CALGARY, Sept. 22, 2016 /CNW/ - Paramount Resources Ltd.
("Paramount" or the "Company") (TSX:POU) announces that it has
monetized part of its holdings of 33.5 million common shares of
Seven Generations Energy Ltd. ("7G") which were acquired in August
as partial consideration for the sale of the Company's
Musreau/Kakwa assets. Paramount has monetized an aggregate of 24.7
million 7G shares through sale transactions for gross proceeds of
approximately $735 million. The
Company has received approximately $310
million in cash and will realize the balance of the proceeds
in late December 2016.
The proceeds will initially be held as cash and used to fund the
continued development of the Company's oil and gas properties.
Paramount's financial resources and access to capital markets also
provide the Company with the ability to participate in strategic
acquisitions and capitalize on new opportunities.
Operational Update
Paramount recently completed the first extended reach lateral
well in a 25 well Montney drilling
program at Karr-Gold Creek. The slickwater completion placed 5,000
tonnes of proppant over 50 stages and the well commenced production
on September 5th.
The table below summarizes the initial flow rates:
|
Average
|
|
Cumulative
|
|
Natural
gas(1)
|
7.0
|
MMcf/d
|
112.0
|
MMcf
|
Wellhead
liquids(1)
|
1,288
|
Bbl/d
|
20,600
|
Bbl
|
Total(1)
|
2,454
|
Boe/d
|
39,267
|
Boe
|
CGR(2)
|
184
|
Bbl/MMcf
|
184
|
Bbl/MMcf
|
(1)
|
Production volumes
are the gross volumes measured at the wellhead separator from
September 6, 2016 to September 21, 2016. Natural gas sales volumes
are approximately 10 percent lower when compared to wellhead
separator natural gas volumes and stabilized condensate sales
volumes are approximately 15 percent lower when compared to
wellhead separator condensate volumes.
|
(2)
|
Condensate to natural
gas ratios (CGRs) were calculated by dividing total wellhead
separator liquids volumes by total wellhead separator natural gas
volumes.
|
The remaining wells in the program will be executed over the
next 9 to 12 months. Production volumes from these wells will flow
to the Company's existing 40 MMcf/d 6-18 compression and
dehydration plant at Karr-Gold Creek and be processed at a
downstream third party facility. The 6-18 plant is currently being
expanded from 40 MMcf/d to 80 MMcf/d, with the incremental capacity
scheduled to come on stream in the second quarter of
2017.
The 25 well Karr-Gold Creek drilling and completion program and
plant expansion is being funded from the proceeds of the 7G share
monetization.
Paramount's Board of Directors
The Company also wishes to announce that Mr. Thomas Claugus is leaving the Board of Directors
to focus on his principal business endeavors. "The Company would
like to thank Mr. Claugus for his six years of service to the
Company. Mr. Claugus has been an invaluable contributor to our
Board as we navigated through these challenging times", said
Jim Riddell, President and Chief
Executive Officer.
Paramount is an independent, publicly traded, Canadian
corporation that explores for and develops conventional petroleum
and natural gas prospects, pursues longer-term non-conventional
exploration and pre-development projects and holds investments in
other entities. The Company's principal properties are primarily
located in Alberta and
British Columbia. Paramount's
Class A Common Shares are listed on the Toronto Stock Exchange
under the symbol "POU".
Advisories
Forward Looking Information
Certain statements in this news release constitute
forward-looking information under applicable securities
legislation. Forward-looking information typically contains
statements with words such as "anticipate", "believe", "estimate",
"will", "expect", "plan", "schedule", "intend", "propose", or
similar words suggesting future outcomes or an outlook.
Forward-looking information in this document includes, but is not
limited to:
- the anticipated completion of the 7G share sale
transactions;
- the use of proceeds from the 7G share sale transactions;
- the execution of Paramount's Karr-Gold Creek 25 well
Montney drilling program;
- projected timelines for, and anticipated costs of,
constructing, commissioning and/or starting-up new and expanded
Karr facilities;
- Paramount's business plans and strategy following the sale
transactions; and
- general business strategies and objectives.
