Seven Generations Energy Ltd. Announces Third Quarter 2014 Results
CALGARY, Nov. 12, 2014 /CNW/ - Seven Generations Energy Ltd. ("7G" or the "Company") (TSX: VII) is pleased to report its third quarter 2014 operating and financial results.
Highlights
- Third quarter production averaged a record 35,820 boe/d, an increase of 406% from the third quarter of 2013 and a 49% increase over the second quarter of 2014, with a September 2014 average production rate of 39,690 boe/d (59% liquids).
- The third quarter of 2014 established a record funds from operations for the quarter of $106.3 million or $0.48 per share on a diluted basis. On a per share basis, this is a 1,500% increase over the third quarter of 2013, and a 55% increase over the second quarter of 2014.
- The Company has the financial capacity to execute its 2015 business plan:
- On September 15, 2014, the Company and its lending syndicate agreed to an amendment to the senior secured revolving credit arrangement that increased the borrowing capacity from $150.0 million to $480.0 million and extended the maturity date of the credit facility to September 2017.
- At September 30, 2014 the Company's adjusted working capital was $67.7 million.
- Subsequent to the third quarter of 2014, 7G completed an initial public offering of common shares with net proceeds to the Company of approximately $882 million. As a result of the offering, the Company has access to liquidity in excess of $1.4 billion.
- During the third quarter of 2014 independent evaluator, McDaniel & Associates Consultants Ltd., updated the Company's Total Best Estimate Contingent Resources to 728 million barrels gross (637 million barrels net) oil equivalent ("MMboe") and Total Best Estimate Prospective Resources to 1,096 MMboe gross (986 MMboe net). The corresponding before tax net present values, using a discount rate of ten percent per annum, are $4.6 billion for Total Best Estimate Contingent Resources and $4.2 billion for Total Best Estimate Prospective Resources.
Corporate Update
- As a result of significant increases in production volumes, revenue increased 599% in the third quarter of 2014 versus the same period last year, and 35% over the second quarter of 2014.
- 7G achieved operating netbacks of $35.79 per boe in the third quarter of 2014, a 56% increase over the third quarter of 2013 and a 10% decrease relative to the second quarter of 2014 due to a weaker commodity price environment in the third quarter of 2014.
- During the third quarter of 2014, 7G increased its contracted volumes of condensate and other natural gas liquids (NGLs) with Pembina Pipeline Corporation and its affiliates on Pembina's Peace Pipeline Phase III Expansion by 91% to 40,695 bbl/d. This service is set to commence upon the completion of Pembina's Phase III Expansion expected in late 2016 to mid 2017. 7G has also increased its contracted volumes at Pembina's fractionation expansion project (RFS3) near Fort Saskatchewan by 143% to 8,806 bbl/d.
- Net capital investments for the quarter totaled $328.4 million with approximately 72% invested on drilling and completions and 28% on facilities and well equipment.
- The Company increased its active drilling rig count to ten rigs during the quarter from seven rigs at the beginning of the year.
- During the third quarter of 2014, 7G rig-released ten wells with an average horizontal lateral length of approximately 2,838 meters and completed ten wells with an average of 32.8 stages and 3,796 tonnes of proppant per well.
