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CALGARY, ALBERTA--(Marketwired - Mar 30, 2016) - Seven Generations Energy Ltd. (TSX:VII) has completed the construction and commissioning of its Cutbank processing plant at the Company's Kakwa River Project in northwest Alberta.
The Cutbank plant is designed to process 250 million cubic feet per day (MMcf/d) of liquids-rich natural gas. With the addition of the Cutbank plant, production volumes in 2016 are expected to grow as additional wells are brought on-stream. 7G expects to produce an average of between 100,000 and 110,000 barrels of oil equivalent per day and plans capital investment of $900 million to $950 million in 2016.
Cutbank was brought on-stream about a week early and about 18 percent under budget. When combined with the expansion in late 2015 of 7G's Lator processing complex, Cutbank takes liquids-rich natural gas processing capacity to approximately 510 MMcf/d at the Kakwa River Project. The Cutbank plant project included the construction of field gathering pipelines and a 29-kilometre, 24-inch diameter natural gas sales pipeline that connects Cutbank to the Alliance Pipeline for the delivery of liquids-rich natural gas to the Chicago-area market.
Seven Generations Energy
Seven Generations is a low-supply-cost, high-growth Canadian natural gas developer generating long-life value from its liquids-rich 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.
Further information about Seven Generations is available on the Company's website: www.7genergy.com.
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: anticipated growth; expected processing capacity; anticipated production growth; production guidance; and the ability to generate long-life value from the Kakwa River Project.
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; the Company's ability to obtain qualified staff and equipment in a timely and cost efficient manner; the Company's ability to market production of oil, natural gas and natural gas liquids successfully to customers; the Company's future production levels; the applicability of technologies for the Company's reserves; future capital investments by the Company; future funds from operations from production; future sources of funding for the Company's capital program; the Company's future debt levels; geological and engineering estimates in respect of the Company's reserves and resources; the geography of the areas in which the Company is conducting exploration and development activities; the access, economic and physical limitations to which the Company may be subject from time to time; the impact of competition on the Company; and the Company's ability to obtain financing on acceptable terms.
Actual results could differ materially from those anticipated in the forward-looking information as a result of the risks and risk factors that are set forth in the Company's Annual Information Form dated March 8, 2016, 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 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 the Company'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 the Company does not control; the ability to satisfy obligations under the Company's firm commitment transportation arrangements; uncertainties related to the Company's identified drilling locations; the concentration of the Company's assets in the Kakwa area; unforeseen title defects; Aboriginal 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; natural disasters; reassessment by taxing authorities of the Company'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 certain financial 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 the Company's credit facilities and/or the covenants in the indentures in respect of the Company's senior secured notes; seasonality of the Company's activities and the Canadian oil and gas industry; weather related risks, fires and natural disasters, and extensive competition in the Company's industry.
The forward-looking information and statements contained in this news 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.
Seven Generations has adopted the standard of six thousand cubic feet (Mcf) to one barrel (bbl) (6 Mcf:1 bbl) when converting natural gas to barrels of oil equivalent (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.
Seven Generations Energy Ltd. is referred to herein as Seven Generations, Seven Generations Energy, 7G and the Company.
Seven Generations Energy Ltd.
Chris Law, Chief Financial Officer
Brian Newmarch, Director, Capital Markets
Seven Generations Energy Ltd.
Director, Communications and Stakeholder Relations
Seven Generations Energy Ltd.
Suite 300, 140 - 8th Avenue SW
Calgary, AB T2P 1B3