Business
BNK Petroleum Inc. purchases royalty and net profits interest from lender and provides update on Poland operations
BNK Petroleum Inc. purchases royalty and net profits interest from lender and provides update on ...
About this update from Kolibri Global Energy Inc
[{"type":"text","content":"\n\n\n\n May 21, 2010 (Canada NewsWire Group) -- BNK Petroleum Inc. (the "Company") (TSX: BKX) announced today that its wholly owned subsidiary BNK Petroleum (US) Inc., has entered into an agreement with Wells Fargo Energy Capital Inc. to buy out an overriding royalty interest and net profits interest in the Company's Tishomingo Field, Oklahoma for US$12 million. The overriding royalty interest consists of 3% in the first forty wells ("initial wells"), a 2% overriding royalty interest on all subsequent wells and a net profits interest equal to 20% of the Company's net operating income from its initial wells, declining to 10% on all subsequent wells.\nThe purchase of these interests is part of the Company's overall strategy to improve the value of its properties and to position the Company to negotiate a reserve-based credit facility on terms that will allow it to retain more of its cash flow and to accelerate development.\n\n\n >\n\n\nThe Company has retained Environmental Resources Management ("ERM") to assist it in its objective of meeting or exceeding Polish health, safety, and environmental ("HSE") regulations. ERM will conduct HSE audits and will consult with the Company on HSE regulatory compliance. ERM is one of the world's leading providers of health, safety, and environmental management and technical consulting services. It has 145 offices worldwide, 32 of which are in Europe.\nTendering for services and preparation of the drilling permit application required for the Company's first well in Poland has commenced. A number of suitable drilling locations have been identified and negotiations with landowners are underway to secure the surface rights required for drilling.\n\nCaution Regarding Forward-Looking Information\n\nCertain statements contained in this news release constitute "forward-looking statements" as such term is used in applicable Canadian securities laws, including information regarding the Company's intention to seek replacement credit facilities and its expectation that the elimination of existing royalty burdens will improve its ability to obtain more favorable terms, and improve property valuation fundamentals. Forward looking information is based on plans and estimates of management at the date the information is provided and certain assumptions (includi...