BNK Petroleum Closes On Woodford Sale

Closed the sale of assets in the Tishomingo field in Oklahoma to XTO Energy Inc., a subsidiary of Exxon Mobil Corp.

BNK Petroleum Inc. (TO: BKX) closed the previously announced sale by its indirect wholly owned subsidiary, BNK Petroleum (US) Inc., to XTO Energy Inc., a subsidiary of Exxon Mobil Corp. (NYSE: XOM), of assets in the Tishomingo field, Okla., for US $147.5 million.

The indebtedness under the company’s credit facility has been paid down to US $100,000 with the proceeds from the sale, the company’s hedging positions have been closed and the balance of the sale price less a US $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.

The sale puts the company in a strong debt free financial position to advance its ongoing exploration and development efforts in Oklahoma and Europe. The sale was structured to preserve the company’s rights in the relatively undeveloped Caney and Upper Sycamore formations in the Tishomingo field, which the company thinks represent a promising opportunity to develop new oil reserves and production in an area in which it has a successful operating history. The company is now looking forward to the results from its next planned Caney / Upper Sycamore wells, one of which is currently being drilled. The company is also making progress on obtaining drilling permits in Europe and anticipates being able to drill a lateral out of its Gapowo B-1 well in Poland later this year, said Wolf Regener, BNK’s president and CEO, in the release.

BNK Petroleum Inc. is an independent energy company focused on the acquisition, exploration, development, production, and marketing of oil and gas reserves. The company is headquartered in Camarillo, Calif.