The Kakwa River Project is a large-scale, tight, liquids-rich natural gas property covering more than 500,000 net acres in the Kakwa area of northwest Alberta. This high-quality property contains a large resource base that is considered sufficient to deliver several years of production growth at a supply cost that is among the lowest in North America.
In the Heart of Alberta’s Liquids-Rich Region
Seven Generations lands' are well served by processing facilities and regional gathering systems for oil and NGLs, and sweet and sour natural gas. Two transcontinental natural gas pipelines – Alliance and TransCanada, a liquids pipeline – Pembina, plus Canadian National Railway, all intersect in close proximity to the Kakwa River Project. Alberta’s oil sands, a key condensate and natural gas market, are located about 400 kilometres east of the project. This northwest Alberta region is well served by a vibrant oil and natural gas service sector in Grande Prairie, located about 100 kilometres north via a year-round provincial transportation corridor – Highway 40.
Seven Generations owns almost 100 percent of the land in the Kakwa project area, and it has the proven engineering and business capacity to develop low-cost, highly competitive supplies of liquids-rich natural gas. The project is growing rapidly and is considered to be an early stage of a multi-decade development.
Reaching a Milestone of 150,000 Barrels of Oil Equivalent per Day
During the first quarter of 2017, Seven Generations produced about 153,000 barrels of oil equivalent, with about 60 percent of the production from liquids – condensate and natural gas liquids. The company is focused on its highest value lands, the heart of the play, which is called The Nest, where liquids yields are more than 200 barrels per million cubic feet of gas production. The Nest area holds an estimated 1,300 well locations, more than a decade of development drilling and the full cycle supply cost is estimated to be among the lowest cost natural gas production in North America.
The Triassic Montney reservoir within the Nest is about 200 metres thick in the upper, middle and lower intervals of the formation, and is located in a geological setting that provides for high liquids content, large resource in place and high pressure. Seven Generations' lands contain numerous other hydrocarbon-bearing zones, many of which have been commercially demonstrated by other operators in the area.
Seven Generations' management believes that the project is significant in terms of both the size of the ultimately recoverable resources and the quality of the portion of the project that has been tested and delineated to date.
Skilled and Talented Team Delivering Rapid Production Growth
7G has assembled a highly skilled technical and business team with specialized expertise in resource play identification, capture, development and production. The team has a track record of growing production, reserves and cash flow; it is innovative, with a demonstrated ability to enhance well economics by achieving significant cost reductions, performance improvements and operating efficiencies, in particular with respect to gathering and processing facilities and horizontal well drilling and completions.
Processing and Take-Away Capacity Growing to Accommodate Rising Production
Seven Generations continues to invest in processing infrastructure and transportation service to ensure that its rising production reaches its diversified North American markets. 7G owns and operates two large liquids-rich natural gas processing plants – Lator and Cutbank – with a combined capacity of 510 MMcf/d. Planning is underway on a third large processing plant. The company also has access to 250 MMcf/d of third-party processing capacity.
7G’s Kakwa River Project is located within convenient reach, about 500 kilometres southwest, of North America’s largest demand for condensate – the Canadian oil sands – and it is well positioned to continue serving this demand with more than 60,000 bbls/d of condensate stabilization capacity.
7G has diversified natural gas market access, totaling more than 1 Bcf/d of firm service transportation capacity to Alberta (AECO), Eastern Canada (Dawn), the US Mid-West (Chicago Citygate), the Gulf Coast (Henry Hub), and US West (Malin).
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