CALGARY, ALBERTA–(Marketwired – Jan. 20, 2014) – Donnycreek Energy Inc. (“Donnycreek” or the “Company“) (TSX VENTURE:DCK) provides an operations update for its activities in the Wapiti and Kakwa areas.
Wapiti Drilling Operations
Donnycreek has drilled and evaluated its 3,800 metre stratigraphic Montney exploration well at 13-26-64-8 W6M (the “13-26 Well”). Based on petrophysical analysis, the Company kicked off and is drilling a 1,600 metre long horizontal well in the middle Montney from 13-26 to 1-26-64-8 W6M (the “1-26 Well”). The 1-26 Well will be completed with a hydraulic stimulation scheduled for early March 2014. The Company’s working interest in the 1-26 Well is 75%.
Donnycreek holds a 75% operated working interest in 328 gross (246 net) sections of Montney P&NG rights at Wapiti.
Kakwa Drilling Operations
Donnycreek has drilled and tested a sixth middle Montney natural gas well on its Kakwa block at 16-25-63-6 W6M (the “16-25 Well”). The initial gas rates and condensate yields from the 16-25 Well flow test are similar to the previous 5 middle Montney wells drilled on the Kakwa acreage. The 16-25 Well should be tied in and on production by mid-February 2014. The Company advises that production test results are not necessarily indicative of the long-term performance or of ultimate recovery.
The Company is currently conducting a fracture stimulation on its seventh middle Montney horizontal well at 16-17-63-5 W6M (the “16-17 Well”). Following a brief clean up period, and subject to results, the 16-17 Well should be tied in and brought on production by mid-February 2014.
An eighth middle Montney horizontal well is currently being drilled at 15-30-63-5 W6M (the “15-30 Well”). Upon rig release the drilling rig will remain on the same surface lease and commence drilling the Company’s ninth horizontal well at 102/14-30-63-5 W6M (the “102/14-30 Well”) which will be targeting the upper Montney. The program contemplates completing these wells consecutively once the 102/14-30 Well has finished drilling.
Kakwa Central Production Facility and Production
The Company’s Kakwa central gas compression and condensate stabilization facility at 16-7-63-5 W6M (the “16-7 Facility”) is now operational. The 16-7 Facility which has a design throughput of 15 mmcf/d of natural gas and 3,000 bbls/d of lease condensate is currently handling flush production rates of up to approximately 8 mmcf/d of natural gas and 1,200 bbls/d of lease condensate (4 mmcf/d and 600 bbls/d net) from the Company’s previously reported four wells; 13-17-63-5 W6M, 14-30-63-5 W6M, 3-19-63-5 W6M and 5-23-63-6 W6M. The recent drilling, completion and construction activity required production from the producing wells to be shut in during the majority of December 2013 and early January 2014.
As previously reported Donnycreek and its partners intend to employ one rig year round at Kakwa and are currently permitting a new multi-well pad at 7-19-63-5 W6M and plans to drill two horizontal middle Montney wells between March and July, 2014. The program contemplates completing these wells consecutively once the second well has finished drilling.
Donnycreek holds a 50% working interest in all lands, wells and facilities on a 16.75 section block in the Kakwa area, except for the 13-17-63-5 W6M Well where the Company holds a 25% working interest plus 10% GORR before payout, 50% working interest after payout.
Kakwa 14-2-63-6 W6M (the “14-2 Well”)
Adjoining the Company’s 16.75 section Kakwa block discussed above, Donnycreek holds a 23.75% working interest in two additional sections. Donnycreek participated in the 14-2 upper Montney natural gas well that was tied-in in the fourth quarter of 2013 but was shut in for substantially all of November and December 2013 due to the operator’s infrastructure restrictions. The 14-2 Well re-commenced production in January 2014 to help best determine a go-forward production strategy once a longer term performance profile has been developed and evaluated.
Donnycreek is a Calgary based public oil and gas company which holds approximately 438 gross (313 net) sections of petroleum and natural gas rights, with an average working interest of approximately 70%, prospective primarily for Montney liquid rich natural gas resource development all of which are located in the Deep Basin area of west-central Alberta.
ON BEHALF OF THE BOARD OF DONNYCREEK ENERGY INC.
Malcolm F.W. Todd, President and 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 foregoing, this news release contains statements concerning the timing of the hydraulic stimulation of the 1-26 Well, the timing of the tie in of and production from the 16-25 Well and the 15-30 Well, the drilling of the Company’s ninth horizontal well, the drilling and completion of two Kakwa horizontal wells from a multi-well pad and the primary prospective zone 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. 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: whether the Company’s exploration and development activities respecting its prospects 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 will be successful such that further development activities in these areas are warranted; 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 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; 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, 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 risks, expectations or assumptions and other factors may be found under in the Company’s Annual Information Form for the year ended July 31, 2013 and the Company’s Management’s Discussion and Analysis prepared for the year ended July 31, 2013. 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.
In this news release the calculation of barrels of oil equivalent (boe) is calculated at a conversion rate of six thousand cubic feet (6 mcf) of natural gas for one barrel (bbl) of oil based on an energy equivalency conversion method. Boes may be misleading particularly if used in isolation. A boe conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable to the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE.
Donnycreek Energy Inc.
President and Chief Executive Officer
(604) 684-4265 (FAX)