| Three months ended September 30 |
Nine months ended September 30 |
||||||
| 2014 |
2013 |
% Change |
2014 |
2013 |
% Change |
||
| OPERATIONAL |
|||||||
| Total land holdings(1) |
|||||||
| Gross acres |
367,520 |
275,680 |
33 |
367,520 |
275,680 |
33 |
|
| Net acres |
358,238 |
268,537 |
33 |
358,238 |
268,537 |
33 |
|
| Undeveloped land holdings(1) |
|||||||
| Gross acres |
290,236 |
223,196 |
30 |
290,236 |
223,196 |
30 |
|
| Net acres |
284,442 |
219,245 |
30 |
284,442 |
219,245 |
30 |
|
| Rig count(1) |
10 |
5 |
100 |
10 |
5 |
100 |
|
| Production |
|||||||
| Oil and NGL (bbl/d) |
20,869 |
3,253 |
542 |
15,527 |
4,904 |
217 |
|
| Natural gas (MMcf/d) |
89.7 |
23.0 |
290 |
67.3 |
19.5 |
245 |
|
| Total (boe/d) |
35,820 |
7,084 |
406 |
26,739 |
6,505 |
311 |
|
| Liquids ratio |
58% |
46% |
26 |
58% |
50% |
16 |
|
| Product prices (2) |
|||||||
| Oil and NGL ($/bbl) |
66.33 |
60.52 |
10 |
70.16 |
57.09 |
23 |
|
| Natural gas ($/Mcf) |
4.62 |
2.64 |
75 |
5.14 |
3.38 |
52 |
|
| Operating expense ($/boe) |
4.32 |
6.91 |
(38) |
4.83 |
6.86 |
(30) |
|
| Transportation expense ($/boe) |
3.89 |
3.82 |
2 |
4.65 |
4.03 |
15 |
|
| Operating netback ($/boe) (3) (4) |
35.79 |
23.00 |
56 |
37.74 |
25.99 |
45 |
|
| General and administrative expenses ($/boe) (5) |
1.35 |
3.08 |
(56) |
1.76 |
3.42 |
(49) |
|
| FINANCIAL ($000s, except for per share amounts) |
|||||||
| Revenue |
165,501 |
23,692 |
599 |
391,828 |
68,681 |
471 |
|
| Funds from operations(4) |
106,294 |
4,780 |
2,124 |
226,430 |
27,159 |
734 |
|
| Funds from operations per share – diluted(6) |
0.48 |
0.03 |
1,500 |
1.02 |
0.16 |
538 |
|
| Net income (loss) |
30,482 |
(955) |
3,292 |
75,572 |
(8,533) |
986 |
|
| Net income (loss) per share – diluted(6) |
0.14 |
(0.01) |
1,500 |
0.34 |
(0.05) |
780 |
|
| Capital investments, net of dispositions |
328,423 |
142,185 |
131 |
740,596 |
396,090 |
87 |
|
| Weighted average shares outstanding – diluted (6) |
222,151 |
173,237 |
28 |
222,098 |
172,328 |
29 |
|
| Adjusted working capital (4)(7) |
67,700 |
129,586 |
(48) |
67,700 |
129,586 |
(48) |
|
| Senior notes (8) |
784,000 |
412,120 |
90 |
784,000 |
412,120 |
90 |
|
| (1) |
As of September 30 |
| (2) |
Prices exclude realized gains and losses on risk management contracts. |
| (3) |
Operating netback is calculated on a per-boe basis and is defined as revenue (including realized hedging gains and losses plus third party income) less royalties, operating expenses and transportation costs. |
| (4) |
Operating netback, funds from operations and adjusted working capital do not have any standardized meaning prescribed by International Financial Reporting Standards (IFRS) and, therefore, may not be comparable with the calculation of similar measures presented by other entities. Please refer to the Non-IFRS Financial Measures section of this press release for additional information. |
| (5) |
Excludes interest and financing charges. |
| (6) |
On September 8, 2014, the Company amended its articles of incorporation to divide the issued and outstanding Class A Common Shares on a two-for-one basis. The share split has been reflected in the condensed interim statements on a retroactive basis. Only dilutive stock options and performance warrants have been included. |
| (7) |
Adjusted working capital excludes unrealized risk management contracts and deferred credits. |
| (8) |
Senior notes as reported represent US$700.0 million principal converted to Canadian dollars at the closing exchange rate for the period end. |
Outlook
- 7G expects 2014 average production to meet previous estimates of 27,000 – 30,000 boe/d.
- The Company previously announced that 2014 capital investments were estimated to total $1.038 billion. Presently, 2014 capital is expected to be $1.067 billion. The difference is primarily due to higher than expected costs for well completions partly as a result of drilling longer than expected laterals and logistical challenges associated with the supply of nitrogen and other resources required for fracture treatments. The previously announced dedicated frac spread and systematic improvements in our stimulation technique are expected to improve the Company's capital efficiency going forward.
- In the third quarter of 2014, the Board of Directors approved a 2015 capital budget of $1.6 billion which is designed to generate average annual production in 2015 of 55,000 to 60,000 boe/d. The 2015 capital budget includes discretionary capital for delineation drilling and facility project pre-investment, equating to approximately 15% of the total capital budget. In the event that commodity prices remain low into 2015, the discretionary projects could be deferred to preserve the Company's strong balance sheet.
- 7G plans on increasing the active rig count to 15 drilling rigs during the first half of 2015.
- Construction of the Karr 7-11 to Lator condensate pipeline and the Lator to Pembina pipeline was mechanically complete in third quarter of 2014. Commissioning and start-up is expected in the fourth quarter.
