Donnybrook Energy will pay 70% of the costs to drill, complete, equip and tie-in the well to earn a 70% working interest in the section where the well will be drilled, subject to a 12.5% non-convertible gross over-riding royalty.
Donnybrook Energy will also earn a 49% working interest in four adjacent sections prospective for Montney production.
It is anticipated that Donnybrook Energy, as operator, will commence drilling operations by mid-January 2011.
Donnybrook has also acquired six sections of petroleum and natural gas rights targeting liquid rich Montney gas at the Alberta Crown land sale.
Donnybrook Energy now owns working interests in 40 gross sections (26.16 net sections) of Montney petroleum and natural gas rights in its core area of the Alberta Deep Basin.
In addition, Donnybrook Energy expects that its Montney horizontal drilling location at Deep Valley-Simonette (25% BPO/50% APO) will be spud by Cequence Energy within the next two weeks.
