CALGARY, ALBERTA–(Marketwired – Oct. 14, 2014) – Donnycreek Energy Inc. (“Donnycreek” or the “Company“) (TSX VENTURE:DCK) reports that its natural gas production has resumed at its 50% working interest Kakwa property in west central Alberta following an 18 day pipeline maintenance shut down by TransCanada. Total net production to Donnycreek’s interest is currently approximately 2,000 boe per day of which approximately 48% is condensate.
Hydraulic fracturing stimulation operations are expected to take place over the next 4 weeks on 3 previously drilled horizontal Montney wells awaiting completion. Two of these wells drilled in the previous quarter are scheduled to be on production by calendar year-end 2014 and the third well is scheduled for production startup in calendar Q2 2015 following expansion of the gas plant and gas gathering infrastructure.
Drilling operations are continuing with two drilling rigs, one drilling a horizontal Montney development well (50% WI) and the second drilling a horizontal Montney delineation well (50% WI) on the Company’s land block west of the existing Kakwa development area. These wells bring the total number of wells on the Kakwa land block to 16 wells (net 7.48).
In August 2013, a proposed class action lawsuit (“lawsuit“) was filed in the Alberta Court of Queen’s Bench against Donnycreek, Donnybrook Energy Inc. (“Donnybrook“), and certain of their respective directors and officers. The action contains various allegations relating to the plan of arrangement involving Donnycreek and Donnybrook completed in November 2011, the transfer of certain assets from Donnybrook to Donnycreek, a related private placement and other related transactions. As part of its strategy to bring this matter to a final resolution in an expeditious manner, the Company intends to agree to certify the lawsuit as a class proceeding and to proceed directly to trial rather than attempting to determine the matter on a summary basis. The Company firmly believes that the allegations in the class action are without merit and the Company will be vigorously defending the lawsuit.
Donnycreek is a Calgary based public oil and gas company which holds approximately 439 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 exploration and development 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.
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 hydraulic fracturing stimultation operations, the timing to bring on further production, drilling operations, the lawsuit and the primary prospective zone of exploration and development on the Company’s lands. Such forward-looking statements are provided for the purpose of providing information about management’s current expectations and plans relating to the future. Investors are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions.
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. Readers are cautioned that the foregoing list of factors is not exhaustive. 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 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.
Chief Operating Officer