Seven Generations proposes a US$400 million note offering, Q1 production and capital investment on track

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

CALGARY, April 22, 2015 /CNW/ - Seven Generations Energy Ltd. (7G or the Company) (TSX: VII) is proposing a private placement (the Offering) of US$400 million senior notes due 2023 (the Notes) and the Company's first quarter production and capital investment are on track to meet 2015 operating guidance.

"This financing, along with funds from operations, cash and our undrawn $480 million credit facility, will go to fund our ongoing capital investment program. Our first quarter production is strong, currently expected to be between 48,000 and 49,000 barrels of oil equivalent per day (boe/d). Our Kakwa River Project wells are delivering robust performance that supports our annual production target of 55,000 to 60,000 boe/d. First quarter capital investment aligns with our planned capital spending profile, which will see our highest investment occur during our most-active quarters, at the start and the end of the year," said Pat Carlson, 7G's Chief Executive Officer.

Note Offering

The Company is proposing to offer, on a private placement basis, US$400 million aggregate principal amount of senior notes due 2023. Certain terms of the Notes, including the interest rate payable, will depend on market conditions at the time of pricing. 7G intends to use the net proceeds of the Offering for continued development of the Kakwa River Project and for general corporate purposes.  

Operational Update

During the first quarter, 7G successfully drilled 23 (gross) horizontal wells and completed 16 (gross) wells with an average lateral length of approximately 2,700 meters and an average proppant density of approximately 1.5 tonnes per meter.  First quarter drilling and completion costs averaged approximately $14 million per well. This cost includes several delineation wells, along with non-standardized designs on a portion of completed wells. These wells do not provide the same cost reduction opportunities compared with 7G's standardized drilling and completion design. Well costs have continued to trend lower, with recent wells drilled and completed using 7G's standardized design averaging approximately $500,000 to $1 million less than the first quarter average well cost. First quarter 2015 capital investments are expected to be within a range of $360 million to $380 million. 7G anticipates total 2015 capital investments to be within the previously announced range of $1.30 billion to $1.35 billion, with higher spending anticipated in the first and fourth quarters due to higher levels of activity and seasonality.

About the Company

Seven Generations Energy Ltd. is an Alberta-based company engaged in the development of the Kakwa River Project. Located approximately 100 kilometers south of Grande Prairie, Alberta, the Project is a tight, liquids-rich gas and light oil project in the early stages of development. 7G has its corporate headquarters in Calgary, Alberta and its operations headquarters in Grande Prairie, Alberta.

Reader Advisory

This press release is for informational purposes only. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities. The Notes have not and will not be registered under the United States Securities Act of 1933, as amended (the "US Securities Act"). The Notes may not be offered or sold, except to qualified institutional buyers in reliance on the exemption from registration provided by Rule 144A under the US Securities Act, or to persons outside the United States in compliance with Regulation S and applicable Canadian exemptions from prospectus requirements. Any public offering of securities made in the United States would be made by means of a prospectus that would be obtainable from the Company and that would contain detailed information about the Company, its management and financial statements.

Forward Looking Statements

This press release contains "forward-looking information" or "forward-looking statements" within the meaning of applicable securities laws (collectively, "forward-looking statements") regarding the Company. Any statements included in this press release that address activities, events or developments that the Company "expects," "believes," "plans," "intends," "estimates," or "anticipates" will or may occur in the future are forward-looking statements. Specific forward-looking statements contained in this press release include, but are not limited to: expected first quarter production results and the anticipated daily average production results for 2015; capital investments for 2015; quarterly fluctuations in capital spending; 7G's ability to complete the Offering; the anticipated size of the Offering and the expected use of proceeds of the Offering. With respect to forward-looking statements contained in this press release, assumptions have been made regarding, among other things: future oil, natural gas liquids and natural gas prices; the Company's future production levels; future capital investments by the Company; future cash flows from production; geological and engineering estimates in respect of the Company's reserves, the geography of the areas in which the Company is conducting exploration and development activities, and the access, economic and physical limitations to which the Company may be subject from time to time; and the Company's ability to obtain financing on acceptable terms.

Actual results could differ materially from those anticipated in the forward-looking statements as a result of the risks and risk factors that are set forth in the Company's annual information form dated March 10, 2015, which is available on SEDAR at www.sedar.com, including, but not limited to: volatility in market prices and demand for oil, natural gas liquids and natural gas and hedging activities related thereto; general economic, business and industry conditions; variance of the Company's actual capital costs, operating costs and economic returns from those anticipated; risks related to the exploration, development, production and transportation of oil and natural gas reserves and resources; actions by governmental authorities, including changes in government regulation, royalties and taxation; uncertainty associated with estimates of oil, natural gas liquids and natural gas reserves and the variance of such estimates from actual future production; dependence upon compressors, gathering lines, pipelines and other facilities, certain of which the Company does not control; and seasonality of the Company's activities.

The forward-looking statements contained in this press release speak only as of the date hereof, and the Company does not assume any obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable laws. Do not place undue reliance on forward-looking statements.

Abbreviations

bbl

barrel or barrels

boe

barrels of oil equivalent

boe/d

barrels of oil equivalent per day

mcf

million cubic feet

Seven Generations has adopted the standard of 6 Mcf:1 bbl when converting natural gas to boes. Condensate and other natural gas liquids are converted to boes at a ratio of 1 bbl: 1 bbl. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf:1 bbl is based roughly on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the Company's sales point. Given the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalency of 6 Mcf: 1 bbl, utilizing a conversion ratio at 6 Mcf: 1 bbl may be misleading as an indication of value.

SOURCE Seven Generations Energy Ltd.

Image with caption: "Seven Generations Energy Ltd. (CNW Group/Seven Generations Energy Ltd.)". Image available at: http://photos.newswire.ca/images/download/20150422_C8886_PHOTO_EN_14603.jpg

For further information: Pat Carlson, CEO, Chris Law, CFO, Brian Newmarch, Manager Investor Relations, Seven Generations Energy Ltd., Suite 300, 140 - 8th Avenue SW, Calgary, AB T2P 1B3, Phone: 403-718-0700, Email: investors@7genergy.com

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Seven Generations Energy Ltd.

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