BNK Petroleum Inc.

/C O R R E C T I O N -- BNK Petroleum Inc/

Calgary, Alberta, November 5 (ots/PRNewswire) - In the news release, "BNK Petroleum inc. Reports Third Quarter 2010 Results" issued on 4 Nov 2010 06:15 GMT, by BNK Petroleum Inc TSX:BKX over PR Newswire, we are advised by a representative of the company that errors occurred in the 'Average Netback per Barrel' row of the Overview table as well as in the Statistics table where the '3RD Quarter' and 'Nine Months' column numbers were mismatched. Complete, corrected release follows:

    OVERVIEW
                    Three Months Ended Sept 30     Nine Months Ended Sept 30
    (US$000)          2010      2009  % Change      2010      2009  % Change
    --------       ----------------------------------------------------------
    Earnings
     (Loss):
    $ Thousands       ($30)  ($3,224)       99     ($611)  ($9,915)       94
    $ per common
     share assuming
     dilution        $0.00    ($0.04)      100    ($0.01)   ($0.14)       93
    Capital
     Expenditures   $8,067    $4,722        71   $25,918   $11,878       118
    Average
     Production
     (Boepd)         1,098       981        12     1,114       939        19
    Average Product
     Price per
     Barrel         $37.67    $29.37        28    $40.43    $26.40        53
    Average Netback
     per Barrel     $19.97    $15.00        33    $21.13    $12.27        72
    As at                  9/30/2010           6/30/2010          12/31/2009
                          -----------         -----------         -----------
    (US$000)
    --------
    Cash and Cash
     Equivalents             $10,081             $20,096              $8,372
    Working Capital           $7,963             ($8,640)           ($13,771)
    BNK's President and CEO Wolf Regener commented:
    ----------------------------------------------- 

"Excellent progress has been made on our European concessions during the quarter. Six 2D seismic lines were acquired and interpreted on our Baltic Basin Project. The seismic lines were acquired to avoid encountering faults in our test wells so that all targeted intervals can be properly evaluated. Tendering for our first two wells is now nearly complete so that our 1st well, the Wytowno No. 1 can be spudded near the end of November. In Germany our geologic work continued with our team making excellent progress towards further high-grading the concessions and achieving our goal of being able to pursue farm down opportunities in the second quarter of 2011. Our team has also been busy working on additional concessions in other basins within Europe that we hope to be awarded in the future which would further diversify our projects.

Our operating results in the U.S. also continued to improve and were characterized by higher revenues resulting from improved product pricing on increased production over last year with increased investment in property, plant and equipment. The field work done in the third quarter has resulted in our net production increasing further to over 1,300 barrels of oil equivalent per day. The third quarter loss of $30,000 was only 1% of last year's third quarter loss of $3.2 million. For the nine month period the loss was $611,000, a 94% improvement as compared to a $9.9 million loss in the first nine months of 2009".

"Working capital improved to a positive $8.0 million at September 30, 2010 versus negative working capital at June 30, 2010 and December 31, 2009 of $8.6 million and $13.8 million, respectively."

"The recently announced private placement will increase our cash and working capital by a net $64 million once fully funded. $26.9 million of these funds were received on October 27, 2010 and the second tranche is expected to close in November 2010. This cash will allow us to fully pursue our currently planned European exploration activities and give us flexibility and options for our European projects."

"On October 27, 2010 the Company's US operating subsidiary, BNK Petroleum (US) Inc., obtained a new revolving reserve based credit facility with an initial borrowing base of $23.8 million against which $20 million of credit was extended and used to partially pay off our former bank debt. The balance owed inclusive of accrued interest of $3.5 million was paid from cash on hand. Absent any reductions in the borrowing base this new three year facility requires interest only payments versus required principal payments under our former facility, which payments totaled $4,678,000 through the first nine months of 2010. As a result the new facility will free up more cash for operating needs".

