CALGARY, Aug. 12, 2015 /CNW/ - Seven Generations Energy Ltd. (7G) plans to restart normal liquids-rich natural gas shipments on Alliance Pipeline on Thursday, August 13, 2015.
Seven Generations has started to inject and sell initial natural gas volumes into Alliance as part of a group of shippers who are contributing to the operational linepack that fills the pipeline and prepares it for normal service.
"We used this downtime to conduct maintenance and advance the connection of the new Lator 2 plant to the existing Lator 1 plant, work that would have required a shutdown later in August. With that work now complete, we are preparing to resume normal production from our Kakwa River Project on Thursday," said Marty Proctor, 7G's President and Chief Operating Officer.
"This event resulted in a short-term deferral of production. We continue to expect to produce to our 2015 guidance of 55,000 – 60,000 barrels of oil equivalent per day," Proctor said.
Alliance announced August 11 that it plans to lift a force majeure shut-down that started on August 7 due to an operational event. Alliance advised shippers late on August 6 that an amount of hydrogen sulfide (H2S) entered into its mainline pipeline system as a result of complications experienced by an operator injecting volumes downstream of 7G's injection location at the Moose River receipt station. Alliance declared this to be a force majeure event. Alliance has managed this event in a safe, professional and prompt manner that reflects the pipeline's long history of safe and reliable performance.
Seven Generations is a low-cost, high-growth Canadian gas developer generating long-life value from its liquids-rich, natural gas Kakwa River Project, located about 100 kilometres south of its operations headquarters in Grande Prairie, Alberta. 7G's corporate headquarters are in Calgary and its shares trade on the TSX under the symbol VII.
This news release contains certain forward-looking information and statements that involves various risks, uncertainties and other factors. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "should", "believe", "plans", and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, this news release contains forward-looking information and statements pertaining to the following: resumption of production; restart of regular transportation service on Alliance Pipeline; production guidance; future growth and profitability.
With respect to forward-looking information contained in this news release, assumptions have been made regarding, among other things: future oil, natural gas liquids and natural gas prices; 7G's ability to obtain qualified staff and equipment in a timely and cost efficient manner; 7G's ability to market production of oil, NGLs and natural gas successfully to customers; 7G's future production levels; the applicability of technologies for 7G's reserves and resources; future capital investments by 7G; future funds from operations from production; future sources of funding for 7G's capital program; 7G's future debt levels; geological and engineering estimates in respect of 7G's reserves and resources, the geography of the areas in which 7G is conducting exploration and development activities, and the access, economic and physical limitations to which 7G may be subject from time to time; the impact of competition on 7G; and 7G's ability to obtain financing on acceptable terms.
Actual results could differ materially from those anticipated in this forward-looking information as a result of the risks and risk factors that are set forth in 7G'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 7G's actual capital costs, operating costs and economic returns from those anticipated; risks related to the exploration, development and production of oil and natural gas reserves and resources; negative public perception of oil sands development, oil and natural gas development and transportation, hydraulic fracturing and fossil fuels; actions by governmental authorities, including changes in government regulation, royalties and taxation; the management of 7G's growth; the availability, cost or shortage of rigs, equipment, raw materials, supplies or qualified personnel; the absence or loss of key employees; uncertainty associated with estimates of oil, natural gas liquids and natural gas reserves and resources and the variance of such estimates from actual future production; dependence upon compressors, gathering lines, pipelines and other facilities, certain of which 7G does not control; the ability to satisfy obligations under 7G's firm commitment transportation arrangements; uncertainties related to 7G's identified drilling locations; the concentration of 7G's assets in the Kakwa area; unforeseen title defects; First Nations claims; failure to accurately estimate abandonment and reclamation costs; changes in the interpretation and enforcement of applicable laws and regulations; terrorist attacks or armed conflicts; reassessment by taxing authorities of 7G's prior transactions and filings; variations in foreign exchange rates and interest rates; third-party credit risk including risk associated with counterparties in risk management activities related to commodity prices and foreign exchange rates; sufficiency of insurance policies; potential for litigation; variation in future calculations of non-IFRS measures; sufficiency of internal controls; impact of expansion into new activities on risk exposure; risks related to the senior unsecured notes and other indebtedness, including: potential inability to comply with the covenants in the credit agreement related to 7G's credit facilities and/or the covenants in the indentures in respect of 7G's senior secured notes; seasonality of 7G's activities and the Canadian oil and gas industry; and extensive competition in 7G's industry.
The forward-looking information and statements contained in this news release speak only as of the date hereof, and 7G 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.
7G has adopted the conversion standard of six thousand cubic feet of gas to one barrel of oil (6 Mcf:1bbl) when converting natural gas to barrels of oil equivalent (boes). Condensate and other NGLs 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 Seven Generations' 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.
For further information: Further information is available on Seven Generations' website: www.7genergy.com, or by contacting: Investor Relations, Chris Law, Chief Financial Officer; Brian Newmarch, Director, Capital Markets; Phone: 403-767-0752, Email: [email protected]; Media Relations, Alan Boras, Director, Communications and Stakeholder Relations, Phone: 403-767-0772, Email: [email protected]