BNK Petroleum Inc. (TSX: BKX) announces the sale by its indirect wholly owned subsidiary BNK Petroleum (US) Inc. to XTO Energy Inc., a subsidiary of Exxon Mobil Corporation (NYSE:XOM), of its Tishomingo Field, Oklahoma assets other than the Caney and upper Sycamore formations, for US$147.5 million has been closed.
The indebtedness under the Company's credit facility has been paid down to $100,000 with the proceeds from the sale, the Company's hedging positions have been closed and the balance of the $147.5 million sale price less an approximately $400,000 downward price adjustment, has been received by the Company. The Company's credit facility remains in place with the intent of creating future borrowing capacity from reserves associated with any successful Caney / Upper Sycamore wells in the Tishomingo Field.
Wolf Regener, President and CEO, stated: "We are pleased to announce the closing of this transaction, which puts us in a strong debt free financial position to advance our ongoing exploration and development efforts in Oklahoma and Europe. The sale was structured to preserve our rights in the relatively undeveloped Caney and Upper Sycamore formations in the Tishomingo Field, which we believe represent a promising opportunity to develop new oil reserves and production in an area in which we have a successful operating history. We now look forward to the results from our next planned Caney / Upper Sycamore wells, one of which is currently being drilled. We are also making progress on obtaining drilling permits in Europe and anticipate being able to drill a lateral out of our Gapowo B-1 well in Poland later this year."
Update on Caney Development
A drilling rig is currently drilling the Company's next Caney well, the Barnes 6-3H well. The well has about 1,700 feet of lateral drilled with another approximately 3,400 feet of lateral left to drill. The drilling rig has been contracted for two wells with the option for two additional wells.
Chief Financial Officer
Warren Nelson has stepped down as Chief Financial Officer of the Company. We wish Warren well in his future endeavours and appreciate his contributions to the Company.
Gary Johnson has been appointed interim CFO of the Company. Gary has been with the Company for two years as Financial and International Controller and has 15 years of accounting experience in the oil and gas industry. We look forward to Gary's contribution in this role.