    THIRD QUARTER HIGHLIGHTS
    - The net loss in the quarter was $30,000 versus $3,224,000 in the
      third quarter of 2009
    - Oil and gas revenue increased 77% to $3,805,000 in the quarter
      compared to the same quarter in 2009
    - Earnings per share was zero versus a four cent per share loss in the
      same period last year
    - Capital expenditures were $8,067,000 in the quarter up 71% from the
      third quarter of 2009
    - Production per day averaged 1,098 or 12% higher than the third
      quarter of 2009
    - Oil production increased 49% to 245 barrels per day versus the third
      quarter of 2009
    - Natural gas production increased 14% to 2,319 mcf per day versus the
      third quarter of 2009
    - NGL (Natural Gas Liquids) production declined 2% to 466 barrels per
      day versus the third quarter of 2009
    - Production per day declined 6% from the second quarter of 2010 as
      three wells were shut in, preparing for fracing and the time
      required for flowback after fracture stimulation
    - Working capital improved $16.6 million to $7,963,000 at September 30,
      2010 from a negative $8,640,000 at June 30, 2010 

Third Quarter 2010 Compared to Third Quarter 2009

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

Oil and gas revenues net of royalties were $3,080,000 up from $1,681,000 in the third quarter of 2009. Improved product pricing averaging $37.67 a barrel up from $29.37 a barrel (a 28% increase) in the third quarter of 2009 coupled with a 12% increase in average daily production caused the increase in revenue between quarters.

During the quarter 27 gross stages from four Company operated wells in its Tishomingo field were fracture stimulated. Three wells were shut in for all or some of the quarter in preparation for fracing and the time required for flowback after fracture stimulations.

In the quarter the Company recorded an unrealized risk management gain on its product hedges of $380,000 primarily related to its hedges on natural gas that benefit the Company if the price of natural gas declines.

Operating expenses increased 52% to $1,063,000 due to higher gathering fees and production taxes while general and administrative expenses increased 64% to $1,317,000 due primarily to increased salaries and wages as the company grows.

Interest in the quarter declined $173,000 or 31% to $390,000 due to lower debt levels between quarters.

A foreign exchange gain of $653,000 was recorded in the quarter primarily due to the strengthening of the Canadian dollar to the US dollar in the third quarter of 2010. A $28,000 foreign exchange loss was recorded in the third quarter of 2009.

Stock-based compensation expense totaled $673,000 in the quarter and was 51% lower than the third quarter of 2009 as more options were granted in the third quarter of 2009 (6,740,000) than in the third quarter of 2010 (1,160,000).

Depletion, Accretion and Depreciation expense totaled $1,278,000 in the quarter or 22% lower than the third quarter of 2009 due to increased reserves decreasing the depletion rate per barrel.

First Nine Months of 2010 Compared to first Nine Months of 2009

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

The loss for the first nine months of $611,000 was 94% lower than the loss in the first nine months of 2009 of $9,915,000.

    FIRST NINE MONTHS HIGHLIGHTS
    - Losses declined 94% to $611,000
    - Loss per share declined 93% to one cent per share from 14 cents per
      share
    - Additions to property, plant and equipment totals $25,918,000 versus
      $11,868,000 last year. Excluding the $12,000,000 paid to Wells Fargo
      in the second quarter to purchase the net profits and overriding
      royalty interests from its senior lender net additions to property
      plant and equipment totaled $13,918,000 in the first nine months of
      2010 and primarily relate to fracing and drilling costs in Oklahoma
    - Average production per day increased 19% to 1,114 barrels per day
    - Average product price increased 53% to $40.43 per barrel
    - Oil and Gas revenue increased 78% to $12,297,000
    - On January 26, 2010 the Company was awarded two additional
      concessions of 770,000 acres in Germany
    - On March 20, 2010 the Company was awarded three new concessions in
      Poland totaling 880,000 acres
    - On May 19, 2010 the Company was awarded an additional concession in
      Germany totaling 840,000 acres bringing total gross acreage in Europe
      to 3.9 million acres (3.5 million net)
    - On May 18, 2010 the Company closed a bought deal equity financing
      raising $43,593,000 in gross proceeds issuing 15,800,000 common
      shares at a price of CAD$2.85
    - On May 19, 2010 the Company repaid its subordinated debt of
      $2,749,000
    - On May 21, 2010 the Company purchased the net profits and overriding
      royalty interests from its senior lender for $12,000,000 

Oil and gas revenues net of royalties were $9,750,000 up from $5,521,000 in the first nine months of 2009. This 77% increase was caused by higher average product prices of $40.43 versus $26.40 in 2009, an increase of 53% and increased average production of 1,114 barrels per day or 19% versus the first nine months of 2009.

