Donnycreek Provides Operations Update
May 23 2013 - 8:00AM
Marketwired Canada
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) reports
that it currently has 322 gross (226 net) sections of Montney lands in the
greater Kakwa / Wapiti / Chicken area of Alberta and is producing approximately
640 boe/d (54% liquids) from two of its three Kakwa Montney gas wells. The third
well will be brought on-stream as facility limitations are alleviated during the
summer and further optimized with the completion of the 16-07-63-5 W6M
centralized gas handling facility in Q4 2013. The facility will have capacity to
handle 15 mmcf/d of gas and 3,000 bbls/d of condensate and will be capable of
handling production volumes through 2014.
KAKWA MONTNEY 13-17-63-5 W6M
The first Donnycreek horizontal Kakwa Montney well at 13-17-63-5 W6M (the "13-17
Well") has been on production since January 2013. Various facility bottlenecks
associated with downstream processing has limited production. However, in the
first 90 days of production the 13-17 Well had gross production at a restricted
rate averaging approximately 2.4 mmcf/d of natural gas plus NGLs and 338 bbls/d
wellhead condensate against 900 psi pipeline pressure. In the last 30 days of
production, the well had gross production at a restricted rate averaging
approximately 1.2 mmcf/d of natural gas plus NGLs and 161 bbls/d wellhead
condensate with cumulative to date production of 268 mmcf and 37.2 mbbls.
Donnycreek has a 25% working interest plus 10% GORR on 75% working interest
before payout; 50% working interest after payout in the 13-17 Well.
KAKWA MONTNEY 14 - 30 - 63 - 5 W6M
Donnycreek's second horizontal Kakwa Montney well at 14 - 30 - 63 - 5 W6M (the
"14-30 Well") has been on production since May 6, 2013 with the first ten days
of restricted production averaging 2.5 mmcf/d of natural gas and 490 bbls/d of
condensate with a condensate to gas ratio of 196 bbls/mmcf against 900 psi
pipeline pressure. Donnycreek holds a 50% working interest in the 14-30 Well.
The production from the 13-17 Well and the 14-30 Well is constrained due to high
pipeline pressures until Q4 2013 which will be alleviated when the centralized
gas facility is on-stream.
KAKWA MONTNEY 3-19-63-5 W6M
Donnycreek's third horizontal Kakwa Montney well at 3-19-63-5 W6M (the "3-19
Well") was produced for three days but facility constraints has resulted in the
well being shut in. The Corporation expects similar production results as its
first and second Montney wells. Donnycreek holds a 50% working interest in the
3-19 Well.
KAKWA MONTNEY 14-02-63-6 W6M
The Company's 14-02-63-6 W6M well (the "14-02 Well") has reached total depth and
is expected to be completed post break-up. Donnycreek is participating as to a
23.75% working interest (subject to a 5% GORR) and after drilling this new
exploratory well, Donnycreek will earn a similar working interest in 2.25
sections of Montney rights, all contiguous with Donnycreek's existing 50% Kakwa
acreage.
2013 DRILLING ACTIVITY
Donnycreek expects to spud its 5th Montney well in June, its 6th Montney well in
August and its 7th Montney well in October of this year.
About Donnycreek Energy Inc.
Donnycreek is a Calgary-based public oil and gas company which holds 326 gross
(229 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 in its 3 core areas: Kakwa, Wapiti and Chicken,
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, 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 press release contains statements concerning the timing of the 3-19 Well
being brought on-stream, the completion of the centralized gas handling
facility, facility capacity, production from the 3-19 Well, alleviation of
production constraints, the completion of the 14-02 Well, the spudding of the
Company's 5th, 6th and 7th Montney wells 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. 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 its prospects, including the wells discussed herein, 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, including the wells discussed herein,
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 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 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 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.
The Company advises that initial production results from the wells disclosed
herein are not necessarily indicative of long-term performance or of ultimate
recovery.
In this press 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. References to oil in this discussion
include crude oil and natural gas liquids ("NGLs"). NGLs include condensate,
propane, butane and ethane.
FOR FURTHER INFORMATION PLEASE CONTACT:
Donnycreek Energy Inc.
Malcolm Todd
President and Chief Executive Officer
(604) 684-2356
(604) 684-4265 (FAX)
www.donnycreekenergy.com
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