Donnycreek Energy Inc.
TSX VENTURE : DCK

Donnycreek Energy Inc.

December 19, 2011 22:08 ET

Donnycreek Announces Increase in Size of Private Placement

CALGARY, ALBERTA--(Marketwire - Dec. 19, 2011) -

NOT FOR DISSEMINATION INTO THE UNITED STATES OF AMERICA OR DISTRIBUTION TO U.S. NEWSWIRE SERVICES

Donnycreek Energy Inc. ("Donnycreek" or the "Company") (TSX VENTURE:DCK) reports that due to the oversubscription of its previously announced private placement, the Company is increasing the size of its proposed private placement of a combination of "flow-through" common shares ("FT Share") within the meaning of the Income Tax Act (Canada) at a price of $0.85 per FT Share and non-flow-through common shares ("NFT Share") at a price of $0.75 per NFT Share (the "Offering"). The Company will now issue up to $6,000,000 of FT Shares and NFT Shares, subject to regulatory approval.

The proceeds from FT Share subscriptions received prior to December 31, 2011 will be used to incur eligible Canadian Exploration Expenses (as defined in the Income Tax Act (Canada)) prior to December 31, 2012 and which will be renounced to subscribers effective on or before December 31, 2011. The proceeds from FT Share subscriptions received after December 31, 2011 will be used to incur eligible Canadian Exploration Expenses (as defined in the Income Tax Act (Canada)) prior to December 31, 2013 and which will be renounced to subscribers effective on or before December 31, 2012.

The FT Shares and NFT Shares issued pursuant to the Offering will be subject to a four month hold from the date of issuance.

The Company will pay finder's fees to eligible persons on a portion of the Offering consisting of a cash payment equal to 6% and the issuance of finder's warrants ("Finder's Warrants") equal to 6% of the gross proceeds raised from applicable subscriptions in the Offering. Each Finder's Warrant will entitle the holder to acquire one additional NFT Share at an exercise price of $0.85 for six months following the date of issuance.

The Offering is subject to the approval of the TSX Venture Exchange.

Kakwa Area, Alberta

A portion of the proceeds raised from the private placement will be deployed on Donnycreek's large, 16 section (4,140 ha/10,240 acres) land block located in the prolific, liquids-rich Kakwa Montney gas trend.

Donnycreek Energy is an emerging Canadian oil and natural gas production company focused on horizontal, multi-stage frac development in the Deep Basin area of west central Alberta. The Company holds working interests in 28 gross sections (7,250 ha/17,920 acres); 20 net sections (5,180 ha/12,800 acres) prospective for Montney, Bluesky, Wilrich and Falher liquid rich resource development providing a potential current drilling inventory of in excess of 80 gross locations.

ON BEHALF OF THE BOARD OF DONNYCREEK ENERGY INC.

Malcolm Todd, President and 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 concerning the uses of the net proceeds of the private placement.

The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Donnycreek, including expectations and assumptions concerning timing of receipt of required regulatory approvals and third party consents and the satisfaction of other conditions to the completion of the private placement as well as expectations and assumptions concerning the success of future drilling activities.

By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Donnycreek's control, including 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 Donnycreek 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, Donnycreek 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.

Where amounts are expressed on a barrel of oil equivalent ("BOE") basis, natural gas volumes have been converted to oil equivalence at six thousand cubic feet per barrel. The term BOE may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet per barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. References to oil in this discussion include crude oil and natural gas liquids ("NGLs"). NGLs include condensate, propane, butane and ethane. References to gas in this discussion include natural gas.

This news release is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States or to or for the account or benefit of US persons (as such terms are defined in Regulation S under the United States Securities Act of 1933, as amended (the "U.S. Securities Act")), absent registration or an exemption from registration. The securities offered have not been and will not be registered under the U.S. Securities Act or any state securities laws and, therefore, may not be offered for sale in the United States, except in transactions exempt from registration under the U.S. Securities Act and applicable state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

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.

Contact Information

  • Donnycreek Energy Inc.
    Malcolm Todd
    President and Chief Executive Officer
    (604) 684-2356
    (604) 684-4265 (FAX)