Through the first nine months of 2010, 60 gross stages from 11 wells have been fracture stimulated in the Tishomingo field. In all of 2009, 32 gross stages were fracture stimulated.

The Company has earned 8,400 out of a possible 40,000 net acres in the Black Warrior Project .

Through the first nine months of 2010 the Company has recorded gathering revenue of $2,406,000 versus $820,000 in the same period in 2009. However $1,150,000 of this year's gathering income resulted from a correction of an accounting error that related to 2009 and 2008.

Through the first nine months of 2010 an unrealized gain on risk management contracts of $937,000 versus a loss of $334,000 in the same period last year relates to gains primarily on natural gas hedges.

Operating expenses total $3,322,000 through the first nine months of 2010 or 47% higher than the comparable period in 2009 due to higher gathering fees and production taxes resulting from increased production.

General and Administrative expenses totaled $3,586,000 through the first nine months of 2010 versus $2,734,000 for the same period in 2009, an increase of 31% due to higher salary and recruitment costs as the company grows.

Interest through the first nine months of 2010 total $1,356,000 versus $2,604,000, a decline of 48% due to lower debt levels.

Stock based compensation expense declined 46% to $1,733,000 due to lower levels of options granted in 2010 than 2009.

Depletion, depreciation and accretion declined 30% to $3,575,000 due to increased reserves decreasing the depletion rate per barrel.

                             Three months ended         Nine months ended
                                September 30              September 30
                          ------------------------- -------------------------
                              2010         2009         2010         2009
                          ------------ ------------ ------------ ------------
    Revenue
      Oil and gas              $3,805       $2,148      $12,297       $6,918
      Royalties                  (725)        (467)      (2,547)      (1,397)
      Gathering                   464          313        2,406          820
      Realized gain on risk
       management contracts       122           31          238           43
      Unrealized gain
       (loss) on risk
       management contracts       380         (146)         937         (334)
      Interest and other           14            -           26            5
    Equity loss on
     investment                   (22)           -          (43)           -
                          ------------ ------------ ------------ ------------
                                4,038        1,879       13,314        6,055
                          ------------ ------------ ------------ ------------
    Expenses
      Operating                 1,063          698        3,322        2,256
      General and
       administrative           1,317          803        3,586        2,734
      Interest on long-term
       debt                       390          479        1,297        2,132
      Interest on
       subordinated debt            -           84           59          472
      Foreign exchange
       (gain) loss               (653)          28          353           80
      Stock-based
       compensation               673        1,376        1,733        3,220
      Depletion,
       depreciation and
       accretion                1,278        1,635        3,575        5,076
                          ------------ ------------ ------------ ------------
                                4,068        5,103       13,925       15,970
                          ------------ ------------ ------------ ------------
    Net loss and
     comprehensive loss
     for the period               (30)      (3,224)        (611)      (9,915)
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------
    Loss per share             $(0.00)      $(0.04)      $(0.01)      $(0.14)
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------
    Average shares
     outstanding          117,404,930   82,763,422  109,428,482   76,145,521
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------
                             BNK Petroleum Inc.
                             Third Quarter 2010
                           ($000 except as noted)
                                    3RD Quarter               Nine Months
                                 2010         2009         2010         2009
                          ------------------------- -------------------------
    Oil revenue before
     royalties                  1,654          753        4,605        2,740
    Gas revenue before
     royalties                    825          347        2,858        1,745
    NGL revenue before
     royalties                  1,326        1,048        4,834        2,433
                          ------------------------- -------------------------
    Oil and Gas revenue         3,805        2,148       12,297        6,918
    Funds from (used in)
     operations                 1,563          (67)       3,803       (1,285)
    Additions to
     property, plant
     & equipment                8,067        4,722       25,918       11,868
    Advances to and
     investments in
     affiliates                   695            -        1,278            -
    Issue of equity
     instruments                    -        4,506       41,083        4,506
    Proceeds from
     long-term debt                 -        1,480            -       28,996
    Repayment of
     long-term debt             1,343          478        4,678          478
    Repayment of
     subordinated debt              -          416        2,749        2,028
    Statistics:
                                    3RD Quarter               Nine Months
                                 2010         2009         2010         2009
    Average natural gas
     production (mcf/d)         2,319        2,040        2,456        2,133
    Average NGL
     production (Boepd)           466          477          485          375
    Average Oil
     production (Bopd)            245          164          220          208
    Average production
     (Boepd)                    1,098          981        1,114          939
    Average natural gas
     price ($/mcf)              $3.87        $2.88        $4.26        $3.00
    Average NGL price
     ($/bbl)                   $30.95       $25.68       $36.48       $22.29
    Average oil price
     ($/bbl)                   $73.41       $65.35       $76.60       $48.34
    Average price per
     barrel                    $37.67       $29.37       $40.43       $26.40
    Royalties per barrel         7.18         6.22         8.38         5.33
    Operating expenses
     per barrel                 10.52         8.15        10.92         8.80
                          ------------------------- -------------------------
    Netback per barrel         $19.97       $15.00       $21.13       $12.27
                          ------------------------- -------------------------
                          ------------------------- ------------------------- 

