Seven Generations Announces $260 Million Common Share Private Placement Financing

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Seven Generations Announces $260 Million Common Share Private Placement Financing

by ahnationtalk on February 10, 2016439 Views

CALGARY, ALBERTA–(Feb. 9, 2016) –


Seven Generations Energy Ltd. (TSX:VII) has agreed to issue 18,571,600 common shares at a price of $14.00 per share for gross proceeds of approximately $260 million in a bought deal private placement financing. The proceeds are anticipated to be used for general corporate purposes – primarily 2016 capital investment aimed at growing liquids-rich natural gas production at the Company’s Kakwa River Project. With the issuance of this additional equity, combined with cash on hand and anticipated funds from operations, 7G expects to complete its planned 2016 capital investment of between $900 million and $950 million.

“This new investment will provide additional financial resilience and fortify our balance sheet. We continue to be well funded through 2016 and this additional equity will improve our net debt-to-cash flow ratio during this time of significant commodity price weakness and volatility,” said Chris Law, 7G’s CFO.

“We are continuing to invest in low-cost, economic growth under our revised and flexible 2016 capital investment plan. Our focus remains on prudent, disciplined investment in long-term value creation. If commodity prices show sustainable improvement this year, we have the access to drilling rigs and completions crews to ramp up activity. Conversely, if prices deteriorate, we can further taper and concentrate our capital investment on our most economic developments. Our persistent focus is on innovation, efficiency and value optimization to continue to be among the lowest cost suppliers in North America,” said Pat Carlson, Seven Generations CEO.

This brokered private placement financing is being co-led by Peters & Co. Limited and RBC Capital Markets.

Seven Generations Energy

Seven Generations is a low-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 on Seven Generations is available on the Company’s website:

Reader Advisory

This news release is not an offer of the shares in the United States. The shares have not and will not be registered under the U. S. Securities Act of 1933, as amended (the “US Securities Act”). The shares may not be offered or sold, except to accredited investors in reliance on the exemption from registration provided by Regulation D under the US Securities Act, or to persons outside the United States in compliance with Regulation S and applicable Canadian exemptions. 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.

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: the completion of the private placement financing; expected use of the proceeds of the private placement financing; anticipated capital investment in 2016; production growth; expected economics; 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 10, 2015, which is available on SEDAR at, 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; 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 Energy Ltd. is referred to herein as Seven Generations, Seven Generations Energy, 7G and the Company.


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