Donnybrook Announces Closing of Asset Exchange and Arrangement
Donnybrook Announces Closing of Asset Exchange and Arrangement
CALGARY, ALBERTA -- (Marketwired) -- 04/15/13 -- Donnybrook Energy Inc. ("Donnybrook" or the "Company") (TSX VENTURE:DEI) reports the closing of the previously announced arrangement (the "Arrangement") involving the Company, Cequence Energy Ltd. ("Cequence") and holders ("Donnybrook Shareholders") of common shares of Donnybrook ("Donnybrook Shares") under which Donnybrook has transferred its interest in its Simonette and Resthaven oil and gas properties ("Donnybrook Assets") to Cequence for consideration consisting of 10.3 million common shares of Cequence ("Cequence Shares") and Cequence's interest in its Fir oil and gas property ("Cequence Assets"), by way of a plan of arrangement under the Business Corporations Act (Alberta) (the "Plan of Arrangement").
The Plan of Arrangement was approved by 99.85% of the votes cast by Donnybrook Shareholders at a special meeting of Donnybrook Shareholders on April 15, 2013 (the "Special Meeting") and was also approved by the Court of Queen's Bench of Alberta. Under the terms of the Plan of Arrangement, Donnybrook transferred the Donnybrook Assets to Cequence in exchange for the Cequence Assets and 10.3 million Cequence Shares. The Donnybrook Assets transferred to Cequence consist of 38 gross (19 net) sections of land with net production of approximately 120 boe per day.
Pursuant to the Plan of Arrangement, Donnybrook Shareholders received 0.0527 of a Cequence Share for each Donnybrook Share outstanding at the effective time of the Arrangement (the "Distribution") by way of a "reduction of capital", being in the aggregate equal to approximately 5.13 percent of the outstanding Cequence Shares.
Cequence is a natural gas and oil resource play focused company with current production in excess of 9,000 boe per day. The majority of Cequence's production comes from the Deep Basin in the Simonette area where it owns Montney and other Cretaceous oil and gas rights, now including the Simonette property forming part of the Donnybrook Assets.
Donnybrook now holds its Bigstone property with 8 gross (3.75 net) sections of land and the newly acquired Fir property which consists of a total of 14 gross (3.90 net) sections of land and long life, low decline production of approximately 220 net boe per day. The Fir property is approximately 35 km from the Bigstone property.
Donnybrook will continue to consider strategic alternatives and the maximization of shareholder value and which alternatives may include further acquisitions or dispositions of assets, recapitalization or mergers with other companies. Except as required by law, Donnybrook does not intend to disclose developments with respect to strategic alternatives until the board of directors of the Company has approved a definitive transaction or strategic alternative. The Company cautions that there are no guarantees that a transaction will be undertaken or a strategic alternative pursued.
For more information about the Arrangement and the Distribution (including due bill trading), please refer to Donnybrook's information circular and proxy statement dated March 15, 2013 and the Company's news release dated March 28, 2013.
Further information relating to Donnybrook is also available on its website at www.donnybrookenergy.ca.
ON BEHALF OF THE BOARD OF DONNYBROOK ENERGY INC.
Malcolm F. W. Todd, Chief Executive Officer
This press release contains forward-looking statements or information ("forward-looking statements") within the meaning of applicable securities laws, including statements regarding the consideration by the Company of strategic alternatives. The use of any of the words "will", "expects", "believe", "plans", "potential" and similar expressions are intended to identify forward-looking statements. The forward-looking statements in this press release are based on certain key expectations and assumptions made by Donnybrook. There is no assurance that these expectations and assumptions will be met or satisfied and there is therefore no assurance that the transaction will be completed in the time frame anticipated or at all. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties, some of which are beyond Donnybrook's control, including tax consequences of the Arrangement, 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. Readers are cautioned that the foregoing list of factors is not exhaustive.
Although Donnybrook 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. Additional information on these and other factors that could affect the operations or financial results of Donnybrook are included in Donnybrook's Annual Information Form, management's discussion and analysis and other documents filed with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). The forward-looking statements contained in this press release are made as of the date hereof and Donnybrook undertakes no obligation 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. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.
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.
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.
Contacts: Donnybrook Energy Inc. Malcolm Todd President and Chief Executive Officer (604) 684-2356 (604) 684-4265 (FAX) www.donnybrookenergy.ca