Donnycreek Energy Inc.
TSX VENTURE : DCK

Donnycreek Energy Inc.

October 02, 2012 06:00 ET

Donnycreek Increases Private Placement Equity Financing to Include Flow-Through Shares

CALGARY, ALBERTA--(Marketwire - Oct. 2, 2012) -

THIS NEWS RELEASE IS NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES OF AMERICA TO UNITED STATES NEWSWIRE SERVICES OR UNITED STATES PERSONS

Donnycreek Energy Inc. ("Donnycreek" or the "Company") (TSX VENTURE:DCK) announces that the Company and a syndicate of agents led by RBC Capital Markets and including Paradigm Capital Inc. and Cormark Securities Inc. have increased the size of the recently announced brokered private placement from up to $25,000,000 to up to $29,000,000 of common shares of the Company ("Common Shares"), of which up to $4,000,000 of "flow-through" Common Shares within the meaning of the Income Tax Act (Canada) ("Flow-Through Shares") will be offered at a price of $1.90 per Flow-Through Share (the "Offering").

The Offering will be conducted on a "best efforts" basis and is subject to certain conditions including, but not limited to, the closing of the Company's acquisition of lands in the Deep Basin area of West Central Alberta from Deventa Land Corp. (the "Acquisition") and the receipt of all necessary approvals, including the approval of the TSX Venture Exchange. The shares issued pursuant to the Offering will be subject to a four month hold period from the date of closing of the Offering.

The proceeds from the issuance of Flow-Through Shares 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. Donnycreek will expend the proceeds from the Offering on drilling the Company's Kakwa block, advancing the Wapiti assets to be acquired in connection with the Acquisition towards commercial development and for general corporate purposes.

It is currently anticipated that the closing of the Offering and the Acquisition will occur on or about October 15, 2012.

Donnycreek is a Calgary-based oil and natural gas production company focused on horizontal, multi-stage frac development 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

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 Offering and the expected timing of the closing of the Offering and the Acquisition.

The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Donnycreek, including with respect to the closing dates of the Offering and the Acquisition, the use of proceeds of the Offering, 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 Offering and the Acquisition 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.

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 news 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)
    www.donnycreekenergy.com