Donnycreek Energy Inc. (“Donnycreek” or the “Company“) (TSX VENTURE:DCK) reports that it will be participating in the drilling of a new non-operated Montney well, immediately adjacent to Donnycreek’s original 16.75 section 50% working interest Kakwa land block. The operator of the well has advised that spud is expected mid-February 2013. Donnycreek will participate as to a 23.75% working interest (subject to a 5% GORR) and after drilling this new exploratory well, Donnycreek will earn a similar working interest in 2.25 sections of Montney rights, all contiguous with Donnycreek’s existing 50% Kakwa acreage. Once earned, Donnycreek will hold 235.5 gross (160 net) sections of Montney acreage in the greater Kakwa Wapiti area.
KAKWA MONTNEY 13 – 17 – 63 – 5 W6M
The first Donnycreek horizontal Kakwa Montney well at 13 – 17 – 63 – 5 W6M (the “13 – 17 Well“) has been on production since December 1, 2012. Various bottlenecks associated with downstream processing limited December 2012 production. However, since January 4, 2013, when the operator added additional well site equipment, the 13 – 17 Well has maintained relatively stable gross production at a restricted rate averaging approximately 3.8 mmcf/d of natural gas plus NGLs and 575 bbl/d well head condensate. Donnycreek has a 25% working interest plus 10% GORR on 75% working interest before payout; 50% working interest after payout in the 13 – 17 Well.
KAKWA MONTNEY 3 – 19 – 63 – 5 W6M AND 14 – 30 – 63 – 5 W6M
Donnycreek’s third horizontal Kakwa Montney well at 3 – 19 – 63 – 5 W6M (the “3 – 19 Well“) is being drilled from the same surface location as 14 – 30 – 63 – 5 W6M (the “14 – 30 Well“), Donnycreek’s second horizontal Kakwa Montney well. The 3 – 19 Well is on schedule to be finished drilling in mid-February 2013, with completion operations anticipated to be finished by mid-March 2013. The 14 – 30 Well has been successfully tied into downstream processing facilities. In January 2013, the 14 – 30 Well was flowed for a brief interval, however the extremely high condensate/natural gas ratio (in excess of 200 bbl/mmcf) could not be handled at the third party gas plant. Upon the completion of the 3 – 19 Well, the 14 – 30 Well and the 3 – 19 Well will each be equipped similar to the 13 – 17 Well such that well head condensate can be separated at location, allowing for flow of the natural gas and NGLs to the third party facility and well head condensate trucked directly to sales. Donnycreek holds a 50% working interest in the 3 – 19 and 14 – 30 Wells.
About Donnycreek Energy Inc.
Donnycreek is a Calgary-based public oil and gas company which holds 242 gross sections; 174 net sections of petroleum and natural gas rights, with an average working interest of approximately 72%, prospective primarily for Montney liquid rich natural gas resource development in its 3 core areas: Kakwa, Wapiti and Chicken, all of which are located in the Deep Basin area of west central Alberta.
Further information relating to Donnycreek is also available on its website at www.donnycreekenergy.com.
ON BEHALF OF THE BOARD OF DONNYCREEK ENERGY INC.
Malcolm F.W. Todd, Chief Executive Officer
ADVISORY ON FORWARD-LOOKING STATEMENTS: This news release contains certain forward-looking information and statements (“forward-looking statements“) within the meaning of applicable securities laws. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends” and similar expressions are intended to identify forward-looking statements. In particular, but without limiting the forgoing, this press release contains statements concerning the spud date of the new non-operated Montney well, the timing of the drilling and completion of the 3 – 19 Well, the equipping of the 14 – 30 Well and the 3 – 19 Well and the prospective zones for development on the Company’s lands.
Forward-looking statements are based on a number of material factors, expectations or assumptions of Donnycreek which have been used to develop such statements and information but which may prove to be incorrect. Although Donnycreek believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because Donnycreek can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. In particular, in addition to other factors and assumptions which may be identified herein, no assurances can be given respecting: whether the Company’s exploration and development activities respecting its prospects, including the wells discussed herein, will be successful or that material volumes of petroleum and natural gas reserves will be encountered, or if encountered can be produced on a commercial basis; the ultimate size and scope of any hydrocarbon bearing formations on its lands; that drilling operations on its lands, including the wells discussed herein, will be successful such that further development activities in these areas are warranted; that Donnycreek’s efforts to raise additional capital will be successful; that Donnycreek will continue to conduct its operations in a manner consistent with past operations; results from drilling and development activities will be consistent with past operations; the accuracy of the estimates of Donnycreek’s reserve volumes; the general stability of the economic and political environment in which Donnycreek operates; drilling results; field production rates and decline rates; the general continuance of current industry conditions; the timing and cost of pipeline, storage and facility construction and expansion and the ability of Donnycreek to secure adequate product transportation; future commodity prices; currency, exchange and interest rates; regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which Donnycreek operates; and the ability of Donnycreek to successfully market its oil and natural gas products.
Further, events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company, including, without limitation: changes in commodity prices; changes in the demand for or supply of the Company’s products; unanticipated operating results or production declines; changes in tax or environmental laws, royalty rates or other regulatory matters; changes in development plans of Donnycreek or by third party operators of Donnycreek’s properties, increased debt levels or debt service requirements; inaccurate estimation of Donnycreek’s oil and gas reserve and resource volumes; limited, unfavourable or a lack of access to capital markets; increased costs; a lack of adequate insurance coverage; the impact of competitors; and certain other risks detailed from time-to-time in Donnycreek’s public disclosure documents. Additional information regarding some of these risk factors may be found under “Risk Factors” in the Company’s Management’s Discussion and Analysis prepared for the year ended July 31, 2012. The reader is cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements contained in this news release are made as of the date hereof and Donnycreek undertakes no obligations to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
References to oil in this discussion include crude oil and natural gas liquids (“NGLs“). NGLs include condensate, propane, butane and ethane.