TSX ticker symbol; BKX

CAMARILLO, CA, Jan. 29, 2013 /PRNewswire/ - BNK Petroleum Inc. (the "Company") (TSX: BKX) is pleased to announce that its indirect wholly owned subsidiary BNK Petroleum (US) Inc. ("BNK US") has obtained a new US$76,000,000 credit facility ("new facility") from Morgan Stanley Capital Group Inc. ("MSCGI"). The initial commitment amount of the new reserve-based facility is US$61,000,000 with an additional uncommitted amount of US$15,000,000 available at the discretion of MSCGI.  A portion of the proceeds from the initial advance under the new facility were used to repay BNK US' existing Senior First Lien Secured Credit Facility, which had a fully drawn borrowing base of US$32,000,000.

After the repayment of the existing facility, the proceeds from the new facility are primarily intended to fund drilling of Sycamore/Caney and Woodford wells in the Tishomingo field.  A portion of the proceeds may also be used for general corporate purposes, including the Company's European activities.  The new facility will bear interest at a per annum rate equal to the greater of 1% and the then three month LIBOR plus an applicable margin ranging from 4% to 9% based on the ratio of outstanding borrowings to present value of proved developed producing reserves discounted at 9% ("PDP PV9"). The facility provides for principal amortization beginning July 1, 2013 through the maturity of the facility in five years.  Amortization is determined based on a formula of PDP PV9 to outstanding debt subject to a minimum monthly amortization of US$300,000 a month beginning in January 2014.

Commenting on the new facility, Wolf Regener, President and CEO said "We are pleased to have received this new, larger facility from MSCGI which will allow the Company to drill additional Sycamore/Caney shale wells and speed up the pace of development of its Woodford shale assets.  The test results from our Sycamore/Caney exploration wells have been very encouraging and we hope to be able to continue to improve on flow rates in future wells and create substantial value from these new intervals".

David Lazarus, Executive Director, Morgan Stanley & Co, stated "We are delighted to provide BNK with a creative solution to fund the development of its Oklahoma producing properties.  Highlighting Morgan Stanley Capital Group, Inc.'s extensive experience with innovative financing, hedging, physical supply and offtake solutions, this facility provides BNK with the development capital that it needs today, with the added benefit of automatic interest rate and amortization reductions as BNK's asset value increases."


In Germany, the Company has decided to stop its exploration activities in selected areas and intends to relinquish its five concessions in Thuringia, Saxony-Anhalt and Lower Saxony.  The geological work conducted over the last few years indicates an increased geological risk for unconventional oil and gas projects on these concessions.  This decision is the result of an internal ranking of all of the Company's international projects, which considers the geological risk and expected resource potential. The Company will concentrate its unconventional exploration efforts in Germany on its three remaining concessions in North Rhine Westphalia.

In Spain the Company has submitted five separate Environmental Impact Assessment ("EIA") documents for its exploration permits on its Sedano and Urraca concessions.  The EIA's are part of the process to obtain approval to drill exploration wells on these concessions.

In Poland, as was stated in the Company's January 13, 2013 press release, the Company is still awaiting approval for the re-entry of the Gapowo B-1 well to drill a horizontal leg.