CALGARY, Sept. 22, 2016 /CNW/ – Paramount Resources Ltd. (“Paramount” or the “Company”) (TSX:POU) announces that it has monetized part of its holdings of 33.5 million common shares of Seven Generations Energy Ltd. (“7G”) which were acquired in August as partial consideration for the sale of the Company’s Musreau/Kakwa assets. Paramount has monetized an aggregate of 24.7 million 7G shares through sale transactions for gross proceeds of approximately $735 million. The Company has received approximately $310 million in cash and will realize the balance of the proceeds in late December 2016.
The proceeds will initially be held as cash and used to fund the continued development of the Company’s oil and gas properties. Paramount’s financial resources and access to capital markets also provide the Company with the ability to participate in strategic acquisitions and capitalize on new opportunities.
Operational Update
Paramount recently completed the first extended reach lateral well in a 25 well Montney drilling program at Karr-Gold Creek. The slickwater completion placed 5,000 tonnes of proppant over 50 stages and the well commenced production on September 5th. The table below summarizes the initial flow rates:
Average |
Cumulative |
|||
Natural gas(1) |
7.0 |
MMcf/d |
112.0 |
MMcf |
Wellhead liquids(1) |
1,288 |
Bbl/d |
20,600 |
Bbl |
Total(1) |
2,454 |
Boe/d |
39,267 |
Boe |
CGR(2) |
184 |
Bbl/MMcf |
184 |
Bbl/MMcf |
(1) |
Production volumes are the gross volumes measured at the wellhead separator from September 6, 2016 to September 21, 2016. Natural gas sales volumes are approximately 10 percent lower when compared to wellhead separator natural gas volumes and stabilized condensate sales volumes are approximately 15 percent lower when compared to wellhead separator condensate volumes. |
(2) |
Condensate to natural gas ratios (CGRs) were calculated by dividing total wellhead separator liquids volumes by total wellhead separator natural gas volumes. |
The remaining wells in the program will be executed over the next 9 to 12 months. Production volumes from these wells will flow to the Company’s existing 40 MMcf/d 6-18 compression and dehydration plant at Karr-Gold Creek and be processed at a downstream third party facility. The 6-18 plant is currently being expanded from 40 MMcf/d to 80 MMcf/d, with the incremental capacity scheduled to come on stream in the second quarter of 2017.
The 25 well Karr-Gold Creek drilling and completion program and plant expansion is being funded from the proceeds of the 7G share monetization.
Paramount’s Board of Directors
The Company also wishes to announce that Mr. Thomas Claugus is leaving the Board of Directors to focus on his principal business endeavors. “The Company would like to thank Mr. Claugus for his six years of service to the Company. Mr. Claugus has been an invaluable contributor to our Board as we navigated through these challenging times”, said Jim Riddell, President and Chief Executive Officer.
Paramount is an independent, publicly traded, Canadian corporation that explores for and develops conventional petroleum and natural gas prospects, pursues longer-term non-conventional exploration and pre-development projects and holds investments in other entities. The Company’s principal properties are primarily located in Alberta and British Columbia. Paramount’s Class A Common Shares are listed on the Toronto Stock Exchange under the symbol “POU”.