- Field construction of the 25,000 bbl/d stabilizer project at the Karr 7-11 battery commenced during the third quarter. The project is estimated to be mechanically complete in the fourth quarter of 2014 with commissioning anticipated in early 2015.
- Procurement and engineering for the Lator 2 gas plant expansion continued throughout the third quarter. Construction kickoff is planned for the first quarter of 2015, subject to regulatory approvals, and start-up is expected by the fourth quarter of 2015. 7G anticipates that the Lator 2 gas plant expansion will increase the Company's natural gas processing capacity to 250 MMcf/d by December 2015, consistent with its marketing commitments.
| SELECTED QUARTERLY INFORMATION |
||||||
| Q3 2014 |
Q2 2014 |
Q1 2014 |
YTD 2014 |
|||
| FINANCIAL ($ thousands, except per share amounts) |
||||||
| Oil and natural gas liquids revenues |
127,343 |
93,742 |
76,338 |
297,423 |
||
| Natural gas revenues |
38,158 |
29,254 |
26,993 |
94,405 |
||
| Total revenues |
165,501 |
122,996 |
103,331 |
391,828 |
||
| Realized hedging loss |
(148) |
(6,873) |
(5,405) |
(12,426) |
||
| Processing and third party income |
571 |
243 |
285 |
1,099 |
||
| Interest and other income |
512 |
782 |
626 |
1,920 |
||
| Royalties |
(20,925) |
(9,434) |
(5,386) |
(35,745) |
||
| Operating expenses |
(14,245) |
(9,659) |
(11,391) |
(35,295) |
||
| Transportation expenses |
(12,814) |
(9,940) |
(11,220) |
(33,974) |
||
| General and administrative expense |
(4,457) |
(5,233) |
(3,175) |
(12,865) |
||
| Interest expense |
(16,037) |
(16,262) |
(13,746) |
(46,045) |
||
| Foreign exchange |
8,367 |
(618) |
223 |
7,972 |
||
| Other |
(31) |
(30) |
22 |
(39) |
||
| Funds from operations (1) |
106,294 |
65,972 |
54,164 |
226,430 |
||
| Per share – basic (2) |
0.55 |
0.35 |
0.29 |
1.19 |
||
| Per share –diluted (2) |
0.48 |
0.31 |
0.25 |
1.02 |
||
| Net income |
30,482 |
43,926 |
1,164 |
75,572 |
||
| Per share – basic (2) |
0.16 |
0.23 |
0.01 |
0.40 |
||
| Per share – diluted (2) |
0.14 |
0.20 |
0.01 |
0.34 |
||
| Capital investments, net of dispositions |
||||||
| Land |
1,408 |
28,137 |
1,519 |
31,064 |
||
| Drilling and completions |
234,879 |
155,284 |
124,294 |
514,457 |
||
| Facilities and equipment |
90,447 |
34,172 |
65,806 |
190,425 |
||
| Other |
1,689 |
1,531 |
1,430 |
4,650 |
||
| Total capital investments |
328,423 |
219,124 |
193,049 |
740,596 |
||
| Adjusted working capital (1) |
67,700 |
277,222 |
424,581 |
67,700 |
||
| Senior notes (3) |
784,000 |
746,900 |
773,850 |
784,000 |
||
| OPERATING |
||||||
| Average daily production |
||||||
| Oil and natural gas liquids (bbls/d) |
20,869 |
14,005 |
11,608 |
15,527 |
||
| Natural gas (MMcf/d) |
89.7 |
60.0 |
51.7 |
67.3 |
||
| Total (boe/d) |
35,820 |
23,999 |
20,231 |
26,739 |
||
| Realized prices |
||||||
| Oil and natural gas liquids ($/bbl) |
66.33 |
73.55 |
73.07 |
70.16 |
||
| Natural gas ($/mcf) |
4.62 |
5.36 |
5.80 |
5.14 |
||
| (1) |
See "Non-IFRS Financial Measures" |
| (2) |
On September 8, 2014, the Company amended its articles of incorporation to divide the issued and outstanding Class A Common Voting Shares on a two-for-one basis. The share split has been reflected in the condensed interim statements for the three and nine months ended September 30, 2014 and on a retroactive basis. |
| (3) |
