CAMARILLO, CA, Jan. 15, 2014 /CNW/ - BNK Petroleum Inc. (the "Company" or "BNK") (TSX: BKX), is providing an update on its Tishomingo Field, Caney oil
shale operations in Oklahoma as well as its Polish shale gas project.
Oklahoma - Tishomingo Field
BNK's strategy for its 2013 Caney drilling program was to prove the
productivity of the Caney formation in our Tishomingo field. The
Company's efforts were focused on increasing the oil rate of each
consecutive well, reducing drilling time and cost, testing the optimal
lateral placement within the formation and optimizing the fracture
stimulations. These goals have been successfully achieved.
Recently, in the Wiggins 12-8H, (96.5% working interest) the Company
also focused on reducing completion costs by testing various fracture
stimulation techniques. This work has contributed to a dramatic
reduction in future estimated completion costs, as discussed below.
The Wiggins 12-8H, while still recovering stimulation fluid from its
fracture treatment, has been steadily improving, with a recent 24 hour
production rate of 300 Barrels of oil per day (BOPD) or 420 Barrels of
oil equivalent per day (BOEPD). Due to technical issues encountered
during the drilling of the Wiggins 12-8H and the testing of different
fracture stimulation techniques, only 2,600 feet of lateral was
effectively stimulated - approximately half the effective length
planned in our Caney wells. Most importantly, on a net stimulated
stage basis, oil production from this shorter lateral is comparable to
the production from the Barnes 7-2H well.
Our previously completed well, the Barnes 7-2H (98.1% working interest)
had a 30 day oil rate of 406 BOPD (520 BOEPD) and a 24 hour peak rate
of 520 BOPD (750 BOEPD). This was the Company's first well which
targeted the lower Caney interval and, despite a completion interval
15% shorter than previous wells, is producing at higher oil rates and
significantly slower decline rates than previous wells placed in the
Transition zone. The Company plans to return to the Barnes 7-2H well to
stimulate the remaining 15% of the lateral.
BNK rig released its Leila 31-2H well (100.0% working interest) in a
record 17 days and has initiated the fracture stimulation of 7 of the
33 planned stages. The completion is utilizing one of the new fracture
stimulation techniques successfully tested in the Wiggins 12-8H well.
The initial seven stages will be flowed back to fully evaluate the
results prior to continuing with the fracture stimulation of the rest
of the lateral.
Incorporating the significant improvement in drilling times and cost and
the new stimulation technique, the Company expects that its future
Caney wells will be approximately $8 million to drill and complete.
The drilling rig has been released while the Company awaits the final
core work from the Barnes 7-2H well and the results of the Leila 31-2H
stimulation. The Company plans to begin its 2014 drilling program in
the second quarter. Over the next few months the Company also plans to
finish stimulating the remaining stages in the Barnes 7-2H and the
Leila 31-2H wells. The Company's net year-end exit rate was
approximately 1,040 BOEPD of which 635 barrels a day were oil with
current net production at 1,415 BOEPD. The Company's net prospective
Caney acreage totals about 14,880 acres.
Wolf Regener, President and Chief Executive Officer commented, "I am
very pleased with the progress our team has made this past year in
reaching our U.S. goals. The reduction of well drilling times, the
refinement of the placement of the laterals and optimization of the
completions has led to our now being able to drill much cheaper wells,
with much lower decline rates and have a higher percentage of oil in
the production mix. In our last two wells, approximately 70 percent of
the production is oil versus about 50 percent in previous wells. A
higher mix of oil in our production stream leads to higher netbacks in
the current pricing environment".
The Company's investor presentation has been updated and can be found on
Company's website. The presentation contains comparisons of a number
of the Company's wells as well as an internally modelled estimated
decline curve for its future Caney wells.
Poland
In Poland, the Company has initiated the drilling of the horizontal
lateral with the re-entry of the Gapowo B-1 well, which is expected to
take about 30 days to drill. The well is targeting the over-pressured,
gas charged, organic-rich shales that were encountered in the vertical
Gapowo B-1 well.
While drilling the vertical well, the average and maximum total gas
readings were much higher than those seen in the Company's other Baltic
Basin wells. The analysis of the log and core data leads the Company to
believe that the Lower Silurian and Ordovician shales are highly
prospective for shale gas as the shales have good total organic carbon,
porosities and permeability's. The Company's geological work indicates
that these characteristics are likely to extend over a significant
portion of the Company's Baltic Basin acreage.
The Company plans to fracture stimulate seven of the available stages
and evaluate the flowback prior to fracture stimulating the rest of the
lateral. This two step approach will provide data to further optimize
the fracture design prior to continuing the stimulation along the
lateral section.
The Company, as well as Esrey Energy Ltd., have increased their
ownership in Saponis Investments Sp. z o.o. ("Saponis") by acquiring
the interests of the other two Saponis shareholders on a pro-rata
basis. The Company now holds a 57.04% interest in Saponis up from the
original 26.7%. The consideration for the acquisition is the
assumption of the future obligations of the selling shareholders in
Saponis on a pro-rata basis.
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,
Poland, Spain and Germany. 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.
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 Caney wells
and Gapowo B-1 well development, including plans, anticipated results
and timing, estimated future Caney well costs and the prospectiveness
of the Company's properties. 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 indications of early results
are reasonably accurate predictors of the prospectiveness of the shale
intervals, that anticipated results and estimated costs will be
consistent with managements' expectations, that new stimulation
techniques will be successful, that required regulatory approvals will
be available when required, 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,
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 anticipated results and estimated
costs will not be consistent with managements' expectations, new
completion techniques proving to be unsuccessful, 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 equipment failures,
permitting delays or labor or contract disputes or shortages 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.
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.
SOURCE BNK Petroleum Inc.
