CALGARY, ALBERTA--(Marketwire - Feb. 25, 2013) - Donnybrook Energy Inc. ("Donnybrook" or the "Company") (TSX VENTURE:DEI) reports that it has entered into an asset exchange agreement (the "Asset Exchange Agreement") and an arrangement agreement (the "Arrangement Agreement") with Cequence Energy Ltd. ("Cequence") (TSX:CQE) to sell the Company's interest in its Simonette and Resthaven oil and gas properties for consideration consisting of 10.3 million common shares of Cequence ("Cequence Shares") and Cequence's interest in its Fir oil and gas property. The transaction, including the subsequent distribution of the 10.3 million Cequence Shares to the holders ("Donnybrook Shareholders") of common shares of Donnybrook ("Donnybrook Shares"), is anticipated to be completed, in part, by way of a plan of arrangement under the Business Corporations Act (Alberta) (the "Arrangement").
The Simonette and Resthaven properties to be sold to Cequence consist of 38 gross (19 net) sections of land with net production of approximately 120 boe per day.
Upon completion of the Arrangement, Donnybrook Shareholders are anticipated to receive, based on the current number of outstanding Donnybrook Shares, approximately 0.0531 of a Cequence Share for each Donnybrook Share while continuing to hold their existing Donnybrook Shares. On closing, it is anticipated that existing Donnybrook Shareholders will own approximately 5 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. Cequence currently operates Donnybrook's Simonette property and has the requisite technical, operational, financial flexibility and access to capital to develop the property on an efficient basis for its shareholders.
On a pro forma basis, Donnybrook will hold its existing Bigstone property with 8 gross (3.75 net) sections of land and the newly acquired Fir property which consists of a total of 5 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.