Cequence Energy to acquire Montney assets in Simonette and provides update on recent drilling activity

Cequence Energy to acquire Montney assets in Simonette and provides update on 
recent drilling activity 
CALGARY, Feb. 25, 2013 /CNW/ - Cequence Energy Ltd. ("Cequence") (TSX: CQE) is 
pleased to announce that it has entered into agreements with Donnybrook Energy 
Inc. ("Donnybrook") (TSX: DEI) pursuant to which Cequence has agreed to 
acquire Donnybrook's interests in its oil and gas properties located in the 
Simonette and Resthaven areas of Alberta (the "Donnybrook Assets"). As 
consideration for the assets, Cequence will transfer its interest in its 
non-operated oil and gas properties located in the Fir area (the "Non-core 
Assets"), and issue an aggregate of 10,300,000 Cequence common shares to 
Donnybrook, which shares will be distributed to the Donnybrook shareholders, 
representing aggregate consideration to Donnybrook of approximately $23 
million. Cequence believes that this expansion and consolidation of its 
contiguous Montney land position at Simonette has significant present and 
future economic and strategic value. 
Cequence is also pleased to announce the results of its recent drilling at 
Simonette/Resthaven. 
Assets Being Acquired From Donnybrook 
The Donnybrook Assets consist of 19.2 net sections of Montney lands, 
associated reserves and production in the Simonette and Resthaven areas of 
Alberta. At Simonette, Cequence will acquire all of Donnybrook's interest in 
33 gross (16.5 net) sections of Montney rights. Cequence is currently a 
partner with Donnybrook in these assets. In addition, 2.7 net sections of 
Montney land will be acquired at Resthaven. Current production of the acquired 
properties is approximately 120 boe/d. 
Cequence is acquiring 720 mboe of proved reserves and 1,407 mboe of proved and 
probable reserves with a net present value estimated at $12 million, based on 
the December 31, 2011 GLJ reserves report of Cequence. Based on the closing 
price of the Cequence common shares on February 22, 2012, the value attributed 
to the land acquired is $11 million or approximately $2,200 per hectare. 
The acquisition will increase Cequence's holdings at Simonette/Resthaven to 96 
gross (89 net) Montney sections. The Donnybrook Assets increase Cequence's 
working interest to 100% in several sections of land immediately adjacent to 
the Company's recent Montney drilling activity. As a 100% working interest 
owner in substantially all of its Simonette Montney landbase, Cequence will 
control the pace of future development with no limitations arising from 
section boundaries or partner interests. Cequence management has identified 
approximately 70 future net potential horizontal locations that can be added 
to its existing Montney drilling inventory. 
A land map of Cequence's holdings at Simonette, showing the location of 
Donnybrook Assets, has been posted to Cequence's website at 
www.cequence-energy.com. 
Cequence Falher Drilling Results at Simonette/Resthaven 
Cequence recently completed a well located at 2-6-61-26W5. The well was 
drilled to a final measured depth of 5,136 meters in the Falher formation 
including approximately 2,086 meters of horizontal section. Eighteen 50 
tonne fracs were successfully placed using a frac port system. The well 
flowed on clean-up for 52 hours at a final rate of 13.1 mmcf/d plus liquids 
with 2,005 psi flowing casing pressure This is the final well drilled in 
the Resthaven farm-in whereby Cequence earned a 65% working interest in nine 
sections of land prospective for Falher and Dunvegan natural gas and 
liquids. The 2-6 well is approximately 2.5 miles south of the Company's 
previously announced discovery well at 16-18 and further validates the 
potential for as many as 30 net locations at Simonette/Resthaven. Well costs 
to drill and complete the 2-6 well are estimated to be approximately $7.1 
million. 
The first three wells completed as part of the 2013 drilling program have 
tested at an aggregate 42.4 mmcfd plus liquids from three separate formations 
including the Montney, Dunvegan and Falher formations. Two additional 
Montney wells in Simonette and a Wilrich well in Ansell are expected to be 
completed before spring break-up. 
Agreements and Timing 
The transaction will be effected pursuant to the terms of an asset exchange 
agreement (the "Asset Exchange Agreement") and an arrangement agreement (the 
"Arrangement Agreement"), both between Cequence and Donnybrook dated February 
22, 2013. Pursuant to the terms of the Arrangement Agreement and the plan of 
arrangement (the "Arrangement"), at the effective time of the Arrangement, the 
transactions contemplated by the Asset Exchange Agreement will become 
effective and Donnybrook will convey to Cequence its rights to the Donnybrook 
Assets in exchange for all of Cequence's rights in the Non-Core Assets and the 
issuance by Cequence to Donnybrook of 10,300,000 Cequence common shares. The 
Arrangement Agreement further provides that the common shares received by 
Donnybrook shall immediately be transferred from Donnybrook to the Donnybrook 
shareholders on a pro rata basis. 
The Non-Core Assets are not operated by Cequence and consist of 5 net sections 
of land with current production of approximately 220 boepd. The Non-Core 
Assets have proved reserves of 861 mboe and proved plus probable reserves of 
1,287 mboe and a net present value of $8.8 million, at December 31, 2012, as 
estimated by Cequence. 
