Trofagas Hidrocarburos SL, a wholly owned subsidiary of BNK Petroleum Inc., was awarded the Sedano oil and gas concession totaling about 86,000 acres 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 five separate basins.

Located in the Cantabrian Basin of Spain, the Sedano concession targets principally shale gas but also has some conventional oil and gas potential. The primary target is a Jurassic-aged shale that, based on available information, ranges in the most prospective areas from 100 to over 200 m (330 to 660 ft) in gross thickness at depths of about 2,500 to 4,500 m (8,250 to 14,850 ft).

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.

Certain minimum requirements in the concession terms include drilling a well and beginning to drill 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.

In Poland, a drilling rig has been contracted to begin drilling the first well on BNK’s Indiana concession blocks in the first quarter 2012. Casing and wellheads have been ordered and site construction is expected to start in early January.

The previously announced 2D seismic program is progressing with approximately 17% of the data already acquired. The program consists of about 407 km on the Saponis concessions and 333 km on the Indiana concessions. The objective of the seismic program is to further define basin structure and burial history as well as to aid in the selection of individual well locations.