Donnycreek Reports Proved Plus Probable Reserves of 10.45 Million BOE at Kakwa
July 02 2013 - 8:35PM
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
the results of its interim independent reserve evaluation of the Middle Montney
reservoir on the Company's Kakwa, Alberta property at March 31, 2013 conducted
in accordance with the COGE Handbook by McDaniel and Associates Consultants Ltd.
("McDaniel"). The Company also provides an operational update on its Montney
properties in the Alberta Deep Basin.
Interim Reserve Evaluation Update
The report outlines the volume of natural gas and natural gas liquids and the
forecasted Net Present Value (NPV) of the non-conventional Middle Montney
reservoir on 6 of its 19 prospective gross sections in the Kakwa block based on
3 gross (1.25 net) producing natural gas wells and using McDaniel's April 1,
2013 forecast pricing and cost assumptions.
Company Reserve Evaluation Highlights:
------------------------------------------------------------------------
Total Proved plus Probable Reserves
------------------------------------------------------------------------
Natural Gas: 32.2 bcf 5.37 mmboe
Natural Gas Liquids: 5.08 mmbbls
------------------------------------------------------------------------
Total Proved plus Probable: 10.45 mmboe
------------------------------------------------------------------------
------------------------------------------------------------------------
Total Proved Reserves
------------------------------------------------------------------------
Natural Gas: 8.2 bcf 1.37 mmboe
Natural Gas Liquids: 1.32 mmbbls
------------------------------------------------------------------------
Total Proved: 2.69 mmboe
------------------------------------------------------------------------
------------------------------------------------------------------------
Net Present Value at 10% Discount ($,000) Before Tax
------------------------------------------------------------------------
Total Proved plus Probable: $126,380
------------------------------------------------------------------------
Total Proved: $36,256
------------------------------------------------------------------------
Operational Update
Kakwa, Alberta
The Company's current net average daily production from the Kakwa area Montney
natural gas wells is approximately 1.82 mmcf of natural gas and 315 bbls of
natural gas liquids which is primarily condensate. Two of the three natural gas
wells are on production while the third well is shut in until minor facility
restrictions are resolved. The net shut in production is approximately 1.25
mmcf/d of natural gas and 220 bbls/d of natural gas liquids which is primarily
condensate.
Production from the wells is still limited by high line pressure and by the
ability to handle the large volumes of lease condensate during periods of wet
weather limiting the accessibility of tank trucks to the sales terminal.
Completion operations are underway on the non-operated Upper Montney horizontal
well at 14-02-63-6 W6M which was drilled in early 2013. Test results from this
well (23.75% net working interest) are expected in August 2013.
Wellsite construction has begun for the drilling of a Montney stratigraphic
vertical well at 12-24-63-6 W6M. This well is being drilled to assist in the
evaluation of the remaining 13 sections of Montney rights on the Kakwa block.
Following the drilling of the vertical well a horizontal well is programmed to
be whipstocked from 12-24 to 5-23-63-6 W6M.
Two additional horizontal Kakwa Montney wells are planned to be drilled before
calendar 2013 year end.
Construction of the Company's Centralized Gas Gathering and Condensate Handling
Facility has begun and is expected to be completed by October 31, 2013. The
facility will help to provide for unrestricted production of up to 15 mmcf/d of
natural gas and 3,000 bbls/d of condensate allowing for the gas wells to produce
at their maximum potential.
Wapiti, Alberta
The Company has begun initial stages of evaluation on its Wapiti block which
consists of approximately 256 gross (193 net) sections of Montney rights. Plans
are underway to drill a stratigraphic Montney test well (with potential to drill
horizontally) and also to re-enter a wellbore with bypassed Montney pay and test
the reservoir potential before year end 2013.
Independent Undeveloped Deep Basin Land Evaluation
The Company engaged Seaton-Jordan & Associates Ltd. to complete an evaluation of
Donnycreek's undeveloped acreage at May 15, 2013, arriving at a value of
approximately $62.86 million.
The above valuations exclude the Company's holdings at Delia-Michichi valued at
$1,012,000 (Proved plus Probable PVBT 10%) as evaluated by GLJ Petroleum
Consultants Ltd. at July 31, 2012.
Working Capital
The Company currently has net working capital of approximately $13.5 million and
no debt.
About Donnycreek Energy Inc.
Donnycreek is a Calgary based public oil and gas company which holds 339 gross
(238 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 reserves, the timing of test
results from the non-operated Upper Montney horizontal well, drilling plans for
future vertical and horizontal Montney wells, the completion of the Company's
Centralized Gas Gathering and Condensate Handling Facility, facility handling
capacity and the primary prospective zone for development on the Company's
lands.
Statements relating to reserves are by their nature forward-looking statements,
as they involve the implied assessment, based on certain estimates and
assumptions, that the reserves can be profitably produced in the future. It
should not be assumed that the estimated future net cash flow shown below is
representative of the fair market value of the Company's properties. There is no
assurance that such price and natural gas liquids ("NGLs") and natural gas
reserves provided herein are estimates only and there is no guarantee that the
estimated reserves will be recovered. Actual crude oil, NGLs and natural gas
reserves may be greater than or less than the estimates provided herein.
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: 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 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 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. Natural gas liquids include condensate,
propane, butane and ethane.
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.
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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