Seven Generations strong Q3 results with 22% increase in funds

CALGARY, ALBERTA- Seven Generations’ strong production growth drove funds from operations to $284.3 million or 78 cents per share in the third quarter of 2017, representing a 22 per cent increase in funds from operations per share compared to the same period one year ago, according to a press release.

“We grew production and cash flow per share consistent with our plans and we reduced per unit operating and well construction costs. Our diversified market access helped capture attractive natural gas prices, which, combined with our high liquids yields, generated strong returns on capital,” said Marty Proctor, 7G’s President and Chief Executive Officer.

Production averaged 183,920 boe/d in the third quarter of 2017, up 39 per cent from the third quarter of 2016, with liquids making up 59 per cent of 7G’s total production.

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“We remain focused on improving our operational performance and executing a development program that achieves industry-leading returns,” said Proctor.

THIRD QUARTER HIGHLIGHTS

• Production averaged 183,920 boe/d, up 39 percent, or 26 percent per share, from the third quarter of 2016, comprised of 59 per cent liquids and a condensate-to-gas ratio of 128 barrels per MMcf.

• Funds from operations were $284.3 million, or 78 cents per share, up 34 per cent and 22 per cent respectively compared to the third quarter of 2016.

• Operating income was $63.4 million or 17 cents per share, up 33 per cent and 21 per cent respectively compared to the third quarter of 2016.

• 7G commenced a refinancing transaction to issue US$700 million of 5.375% senior unsecured notes due in 2025. These new notes retired US$700 million of 8.25% senior unsecured notes due in 2020. This refinancing will save about $25 million per year in interest. The new issuance was completed subsequent to quarter end on Oct. 2^nd and the 2020 note redemption was completed Oct. 25^th.

7G’s market access strategy contributes to record funds from operations

7G’s natural gas marketing portfolio provides geographic takeaway capacity and natural gas pricing optionality across North America – the U.S. Midwest, Gulf of Mexico, Alberta and Eastern Canada.

7G’s third quarter realized natural gas price prior to hedging was $3.46 per Mcf, significantly higher than Alberta prices.

Per unit operating costs down 13 percent; drilling and completions costs track lower

7G’s cost focus reduced third quarter operating costs to $5.43 per boe, down from $6.24 per boe in the second quarter of 2017. Operating costs are expected to trend to historical levels by early 2018.

Third quarter drilling and completing costs were also lower, down 7 percent to $11 million per well compared to the second quarter of 2017, while drilling longer wells and completing them with more fracture stages and sand per well.