Donnycreek Announces First Quarter Results & Provides Kakwa and
Wapiti Field Operations Update
CALGARY, ALBERTA--(Marketwired - Dec 20, 2013) - Donnycreek
Energy Inc. ("Donnycreek" or the "Company") (TSX-V: DCK) reports
that it has filed its condensed interim financial statements and
related Management's Discussion and Analysis ("MD&A") for the
three months ended October 31, 2013 with 2012 comparatives on
SEDAR. Selected financial and operational information is outlined
below and should be read in conjunction with Donnycreek's condensed
interim financial statements for the three months ended October 31,
2013 and its audited financial statements and related MD&A for
the year ended July 31, 2013 which are available for review at
www.sedar.com and on our website at www.donnycreekenergy.com.
FINANCIAL AND
OPERATING HIGHLIGHTS
|
Three Months Ended |
|
31-Oct-13 |
31-Jul-13 |
31-Oct-12 |
| Petroleum and natural gas sales |
$
2,447,769 |
$
2,899,982 |
$
77,841 |
| Funds flow from operations(1) |
$
1,545,501 |
$
1,726,323 |
$
(48,969) |
|
Basic ($/share) |
$
0.03 |
$
0.04 |
$
(0.01) |
|
Diluted ($/share) |
$
0.03 |
$
0.04 |
$
(0.01) |
| Net income (loss) |
$
396,224 |
$
551,137 |
$
(1,920) |
|
Basic ($/share) |
$
0.01 |
$
0.01 |
$
(0.01) |
|
Diluted ($/share) |
$
0.01 |
$
0.01 |
$
(0.01) |
| Capital expenditures |
$
7,290,529 |
$
4,937,074 |
$
13,156,289 |
| Working capital |
$
23,606,388 |
$
27,781,356 |
$
24,522,259 |
| Total assets |
$ 67,176,274 |
$ 65,907,337 |
$ 46,559,397 |
| Operating |
|
|
|
| Average daily production (sales) |
|
|
|
|
Crude oil (bbls/d)(2) |
221 |
250 |
0.1 |
|
Natural gas (mcf/d) |
1,432 |
1,471 |
204 |
|
NGLs (bbls/d) |
12 |
2 |
2 |
|
Total (boe/d) |
472 |
498 |
36 |
| Average realized price |
|
|
|
|
Crude oil ($/bbls)(2) |
$
95.67 |
$
99.89 |
$
81.55 |
|
Natural gas ($/mcf) |
$
2.90 |
$
3.76 |
$
2.41 |
|
NGLs ($/bbls) |
$ 95.01 |
$ 76.22 |
$ 91.94 |
| Netback ($/boe) |
|
|
|
|
Petroleum and natural gas sales |
$
56.37 |
$
63.33 |
$
23.50 |
|
Royalties |
$
(2.98) |
$
(2.42) |
$
(3.11) |
|
Operating expenses (incl. transportation) |
$ (12.59) |
$ (17.48) |
$ (8.57) |
| Operating netbacks(3) |
$ 40.80 |
$ 43.43 |
$ 11.81 |
| Share Information |
|
|
|
| Common shares outstanding |
51,310,350 |
51,310,530 |
40,785,037 |
| Weighted average common shares outstanding |
51,310,350 |
42,961,889 |
24,167,780 |
| Notes: |
|
(1) |
Funds flow from operations are petroleum and natural gas revenue
and interest income less producing and operating expenses,
royalties, exploration and evaluation expenditures and general and
administrative expenses. |
|
(2) |
References to crude oil include condensate. |
|
(3) |
Operating netbacks are determined by deducting royalties,
production expenses and transportation and selling expenses from
petroleum and natural gas revenue. |
Fiscal 2014 Capital Budget
Donnycreek's updated
capital budget for fiscal 2014 allocates approximately $49.2
million to its Kakwa and Wapiti properties which are expected to be
funded from cash on hand and funds flow from operations. In
addition to the operations outlined below at Kakwa and Wapiti, the
updated fiscal 2014 budget includes the drilling of 5 additional
Montney wells at Kakwa to bring the total number of wells drilled
to 12 gross (5.5 net) on our 18.75 gross (8.75 net) section Kakwa
land block by July 31, 2014.
Operations Update - Kakwa
Donnycreek's seventh
horizontal Montney well spud on November 10, 2013 targeting the
middle Montney formation 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").
The 16-17 Well (50% working interest) has been drilled to a total
measured depth of 5,191 metres from the same drilling pad as our
discovery well at 13-17-63-5 W6M and completion operations are
expected to commence in January 2014.
Completion
operations are underway at Donnycreek's sixth horizontal middle
Montney well (50% working interest) at 16-25-63-6 W6M (the "16-25
Well"). The Company expects to flow the well back in the next two
weeks.
The recently
completed and tested 5-23-63-6 W6M horizontal middle Montney well
(the "5-23 Well") (results reported - October 16, 2013) (50%
working interest) is tied-into existing Company owned
infrastructure, including the 16-7-63-5 W6M compressor station and
condensate stabilization facility (the "16-7 Facility"). The 16-7
Facility (50% working interest) is designed to handle 3,000 barrels
per day of condensate and 15 mmcf per day of natural gas.
Construction of the 16-7 Facility is complete and start up and
commissioning of the facility is expected before the end of
December 2013.
All three of these
wells are expected to be on production by February 1, 2014 together
with the three existing producing middle Montney Kakwa wells.
Operations Update - Wapiti
At Wapiti, the
Company is in process of drilling a 75% operated working interest
stratigraphic Montney test well. The well is being drilled from a
location at 13-26-64-8 W6M (the "13-26 Well") 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 328 gross (246 net) sections of Montney
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
capital budget for fiscal 2014 and the funding thereof, the fiscal
2014 drilling program, the timing of the completion and testing of
the 16-17 Well, the timing of the flow-back of the 16-25 Well, the
16-7 Facility start-up, the drilling of the 13-26 Well, the timing
of production for the 16-17 Well, the 16-25 Well and the 5-23 Well
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 Annual Information Form for the year ended July 31,
2013 and the Company's Management's Discussion and Analysis
prepared for the year ended July 31, 2013. 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.
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.
Donnycreek Energy Inc.Malcolm ToddPresident and Chief Executive
Officer(604) 684-2356(604) 684-4265www.donnycreekenergy.com
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