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Press release from Marketwire

Donnycreek Confirms Repeatability of Kakwa Liquids-Rich Montney Development With Second Successful Well

Monday, November 05, 2012

Donnycreek Confirms Repeatability of Kakwa Liquids-Rich Montney Development With Second Successful Well08:00 EST Monday, November 05, 2012CALGARY, ALBERTA--(Marketwire - Nov. 5, 2012) -THIS NEWS RELEASE IS NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES OF AMERICA TO UNITED STATES NEWSWIRE SERVICES OR UNITED STATES PERSONSDonnycreek Energy Inc. ("Donnycreek" or the "Company") (TSX VENTURE:DCK) reports that the Company's second horizontal Montney well (the "14-30 Well") at Kakwa has been successfully completed with a 14 stage water-based nitrogen foam frac. The well was flowed for 96 hours against anticipated gathering system pressure of approximately 1,100 psi. During the final 24 hours of flow-back the well averaged gross production rates of 974 bbl/d of condensate and 4,970 mcf/d of natural gas, being 1,803 boe/d combined (487 bbl/d and 2,485 mcf/d, or 901 boe/d combined, net to Donnycreek's 50% working interest). An additional 4 hour flow test was subsequently conducted to provide insight into the free-flowing initial deliverability of the well, against a final wellhead pressure of 360 psi, which test resulted in gross rates of 1,324 bbl/d of condensate and 6,423 mcf/d of natural gas, being 2,394 boe/d combined. The 14-30 Well was drilled ahead of schedule and under budget and completion operations have remained on budget.The successful drilling and completion of the 14-30 Well confirms that Donnycreek's Kakwa lands are in the heart of the liquids-rich Montney trend, validating the repeatability of this prolific play.Condensate rates from the 14-30 Well are in line with management's expectations given that both the horizontal length of the 14-30 Well and its 24 hour production test volumes are approximately 85% of the horizontal length and test rates from the Company's first well at 13-17. However, the 14-30 Well has surpassed expectations for overall condensate production, having flowed more condensate in its 96 hour production test than did the 13-17 well and demonstrating free-flowing well head condensate yields of 200 bbls/mmcf. The condensate yields from the 14-30 Well will enhance the economic returns from this already strongly commercial project. The 14-30 Well will now be equipped for production and Donnycreek anticipates pipeline connection to the Company's previously built mainline to be finalized by early 2013. The 14-30 Well was designed to allow for the vertical completion and testing of an up-hole Montney target. However, given the success of the horizontal test and the potential risk of compromising wellbore integrity, Donnycreek and its partners have elected not to complete this uphole Montney zone at this time. Donnycreek continues to have confidence in this interval and will plan to test the zone in a future well. The Company and its partners are currently permitting a new well from the same well pad location as the 14-30 Well, and are expecting to spud this well by January 2013.Donnycreek also reports that together with its partners they acquired 3/4 of a section immediately adjacent to the section upon which the 14-30 Well was drilled (DCK: 50% working interest). The Company advises that although the initial rates from the 14-30 Well are very encouraging, production test results are not necessarily indicative of long-term performance or of ultimate recovery from the 14-30 Well. The Company currently has 192.5 gross sections (129.5 net sections) prospective for either Montney, Bluesky, Wilrich and Falher development. 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.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 OfficerADVISORY 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 repeatability of the play, the enhancement of economic returns from the 14-30 Well, the timing of pipeline connection for the 14-30 Well, plans to vertically test an uphole Montney zone in a future well, the timing to spud a new well from the well pad of the14-30 Well and the prospective zones 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. In particular, in addition to other factors and assumptions which may be identified herein, no assurances can be given respecting: whether the Company's exploration and development activities respecting the Kakwa prospect 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 at Kakwa; that drilling operations in Kakwa will be successful such that further development activities in these areas are warranted; that Donnycreek's efforts to raise additional capital will be successful; that Donycreek 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 accuracy of the estimates of Donnycreek's reserve volumes; 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. 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: 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, royalty rates or other regulatory matters; 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 risk factors may be found under "Risk Factors" in the Company's Management's Discussion and Analysis prepared for the year ended July 31, 2012. The reader is cautioned not to place undue reliance on this 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. Where amounts are expressed on a barrel of oil equivalent ("BOE") basis, natural gas volumes have been converted to oil equivalence at six thousand cubic feet per barrel. The term BOE may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet per barrel is based on an energy equivalency conversion method primarily applicable at 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. References to oil in this discussion include crude oil and natural gas liquids ("NGLs"). NGLs include condensate, propane, butane and ethane. References to gas in this discussion include natural gas. FOR FURTHER INFORMATION PLEASE CONTACT: 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. Contact Information: Donnycreek Energy Inc.Malcolm ToddPresident and Chief Executive Officer(604) 684-2356(604) 684-4265 (FAX)www.donnycreekenergy.com