The Arrangement will be effected pursuant to the provisions of the Business 
Corporations Act (Alberta). Completion of the transaction is expected to 
occur in mid-April 2013 and is subject to the satisfaction of several 
conditions, including receipt of the applicable court, stock exchange and 
regulatory approvals as well as the approval by not less than 66 ⅔% of the 
Donnybrook shareholders entitled to vote at a meeting of Donnybrook 
shareholders. In connection with such meeting, Donnybrook will prepare and 
mail to each Donnybrook shareholder an information circular setting forth, 
among other things, details of the Arrangement. It is expected that 
Donnybrook will mail the information circular in mid-March and hold the 
required meeting of Donnybrook shareholders in mid-April with closing of the 
Arrangement and the Asset Exchange Agreement to occur shortly thereafter 
provided that all shareholder, court and regulatory approvals are obtained. 
Management and directors of Donnybrook holding approximately 12.5 percent of 
the issued and outstanding Donnybrook common shares have entered into support 
agreements pursuant to which they have agreed to vote in favour of the 
Arrangement. 
Under the terms of the Arrangement Agreement, Donnybrook has agreed that it 
will not solicit or initiate any inquiries or discussions that may reasonably 
be expected to lead to an alternative sale of the Donnybrook Assets or any 
other transaction which could impede, interfere, prevent or delay the 
transaction contemplated under the Arrangement Agreement. In addition, 
should a Superior Proposal (as such term is defined in the Arrangement 
Agreement) be presented to Donnybrook, Donnybrook has granted Cequence the 
right to match such Superior Proposal. The Arrangement Agreement also 
provides for the payment of a reciprocal non-completion fee of $1.0 million 
under certain circumstances. 
Complete details of the Arrangement, the plan of arrangement and the Asset 
Exchange Agreement are available in their respective agreements which will be 
available for viewing at www.sedar.com. 
Peters & Co. Limited is acting as financial advisor to Cequence in connection 
with the transaction. 
Cequence is a publicly traded Canadian energy company involved in the 
acquisition, exploitation, exploration, development and production of natural 
gas and crude oil in western Canada. Further information about Cequence may be 
found in its continuous disclosure documents filed with Canadian securities 
regulators at www.sedar.com. 
Forward Looking Information and Additional Advisories 
Certain information included in this press release constitutes forward-looking 
information under applicable securities legislation. Such forward-looking 
information is provided for the purpose of providing information about 
management's current expectations and plans relating to the future. Readers 
are cautioned that reliance on such information may not be appropriate for 
other purposes, such as making investment decisions. Forward-looking 
information typically contains statements with words such as "anticipate", 
"believe", "expect", "plan", "intend", "estimate", "propose", "project" or 
similar words suggesting future outcomes or statements regarding an outlook. 
Forward-looking information in this press release may include, but is not 
limited to, the timing for completion of the transactions contemplated herein, 
receipt of regulatory and Donnybrook shareholder approvals, meeting dates, 
future development plans, future production levels, the viability of future 
prospective drilling locations and the anticipated benefits resulting from the 
transactions described in this press release. Forward-looking information is 
based on a number of factors and assumptions which have been used to develop 
such information but which may prove to be incorrect. Although Cequence 
believes that the expectations reflected in such forward-looking information 
are reasonable, undue reliance should not be placed on forward-looking 
information because Cequence can give no assurance that such expectations will 
prove to be correct. In addition to other factors and assumptions which may be 
identified in this press release, assumptions have been made regarding and are 
implicit in, among other things: reserves; field production rates and decline 
rates; the ability of Cequence to secure adequate product transportation; the 
timely receipt of any required regulatory and Donnybrook shareholder 
approvals; the ability of Cequence to obtain qualified staff, equipment and 
services in a timely and cost efficient manner to develop its business; 
future oil and natural gas prices; currency, exchange and interest rates; the 
regulatory framework regarding royalties, taxes and environmental matters; and 
the ability of Cequence to successfully market its oil and natural gas 
products. Readers are cautioned that the foregoing list is not exhaustive of 
all factors and assumptions which have been used. 
Forward-looking information is based on current expectations, estimates and 
projections that involve a number of risks and uncertainties which could cause 
actual results to differ materially from those anticipated by Cequence and 
described in the forward-looking information. The material risk factors 
affecting Cequence and its business are contained in Cequence's Annual 
Information Form which is available under Cequence's issuer profile on SEDAR 
at www.sedar.com. 
The forward-looking information contained in this press release is made as of 
the date hereof and Cequence undertakes no obligation to update publicly or 
revise any forward-looking information, whether as a result of new 
information, future events or otherwise, unless required by applicable 
securities laws. The forward looking information contained in this press 
release is expressly qualified by this cautionary statement. 
Additional Advisories 
Cequence uses test rate information as one indicator of potential future well 
productivity. The test rates set forth in this press release are of a short 
duration and are not necessarily indicative of future performance. 
Boes are presented on the basis of one Boe for six Mcf of natural gas. 
Disclosure provided herein in respect of 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 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. 
The Toronto Stock Exchange has neither approved nor disapproved the contents 
of this press release. 
Paul Wanklyn, President & CEO, (403) 218-8850,pwanklyn@cequence-energy.com 
David Gillis, VP Finance & CFO, (403) 806-4041,dgillis@cequence-energy.com 
SOURCE: Cequence Energy Ltd. 
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CO: Cequence Energy Ltd.
ST: Alberta
NI: OIL MNA FIELD  
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