CALGARY, ALBERTA--(Marketwire - June 15, 2012) -
NOT FOR DISSEMINATION INTO THE UNITED STATES OF AMERICA OR DISTRIBUTION TO U.S. NEWSWIRE SERVICES
Donnycreek Energy Inc. (TSX VENTURE:DCK) ("Donnycreek" or the "Company") reports that it has successfully completed the first tranche of its previously announced non-brokered private placement (the "Offering") pursuant to the issuance of: (i) 2,384,400 common shares of the Company issued on a "flow-through" basis within the meaning of the Income Tax Act (Canada) ("FT Shares") at a price of $0.85 per FT Share for gross proceeds of $2,026,740; and (ii) $1,580,000 principal amount of ten percent (10%) redeemable, convertible, unsecured debentures of the Company ("Convertible Debentures"), for aggregate gross proceeds of approximately $3.6 million.
In connection with the first tranche of the Offering, the Company paid a finder's fee to eligible persons consisting of a cash payment in the aggregate amount of approximately $111,186 and the issuance of an aggregate of 130,020 finder's warrants ("Finder's Warrants"). Each Finder's Warrant entitles the holder to acquire one common share of the Company at an exercise price of $0.85 for six months following the date of issuance.
The proceeds from the FT Shares will be used to incur eligible exploration and development expenses prior to December 31, 2013 and which will be renounced as Canadian Exploration Expenses for income tax purposes to subscribers effective on or before December 31, 2012, including a portion of the proceeds from the FT Shares will be deployed on Donnycreek's 16 gross section (4,140 ha/10,240 acres) land block located in the liquids-rich Kakwa Montney gas trend. A portion of the proceeds from the Convertible Debentures will be used for the tie-in of the Company's first Montney horizontal well in Kakwa, Alberta and for working capital purposes.
The FT Shares, Convertible Debentures and Finder's Warrants issued in this tranche are subject to a hold period under applicable securities laws until October 16, 2012.
It is anticipated that the closing of the remaining FT Shares and Convertible Debentures under the Offering will occur on or about June 20, 2012.
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 concerning the use of the proceeds of the Offering and the timing of the closing of the remaining FT Shares and Convertible Debentures under the Offering.
The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Donnycreek, including expectations and assumptions concerning timing of receipt of required regulatory approvals and third party consents and the satisfaction of other conditions to the completion of the Offering as well as expectations and assumptions concerning the success of future drilling activities.
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 our forward-looking statements are reasonable, our 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 information. As such, readers are cautioned not to place undue reliance on the forward looking information, 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 our 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.
This news release is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States or to or for the account or benefit of US persons (as such terms are defined in Regulation S under the United States Securities Act of 1933, as amended (the "U.S. Securities Act")), absent registration or an exemption from registration. The securities offered have not been and will not be registered under the U.S. Securities Act or any state securities laws and, therefore, may not be offered for sale in the United States, except in transactions exempt from registration under the U.S. Securities Act and applicable state securities laws. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.
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