This watershed is situated in the eastern half of Hamilton and the west half of Malpeque as well as portions of Indian River and Baltic. The highest elevation of 58 m is found at the south end of the area between the Old Princetown Rd and Route 20 east of the Old School Rd.
The main branch of the Shipyard River has its source near Route 20 south of the Cheese Factory Rd intersection at an elevation of 18 m. It is about 2.8 km long and flows northwest parallel to the Cheese Factory Rd. The upper section flows partly through open field and partly through a stand of alders. As the river flows downstream, it enters a beautiful mixed woods and eventually drains into Carruthers Pond, and then into the estuary and finally into Malpeque Bay. A secondary branch about 1.0 km long flows southwest to meet the main branch just west of the Hamilton Rd (Rte 104). Another secondary branch about 0.6 km long flows northeast joining the main branch in the upper estuary. The upper estuary is about 0.9 km long and covers about 6.9 ha.