Donnycreek Announces Year End Results & Provides Kakwa and Wapiti Field Operations Update
November 15 2013 - 9:26PM
Marketwired Canada
Donnycreek Energy Inc. ("Donnycreek" or the "Company") (TSX VENTURE:DCK) reports
that it has filed on SEDAR its audited financial statements and related
Management's Discussion and Analysis ("MD&A") for the year ended July 31, 2013
with 2012 comparatives. Selected financial and operational information is
outlined below and should be read in conjunction with Donnycreek's audited
financial statements and related MD&A which are available for review at
www.sedar.com and on our website at www.donnycreekenergy.com.
FINANCIAL AND OPERATING HIGHLIGHTS
Three Months Ended Year Ended
Financial July 31, July 31,
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2013 2012 2013 2012
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Petroleum and natural
gas sales $ 2,899,982 $ 132,666 $ 4,751,899 $ 266,987
Funds flow from
operations(1) $ 1,726,323 $ 21,511 $ 2,527,330 $ (49,014)
Basic ($/share) $ 0.04 $ 0.01 $ 0.07 $ (0.01)
Diluted ($/share) $ 0.04 $ 0.01 $ 0.07 $ (0.01)
Net income (loss) $ 551,137 $ 749,545 $(1,308,614) $ 164,985
Basic ($/share) $ 0.01 $ 0.05 $ (0.04) $ 0.01
Diluted ($/share) $ 0.01 $ 0.05 $ (0.04) $ 0.01
Capital expenditures $ 4,937,074 $ 1,092,441 $27,168,319 $ 8,004,276
Working capital $ - $ - $27,781,356 $ 7,840,474
Total assets $ - $ - $65,907,337 $16,153,024
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Operating
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Average daily production
Crude oil (bbls/d)(2) 250.33 8.10 90.73 3.20
Natural gas (mcf/d) 1,470.60 298.90 716.54 240.00
NGLs (bbls/d) 2.27 2.50 2.11 2.30
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Total (boe/d) 497.71 60.40 212.25 45.50
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Average realized price
Crude oil ($/bbls)(2) $ 99.89 $ 81.65 $ 99.33 $ 87.26
Natural gas ($/mcf) $ 3.76 $ 2.07 $ 3.75 $ 2.13
NGLs ($/bbls) $ 76.22 $ 70.22 $ 89.28 $ 79.52
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Netback ($/boe)
Petroleum and natural
gas sales $ 63.33 $ 23.87 $ 61.34 $ 21.39
Royalties $ (2.42) $ 0.45 $ (2.63) $ (2.63)
Operating expenses
(incl.
transportation) $ (17.48) $ (3.09) $ (15.18) $ (5.74)
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Operating netbacks(3) $ 43.43 $ 21.23 $ 43.52 $ 13.02
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Share Information
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Common shares
outstanding 51,310,530 20,603,587 51,310,530 20,603,587
Weighted average common
shares outstanding 42,961,889 14,670,365 37,154,660 13,607,399
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Note:
(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 YEAR END RESERVES (as reported September 26, 2013)
July 31, July 31,
2013 2012
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Proved plus probable (Gross) 10,700 Mboe 544 Mboe
Proved plus probable (PV10 before tax) M$ $ 133,513 $ 9,947
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Fiscal 2014 Capital Budget
Donnycreek's capital budget for fiscal 2014 allocates approximately $38.9
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 fiscal 2014 budget includes the drilling
of 4 additional Montney wells at Kakwa to bring the total number of wells
drilled to 11 gross (5 net) on our 19 gross (8.9 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) is being drilled from the same drilling pad as our discovery
well 13-17-63-5 W6M.
Production casing has been run in Donnycreek's sixth horizontal Montney well
(50% working interest) at 16-25-63-6 W6M (the "16-25 Well"). Donnycreek expects
completion and testing of the middle Montney in the 16-25 Well to occur over the
next 3 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 currently being tied-into existing Company owned infrastructure, including
the 16-7-63-5 W6M compressor station and condensate stabilization facility (the
"16-7 Facility"). The 16-17 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 underway and is on schedule for facility
start-up in December 2013.
Operations Update - Wapiti
At Wapiti, final surface approval has been obtained to drill the Company's 75%
operated working interest stratigraphic Montney test well. The well will be
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.
A drilling rig has been secured and the 13-26 Well is expected to spud in
December 2013.
Donnycreek holds a 75% working interest in 328 gross (246 net) sections of
Montney P&NG rights at Wapiti.
Litigation
In August 2013, a proposed class action lawsuit ("proposed lawsuit") was filed
in the Alberta Court of Queen's Bench against Donnycreek, Donnybrook Energy Inc.
("Donnybrook"), and certain of their respective directors and officers. The
action contains various claims relating to the plan of arrangement involving
Donnycreek and Donnybrook completed in November 2011, the transfer of certain
assets from Donnybrook to Donnycreek, a related private placement and other
related transactions. The proposed lawsuit cannot proceed unless certified by
the Court. The Company firmly believes that the allegations in the proposed
class action are without merit and the Company will be vigorously defending the
proposed lawsuit.
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 16-25 Well, the 16-7 Facility start-up, the
drilling of the 13-26 Well, the proposed lawsuit 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 Revised Annual Information Form for the year ended July 31, 2012 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.
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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