BNK Petroleum Inc. Announces Borrowing Base Redetermination
TSX ticker symbol; BKX
OTCQX ticker symbol; BNKPF
CAMARILLO, CA, April 7, 2020 /PRNewswire/ - BNK Petroleum Inc. (the "BNK") (TSX: BKX) announces that its indirect wholly owned subsidiary BNK Petroleum (US) Inc. ("BNK US") has received its bank borrowing base redetermination on its revolving line of credit ("credit facility") from BOK Financial ("BOKF"), which has lowered the borrowing base to $23.5 million.
Concurrent with the redetermination, BNK made a $3 million principal payment on its line of credit, reducing the outstanding amount to $23.5 million, and has agreed to make future principal payments to further reduce the borrowing base to $21.0 million by November 2020.
Wolf Regener, President and CEO commented. "At an assumed oil price range of $22/bbl to $35/bbl, we expect adjusted funds flow of between $5.7 million and $6.5 million in 2020 due to our strong hedge position and low decline rates on our existing production. The Company's cash on hand, which totaled $3.1 million at December 31, 2019, and its 2020 adjusted funds flow, are expected to fund all of these principal payments to the bank. In addition, BNK has approximately 37 percent of its forecasted oil production hedged at $52.66/bbl for 2021."
All figures are in U.S. dollars.
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. 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 and on the OTCQB under the stock symbol BNKPF.
Adjusted funds flow is not a measure recognized under Canadian generally accepted accounting principles ("GAAP") and does not have any standardized meaning prescribed by GAAP. The Company's non-GAAP measures, including adjusted funds flow, are described and reconciled to the GAAP measures in the Company's management's discussion and analysis which is available under the Company's profile at www.sedar.com. Adjusted funds flow is calculated as cash from operating activities excluding changes in non-cash operating working capital and interest expense. The Company considers this a key measure as it demonstrates its ability to generate funds from operations necessary for future growth excluding the impact from short-term fluctuations in the collection of accounts receivable and the payment of accounts payable and financing costs.
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 estimated adjusted funds flow, payments under the credit facility and the Company's plans and objectives. Forward-looking information is based on plans and estimates of management and interpretations of data by the Company's technical team at the date the data is provided and is subject to several factors and assumptions of management, including that that indications of early results are reasonably accurate predictors of the prospectiveness of the shale intervals, that required regulatory approvals will be available when required, that no unforeseen delays, unexpected geological or other effects, including flooding and extended interruptions due to inclement or hazardous weather conditions, equipment failures, permitting delays or labor or contract disputes are encountered, that the necessary labor and equipment will be obtained, that the development plans of the Company and its co-venturers will not change, that the offset operator's operations will proceed as expected by management, 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 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 labor or contract disputes or shortages of equipment or labor are encountered, the risks associated with the oil and gas industry (e.g. operational risks in development, exploration and production; delays or changes in plans with respect to exploration and development projects or capital expenditures; the uncertainty of reserve and resource estimates and projections relating to production, costs and expenses, and health, safety and environmental risks, including flooding and extended interruptions due to inclement or hazardous weather conditions), the risk of commodity price and foreign exchange rate fluctuations, that the offset operator's operations have unexpected adverse effects on the Company's operations, 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.
The estimate of adjusted funds flow in this news release is provided for the purpose of assisting the reader in evaluating the Company's ability to repay the required amounts under the credit facility disclosed in this news release. The Company cautions readers that the information may not be appropriate for other purposes.
SOURCE BNK Petroleum Inc.