CALGARY, ALBERTA--(Marketwire - Oct. 9, 2012) -
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Donnycreek Energy Inc. ("Donnycreek" or the "Company") (TSX VENTURE:DCK) reports that its second horizontal Montney well at Kakwa, Alberta (the "14-30 Well") has been successfully drilled to a measured depth of 4,678 metres including a horizontal leg that remained within the target interval for the entire 1,230 metre length. The 14-30 Well (DCK: 50% working interest) was drilled to total depth ("TD") seven days ahead of schedule and under budget, having reached TD 17 days faster than the Company's initial Montney discovery well at 13-17-63-5 W6M (the "13-17 Well").
The 14-30 Well has been logged, cased and equipped with a packer-style completion system that will facilitate a fourteen stage nitrogen-based frac with an option to frac an additional prospective interval above the primary target, also within the Montney. Contact Exploration Inc. (the "Operator") has advised the Company that it is planning to complete and test the 14-30 Well over the next 30 days. With successful test results, the 14-30 Well will be equipped for production and tied-in to the Company's newly constructed jointly owned gas transportation line by year-end. The Operator is preparing to drill another well (DCK: 50% working interest) from the same surface location as the 14-30 Well later this winter, and is also in the process of licensing additional locations (DCK: 50% working interest) on our jointly owned Kakwa acreage.
As previously announced on May 3, 2012, the 13-17 Well (DCK: 25% before payout; 50% after payout working interest) was successfully drilled and completed, demonstrating average gross production rates over the final 24 hours of production testing of 1,150 bbl/d condensate and 8,290 mscf/d gas, being 2,532 boe/d. Construction of the well site facilities and transportation line, connecting the 13-17 Well to Pembina's Musreau facility to the south has been finalized. The Operator has advised the Company that a series of outages at downstream liquids processing facilities in Alberta have caused delay in the start-up of the 13-17 Well, as new volumes of propane and butane temporarily cannot be accepted. The Operator is looking for alternative solutions for what they have advised is a short-term restriction and are confident the delay will not affect overall forecast economics that remain exceptional due to the strong condensate market and improving gas prices.
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 OFDONNYCREEK ENERGY INC.
Malcolm F.W. Todd, Chief Executive Officer
ADVISORY ON FORWARD-LOOKING STATEMENTS: This press release contains certain forward-looking information and 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 information or statements. In particular, but without limiting the forgoing, this press release contains statements concerning the completion and tie-in of the 14-30 Well, the timing of the drilling of an additional well, the licensing of additional locations on the jointly owned Kakwa acreage and the delay to the start-up of the 13-17 Well.
Forward-looking statements or information 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. In particular, in addition to other factors and assumptions which may be identified herein, no assurances can be given respecting: whether the Company's exploration and development activities respecting the Kakwa prospect 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 at Kakwa; that drilling operations in Kakwa will be successful such that further development activities in these areas are warranted; that Donnycreek's efforts to raise additional capital will be successful; that Donycreek 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 accuracy of the estimates of Donnycreek's reserve volumes; 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.
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: 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, royalty rates or other regulatory matters; 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 risk factors may be found under "Risk Factors" in the Company's Management's Discussion and Analysis prepared for the nine months ended April 30, 2012. The reader is cautioned not to place undue reliance on this forward-looking information. The forward looking statements contained in this press release are made as of the date hereof and Donnycreek undertakes no obligations to update publicly or revise any forward looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
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.
The reader is cautioned that test results are not necessarily indicative of long-term performance or of ultimate recovery.
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