CALGARY, May 29, 2014 /CNW/ – Seven Generations Energy Ltd. (“7G” or the “Company”) is pleased to report its first quarter 2014 operating and financial results. First quarter production averaged a record 20,231 boe per day and funds from operations also set a record at nearly $54 million. Year over year first quarter production more than tripled from the first quarter of 2013, including a 75% increase from the fourth quarter of 2013. The Company drilled 10 wells in the quarter with a 100% success ratio, and brought 7 new Montney horizontal wells on production. In the summer of 2013, the Company commenced an initiative of larger fracs, longer wells and restricted initial production. On a preliminary analysis of early data, those wells constructed under this new initiative demonstrate both gas and liquids production each exceeding our 25% production improvement target. Vice President Reservoir Engineering, Frank Kuppe said, “While it is too soon to definitively characterize the effect of these well construction changes, the outlook for productivity and recovery improvement is very positive”.
Operational Highlights
Financial Update
Three Months Ended March 31 |
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2014 |
2013 |
Change |
|
OPERATIONAL |
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Total land holdings |
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Gross acres |
289,120 |
190,880 |
51% |
Net acres |
281,977 |
183,601 |
54% |
Undeveloped land holdings |
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Gross acres |
225,916 |
148,636 |
52% |
Net acres |
222,150 |
144,550 |
54% |
Rig Count |
8 |
2 |
300% |
Production |
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Oil and NGL (bbl/d) |
11,608 |
3,509 |
231% |
Gas (mcf/d) |
51,739 |
16,386 |
216% |
Total (boe/d) |
20,231 |
6,240 |
224% |
Liquids Ratio |
57% |
56% |
2% |
Product Prices (1) |
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Crude oil and NGL ($/bbl) |
73.07 |
53.25 |
37% |
Natural gas ($/mcf) |
5.80 |
3.65 |
59% |
Operating and transportation expense ($/boe) |
12.42 |
10.09 |
23% |
Operating netback ($/boe) (2) |
38.56 |
26.67 |
45% |
General administrative expenses ($/boe) (3) |
1.74 |
3.35 |
(48%) |
FINANCIAL ($000, EXCEPT PER SHARE) |
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Revenue |
103,331 |
22,205 |
365% |
Royalties |
5,386 |
2,120 |
154% |
Cash flow |
53,958 |
13,156 |
310% |
Cash flow per share (diluted) |
0.51 |
0.15 |
240% |
Net earnings (loss) |
1,164 |
876 |
33% |
Net earnings per share (diluted) |
0.01 |
0.01 |
– |
Capital expenditures, net of dispositions |
193,049 |
132,469 |
46% |
Weighted average shares outstanding (diluted) |
106,017 |
86,626 |
22% |
Working capital (deficit) (4) |
424,581 |
(23,559) |
1902% |
Net debt (5) |
(349,269) |
(23,559) |
1383% |
(1) Prices excluded realized gains and losses on financial instruments |
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(2) Operating netback is calculated on a per-boe basis and is defined as revenue (including realized risk management contracts and processing income) less royalties, transportation costs and operating expenses |
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(3) Excludes interest and financing charges |
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(4) Working capital excludes unrealized financial instruments and deferred credits |
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(5) Debt as reported represents US$700.0 million converted to Canadian dollars at the closing exchange rate at March 31, 2014 |
About 7G
Seven Generations Energy Ltd. is a tight gas developer with a single asset, the Kakwa River Project. 7G has its corporate headquarters in Calgary, Alberta and operating headquarters in Grande Prairie, Alberta, approximately 100 kilometers from the Project. The Project includes more than 500 square miles of rights in the Alberta Deep Basin, targeting, mainly, the Montney formation. By management’s projection, the Project has the potential to yield more than 25 trillion cubic feet of marketable gas and more than 2.6 billion barrels of natural gas liquids (including over 1.0 billion barrels of condensate), with the potential to produce approximately 2 billion cubic feet of gas and 200,000 barrels of natural gas liquids daily for nearly 20 years.
[expand title=”Advisories & Contact”]Advisories
This press release may contain forward-looking information and statements regarding the Company. 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 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 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. This Press Release includes references to barrel equivalents (boes) which are calculated at a conversion rate of one barrel of oil to six thousand cubic feet of gas. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 1bbl : 6mscf is based on an approximation of energy equivalence conversion method primarily applicable at the burner tip and does not represent a value equivalency at the well head. In addition, given that the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalent of six to one, utilizing a boe conversion ratio of 1bbl:6mscf would be misleading as an indication of value.
SOURCE Seven Generations Energy Ltd.