BNK Petroleum Inc. Announces 3rd Quarter 2011 results

Calgary, Alberta, November 10 (ots/PRNewswire) -

All amounts are in U.S. Dollars unless otherwise indicated:

First Nine
Third Quarter Months
2011 2010 % 2011 2010 %
Earnings (Loss):
$ Thousands ($274) ($1,464) 81% $18 ($3,895) P
$ per common share $0.00 ($0.01) $0.00 ($0.04) P
assuming dilution
Funds from operations:
$ Thousands $3,330 ($808) $6,281 ($17,129)
$ per common share $0.02 ($0.01) $0.04 ($0.16)
Capital Expenditures $10,771 $7,639 41% $22,515 $23,556 (4)%
Average Production
(Boepd) 1,868 1,098 70% 1,503 1,114 35%
Average Product Price
per Barrel $46.81 $37.67 24% $46.79 $40.43 16%
Average Netback per
Barrel $28.27 $19.97 42% $27.56 $21.13 30%
9/30/2011 12/31/2010 9/30/2010
Cash and Cash Equivalents $41,957 $62,062 $10,115
Working Capital $46,154 $63,503 $(15,849)

BNK's President and Chief Executive Officer, Wolf Regener
commented:

"BNK incurred a net loss of $.3 million in the third quarter of
2011 on a 70% increase in average third quarter production and a 111%
increase in oil and gas revenues net of royalties compared to the
same period in 2010. Included in third quarter results were a $2.6
million unrealized currency loss due to the weakening of the Canadian
dollar relative to the US dollar and higher general and
administrative costs versus the third quarter of last year of $2.4
million. General and administrative expenses increased due to higher
professional fees (primarily legal fees in connection with corporate
restructuring incurred to significantly minimize the Company's short
and long term tax liability), increased salaries and wages, higher
travel costs and higher public relations costs.

Third quarter results benefited from other income of $1.4 million
from management fee income and $1.8 million from unrealized gains
resulting from financial hedges on crude oil and natural gas.

During the third quarter in Oklahoma the Company completed
fracture stimulations of 29 gross stages on two wells that it
operates and benefited from a successful fracture stimulation of 12
stages on a non-operated well. During the quarter fracture
stimulations began on a third well with 12 stages. We are very
pleased with the production we are achieving in the Woodford wells in
Oklahoma as production has been averaging approximately 2,200 barrels
as day in recent weeks.

Cash and working capital totaled $42 million and $46 million
respectively at September 30, 2011.

As a result of a review of its reserves effective August 1 of its
Tishomingo shale gas field the Company's US lender, Amegy Bank
recently increased the borrowing base against these assets to $32
million from $23.8 million. The Company has currently borrowed $20
million against this credit facility.

Through the first nine months of 2011 BNK earned net income of
$18,000 versus a loss of $3.9 million through the first nine months
of 2010. Oil and gas revenues net of royalties increased $5.8 million
or 60% aided by a 35% increase in average production per day and a
16% increase in average product prices.

In Poland the Company as Manager for Saponis Investments Sp z
o.o. completed drilling the third well (Starogard S-1) in August
2011. Completion of the Lebork S-1 well was initiated in
mid-September. The fracture stimulations were not successful in
placing the programmed quantities and concentrations of proppant. The
Company plans to use a new fracture stimulation design in the spring
of 2012 to re-stimulate and test the Lebork well, The Wytowno S-1 and
Starogard S-1 wells are scheduled to be completed in the spring of
2012 after the Lebork S-1 re-stimulation and results of the analysis
of the cored interval at Starogard are received.

On its wholly owned Indiana concessions (Bytow, Trzebielino and
Darlowo) operations must be commenced to drill three wells by
September 2012.In that regard a drilling rig has been contracted and
the Company is planning on beginning to drill the first well in the
first quarter of 2012.

In Germany the Company is continuing the bidding process for the
2D seismic operations on its concessions to provide the necessary
information for its drilling program and has initiated a public
relations campaign to communicate its commitment to the environment,
safety and open dialogue.

In Spain in addition to its Arquetu concession the Company has
recently been awarded two new concessions (Urraca in September
totaling 234,000 acres and Sedano this month totaling 86,000 acres).

In other areas of Europe (including France) the Company has made
concession applications and awaits their potential grant. The Company
also explores for shale gas opportunities in other areas of the
world."

THIRD QUARTER HIGHLIGHTS:

- Oil and gas revenues net of royalties increased 112%
- Average net-back per barrel increased 42% to $28.27 a barrel
- Cash and working capital at September 30, 2011 totaled $42
million and $46 million respectively
- Average daily production increased 70% to 1,868 boepd
- Capital expenditures totaled $10.8 million of which $8.4 million
was in Oklahoma, $1.6 million was in Poland and $0.8 in other countries.
- Acquired a new concession in Spain totaling 234,292 acres
- As manager of Saponis completed drilling its third well in
Poland

Third Quarter 2011 to Third Quarter 2010

Oil and gas revenues net of royalties totaled $6,537,000 in the
third quarter versus $3,080,000 in the third quarter of 2010. Oil
revenues increased $1,741,000 or 105% as oil production per day
increased 76% to 432boepd while average oil prices increased $12.05 a
barrel or 16% to $85.46 a barrel. Natural gas liquids (NGL's)
revenues increased $1,604,000 or 121% to $2,930,000 as NGL production
increased 45% to 675boepd while NGL prices increased 52% to $47.15 a
barrel. Natural gas revenues increased $895,000 or 108% to $1,720,000
as average natural gas prices rose $.23 a barrel to $4.10 while
natural gas production increased 2,245 metric cubic feet per day
(mcf/d) to 4,564 or 97%.

