BNK Petroleum Inc
760 Paseo Camarillo, Suite 350, Camarillo, California, United States

BNK Petroleum Inc. is a US focused energy company focused on finding and exploiting large oil and gas reserves. The Company owns and operates a focused oil property concentrated in the Southern SCOOP play/Ardmore basin of Oklahoma. BNK continues to aggressively target growth in production and reserves through the application of new and proven technologies by its team of experts. The Company has corporate office in Camarillo, California and a registered office in Vancouver, Canada.

BNK Petroleum Inc., an international energy company, is focused on the acquisition, exploration, and production of large hydrocarbon reserves, predominately unconventional. The strategic objective is to maximize the value of its U.S. shale oil assets, while looking for additional high-impact, large growth potential projects.  BNK is currently applying the knowledge its experienced technical team has gained on U.S. shale gas projects to maximize the potential of its producing assets.

Corporate Mission

BNK Petroleum, Inc. is an International energy company focused on the acquisition, exploration, and production of large oil and gas reserves, primarily unconventional in nature. The Companys mission is to promote the responsible development of oil and gas natural resources while pursuing sustainable and profitable growth through risk-balanced exploration, cost efficient development, and high margin production.  Responsible development results in the efficient exploration and production of oil and gas resources in a manner consistent with the protection of public health, safety and welfare, the prevention of waste, the protection of mineral owners correlative rights, and the prevention and mitigation of adverse environmental impacts.  BNK Petroleum, Inc. seeks to serve, solicit participation from, and maintain trusted working relationships with all those having an interest in the responsible development of oil and gas natural resources.

History

In March of 2008 Bankers Petroleum Ltd. announced its intent to spin off its United States based wholly owned unconventional exploration and production company which had been pursuing shale gas since 2005. The spin off was complete in July of 2008 with shareholders of Bankers receiving one share of BNK Petroleum Inc. for every ten shares held on the record date.  BNK Petroleum Inc. was among the early companies to recognize that improvements in horizontal drilling and completion technologies would enable the industry to develop vast new supplies of natural gas from unconventional reservoirs such as shales and tight sandstones. In the early years, as a part of Bankers Petroleum Ltd., BNK Petroleum Inc.s first project was in Palo Duro, Texas when it began leasing acreage in 2005. Soon after the Company commenced drilling science wells in Palo Duro, as well as making an additional strategic acquisition. In May, 2006 BNK Petroleum Inc. acquired all but one of Vintage Petroleums unconventional assets from Occidental Petroleum for $30 million - $20 million in Bankers stock, and $10 million in cash. In 2008 the Corporation sold its interests in certain oil and gas leases that were not part of the Tishomingo Field development in Oklahoma along with its Black Warrior Basin acreage in Mississippi and Alabama for $10 million, while retaining a right to earn back a 50% interest in the Black Warrior Basin acreage. The acreage has since expired.  With risk spread out into multiple projects. BNK Petroleum Inc., then still operating as part of Bankers Petroleum Ltd., began drilling wells in Oklahoma and New York. The Company drilled its first encouraging vertical well in Oklahoma in late 2006 and followed this by expanding its operations with four Woodford shale horizontal wells in the Carter/Johnson County project in 2007, now referred to as BNKs Tishomingo field. In 2008 the Company drilled and participated in a further 35 wells and exited the year with Proved and Probable reserves of 13.5 million barrels of oil equivalent.  In July of 2008 the Company was spun out of Bankers Petroleum Ltd. and began trading on its own as BNK Petroleum Inc. under the ticker symbol BKX on the Toronto Stock Exchange. The shareholders of Bankers Petroleum, Ltd., received one share of BNK Petroleum Inc. for every 10 shares of Bankers Petroleum Ltd.  In 2008 BNK looked for a way to grow the company utilizing its shale gas expertise it had acquired. As Management and the Board believed that shale gas could not only exist in North America, the Company decided to also look for projects in Europe. In late 2008 the company applied for its first European shale gas concessions in Poland. Work continued in other Countries and basins throughout 2008 and into 2009. The first Polish concessions were granted to BNK in March of 2009, with additional concessions being granted in 2010.  Also in 2009 the Company entered into a farmout agreement with RAG and Sorgenia whereby most of BNKs share of the first $25 million in gross exploration expenses on its first Polish project were paid by them. In 2009  In 2009 through 2011 the Company also acquired concessions totaling 2.4 million acres in Germany, but a few years later due to the difficult political environment and after extensive field work and further geological studies the acreage was eventually dropped. In 2011 the Company acquired concessions in Spain totaling approximately 395,000 acres. Alsothat year the company also tested the Caney Shale formation in its Tishomingo field by recompleting an existing Woodford shale well. In 2012 the Company drilled its first horizontal Chaney shale test well ehere 3 discrete intervals were tested. In Poland the Company drilled two vertical wells and worked on the permitting for the Environmental Impact assessments to allow for the drilling of a horizontal lateral out of the previously drilled Gapowo B-1 well.  In Spain the Company began the procedure of getting Environmental Impact assessments for the test wells that were planned.  In 2013 the Company sold its Tishomingo field assets to XTO Energy Inc. for approximately $147 million in cash while retaining its interest in the Caney and Upper Sycamore formations. The Company drilled 5 horizontal Caney wells that year.  In 2014 the company contuinued drilling 3 additional horizontal Caney wells refining both the placement of the lateral within the caney and the fracture completion technique. The Company year end exit rate was approximately 1,400 BOEPD and its year end proved and probable reserves grew to an estimated 37.4 million BOEs. In Poland the company drilled the horizontal leg and fracture stimulated the Gapowo B-1 well. Varying amounts of proppant were placed 9 of the 20 stages that were attempted to be fracture stimulated. Gas production averged between 200,000 to 400,000 cubic feet per day. Following the flow test, the well was shut-in for over four weeks to obtain a pressure build up and a numerical reservoir model was prepared. Even though a reservoir analysis showed encouraging results the Company decided in  early 2015 to relinquish the Bytow concession due to the difficult oil and gas price environment that was occuring in 2015. By the end of 2014 in Spain, the Corporation had submitted very extensive Environmental impact assessments to drill up to six wells in two of its concessions.  In 2015 th Company completed one Caney horizontal well that had been drilled in 2014. The average 2015 annual prioduction rate from the field was about 1,415 BOEPD and the year end reserve report estimated the proved plus probable reserves in the Tishomingo field increased to 41.4 million boe while the proved plus probable plus possible reserves were 69.3 million boe. In early 2016 the company announced that it had filed the paperwork necessary to relinquish its remaining concession in Poland.  