The information outlined above is extracted from and should be read in conjunction with the Company's unaudited financial statements for the nine months ended September 30, 2010 and the related management's discussion and analysis thereof, copies of which are available under the Company's profile at www.sedar.com.

Non-GAAP Information

Netback per barrel and its components are calculated by dividing revenue, royalties and operating expenses by the Company's sales volume during the period. Netback per barrel is a non-GAAP measure but it is commonly used by oil and gas companies to illustrate the unit contribution of each barrel produced. This is a useful measure for investors to compare the performance of one entity with another. The non-GAAP measures referred to above do not have any standardized meaning prescribed by GAAP and therefore may not be comparable to similar measures used by other companies.

The Company also uses the "barrels" (bbls) or "barrels of oil equivalent" (boe) reference in this report to reflect natural gas liquids and oil production and sales. All boe conversions are derived by converting gas to oil in the ratio of six thousand cubic feet of gas to one barrel of oil, representing the approximate energy equivalency.

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 information regarding the expected closing of the second tranche of the private placement and timing thereof, expectations that the funds from the private placement will be sufficient to fund the Company's planned exploration expenditures in Europe, and work plans and timing of same in the United States and Europe. Forward-looking information is based on plans and estimates of management at the date the information is provided and certain factors and assumptions of management, including that all conditions to closing of the second tranche of the private placement will be fulfilled that costs of planned exploration activities in Europe will be as currently anticipated and that the Company will not need to use the funds for other purposes, that the capital, equipment and approvals required to conduct the proposed work will be available when required. 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 respecting the private placement to change or to be inaccurate include, but are not limited to, the risk that regulatory approval of the private placement will be delayed or not obtained, that the Company could experience a material adverse effect, that the costs of equipment and labor are higher than budgeted, that unexpected events and contingencies could occur that require a diversion of funds to other purposes, that the required capital, equipment, regulatory and third party approvals are not available when required or at all.

About BNK Petroleum Inc.

BNK Petroleum Inc. is a U.S. based 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 gas properties and concessions in the United States, Poland and Germany. Additionally the Company is utilizing its technical and operational expertise to identify and acquire additional unconventional projects outside of North America. The Company's shares are traded on the Toronto Stock Exchange under the stock symbol BKX.

For further information: For further information: Wolf E. Regener, President and Chief Executive Officer, +1-805-484-3613, Email: investorrelations@bnkpetroleum.com; Website: http://www.bnkpetroleum.com

Contact:

CONTACT: For further information, contact: Wolf E. Regener,
President andChief Executive Officer, +1(805)484-3613,
Email:investorrelations@bnkpetroleum.com

Original-Content von: BNK Petroleum Inc., übermittelt durch news aktuell

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