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CALGARY, April 28, 2014 /CNW/ - BNP Resources Inc. ("BNP" or the "Corporation") would like to announce that the company does not have sufficient funds on hand to pay the SEDAR fees and year end financials, which are estimated to cost $100,000. As we will not be filing our financial results at the end of April and are unable to pay the listing fees, we anticipate that the shares of BNP Resources will be suspended from trading shortly after April 30th, 2014.
The following is a summary of our plans, path forward and new exploration prospects:
- Design Basis Memorandum and definitive cost estimate will be updated for the case of one well plus a disposal plant at Jensen. This alternative is estimated to cost $2 million. Two additional BNP Jensen wells can be brought online incrementally, reducing the capital cost of the project. Recycle ratios are 2.0 and greater after 2-3 wells are tied in to the disposal plant.
- An additional well drilled by a third party will be added to the BNP Jensen area development plan, subject to execution of a farm in agreement and a funding commitment. This well has the same freehold leaseholder as two of the existing BNP Jensen wells. This will potentially increase the number of wells to be tied in at the Jensen battery to 4 wellbores, plus one disposal well, subject to approval of the freehold leaseholder.
- The assets of the company going forward are as follows: (a) $10 million in tax losses, (b) AER deposits of $354,000, securing the abandonment of all company owned wellbores, (c) Jensen wellbores, (d) One gas well drilled but not tied in, (e) 50% interest in a gas well, losing $200 per month, (f) Desks in storage and (g) Four wells which have been abandoned but still require surface reclamation. There is also an $800,000 working capital deficiency.
- We will be working to market the corporate assets to a new management team looking for projects with near term production without drilling risk. Once a disposal plant is built, production can be added incrementally. We have the production engineers report, a design basis memorandum and definitive cost estimate prepared enabling new owners to fast track development of the project. Early estimates indicate 10-20 million barrels of original oil in place. A disposal well is the key to the economics at Jensen.
- Once the company is suspended from the TSX Venture Exchange, we still have the opportunity to sell the corporate assets to another public company in exchange for shares. Computershare has confirmed that we can still hold a meeting and vote on resolutions.
- Should we be able to sell the Jensen wellbores and obtain the return of our deposits from the AER, we would have the necessary funding to cover the year end costs and return to the markets as a publicly traded vehicle.
- The management of the company are actively following the Bakken oil development near Ferguson, Alberta and are gaining a better understanding of this play. The western Bakken (Exshaw) have a very low porosity and permeability, which limit the oil produced. Bakken wells drilled near Ferguson, Alberta, have a much higher porosity and permeability with recent wells having IP rates as high as 1500 barrels per day. The company have identified drilling prospects south of Ferguson, on the USA side of the border, subject to prior sale, subject to execution of a farm in agreement and subject to project funding.
Management will be working on the strategic alternatives necessary to resolve this short term suspension. The assets of the company offer good value to a new management team interested in low risk growth. Longer term, the best growth potential is with the high porosity, high permeability Bakken play south of Ferguson. We begin the search for such an investor interested in building a foundation with the low risk Jensen play, followed by growth by the drill bit, focused on the Bakken south of Ferguson, Alberta. This play is still in the early stages.
Our head office address will be changed to 6004 Elbow Drive SW, Calgary, Alberta, T2V-1J3, in order to reduce monthly operating costs.
We appreciate the patience of our creditors, shareholders and directors during these challenging times. Management and directors currently hold in excess to 30% of the shares of the company and share the concerns of all creditors and shareholders.
BNP is actively engaged in the exploration for and the development and production of oil and natural gas reserves. BNP's business strategy is to build sustainable and profitable per share growth through internally generated exploration and development drilling.
BNP has approximately 61,912,151 Class A shares issued and outstanding which trade on the TSX Venture Exchange under the symbols "BNX.A".
Neither the TSX Venture Exchange nor Its Regulation Services Provider (as the term Is defined In the Policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE: BNP Resources Inc.
For further information: James Evans Doody, President and CEO, BNP Resources Inc., Phone: 403.978.6376, E-mail: email@example.com