Senior notes as reported represent US$ principal converted to Canadian dollars at the closing exchange rate for the period. |
| SELECTED QUARTERLY INFORMATION - continued |
||||||
| Q4 2013 |
Q3 2013 |
Q2 2013 |
Q1 2013 |
YE 2013 |
||
| FINANCIAL ($ thousands, except per share amounts) |
||||||
| Oil and natural gas liquids revenues |
39,900 |
18,110 |
15,745 |
16,817 |
90,572 |
|
| Natural gas revenues |
10,921 |
5,582 |
7,039 |
5,388 |
28,930 |
|
| Total revenues |
50,821 |
23,692 |
22,784 |
22,205 |
119,502 |
|
| Realized hedging gain |
49 |
17 |
53 |
160 |
279 |
|
| Processing and third party income |
356 |
501 |
347 |
407 |
1,611 |
|
| Interest and other income |
272 |
506 |
274 |
233 |
1,285 |
|
| Royalties |
(3,188) |
(2,227) |
(318) |
(2,120) |
(7,853) |
|
| Operating expenses |
(8,425) |
(4,502) |
(4,168) |
(3,520) |
(20,615) |
|
| Transportation expenses |
(5,623) |
(2,486) |
(2,529) |
(2,141) |
(12,779) |
|
| General and administrative expense |
(2,052) |
(2,006) |
(2,175) |
(1,884) |
(8,117) |
|
| Interest expense |
(8,970) |
(8,691) |
(5,051) |
(194) |
(22,906) |
|
| Foreign exchange |
(133) |
(24) |
6 |
10 |
(141) |
|
| Other |
7 |
- |
- |
- |
7 |
|
| Funds from operations (1) |
23,114 |
4,780 |
9,223 |
13,156 |
50,273 |
|
| Per share – basic (2) |
0.14 |
0.03 |
0.06 |
0.08 |
0.30 |
|
| Per share – diluted (2) |
0.12 |
0.03 |
0.05 |
0.08 |
0.27 |
|
| Net income (loss) |
(5,625) |
(955) |
(8,454) |
876 |
(14,158) |
|
| Per share – basic (2) |
(0.03) |
(0.01) |
(0.05) |
0.01 |
(0.08) |
|
| Per share – diluted (2) |
(0.03) |
(0.01) |
(0.05) |
0.01 |
(0.08) |
|
| Capital investments, net of dispositions |
||||||
| Land |
2,925 |
8,991 |
35,875 |
13,507 |
61,298 |
|
| Drilling and completions |
129,231 |
102,314 |
44,697 |
45,568 |
321,810 |
|
| Facilities and equipment |
44,717 |
29,707 |
39,806 |
72,464 |
186,694 |
|
| Other |
1,365 |
1,173 |
1,058 |
930 |
4,526 |
|
| Total capital investments |
178,238 |
142,185 |
121,436 |
132,469 |
574,328 |
|
| Adjusted working capital (1) |
214,877 |
129,586 |
268,137 |
(23,559) |
214,877 |
|
| Senior notes (3) |
425,440 |
412,120 |
420,720 |
- |
425,440 |
|
| OPERATING |
||||||
| Average daily production |
||||||
| Oil and natural gas liquids (bbls/d) |
6,771 |
3,253 |
2,994 |
3,509 |
4,139 |
|
| Natural gas (MMcf/d) |
28.9 |
23.0 |
19.1 |
16.4 |
21.9 |
|
| Total (boe/d) |
11,585 |
7,084 |
6,182 |
6,240 |
7,786 |
|
| Realized prices |
||||||
| Oil and natural gas liquids ($/bbl) |
64.05 |
60.52 |
57.78 |
53.25 |
59.96 |
|
| Natural gas ($/mcf) |
4.11 |
2.64 |
4.04 |
3.65 |
3.62 |
|
| (1) |
See "Non-IFRS Financial Measures" |
| (2) |
On September 8, 2014, the Company amended its articles of incorporation to divide the issued and outstanding Class A Common Voting Shares on a two-for-one basis. The share split has been reflected in the condensed interim statements for the three and nine months ended September 30, 2014 and on a retroactive basis. |
| (3) |
Senior notes as reported represent US$ principal converted to Canadian dollars at the closing exchange rate for the period. |
| SELECTED QUARTERLY INFORMATION - continued |
||||||
| Q4 2012 |
Q3 2012 |
Q2 2012 |
Q1 2012 |
YE 2012 |
||
| FINANCIAL ($ thousands, except per share amounts) |
||||||
| Oil and natural gas liquids revenues |
10,994 |
11,308 |
9,269 |
7,047 |
38,618 |
|
| Natural gas revenues |
5,820 |
4,636 |
3,707 |
2,844 |
17,007 |
|
