Donnybrook Energy Inc.
TSX VENTURE : DEI

Donnybrook Energy Inc.

October 03, 2011 18:28 ET

Donnybrook Announces Definitive Arrangement Agreement With Donnycreek Energy Inc.

CALGARY, ALBERTA--(Marketwire - Oct. 3, 2011) - Donnybrook Energy Inc. ("Donnybrook" or the "Company") (TSX VENTURE:DEI) is pleased to announce that it has executed a definitive arrangement agreement regarding the previously announced re-organization of its business components into two separately listed public corporations by the spin-out of certain non-core oil and gas assets and $300,000 in cash (the "Transferred Assets") to a new corporation, Donnycreek Energy Inc. ("Newco"), by means of a plan of arrangement pursuant to the Business Corporations Act (Alberta) (the "Arrangement").

Under the Arrangement, the Company will transfer the Transferred Assets to Newco in return for common shares of Newco ("Newco Shares") and the issuance by Newco to Donnybrook of a promissory note in the principal amount of approximately $2.19 million (the "Promissory Note"). Pursuant to the Arrangement, shareholders of Donnybrook will be entitled to receive 0.025 of a Newco Share for each common share of the Company outstanding as of the effective date of the Arrangement. The Arrangement will be structured as a return of capital for Donnybrook shareholders. In connection with the Arrangement, it is expected that Newco will also complete a private placement of Newco Shares for aggregate gross proceeds of approximately $2.4 million (the "Private Placement").

Further details of the Arrangement are set out in Donnybrook's news release dated August 25, 2011, which is available on Donnybrook's website at www.donnybrookenergy.ca and on SEDAR at www.SEDAR.com. The closing of the Arrangement is subject to a number of conditions including obtaining all required regulatory approvals.

Donnybrook has also received approval from the Court of Queen's Bench of Alberta to call a shareholders' meeting to approve the Arrangement and related transactions. The meeting will be held on November 4, 2011 at 10:00 a.m. at 1900, 520-3rd Avenue S.W., Calgary, Alberta. An information circular containing details on the transaction is expected to be mailed shortly and once mailed, will also be available on SEDAR at www.SEDAR.com.

Further information relating to the Company is also available on its website at www.donnybrookenergy.ca.

ON BEHALF OF THE BOARD OF DONNYBROOK ENERGY INC.

Malcolm F.W. Todd, Chief Executive Officer

FORWARD-LOOKING STATEMENTS

Certain information set forth in this news release contains forward-looking statements or information ("forward-looking statements"), including statements regarding the timing of the mailing of the information circular, the completion of the Arrangement, the completion of the Private Placement, the transfer of the Assets to Newco, the receipt of any shareholder and regulatory approvals for the Arrangement and the Private Placement and the number of Newco Shares outstanding upon completion of the Arrangement. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Donnybrook's control, including the risks of the Company not obtaining the required approvals to proceed with the Arrangement or the Private Placement, tax consequences of the Arrangement, the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, operational risks in exploration and development, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and the ability to access sufficient capital from internal and external sources. Although Donnybrook believes that the expectations in our forward-looking statements are reasonable, our forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward looking information. As such, readers are cautioned not to place undue reliance on the forward looking information, as no assurance can be provided as to future results, levels of activity or achievements. The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in our management's discussion and analysis and other documents available at www.sedar.com. Furthermore, the forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, Donnybrook does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.

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.

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