CALGARY, ALBERTA--(Marketwire - Sept. 19, 2012) -
THIS NEWS RELEASE IS NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES OF AMERICA TO UNITED STATES NEWSWIRE SERVICES OR UNITED STATES PERSONS
Donnycreek Energy Inc. ("Donnycreek" or the "Company") (TSX VENTURE:DCK) reports that it has engaged a syndicate of agents (the "Agents") led by RBC Capital Markets and including Paradigm Capital Inc. and Cormark Securities Inc. in connection with a brokered private placement (the "Offering") of up to $25,000,000 of common shares of the Corporation ("Common Shares"). Donnycreek has also entered into a purchase and sale agreement (the "Purchase and Sale Agreement") with Deventa Land Corp. ("Deventa"), a private non-arm's length corporation, to acquire interests in approximately 133.5 gross (93 net) sections of undeveloped lands in the Deep Basin area of West Central Alberta (the "Assets") for a purchase price of $3,000,000 and two million Common Shares (the "Acquisition").
The Offering will be conducted on a "best efforts" basis with pricing and terms determined in the context of the market and announced in a subsequent news release which is anticipated to be on or about September 26, 2012. The Offering is subject to certain conditions including, but not limited to, the closing of the Acquisition and the receipt of all necessary approvals, including the approval of the TSX Venture Exchange ("TSXV"). The Common Shares issued pursuant to the Offering will be subject to a four month hold period from the date of closing of the Offering.
The proceeds from the Offering will be used for drilling the Company's Kakwa block, advancing the Wapiti assets to be acquired in connection with the Acquisition towards commercial development and for general corporate purposes. It is currently anticipated that the Company will drill its third, fourth and fifth wells in the Kakwa block in the first half of 2013.
Acquisition of Assets
Pursuant to the Purchase and Sale Agreement, Donnycreek has agreed to acquire approximately 93 total net sections (59,600 net acres) of Montney lands comprised as follows:
- a 75% working interest in 113.5 gross sections at Wapiti targeting the Montney with Donnycreek as operator; and
- a 40% working interest in 20 gross sections at Chicken (south of Wapiti) targeting the Montney with Donnycreek as operator
The Acquisition is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSXV and the Company completing a private placement financing of not less than $25 million. In conjunction with the closing of the Acquisition, Donnycreek and Deventa have agreed to a joint operating agreement and areas of mutual of interest. Any interests acquired in such areas of mutual interests by either party up to the time of closing of the Acquisition will be acquired jointly on the basis of the working interests of each party in the Assets upon closing. The Acquisition involves non-arm's length parties as certain directors, officers and/or shareholders of Deventa are directors and/or officers of Donnycreek. The Acquisition is exempt from TSXV Policy 5.9 (related party transaction requirements). The Common Shares issued pursuant to the Acquisition will be subject to a four month hold period from the date of closing of the Acquisition.
Time of Closing
It is currently anticipated that the closing of the Offering and the Acquisition will occur on or about October 15, 2012.
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 22 gross sections (14 net sections) 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 concerning the uses of the net proceeds of the Offering, the anticipated timing of the pricing and terms of the Offering, the expected timing of the closing of the Offering and the Acquisition, the timing of the drilling of future Kakwa wells and the prospective zones of resource development on Donnycreek's lands.
The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Donnycreek, including with respect to the timing of the pricing and terms of the Offering, the closing dates of the Offering and the Acquisition, the use of proceeds of the Offering, expectations and assumptions concerning timing of receipt of required regulatory approvals and third party consents, prospective zones of respurce development and the satisfaction of other conditions to the completion of the Offering and the Acquisition 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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