| Total revenues |
16,814 |
15,944 |
12,976 |
9,891 |
55,625 |
|
| Realized hedging gain |
224 |
520 |
655 |
404 |
1,803 |
|
| Processing and third party income |
405 |
485 |
575 |
568 |
2,033 |
|
| Interest and other income |
433 |
431 |
223 |
93 |
1,180 |
|
| Royalties |
(2,922) |
(959) |
(859) |
(793) |
(5,533) |
|
| Operating expenses |
(3,233) |
(2,227) |
(2,204) |
(2,101) |
(9,765) |
|
| Transportation expenses |
(641) |
(625) |
(503) |
(400) |
(2,169) |
|
| General and administrative expense |
(1,808) |
(1,491) |
(1,324) |
(1,304) |
(5,927) |
|
| Interest expense |
(50) |
(51) |
(117) |
(49) |
(267) |
|
| Foreign exchange |
- |
- |
- |
- |
- |
|
| Other |
(618) |
- |
- |
- |
(618) |
|
| Funds from operations (1) |
8,604 |
12,027 |
9,422 |
6,309 |
36,362 |
|
| Per share – basic (2) |
0.05 |
0.07 |
0.07 |
0.05 |
0.25 |
|
| Per share – diluted (2) |
0.05 |
0.07 |
0.07 |
0.05 |
0.24 |
|
| Net loss |
(379) |
(247) |
(875) |
(1,073) |
(2,574) |
|
| Per share – basic (2) |
- |
- |
(0.01) |
(0.01) |
(0.02) |
|
| Per share – diluted (2) |
- |
- |
(0.01) |
(0.01) |
(0.02) |
|
| Capital investments, net of dispositions |
||||||
| Land |
16,775 |
21,461 |
10,916 |
10,584 |
59,736 |
|
| Drilling and completions |
43,007 |
25,545 |
13,169 |
21,196 |
102,917 |
|
| Facilities and equipment |
42,346 |
14,331 |
3,496 |
10,033 |
70,206 |
|
| Other |
669 |
477 |
522 |
442 |
2,110 |
|
| Total capital investments |
102,797 |
61,814 |
28,103 |
42,255 |
234,969 |
|
| Adjusted working capital (1) |
95,089 |
189,336 |
195,286 |
16,605 |
95,089 |
|
| Senior notes (3) |
- |
- |
- |
- |
- |
|
| OPERATING |
||||||
| Average daily production |
||||||
| Oil and natural gas liquids (bbls/d) |
1,439 |
1,528 |
1,355 |
912 |
1,309 |
|
| Natural gas (MMcf/d) |
17.3 |
19.4 |
18.9 |
13.3 |
17.2 |
|
| Total (boe/d) |
4,316 |
4,763 |
4,512 |
3,123 |
4,180 |
|
| Realized prices |
||||||
| Oil and natural gas liquids ($/bbl) |
83.07 |
80.44 |
75.19 |
84.90 |
80.59 |
|
| Natural gas ($/mcf) |
3.66 |
2.60 |
2.15 |
2.36 |
2.70 |
|
| (1) |
See "Non-IFRS Financial Measures" |
| (2) |
On September 8, 2014, the Company amended its articles of incorporation to divide the issued and outstanding Class A Common Voting Shares on a two-for-one basis. The share split has been reflected in the condensed interim statements for the three and nine months ended September 30, 2014 and on a retroactive basis. |
| (3) |
Senior notes as reported represent US$ principal converted to Canadian dollars at the closing exchange rate for the period. |
Conference Call
7G will host a conference call on Thursday, November 13, 2014 at 9AM MST (11AM EST) to discuss third quarter results and address investor questions. To participate please dial 416-623-0333 or toll free in North America 1-855-353-9183 and enter access code 36248#. A replay will be made available after the call and can be accessed by dialing 1-855-201-2300 and entering conference reference number 1168291# followed by participant access code 36248#.
Non-IFRS Financial Measures
In this press release, the Company uses the terms "funds from operations", "operating netback" and "adjusted working capital". These terms do not have any standardized meaning prescribed by International Financial Reporting Standards (IFRS) and, therefore, may not be comparable with the calculation of similar measures presented by other entities.
