CALGARY, Aug. 13, 2014 /CNW/ – Seven Generations Energy Ltd. (“7G” or the “Company”) is pleased to announce the results of a recent independent Reserves evaluation performed by McDaniel & Associates Consultants Ltd. (“McDaniel”). McDaniel prepared the evaluation in compliance with the standards set out in National Instrument 51-101 of the Canadian Securities Administrators and the Canadian Oil and Gas Evaluation Handbook (COGEH). As of the effective date of the most recent assessment, July 1, 2014, McDaniel recognizes 328.0 million barrels gross (297.4 million barrels net) of oil equivalent (“MMboe”) Total Proved Reserves and 649.1 MMboe gross (569.8 MMboe net) of Total Proved Plus Probable Reserves, up 206% and 129%, respectively, from the previous reserves evaluation, also performed by McDaniel, effective December 31, 2013. The corresponding before tax net present values, using a discount rate of ten percent per annum, are 3.28 billion Canadian dollars for Total Proved Reserves and 7.03 billion Canadian dollars for Total Proved Plus Probable Reserves, up 221% and 127%, respectively, from the December 31 evaluation. In the December 31 evaluation, McDaniel attributed 49% of the Proved Plus Probable Reserve volume to natural gas and 28% to pentanes plus and crude oil, with the balance being ethane, propane and butane. In the more recent report, McDaniel attributes 45% of the Proved Plus Probable Reserve volume to natural gas and 33% to pentanes plus and crude oil.
99.5% percent of the Total Proved Plus Probable Reserves in the most recent report are attributed to the Triassic Montney formation. The most recent reserve report assigns Proved Plus Probable Reserves to 87.5 gross (85.7 net) square miles of 7G’s net land holdings in the Montney including 52.2 (net) existing wells and 512.5 (net) undrilled locations. In total, Seven Generations possesses 516 square miles of net land holdings in the Montney concentrated within 50 miles of the assigned reserves. The portion of the land to which Montney Proved Plus Probable Reserves have not been assigned has not yet been drilled to the density required for McDaniel to recognize any reserve volume assignment. Future drilling of these lands may or may not reveal additional Proved Plus Probable Reserves.
At the Company’s request, McDaniel is now also preparing Contingent and Prospective Resource reports as of the same effective date.
About the Company
7G is a private Canadian corporation engaged in the development of the Kakwa River Project (the “Project”). The Project is a multi-zone tight, liquids rich gas and oil project located roughly 100 km south of Grande Prairie, Alberta, Canada. The Company has its corporate headquarters in Calgary, Alberta and its operations headquarters in Grande Prairie.
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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; our 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.
Seven Generations has adopted the standard of 6 Mcf:1 Bbl when converting natural gas to oil equivalent. BOEs 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.
SOURCE Seven Generations Energy Ltd.