BNK Petroleum Inc. announces the closing of US $30 million credit facilities

BNK Petroleum Inc. announces the closing of US $30 million credit facilities

BNK Petroleum Inc. announce that it has closed its previously announced US $30 million credit facilities (Capital One Facilities) with the Energy Banking division of Capital One, N.A. through its wholly owned subsidiary BNK Petroleum (US) Inc.

The Facility A is a senior revolving credit facility secured by a US $23 million certificate of deposit which was funded by a loan from Bankers Petroleum Ltd. (Bankers, TSX: BNK) pursuant to a subordinated loan agreement (the Subordinated Loan) between Bankers and the Company. The Facility B is a US $50 million senior secured revolving credit facility subject to a borrowing base and secured by the Company’s oil and gas properties in Carter and Johnston counties, Oklahoma. The initial borrowing base was determined as US $7 million. The borrowing base will be determined at least semi-annually on April 1 and October 1. Any increase in the borrowing base will result in the release of all or a part of the US $23 million cash deposit on a dollar for dollar basis and the reduction of the Facility A in an amount equal to the borrowing base increase. The amount available under Facility B will then be increased to the new borrowing base.

The Facility A bears interest at 1% over the interest rate paid on the underlying deposit. The Facility B bears interest at US prime rate plus a margin which ranges from 0 basis points (bps) to 25 bps based on the facility usage. In addition the Company pays commitment fees ranging from 25 bps to 50 bps on the unutilized portion of the Facility B. The Company also pays a 100 bps facility fee on the initial borrowing base and 50 bps on any subsequent increase in the borrowing base.

The Capital One Facilities have no scheduled repayment terms and mature in three years from closing unless terminated earlier by the Company without penalty.

The Company intends to use the proceeds from the Capital One Facilities in the continued development of its Tishomingo Field in Ardmore County, Oklahoma and general working capital purposes.

BNK also is pleased to announce that the NGPL meter upgrade has been completed and production from the shut in wells has been restored.

BNK Petroleum Inc. is a California based oil and gas exploration and production company focused on finding and exploiting large oil and gas resource plays. The Company holds an average of 50% interest in the Tishomingo gas field in Oklahoma and varied interests in three other areas in the Northern and Central regions of the United States, where it is currently pursuing the exploration, development and production of shale and tight sand gas plays. The Company’s shares are traded on the Toronto Stock Exchange under the stock symbol BKX.

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