Operations

BNK Petroleum, Inc. is focused on the continued development and exploitation of its Tishomingo Shale oil property. BNK believes it can further increase its proven reserves by drilling step-out locations and thereby converting possible and undocumented reserves to proved and probable reserves. In addition, BNK continues the pursuit of high-impact, large growth potential projects. The strategic focus provides for a stable growing production and reserves platform that has a lot of growth potential while pursuing other large growth projects.

Shale Oil and Gas 

Shale sample in water- methane gas bubbles The existence of oil and natural gas in shale formations across the world has long been known by experts in the oil and gas industry. Shale is one of the earths most common sedimentary rocks. It is a fine-grain rock composed mainly of clay flakes and tiny fragments of other minerals. Shale can be an oil or gas reservoir, but only formations with certain characteristics are viable for exploration. Thermogenic (from the Greek word meaning ormed by heat) oil and gas forms when organic matter in shale is broken down at high temperatures, often created by burial deep underground.   Geologists have understood for decades that shale formations are the source of oil and natural gas from “conventional” production extracted from sand and carbonate rock formations. However, the extraction of these energy resources was considered technically impossible to recover because the shale formations lack the permeability (interconnected spaces between the rocks) that would allow the oil or natural gas to flow to a well.

Seismic Exploration

Seismic exploration is the search for commercially economic subsurface deposits of crude oil, natural gas and minerals by the recording, processing, and interpretation of artificially induced shock waves in the earth. Artificial seismic energy is generated on land by vibratory mechanisms mounted on specialized trucks. Seismic waves reflect and refract off subsurface rock formations and travel back to acoustic receivers called geophones. The travel times (measured in milliseconds) of the returned seismic energy, integrated with existing borehole well information, aid geoscientists in estimating the structure (folding and faulting) and stratigraphy (rock type, depositional environment, and fluid content) of subsurface formations, and determine the location of prospective drilling targets.

Seismic exploration includes the following processes and activities:

• Review existing seismic and available data.
• Acquire, process and interpret new 2D seismic across concessions.
• Drill science well to evaluate reservoir characteristics by acquiring data in drilling phase, open hole logging, core analysis and production tests.
• Drill second well with potentially a horizontal section for further analysis and production tests

Drilling Steps

• Extensive surveillance and investigation to study the potential well locations to ensure minimal impact on local communities.
• Once selected, the wellsite is cleared and water and electricity sources supply the wellsite.
• BNK does not dig pits to hold any effluent from the well. All effluent from the well is recovered in steel containers. Any pits which may be present on BNK wellsites are used to store fresh water only. In addition, the wellsite is built to ensure complete isolation from surface to the ground below via impermeable layers
• The drilling rig is then assembled on the wellsite and a full inspection is conducted to ensure it meets all specifications and safety standards.
• A conductor pipe is installed to approximately 10-30 m to ensure ground stability near the surface hole.
• The well is drilled to below any and all surface water aquifers. The surface casing is installed, cemented and pressure tested. Sophisticated tools are also run to ensure the cement is properly set in place. It is important to note that BNK does not utilize any toxic chemicals while drilling through any groundwater aquifers.
• Drilling again continues to the target formation either as a vertical well or deviated into a horizontal well. Once the well has finished drilling and open hole logs have been completed, a third casing string (production casing) is installed and cemented in similar fashion as the other two casing strings.  
• The drilling rig is disassembled and removed from the wellsite.
• Once the core and open hole logs have been fully analyzed and a hydraulic stimulation program is finalized, the equipment necessary to conduct the treatment are assembled on the wellsite.
• The hydraulic stimulation is conducted in order to create small fractures within the shale rock formation. These fractures are kept open by the proppant (usually sand) in order to provide pathways for natural gas to flow to the well
• Following short term testing, which may involve burning (flaring) some natural gas at the wellsite, the equipment is removed and the well is evaluated further to determine whether it should be connected to the natural gas distribution system for sale of natural gas.