CALGARY, ALBERTA--(Marketwire - May 3, 2012) - Donnycreek Energy Inc. ("Donnycreek" or the "Company") reports that the first horizontal Montney well Hz 13-17-63-5 W6M ("13-17 Well"), located on its 16 section (8 net) 50% working interest contiguous land block at Kakwa, Alberta has been successfully drilled and completed with a 15 stage foam frac.
Following a 96 hour frac flow back, the 13-17 Well was still cleaning up, with average gross production rates over the final 24 hours of production testing being 1,150 bbls/d condensate and 8.29 MMscf/d gas (374 bbls/d and 2.69 MMscf/d; 823 boe/d net to Donnycreek, before payout including royalty share of production) against a wellhead pressure of 1,100 psi (7,584 kPa). In addition to well head condensate, gas analysis from the 13-17 Well suggests that an additional 25-35 bbls/MMscf of natural gas liquids are recoverable through typical refrigeration processing, and up to 70 bbls/MMscf if deep cut processing is available. The 13-17 Well is currently being equipped with tubing following which additional clean up of frac fluid is expected. The 13-17 Well was drilled and completed within the expected timelines and on budget.
Donnycreek holds an undivided 25% working interest and 10% GORR on 75% before payout and a 50% working interest after payout in the 13-17 Well. Donnycreek holds a 50% working interest in the balance of the 16 section Kakwa Deep Basin land block. The successful drilling and completion of the 13-17 Well is a tangible step, together with significant results reported by other operators in the area in de-risking the 16 section Kakwa land block. This productivity test substantially exceeds our expectations for liquids yield and confirms the technical work that had suggested the acreage was in the core of the liquids-rich Montney trend. The 13-17 Well was completed over a 1,430 metre horizontal length in the Middle Montney, and the Company's geological interpretation indicates that comparable targets also exist across the 16 section block in the Upper Montney formation.
Surveying and applications have commenced for tie-in operations of the 13-17 Well and for a follow-up horizontal Middle Montney drilling location where Donnycreek will have a 50% participating interest. The Company currently anticipates the 13-17 Well to be tied-in by September 2012.
Donnycreek has approximately 17.6 million common shares issued and outstanding (19.6 million fully diluted).
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. The Company holds working interests in 28 gross sections (7,250 ha/17,920 acres); 20 net sections (5,180 ha/12,800 acres) prospective for Montney, Bluesky, Wilrich and Falher liquid rich resource development.
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
Certain information set forth in this news release contains forward-looking statements or information ("forward-looking statements"), including statements regarding the recovery of additional natural gas liquids, the additional clean up of frac fluid, comparable targets in the Upper Montney formation, the drilling of a follow-up location, the timing of the tie-in of the 13-17 Well and the prospective zones of liquid rich resource development on the Company's lands. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Donnycreek's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, operational risks in exploration and development, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and the ability to access sufficient capital from internal and external sources. Although Donnycreek believes that the expectations in the forward-looking statements are reasonable, the forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking statements. As such, readers are cautioned not to place undue reliance on the forward-looking statements, as no assurance can be provided as to future results, levels of activity or achievements. The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in Donnycreek's management's discussion and analysis and other documents available at www.sedar.com. Furthermore, the forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, Donnycreek does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.
The reader is cautioned that test results are not necessarily indicative of long-term performance or of ultimate recovery.
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.
President and Chief Executive Officer
(604) 684-4265 (FAX)