CALGARY, ALBERTA--(Marketwired - Oct. 16, 2013) - Donnycreek Energy Inc. ("Donnycreek" or the "Company") (TSX VENTURE:DCK) reports that its fifth horizontal middle Montney natural gas well at Kakwa 5-23-63-6 W6M (the "5-23 Well") has been successfully completed and tested. Following the multistage fracture stimulation, the 5-23 Well (50% working interest) flowed on cleanup recovering approximately 36% of the estimated 47,000 barrels of water used in the slick water hydraulic stimulation. The 5-23 Well was flow-tested for approximately 170 hours. During the final 24 hours of flow-back, the 5-23 Well produced against anticipated gathering system pressure of approximately 2,000 kPa and averaged gross production rates of approximately 1,433 boe/d consisting of 815 bbl/d condensate and approximately 3,700 mscf/d natural gas (408 bbl/d condensate and 1,850 mscf/d natural gas, or 716 boe/d combined, net to Donnycreek).
The 5-23 Well is an exploration well drilled 2 miles west of the Company's existing Montney production. The success of this well proves condensate rich reserves exist deeper than originally predicted.
Facilities and pipeline work will begin immediately to tie-in production from the 5-23 Well into existing Company owned (50% working interest) infrastructure, including the 16-7-63-5 W6M compressor station and condensate stabilization facility (the "16-7 Facility"). Construction of the 16-7 Facility is underway and is on schedule for facility start-up in December 2013.
The Company advises that production test results are not necessarily indicative of the long-term performance or of ultimate recovery from the 5-23 Well.
Improvements in well design continue to be made and Donnycreek's sixth horizontal Montney Kakwa well (50% working interest) at 16-25-63-5 W6M (the "16-25 Well") has reached total depth. The 16-25 Well was spud on September 10, 2013 and reached a total measured depth of 4,680 metres in the middle Montney after 33.5 days of drilling, approximately 11 drilling days less than the other Company interest Kakwa horizontal Montney wells. Production casing is now being run in the 16-25 Well. Donnycreek expects completion operations to begin on the 16-25 Well in November 2013.
The Company's next 50% working interest horizontal middle Montney well is expected to spud in November 2013 from a surface location at 16-8-63-5 W6M with a bottom hole location at 16-17-63-5 W6M (the "16-17 Well"). Donnycreek and its partners plan to drill the 16-17 Well and 3 additional horizontal middle Montney wells in which Donnycreek has a 50% working interest through June 2014.
At Wapiti, the Company is awaiting final surface approval before licensing and spudding its previously reported 75% operated working interest stratigraphic Montney test well. The well will be drilled from a location at 13-26-64-8 W6M and will log and evaluate the Montney formation and is programmed to allow for the well to be kicked off horizontally. Donnycreek holds a 75% working interest in 365 gross sections of P&NG rights at Wapiti.
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.
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, 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 16-7 Facility start-up, the timing of rig release and commencement of completion operations for the 16-25 Well, the timing of the spud of the Company's 16-17 Well, the drilling of 3 additional horizontal middle Montney wells through June 2014, the drilling of a stratigraphic Montney test well at Wapiti 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 Revised Annual Information Form and Management's Discussion and Analysis prepared for the year ended July 31, 2012. 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.