Seven Generations Energy Ltd. (7G or the Company) (TSX: VII) is proposing a private placement (the Offering) of US$400 million senior notes due 2023 (the Notes) and the Company’s first quarter production and capital investment are on track to meet 2015 operating guidance.

“This financing, along with funds from operations, cash and our undrawn $480 million credit facility, will go to fund our ongoing capital investment program. Our first quarter production is strong, currently expected to be between 48,000 and 49,000 barrels of oil equivalent per day (boe/d). Our Kakwa River Project wells are delivering robust performance that supports our annual production target of 55,000 to 60,000 boe/d. First quarter capital investment aligns with our planned capital spending profile, which will see our highest investment occur during our most-active quarters, at the start and the end of the year,” said Pat Carlson, 7G’s Chief Executive Officer.

Note Offering

The Company is proposing to offer, on a private placement basis, US$400 million aggregate principal amount of senior notes due 2023. Certain terms of the Notes, including the interest rate payable, will depend on market conditions at the time of pricing. 7G intends to use the net proceeds of the Offering for continued development of the Kakwa River Project and for general corporate purposes.  

Operational Update

During the first quarter, 7G successfully drilled 23 (gross) horizontal wells and completed 16 (gross) wells with an average lateral length of approximately 2,700 meters and an average proppant density of approximately 1.5 tonnes per meter.  First quarter drilling and completion costs averaged approximately $14 million per well. This cost includes several delineation wells, along with non-standardized designs on a portion of completed wells. These wells do not provide the same cost reduction opportunities compared with 7G’s standardized drilling and completion design. Well costs have continued to trend lower, with recent wells drilled and completed using 7G’s standardized design averaging approximately $500,000 to $1 million less than the first quarter average well cost. First quarter 2015 capital investments are expected to be within a range of $360 million to $380 million. 7G anticipates total 2015 capital investments to be within the previously announced range of $1.30 billion to $1.35 billion, with higher spending anticipated in the first and fourth quarters due to higher levels of activity and seasonality.

About the Company

Seven Generations Energy Ltd. is an Alberta-based company engaged in the development of the Kakwa River Project. Located approximately 100 kilometers south of Grande Prairie, Alberta, the Project is a tight, liquids-rich gas and light oil project in the early stages of development. 7G has its corporate headquarters in Calgary, Alberta and its operations headquarters in Grande Prairie, Alberta.

Reader Advisory

This press release is for informational purposes only. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities. The Notes have not and will not be registered under the United States Securities Act of 1933, as amended (the “US Securities Act”). The Notes may not be offered or sold, except to qualified institutional buyers in reliance on the exemption from registration provided by Rule 144A under the US Securities Act, or to persons outside the United States in compliance with Regulation S and applicable Canadian exemptions from prospectus requirements. Any public offering of securities made in the United States would be made by means of a prospectus that would be obtainable from the Company and that would contain detailed information about the Company, its management and financial statements.

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