"Funds from operations" is a financial measure not presented in accordance with IFRS and is equal to cash flow from operating activities, the most directly comparable financial measure presented in accordance with IFRS, adjusted for changes in non-cash operating working capital and decommissioning expenditures. The Company has presented funds from operations because it uses funds from operations as an integral part of its internal reporting to measure its performance. Funds from operations is considered an important indicator of the operational strength of the Company's business. Funds from operations is a measure of the cash flow generated by the Company's activities and eliminates the effect of changes in non-cash working capital, which is included in cash flow from operating activities. Funds from operations is not intended to be a performance measure that should be regarded as an alternative to, or more meaningful than, either net income as an indicator of operating performance or to cash flows from operating activities as a measure of liquidity. In addition, funds from operations is not intended to represent funds available for dividends, reinvestment or other discretionary uses.
The following table presents a reconciliation of the non-IFRS financial measure of funds from operations to the IFRS financial measure of cash flow from operating activities.
| Three months |
Nine months |
||||
| 2014 |
2013 |
2014 |
2013 |
||
| ($000) |
($000) |
||||
| Cash flow from operating activities |
118,070 |
14,666 |
221,242 |
41,131 |
|
| Decommissioning expenditures |
- |
- |
206 |
- |
|
| Changes in non-cash operating working capital |
(11,776) |
(9,886) |
4,982 |
(13,972) |
|
| Funds from operations |
106,294 |
4,780 |
226,430 |
27,159 |
|
"Operating netback" is calculated on a per boe basis and is determined by deducting royalties, operating and transportation expenses from petroleum and natural gas revenue and, except where otherwise indicated, after adjusting for hedging gains or losses and processing and third party income. Operating netback is utilized by the Company to better analyze the operating performance of its petroleum and natural gas assets against prior periods.
"Adjusted working capital" is calculated as current assets less current liabilities as they appear on the balance sheets, and excludes current unrealized risk management contracts and deferred credits.
The following table presents a calculation of adjusted working capital as presented in this press release.
| As at Sept 30 |
||
| 2014 |
2013 |
|
| ($000) |
||
| Total current assets |
286,738 |
239,699 |
| Total current liabilities |
(204,634) |
(110,781) |
| Current risk management contracts |
(14,527) |
668 |
| Current deferred credits |
123 |
- |
| Adjusted working capital |
67,700 |
129,586 |
Advisories
Any "financial outlook" or "future oriented financial information' in this press release, as defined by applicable securities legislation, has been approved by management of the Company. Such financial outlook or future oriented financial information is provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes.
Certain statements contained in this press release constitute "forward-looking statements" within the meaning of section 27A of the Securities Act of 1933 and section 21E of the Securities Exchange Act of 1934 and "forward looking information" for the purposes of Canadian securities regulation. 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. Statements relating to "reserves" and "resources" are also deemed to be forward looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated and that the reserves and resources can be profitably produced in the future. Actual reserve and resource values may be greater than or less than the estimates provided herein. 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, natural 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 Company's ability to replace oil and gas reserves; volatility in the financial and credit markets or in oil and natural gas prices; effects of regulation by governmental agencies including changes in environmental regulations, tax laws and royalties. 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. Additional factors are disclosed in the Company's Supplemented PREP Prospectus dated October 29, 2014 under the headings "Forward-Looking Statements" and "Risk Factors".
Seven Generations has adopted the standard of 6 Mcf:1 bbl when converting natural gas to oil equivalent. Boe may be misleading, particularly if used in isolation. A Boe conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. 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.
Unless otherwise noted, "$" refers to Canadian dollars.
About Seven Generations
Seven Generations Energy Ltd. is an independent petroleum company focused on the acquisition, development and value optimization of high quality tight and shale hydrocarbon resource plays. Presently, the Company has a single focus area, the Kakwa River Project, a large-scale, tight, liquids-rich natural gas property located in the Kakwa area of northwest Alberta. 7G has a corporate headquarters in Calgary, Alberta and an operations headquarters in Grande Prairie, Alberta. Seven Generations shares are traded on the Toronto Stock Exchange under the symbol VII.
SOURCE: Seven Generations Energy Ltd.
Brian Newmarch, Manager Investor Relations or Chris Law, Vice President Corporate Planning, Phone: 403-718-0700, Email: [email protected]
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