Donnycreek Announces First Quarter Results & Provides Kakwa and Wapiti Field Operations Update
December 20 2013 - 6:16PM
Marketwired Canada
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
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31-Oct-13 31-Jul-13 31-Oct-12
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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
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Operating
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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
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Total (boe/d) 472 498 36
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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
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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)
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Operating netbacks(3) $ 40.80 $ 43.43 $ 11.81
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Share Information
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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
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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.
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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