Other income of $1,423,000 consisted of management fees recorded
as operator of Saponis Sp z o.o.

Exploration and evaluation expenses totaled $258,000 in the
quarter and relates to pre-concession expenses related to new
ventures.

Production and operating expenses increased $616,000 or 58% to
$1,678,000 due to a 70% increase in production between quarters.

Depletion and depreciation expenses increased $876,000 or 97% to
$1,781,000 due to increased production, a higher reserve base on
which the reserve percentage is applied and increased depreciation.

General and administrative expenses increased $2,358,000 or 119%
due to higher legal costs primarily incurred in restructuring the
corporate entities, higher salary and wage costs, other professional
fees, and higher salary and wage expense.

Finance income increased to $2,226,000 from $1,151,000 or 93% due
to projected gains on the hedging of crude oil and natural gas.

Finance expense increased 541% or $2,371,000 due to a $2,594,000
unrealized currency loss in the third quarter due to the weakening of
the Canadian dollar relative to the US dollar.

FIRST NINE MONTHS 2011 VERSUS FIRST NINE MONTHS 2010 HIGHLIGHTS

- Average production per day increased 35% to 1,503boepd
- Oil and gas revenues net of royalties increased 60% to
$15,599,000 from $9,750,000 in the first nine months of 2010
- Average net-back per barrel increased 30% to $27.56 a barrel
- Earnings were $18,000 versus a loss of $3,895,000 through the
first nine months of 2010
- Cash from operations excluding changes in non-cash working
capital increased to a positive $374,000 from a negative $8,500,000
through the first nine months of 2010
- Capital expenditures totaled $22,515,000 versus $23,556,000 in
2010 (including the $12,000,000 expenditure in the second quarter of
2010 to purchase the overriding royalty and the net profits interest
from its former lender which was recorded as an increase in property,
plant & equipment).

Oil and gas revenues net of royalties totaled $15,599,000 through
the first nine months of 2011 versus $9,750,000 through the first
nine months of 2010. Oil revenues increased $2,986,000 or 65% as oil
production per day increased 39% to 306 boepd while average oil
prices increased $14.14 a barrel or 18% to $90.74 a barrel. Natural
gas liquids (NGL's) revenues increased $2,702,000 or 56% to
$7,536,000 as NGL production increased 23% to 597boepd while NGL
prices increased 27% to $46.25 a barrel. Natural gas revenues
increased $1,214,000 or 42% to $4,072,000 as average natural gas
prices declined $.11 an mcf to $4.15 while natural gas production
increased 1,142 metric cubic feet per day (mcf/d) to 3,598 or 46%.

Other income totaled $3,214,000 through the first nine months of
2011 versus none in 2010 and was the result of $2,038,000 in
management fee income and $1,176,000 from the sale of seismic data in
Oklahoma.

Exploration and evaluation expenses declined $2,433,000 in the
comparative nine month periods due to increased Black Warrior
write-offs through the first nine months of 2010.

Production and operating expenses increased 29% commensurate with
the 35% increase in production.

Depletion and depreciation expense increased $1,645,000 or 62%
due to increased production, a higher reserve base on which the
depletion rate is applied and increased depreciation primarily on
European assets.

General and administrative expenses increased $4,528,000 in the
comparative periods due to higher legal costs, mainly due to
restructuring ,and other professional fees (management fees,
accounting and public relations fees), higher salary and wage and
recruiting expenses as well as higher travel costs.

Finance income increased $867,000 or 69% due to higher unrealized
gains resulting from the financial hedging of crude oil and natural
gas.

Finance expense increased 14% to $2,026,000 as increased foreign
exchange losses of $1,265,000 due to the weakening of the Canadian
dollar versus the US dollar more than offset lower interest expense
of $645,000 due to lower debt levels and lower borrowing rates.

Key Financial and operating data follow.

