BNK Petroleum Inc. Announces 1st Quarter 2016 Results (2)

Production and operating expenses decreased slightly to $552,000 and the per barrel production and operating costs decreased by 11% to $4.49/barrel due to the Company's cost cutting efforts.

Depletion and depreciation expense decreased $140,000 or 8% due to an decrease in the reserve base in 2016.

General and administrative expenses decreased $637,000 or 31% due to cost cutting efforts which included reduced salary and benefits expense and legal, accounting and consulting costs.

Share based compensation decreased $138,000 or 77% due to the timing of stock awards granted to employees.

Finance income decreased $373,000 in the first quarter of 2016 compared to the prior year quarter primarily due to prior year unrealized gains on commodity contracts.

Finance expense increased $614,000 in the first quarter of 2016 compared to the prior year quarter primarily due to unrealized gains on commodity contracts and the interest expense on the credit facility.

Capital expenditures of $131,000 were incurred in the first quarter of 2016 relating to the US operations.

BNK PETROLEUM INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Unaudited, Expressed in Thousands of United States Dollars)

($000 except as noted)

March 31 December 31

2016 2015

---- ----

Current Assets $2,885 $1,666

Cash

Trade and other receivables 2,853 2,905

Other current assets 811 906

Fair value of commodity

contracts 3,988 4,459

10,537 9,936

Non-current assets 134,680 136,233

Property, plant and equipment

Exploration and evaluation

assets 835 835

Fair value of commodity

contracts 2,481 2,802

137,996 139,870

Total Assets $148,533 $149,806

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Current Liabilities $2,587 $2,638

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Trade and other payables

2,587 2,638

Non-current liabilities

Loans and borrowings 24,001 23,961

Asset retirement obligations 725 788

24,726 24,749

Equity

Share capital 279,859 279,859

Contributed surplus 21,522 21,471

Deficit (180,161) (178,911)

Total Equity 121,220 122,419

Total Equity and Liabilities $148,533 $149,806

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BNK PETROLEUM INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited, expressed in Thousands of United States dollars, except per

share amounts)

($000 except as noted)

Three months ended

March 31,

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

($000's) 2016 2015

---- ----

Oil and gas

revenue net of

royalties $2,064 $3,191

Other income 6 3

--- ---

2,070 3,194

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Exploration and

evaluation

expenditures - 32

Production and

operating

expenses 552 572

Depletion and

depreciation 1,671 1,811

General and

administrative

expenses 1,408 2,045

Share based

compensation 42 180

--- ---

$3,673 $4,640

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

Finance Income 1,680 2,053

Finance Expense (1,324) (710)

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Net loss and

comprehensive

loss from

continuing

operations $(1,247) $(103)

Net loss and

comprehensive

loss from

discontinued

operations (3) (657)

--- ----

Net loss (1,250) (760)

------ ----

Net loss per share $(0.01) $0.00

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(CONTINUA)