Seven Generations Energy Ltd. Announces Commencement of Consent Solicitation

CALGARY, Jan. 24, 2014 /CNW/ - Seven Generations Energy Ltd. (the "Company") announced today that it has commenced a solicitation (the "Solicitation") of consents (the "Consents") upon the terms and subject to the conditions set forth in a Notice of Consent Solicitation (as it may be amended or supplemented from time to time, the "Notice") and the related Consent Form (the "Consent Form"), each dated as of January 24, 2014, to a proposed waiver (the "Proposed Waiver") of certain provisions of the Indenture, dated as of May 10, 2013 (as amended or supplemented, the "Indenture"), between the Company and Wells Fargo Bank, National Association, as trustee (the "Trustee"), governing its 8.250% Senior Notes due 2020 (the "Notes") (CUSIP Nos. 81783QAA3 and C83330AA5).

The Company intends to issue up to US$300 million aggregate principal amount of additional 8.250% Senior Notes due 2020 (the "Additional Notes") under the Indenture on or prior to February 14, 2014 (the "Offering").  The Company intends to use the net proceeds from the Offering to fund, in part, its 2014 capital expenditure plan.  The Company is soliciting Consents from the holders of the Notes to waive the covenant contained in Section 4.05(a) of the Indenture, "Incurrence of Indebtedness and Issuance of Preferred Stock," so as to permit the Offering, provided that the aggregate principal amount of Additional Notes issued in connection with the Offering does not exceed US$300 million. If the covenant in Section 4.05(a) of the Indenture is not waived as set forth in the Notice, the Company would not be able to satisfy the financial test set forth therein in connection with the issuance of the Additional Notes, the Additional Notes would not be Permitted Debt (as defined in the Indenture), and the Company would consequently be unable to complete the Offering.

The Solicitation will expire at 5:00 p.m., New York City time, on January 31, 2014, or such later time and date to which the Solicitation is extended (such time and date, the "Expiration Time"), unless earlier terminated.  The Solicitation is subject to customary conditions, including, among other things, the receipt of valid Consents with respect to a majority in aggregate principal amount of the outstanding Notes (the "Requisite Consents") prior to the Expiration Time (which Consents have not been validly revoked prior to the earlier of the execution of the supplemental indenture (the "Supplemental Indenture") giving effect to the Proposed Waiver and the Expiration Time) and the consummation of the Offering as described in the Notice.

In the event that each of the conditions to the Solicitation described in the Notice are satisfied or waived by the Company, including, but not limited to, the receipt of the Requisite Consents and the consummation of the Offering, the Company will pay to each holder of record of Notes as of 5:00 p.m., New York City time, on January 23, 2014 (each such holder, a "Holder"), who has delivered a valid Consent in respect of such Notes prior to the Expiration Time (and has not validly revoked its Consent prior to the earlier of the execution of the Supplemental Indenture and the Expiration Time), US$5.00 in cash for each US$1,000 principal amount of such Notes in respect of which a valid Consent was so delivered (and was not validly revoked) (the "Consent Fee").  The Company will pay the Consent Fee at such time as all of the conditions enumerated in the Notice, including consummation of the Offering, have been satisfied or waived by the Company.  Holders of Notes who deliver Consents but validly revoke their Consent in accordance with the Notice prior to the earlier of the execution of the Supplemental Indenture and the Expiration Time, or who deliver Consents after the Expiration Time, will not receive a Consent Fee.  Subject to applicable law, the Solicitation may be abandoned or terminated for any reason at any time, including after the Expiration Time and prior to the Proposed Waiver becoming operative, as described below, whether or not the Requisite Consents have been received, in which case any Consents received will be voided and no Consent Fee will be paid to any Holders.

If the Requisite Consents are received prior to the Expiration Time (which Consents have not been validly revoked prior to the earlier of the execution of the Supplemental Indenture and the Expiration Time), the Company intends to execute the Supplemental Indenture promptly following the receipt of the Requisite Consents, which may be before the Expiration Time. If the Supplemental Indenture is entered into by the Company and the Trustee and all of the other conditions to the Solicitation are satisfied or waived by the Company, the Proposed Waiver will become operative and will bind all Holders of the Notes, including those that did not give their Consent.  If the Requisite Consents are not received prior to the Expiration Time, the Supplemental Indenture will not be executed, the Proposed Waiver will not become operative and the Consent Fee will not be paid.

The Company has engaged Credit Suisse Securities (USA) LLC to act as Solicitation Agent and D.F. King & Co., Inc. to act as Information and Tabulation Agent for the Solicitation.  Questions regarding the Solicitation may be directed to Credit Suisse Securities (USA) LLC at [phone] (toll-free) or [phone] (collect). Requests for documents relating to the Solicitation may be directed to D.F. King & Co., Inc. at [phone] (toll-free), [phone] (banks and brokers) or by email to [email protected].

This press release is for informational purposes only and the Solicitation is only being made pursuant to the terms of, and subject to the conditions specified in, the Notice and the related Consent Form.  The Solicitation is not being made to, and Consents are not being solicited from, Holders of Notes in any jurisdiction in which it is unlawful to make such Solicitation or grant such Consent.  None of the Company, the Trustee, the Solicitation Agent or the Information and Tabulation Agent makes any recommendation as to whether or not Holders should deliver Consents.  Each Holder must make its own decision as to whether or not to deliver Consents.  This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities.

Seven Generations Energy Ltd. is a private oil and gas developer based in Calgary, Alberta.  The Company is engaged in the delineation and development of its Kakwa River Project, a multi-zone, tight, rich gas project in the Alberta Deep Basin, approximately 100km south of Grand Prairie, Alberta.

Forward-Looking Statements

This press release may contain forward-looking information and statements regarding the Company and the Solicitation.  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 cost 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; our 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.

SOURCE: Seven Generations Energy Ltd.

For further information:

Pat Carlson, Chief Executive Officer
Phone: [phone]
Email: [email protected]