BNK Petroleum Inc. has announced that its indirect wholly-owned subsidiary BNK Petroleum (US) Inc. has obtained an increase in its Borrowing Base to US 30,000,000 on its US 75,000,000 revolving line of credit (“credit facility”) from BOK Financial (“BOKF”).
The Company also announced that it plans to commence its 2018 drilling program in January.
Commenting on the news, Wolf Regener, President and CEO, said, “Following up on the success of our 2017 drilling program, we are now finalizing plans for our 2018 drilling program, which will be funded through existing cash flow and the increased credit available under our credit facility.
We are currently finalizing agreements with a drilling rig contractor to begin drilling the first of our next two wells, the Glenn 16-2H, in January. We have retained the talents of the team that performed so well in our 2017 program and we are looking forward to the continued success of our drilling campaign, which we believe will continue to increase our cash flow and reserves.”
“We are very pleased to have BOKF’s continued support as we continue to develop our Tishomingo project. This increase in our borrowing base supports our reserve growth initiatives.
Additionally, we have engaged financial advisors, Macquarie Capital Markets Canada Ltd. and KLR Group, LLC to provide and review alternatives for the Company that may include drilling funds, joint ventures and other means by which we can accelerate the growth of our reserves and shareholder value.”
The increase of US 5,000,000 in available borrowing capacity under the credit facility is intended to be used for the further development of the Company’s Tishomingo field in Oklahoma. The interest rate on the facility is calculated based on usage under two separate tranches.
The first tranche bears interest at a per annum rate equal to an elected LIBOR rate plus a margin ranging from 3% to 4%, depending on the borrowing base utilization amount. In connection with this borrowing base increase, the first tranche has been increased from US 20,000,000 to US 25,000,000.
The second tranche will bear interest at a per annum rate equal to the elected LIBOR rate plus 6%, which remains at US 5,000,000 of the borrowing base.
The facility provides for interest only payments until the June 2022 maturity date, with bi-annual scheduled reserve redeterminations.
About BNK Petroleum Inc.