Seven Generations Energy Ltd. Reports Doubled Shipping and Processing Contract Volumes
CALGARY, June 26, 2014 /CNW/ - Seven Generations Energy Ltd. ("7G" or the "Company") is pleased to report that it has reached agreement with Aux Sable Canada LP (Aux Sable) and, separately, with Alliance Pipeline Ltd (Alliance) to double the previously contracted peak rich gas delivery volumes. Currently, the Company is contracted to deliver 250 MMcf/d of rich gas to Aux Sable's Channahon, Illinois extraction and fractionation facilities through the Alliance pipeline. The new long-term arrangements provide for doubling the peak volume to 500 MMcf/d within a four-year period. This new rate schedule makes 7G the largest single supplier currently contracted to Aux Sable.
Aux Sable's President & Chief Executive Officer, Tim Stauft, said, "We are very pleased to have reached this additional agreement with 7G which substantially strengthens our feedstock supplies beyond 2015".
CEO Pat Carlson stated that "Our experience with Aux Sable and Alliance has been very rewarding which makes us comfortable expanding our delivery obligations to about one quarter of what we see to be our present potential. The Rich Gas Premium remuneration structure gives us exposure for some of our products to Chicago-based pricing which reduces our market concentration risk and the Chicago market has generally supported higher prices in recent years.
Seven Generations Energy Ltd. is a tight gas developer with a single asset, the Kakwa River Project. 7G has its corporate headquarters in Calgary, Alberta and operating headquarters in Grande Prairie, Alberta, approximately 100 kilometers from the Project. The Project includes more than 500 square miles of rights in the Alberta Deep Basin, targeting, mainly, the Montney formation. By management's projection, the Project has the potential to yield more than 25 trillion cubic feet of marketable gas and more than 2.6 billion barrels of natural gas liquids (including over 1.0 billion barrels of condensate), with the potential to produce approximately 2 billion cubic feet of gas and 200,000 barrels of natural gas liquids daily for nearly 20 years.
This press release may contain forward-looking information and statements regarding the Company. Any statements included in this press release that address activities, events or developments that the Company "expects," "believes," "plans," "projects," "estimates" or "anticipates" will or may occur in the future are forward-looking statements. Actual results may differ materially due to a variety of important factors. Among other items, such factors might include: planned and unplanned capital expenditures; changes in general economic conditions; uncertainties in reserve, resource and production estimates; unanticipated recovery or production problems; weather-related interference with business operations; the effects of delays in completion of, or shut-ins of, gas and liquids gathering systems, pipelines and processing facilities; potential costs associated with complying with new or modified regulations; oil and natural gas prices and competition; the impact of derivative positions; production expense estimates; cash flow and cash flow estimates; drilling and operating risks; the ability to replace oil and gas reserves; volatility in the financial and credit markets or in oil and natural gas prices. Except as required by law, the Company undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change. Do not place undue reliance on forward-looking information. This Press Release includes references to barrel equivalents (boes) which are calculated at a conversion rate of one barrel of oil to six thousand cubic feet of gas. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 1bbl : 6mscf is based on an approximation of energy equivalence conversion method primarily applicable at the burner tip and does not represent a value equivalency at the well head. In addition, given that the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalent of six to one, utilizing a boe conversion ratio of 1bbl:6mscf would be misleading as an indication of value.
SOURCE Seven Generations Energy Ltd.For further information:
Pat Carlson, CEO