian crude is supplied through the Express Pipeline and a local 70 mile pipeline network. This would be a good investment for a Canadian heavy oil producer with 60,000 barrels per day of bitumen production. Suncor owns a refinery in Colorado for similar reasons.

7. Oil prices are at currently at $43.50 US for WTI, down from the recent $47 - $48 range. Canada still needs a west coast pipeline and the Energy East pipeline, to ensure that crude prices are not discounted. Once these pipelines are in service, producers will receive closer to market price for their crudes, less the pipeline shipping costs. Pipelines also provide good jobs for Canadians, and tax revenue for the governments.

8. I have one other proposal that I’m working on, to purchase an 11,000 barrel per day, heavy oil, tank terminal facility, located in the USA. I’ll try to have the offer ready for submission during the month of September. This is an unsolicited bid, to the existing owner / operator, based in the USA. This terminal facility is considered a non-core asset, in a non-core state.

The US elections will soon be upon us. My friends in the USA are predicting a Trump victory. My Canadian friends are certain that Hillary Clinton will win. My personal prediction is that President Obama will stay for another term.
 
August was a quiet month. I had a chance to take a short vacation in Calgary, enjoying the cool summer weather, and working in the garden. Hope that all shareholders had an enjoyable summer.