BNK Petroleum Inc., Camarillo, Calif., (TSX: BKX) has reported that its wholly owned subsidiary Trofagas Hidrocarburos SL, has been awarded the Sedano oil and gas concession totaling approximately 86,000 acres located in the autonomous community of Castile and Leon, Spain. This concession brings the company's total acreage in Europe to about 3.9 million net acres, in 5 separate basins.
Located in the Cantabrian basin of Spain and like the previous Urraca concession, the Sedano concession targets principally shale gas but also has some conventional oil and gas potential. The primary target is a Jurassic-aged shale which, based on available information, ranges in the most prospective areas from 100 to over 200 meters in gross thickness at depths of about 2,500 to 4,500 meters. The Jurassic shale is a Type II Kerogen with Total Organic Carbon content ranging between 1.3 and 5.0%. The structure and stratigraphy are defined by numerous existing 2D seismic lines and dozens of wells previously drilled by other operators. Most of the previously drilled wells had oil and/or gas shows in the shale interval as well as in fractured carbonates both above and below the shale. These fractured carbonates are the conventional targets.
"We are pleased to have acquired another concession in what we believe is a basin with excellent shale gas potential," says Wolf Regener, president and CEO. "Our plan is to develop Spanish shale gas in an environmentally safe manner and create additional regional employment opportunities. We are looking forward to working with Spain's local, regional and federal governments to generate growth, while ensuring a balanced environmental approach. Being at the forefront of implementing the best available environmental technologies and methods is an integral part of the company's business plan. In the coming months we plan to expand our current open dialogue policy and communicate with all stakeholders to provide information and address any questions that may arise."
The concession terms include certain minimum requirements, which must be fulfilled by BNK to retain its interest. The more significant minimum requirements include the requirement to drill a well and begin drilling a second well in the first year, drilling one further well in the second year, and three wells in years three and four. All the timelines are subject to being able to obtain permits in a timely manner.
The company is in the process of acquiring the necessary permits for the drilling of its initial well, the RK-22, on Cub's 100% owned and operated Rusko-Komarovske licence.
Gross production from the Olgovskoye Licence averaged 11.42MMcf/d to KUB-Gas (3.5 MMcf/d net to Cub) during the month of February, representing approximately 40% of total production from all of Cub's licences.