Publicado 06/05/2016 04:00
- Comunicado -

BNK Petroleum Inc. Announces 1st Quarter 2016 Results (1)

CAMARILLO, California, May 5, 2016 /PRNewswire/ --

All amounts are in U.S. Dollars unless otherwise indicated:

FIRST QUARTER HIGHLIGHTS

--- Average production for the first quarter of 2016 was 1,352 BOEPD, an

increase of 8% compared to 2015 production of 1,249 BOEPD due to the

completion of the fracture stimulation operations on the previously

drilled Nickel Hill 36-3H well and the Emery 17-1H well in mid-2015

-- In the quarter, the Company continued to reduce its costs. G&A expenses

decreased by 31% and per barrel operating costs decreased by 11% in the

first quarter of 2016 compared to the first quarter of 2015

-- Cash flow from operating activities was $1.5 million in the first

quarter 2016 compared to $1.3 million in the first quarter of 2015

-- Net loss for the first quarter of 2016 was $1.3 million compared to $0.8

million for the first quarter of 2015 most of which is due to a non-cash

unrealized loss of $0.8 million from hedged commodity contracts in the

first quarter of 2016

-- Revenue, net of royalties was $2.1 million in the first quarter of 2016

compared to $3.2 million for first quarter of 2015, a decrease of 35%,

as average prices declined by 41% between the quarters

-- Average netback per barrel for the first quarter of 2016 was $12.29, a

decrease of 47% from the prior year first quarter due to lower prices in

2016. If the commodity contract hedges are included in the computation,

the average netback per barrel increases over 111% to $25.89, a decrease

of only 17% from the first quarter 2015 amount

-- In February 2016, the Company started the shutdown of the Poland

operations by relinquishing the Slupsk concession which was its last

remaining concession in Poland

-- Cash totaled $2.9 million and working capital totaled $8.0 million at

March 31, 2016

-- In April 2016, the Company made a voluntary $1.8 million pay down on its

credit facility

BNK's President and Chief Executive Officer, Wolf Regener commented:

"Our first quarter 2016 production increased by 8% from the prior year first quarter to 1,352 BOEPD. The Company's existing production continues to perform well and we remain in a ready to drill state, with all the planning for the next wells complete. Our intent is to work with our lender and utilize our existing cash flow to begin drilling again when the pricing warrants.

"The Company continues to succeed in its cost cutting efforts. In the first quarter of 2016 a reduction of general and administrative expense of 31% was achieved over the first quarter of 2015 and our operating expense per barrel was reduced by 11% to $4.49/barrel compared to the prior year first quarter. These continued cost savings partially offset a 41% decrease in average prices compared to the prior year quarter and contributed to the Company generating positive cash flow from continuing operations of $1.5 million in the first quarter of 2016.

"The Company's hedging position has continued to allow us to realize higher prices than current market levels for a portion of our production. The Company's commodity contract hedges generated $1.7 million in realized gains during the first quarter of 2016 with about 73% of our oil production hedged. We expect a comparable level of hedging going forward on our forecasted existing production for the remainder of 2016.

"Average netbacks for the first quarter of 2016 were $12.29, a decrease of 47% compared to the prior year due to lower prices. If we include the impact of the realized gains from the commodity contracts, our average netbacks for 2016 would be $25.89, which is a decrease of only 17% compared to the first quarter of 2015."

"In the first quarter of 2016, the Company generated a net loss of $1,250,000 compared to $760,000 in the first quarter 2015. Oil and gas revenue, net of royalties was $2.1 million in the first quarter of 2016, a decrease of $1.1 million, or 35%, compared to the prior year quarter.

"The Company continues to evaluate alternatives for its Spain operations including continuing its efforts to partner with another company or reducing or ceasing its operations there. With the recently announced shutdown of Poland, we expect our European costs to be substantially reduced from prior years.

"In April, the Company made a voluntary $1.8 million pay down of its existing credit facility to reduce its ongoing interest payments, which amount remains available to the Company under the credit facility."

1st Qtr 2016 1st Qtr 2015 %

------------ ------------ ---

Net loss:

$ Thousands $(1,250) $(760) (64)

$ per common share assuming dilution $(0.01) $(0.00) -

Capital Expenditures $131 $4, 6 May. (97) -

Average production per day (Boepd) 1,352 1,249 8

Average Product Price per Barrel $21.69 $36.62 (41)

Average Netback per Barrel $12.29 $23.33 (47)

Average Price per Barrel including Commodity Contracts 35.29 44.37 (20)

Average Netback per Barrel including Commodity Contracts 25.89 31.08 (17)

3/31/2016 12/31/2015

--------- ----------

Cash and Cash Equivalents $2,885 $1,666

Working Capital $7,950 $7,298

First Quarter 2016 versus First Quarter 2015

Oil and gas gross revenues totaled $2,669,000 in the quarter versus $4,117,000 in the first quarter of 2015. Oil revenues decreased $1,553,000 or 43% as average oil prices decreased $15.89 per barrel or 34% to $30.24 in addition to a 14% decrease in oil production per day to 744 boepd. Natural gas revenues decreased $75,000 or 20% to $299,000 as average natural gas prices decreased $1.04/mcf or 35% to $1.93 which was partially offset by a 22% increase in natural gas production of 305 cubic feet per day (mcf/d) to 1,702 mcf/d. Natural gas liquids (NGL's) revenues increased $180,000 or 126% as NGL production increased 117% to 324 boepd while average NGL prices increased 3% to $10.96.

Average first quarter 2016 production per day increased 8% from the first quarter of 2015 due to the production from the previously drilled Nickel Hill 36-3H well and the Emery 17-1H well which were completed in the second quarter of 2015.

(CONTINUA)

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