BNK PETROLEUM INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited, Expressed in Thousands of United States Dollars)
September 30, December 31,
2011 2010
Assets
Cash and cash
equivalents $ 41,957 $ 62,062
Trade and other
receivables 19,450 18,398
Deposits and
prepaid expenses 2,284 757
Fair value of
commodity contracts 1,267 322
Total current assets 64,958 81,539
Non-current assets
Property, plant and
equipment 147,002 132,413
Exploration and
evaluation assets 7,757 2,345
Fair value of
commodity contracts 826 -
Total non-current assets 155,585 134,758
Total Assets $ 220,543 $ 216,297
Liabilities
Trade and other
payables $ 18,804 $ 18,036
Total current liabilities 18,804 18,036
Non-current liabilities
Loans and
borrowings 19,604 19,486
Asset retirement
obligations 1,709 1,730
Warrants 80 205
Total non-current liabilities 21,393 21,421
Equity
Share capital 247,207 246,240
Contributed surplus 14,032 11,511
Deficit (80,893) (80,911)
Total equity 180,346 176,840
Total Equity and Liabilities $ 220,543 $ 216,297

BNK PETROLEUM INC.
CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE
INCOME (LOSS)
(Unaudited, expressed in Thousands of United States
dollars, except per share amounts)
First Nine
Third Quarter Months
2011 2010 2011 2010
Oil and natural
gas revenue, net
of royalties $ 6,537 $ 3,080 $ 15,599 $ 9,750
Gathering income 404 464 1,354 2,406
Other income 1,423 - 3,214 -
8,364 3,544 20,167 12,156
Exploration and
evaluation
expenditures 258 1,774 1,593 4,026
Production and
operating expenses 1,678 1,062 4,291 3,322
Depletion and
depreciation 1,781 905 4,299 2,654
General and
administrative
expenses 4,338 1,980 10,064 5,536
8,055 5,721 20,247 15,538
Operating income
(loss) 309 -2,177 -80 -3,382
Finance income 2,226 1,151 2,124 1,257
Finance expense -2,809 -438 -2,026 -1,770
Net finance income
(expense) -583 713 98 -513
Net income (loss)
and comprehensive
income (loss) $ -274 $ -1,464 $ 18 $ -3,895
Net income (loss)
per share
Basic
and
Diluted $ 0 $ -0.01 $ 0 $ -0.04
BNK Petroleum Inc.
Third Quarter 2011
($000 except as noted)
First Nine
3rd Quarter Months
2011 2010 2011 2010
Oil revenue before
royalties $ 3,396 1,654 7,591 4,605
Gas revenue before
royalties 1,720 825 4,072 2,858
NGL revenue before
royalties 2,930 1,326 7,536 4,834
Oil and Gas revenue 8,046 3,805 19,199 12,297
Cash Flow provided (used) by
operating activities 1,201 -1,409 374 -8,512
Capital expenditures -10,771 -7,639 -22,515 -23,556
Cash proceeds of stock options
exercised 192 183 621 183
Repayment of long-term
debt - - - -7,427
Statistics:
First Nine
3rd Quarter Months
2011 2010 2011 2010
Average natural gas
production (mcf/d) 4,564 2,319 3,598 2,456
Average NGL production
(Boepd) 675 466 597 485
Average Oil production
(Bopd) 432 245 306 220
Average production
(Boepd) 1,868 1,098 1,503 1,114
Average natural gas price
($/mcf) $4.10 $3.87 $4.15 $4.26
Average NGL price
($/bbl) $47.15 $30.95 $46.25 $36.48
Average oil price
($/bbl) $85.46 $73.41 $90.74 $76.60
Average price per
barrel $46.81 $37.67 $46.79 $40.43
Royalties per barrel 8.78 7.18 8.77 8.38
Operating expenses per
barrel 9.76 10.52 10.46 10.92
Netback per barrel $28.27 $19.97 $27.56 $21.13

The information outlined above is extracted from and should be
read in conjunction with the Company's unaudited financial statements
for the three and nine months ended September 30, 2011 and the
related management's discussion and analysis thereof, copies of which
are available under the Company's profile at http://www.sedar.com.

Non-GAAP Measures

Funds from operations and funds from operations per common share
are not defined by GAAP in Canada and are referred to as non-GAAP
measures. Funds from operations are based on cash flow from operating
activities as per the statement of cash flows before changes in
non-cash working capital. Funds from operations per common share is
calculated based on the weighted average number of common shares
outstanding consistent with the calculation of net earnings (loss)
per share.

For more details on non-GAAP measures, refer to BNK's
"Management's Discussion and Analysis.

Non-IFRS 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-IFRS 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-IFRS measures referred to above do not have any standardized
meaning prescribed by IFRS 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
proposed timing and expected results of exploratory work,
commencement of drilling, and concession applications.
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 required
permits and approvals, funding from co-venturers and the necessary
labor and equipment will be obtained, provided or available, as
applicable, when required. Forward looking information is subject to
a variety of risks and uncertainties and other factors that could
cause plans, estimates, timing 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 permits, approvals, equipment and/or funding are delayed or
available only on terms that are not acceptable to the Company,
political and currency risks and other risks associated with
exploration and development of oil and gas projects, including those
set forth in the Company's management's discussion and analysis and
annual information form filed under the Company's profile on
http://www.sedar.com.

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 gas properties and concessions in the United States, Poland,
Germany and Spain. 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:

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

(BKX.)

ots Originaltext: BNK Petroleum Inc
Im Internet recherchierbar: http://www.presseportal.de

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