Responding to COVID-19

Keeping our people and the communities where we operate safe through the COVID-19 pandemic is our first priority. To ensure the health and safety of our employees, partners and neighbours, and support our stakeholders and Indigenous communities, Seven Generations is following the guidance provided by federal and provincial public health authorities. In addition, we’ve proactively implemented a number of protocols and initiatives at the onset of the pandemic.

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Protecting Our People

To protect our people and proactively mitigate risks associated with COVID-19, we have implemented several health and safety protocols including:

• verbal screenings for employees and contractors with 7G provided paramedical staff
• 14-day self-isolation periods as outlined by government protocols for all out-of-country travel
• enhanced cleaning procedures at all 7G sites
• physical distancing practices including working remotely
• increased safety at our 7G camp locations, a few examples include:
  • reduced shift changes
  • all access doors and washrooms are being sanitized more frequently, with additional emphasis on periods of peak guest activity
  • common touch points in the dining room are being frequently sanitized during meal service
  • mandatory hand sanitization has been put in place for all 7G contractors entering the dining room, with additional stations added to ensure continued smooth flow
  • having camp employees review our 7G screening protocols with new contractors on-site
  • ensuring hand sanitizer dispensers are readily available at entrances to the building, in the main washroom and at the entrance to the dining area

Protecting Our Partners

To maintain a safe worksite and protect the health and wellbeing of our partners and suppliers, we have implemented several health and safety protocols for our third-party contractors and vendors including:

• limiting on-site or in-office access for non-essential visits
• 14-day self-isolation periods as outlined by government protocols for all out-of-country travel
• the completion of a mandatory pre-screening checklist prior to visiting a 7G site
• individual pre-screening with 7G’s paramedical staff for vendors pending the outcome of the checklist results
• ongoing communication to vendors outlining specific protocols and updates when conducting business with 7G

 

Supporting Our Community

Supporting our communities is an important pillar of our commitment to stakeholder service. Throughout the pandemic, we have partnered with several community organizations – donating both financially and through employee volunteerism – to support important community causes including:  

• Supporting Odyssey House in Grande Prairie and the Calgary Women's Shelter with donations that supply all residents, community support clients accessing services and staff with reusable face coverings and other personal protective equipment needs.
• Partnering with Alberta Health Services and the Grande Prairie Regional Hospital Foundation to launch the 7G Seniors Chat Program – an innovative pilot program focused on supporting seniors in times of physical distancing. Through the program, 7G employees connect weekly with seniors by phone or tablet to have a conversation, brighten their day and let them know they are not alone.
• Support for local Indigenous communities to assist with food security and education supplies.
• Employee matching program launched to support several community organizations including The Community Kitchen & Food Bank Fund in Grande Prairie, The Calgary Food Bank and The Calgary Drop-In & Rehab Centre Fund. In addition, all funds are being matched by 7G and additional charitable giving matching programs to multiply the impact.

 

Safeguarding Our Business

In response to COVID-19, we acted swiftly to ensure the financial strength and resilience of our company:

• March 10 – Announced an 18% reduction to our 2020 capital investment plan from $1.1 billion to $900 million in response to challenging global energy prices.
  • The capital program was aligned to expected cashflows and designed to prioritize our financial strength over production volumes.
  • The reduction reflected a temporary deferral of planned activity in the present commodity price environment providing the opportunity to high-grade drilling locations and improve efficiencies.
  • 7G’s disciplined hedging program continued to effectively mitigate risks associated with the current low-price environment.
    • Condensate production was approximately 50% hedged for the balance of 2020 with a WTI floor price above US$50/bbl.
    • Natural gas production was approximately 35% hedged at an equivalent price of US$2.60/MMBtu Henry Hub for the balance of the year.
  • A company-wide cost optimization program was launched to identify general and administrative expense savings opportunities.
• May 7 – Further reduced 2020 capital investments by an additional 28%, or $250 million, to $650 million.
  • The wind-down and pause on development capital announced in early March included a temporary suspension of all drilling and completions activities in early April.
  • Reduced levels of capital investment and the delay of the start-up of 11 new wells, led to a reduction in our 2020 production guidance that is now 175,000 - 185,000 boe/d.
  • Our 2020 development drilling program was tilted towards our natural gas-weighted assets.
  • Following a thorough expense reduction initiative, we reduced the midpoint of 2020 per-boe operating costs by 5% to $4.75/boe. Additionally, 7G is forecasting a reduction to its industry-leading corporate G&A expenses for 2020 by approximately 6%.
  • Subsequent to the end of the first quarter, we added to our hedge position with more than 50,000 bbl/d of production, or approximately 80%, of condensate volumes (net of royalties) hedged for the balance of 2020 at an average price of approximately US$45/bbl.

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These actions will enhance 7G’s sustainability and durability and ensure we emerge from this downturn stronger and better positioned to capture future opportunities.