Exploration & Production | Operational Updates

Donnycreek Kicks Off Completions in Montney

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   |    Monday,January 20,2014

Donnycreek Energy Inc. has provided an operations update for its activities in the Wapiti and Kakwa areas.

Wapiti Drilling Operations

Donnycreek has drilled and evaluated its 3,800 metre stratigraphic Montney exploration well at 13-26-64-8 W6M. Based on petrophysical analysis, the Company kicked off and is drilling a 1,600 metre long horizontal well in the middle Montney from 13-26 to 1-26-64-8 W6M. The 1-26 Well will be completed with a hydraulic stimulation scheduled for early March 2014. The Company's working interest in the 1-26 Well is 75%.

Donnycreek holds a 75% operated working interest in 328 gross (246 net) sections of Montney P&NG rights at Wapiti.

Kakwa Drilling Operations

Donnycreek has drilled and tested a sixth middle Montney natural gas well on its Kakwa block at 16-25-63-6 W6M. The initial gas rates and condensate yields from the 16-25 Well flow test are similar to the previous 5 middle Montney wells drilled on the Kakwa acreage. The 16-25 Well should be tied in and on production by mid-February 2014. The Company advises that production test results are not necessarily indicative of the long-term performance or of ultimate recovery.

The Company is currently conducting a fracture stimulation on its seventh middle Montney horizontal well at 16-17-63-5 W6M. Following a brief clean up period, and subject to results, the 16-17 Well should be tied in and brought on production by mid-February 2014.

An eighth middle Montney horizontal well is currently being drilled at 15-30-63-5 W6M. Upon rig release the drilling rig will remain on the same surface lease and commence drilling the Company's ninth horizontal well at 102/14-30-63-5 W6M which will be targeting the upper Montney. The program contemplates completing these wells consecutively once the 102/14-30 Well has finished drilling.

Kakwa Central Production Facility and Production

The Company's Kakwa central gas compression and condensate stabilization facility at 16-7-63-5 W6M is now operational. The 16-7 Facility which has a design throughput of 15 mmcf/d of natural gas and 3,000 bbls/d of lease condensate is currently handling flush production rates of up to approximately 8 mmcf/d of natural gas and 1,200 bbls/d of lease condensate (4 mmcf/d and 600 bbls/d net) from the Company's previously reported four wells; 13-17-63-5 W6M, 14-30-63-5 W6M, 3-19-63-5 W6M and 5-23-63-6 W6M. The recent drilling, completion and construction activity required production from the producing wells to be shut in during the majority of December 2013 and early January 2014.

As previously reported Donnycreek and its partners intend to employ one rig year round at Kakwa and are currently permitting a new multi-well pad at 7-19-63-5 W6M and plans to drill two horizontal middle Montney wells between March and July, 2014. The program contemplates completing these wells consecutively once the second well has finished drilling.

Donnycreek holds a 50% working interest in all lands, wells and facilities on a 16.75 section block in the Kakwa area, except for the 13-17-63-5 W6M Well where the Company holds a 25% working interest plus 10% GORR before payout, 50% working interest after payout.

Kakwa 14-2-63-6 W6M

Adjoining the Company's 16.75 section Kakwa block discussed above, Donnycreek holds a 23.75% working interest in two additional sections. Donnycreek participated in the 14-2 upper Montney natural gas well that was tied-in in the fourth quarter of 2013 but was shut in for substantially all of November and December 2013 due to the operator's infrastructure restrictions. The 14-2 Well re-commenced production in January 2014 to help best determine a go-forward production strategy once a longer term performance profile has been developed and evaluated.