Energia
BNK Petroleum Inc. - 33.4 Million BOE in 2019 Year-End Proved Reserves
Wolf Regener , President and CEO commented. "We are very pleased that our proved reserves stayed essentially flat (1% decrease on a BOE basis) while we conserved cash by not drilling any new wells last year. This demonstrates the low decline rates of our production and the quality of our reservoir. We are also pleased that the estimated ultimate recovery (EURs) from the existing wells has stayed constant from the prior year. The decrease to our proved reserves on a NPV basis by 26% compared to the prior year is primarily attributed to the lower estimated future pricing. The year after year of excellent reserve numbers demonstrates the favorable performance of our wells and the long life we anticipate from our field. In addition, we have lowered our operating expenses, which has a positive impact on the value and helped offset some of the lower price forecast. The Company has also made some additional cost cutting measures which we expect will reduce our G&A by over 25% going forward. In addition, we are very well hedged with over 75% of our forecasted production hedged at an average price over $56 during 2020, so even significant price drops won't significantly impair our existing cash flow during the year."
The evaluation of the Company's reserves in the Caney formation of the Tishomingo Field in the SCOOP area of Oklahoma was conducted by Netherland, Sewell & Associates, Inc. ("NSAI") in accordance with National Instrument 51-101 – .
The above total Proved reserves are attributed to 18 of the Caney wells already drilled, four Woodford wells (4.9% working interest for the Company) and the drilling of 55.73 net additional wells over the next 3 years. The Probable reserves are attributed to the drilling of 28.91 net additional wells. The wells in this report are planned at 107 acre spacing (6 wells per section) on approximately 14,337 net acres. This is approximately 82 percent of the 17,391 net acres the Company has in the Tishomingo Field. The other 18 percent of the acreage is on the easterly side of the Company's acreage and based on data from the Company's historical drilling of the deeper Woodford formation wells, correlated with a 3D seismic survey, the Company anticipates that future wells on its easterly acreage will demonstrate that the Caney is also productive over this easterly acreage.
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The Company's reserves are derived from non-conventional oil and gas activities. The Company's reserves are contained in a shale oil reservoir from which gas and natural gas liquids are produced as by-products. "Tight oil" means crude oil (a) contained in dense organic-rich rocks, including low-permeability shales, siltstones and carbonates, in which the crude oil is primarily contained in microscopic pore spaces that are poorly connected to one another, and (b) that typically requires the use of hydraulic fracturing to achieve economic production rates. "Shale gas" means natural gas (a) contained in dense organic-rich rocks, including low-permeability shales, siltstones and carbonates, in which the natural gas is primarily adsorbed on the kerogen or clay minerals, and (b) that usually requires the use of hydraulic fracturing to achieve economic production rates.
These after income tax net present values reflect the tax burden on the Company's Tishomingo Field interests on a standalone basis, do not consider the business-entity-level tax situation, or tax planning and do not provide an estimate of the value at the level of the business entity, which may be significantly different. The financial statements and the management's discussion and analysis (MD&A) of the Company should be consulted for information at the level of the business entity.
Readers are referred to the Company's Form 51-101F1 Statement of Reserves Data and Other Oil & Gas Information for the year ended December 31, 2019 , which can be accessed electronically from the SEDAR website at www.sedar.com, for additional information.
Wolf E. Regener , +1 (805) 484-3613, Email: investorrelations@bnkpetroleum.com, Website: www.bnkpetroleum.com