Such forward-looking information is based on a number of
assumptions which may prove to be incorrect. Assumptions have been
made with respect to the following matters, in addition to any
other assumptions identified in this document:
- the expected benefits from the sale transaction;
- future natural gas and liquids prices;
- royalty rates, taxes and capital, operating, general &
administrative and other costs;
- foreign currency exchange rates and interest rates;
- general business, economic and market conditions;
- the ability of Paramount to obtain the required capital to
finance its exploration, development and other operations and meet
its commitments and financial obligations;
- the ability of Paramount to obtain equipment, services,
supplies and personnel in a timely manner and at an acceptable cost
to carry out its activities;
- the ability of Paramount to secure adequate product processing,
transportation, de-ethanization, fractionation, and storage
capacity on acceptable terms;
- the ability of Paramount to market its natural gas and liquids
successfully to current and new customers;
- the ability of Paramount and its industry partners to obtain
drilling success (including in respect of anticipated production
volumes, reserves additions, liquids yields and resource
recoveries) and operational improvements, efficiencies and results
consistent with expectations; and
- anticipated timelines and budgets being met in respect of
drilling programs and other operations (including well completions
and tie-ins and the construction, commissioning and start-up of new
and expanded facilities).
Although Paramount believes that the expectations reflected in
such forward-looking information are reasonable, undue reliance
should not be placed on them as Paramount can give no assurance
that such expectations will prove to be correct. Forward-looking
information is based on expectations, estimates and projections
that involve a number of risks and uncertainties which could cause
actual results to differ materially from those anticipated by
Paramount and described in the forward-looking information. The
material risks and uncertainties include, but are not limited
to:
- the conditions to the completion of the sale transactions not
being satisfied;
- fluctuations in natural gas and liquids prices;
- changes in foreign currency exchange rates and interest
rates;
- the uncertainty of estimates and projections relating to future
revenue, future production, reserve additions, liquids yields
(including condensate to natural gas ratios), resource recoveries,
royalty rates, taxes and costs and expenses;
- the ability to secure adequate product processing,
transportation, de-ethanization, fractionation, and storage
capacity on acceptable terms;
- operational risks in exploring for, developing and producing,
natural gas and liquids;
- the ability to obtain equipment, services, supplies and
personnel in a timely manner and at an acceptable cost;
- potential disruptions, delays or unexpected technical or other
difficulties in designing, developing, expanding or operating new,
expanded or existing facilities (including third-party
facilities);
- processing, pipeline, de-ethanization, and fractionation
infrastructure outages, disruptions and constraints;
- risks and uncertainties involving the geology of oil and gas
deposits;
- the uncertainty of reserves and resources estimates;
- general business, economic and market conditions;
- the ability to generate sufficient cash flow from operations
and obtain financing to fund planned exploration, development and
operational activities and meet current and future commitments and
obligations (including product processing, transportation,
de-ethanization, fractionation and similar commitments and debt
obligations);
- changes in, or in the interpretation of, laws, regulations or
policies (including environmental laws);
- the ability to obtain required governmental or regulatory
approvals in a timely manner, and to enter into and maintain leases
and licenses;
- the effects of weather;
- the timing and cost of future abandonment and reclamation
obligations and potential liabilities for environmental damage and
contamination;
- uncertainties regarding aboriginal claims and in maintaining
relationships with local populations and other stakeholders;
- the outcome of existing and potential lawsuits, regulatory
actions, audits and assessments; and
- other risks and uncertainties described elsewhere in this
document and in Paramount's other filings with Canadian securities
authorities.
The foregoing list of risks is not exhaustive. For more
information relating to risks, see the section titled "RISK
FACTORS" in Paramount's current annual information form. The
forward-looking information contained in this document is made as
of the date hereof and, except as required by applicable securities
law, Paramount undertakes no obligation to update publicly or
revise any forward-looking statements or information, whether as a
result of new information, future events or otherwise.
Oil and Gas Measures and Definitions
This document contains disclosures expressed as "Boe" and
"Boe/d". Natural gas equivalency volumes have been derived using
the ratio of six thousand cubic feet of natural gas to one barrel
of oil. Equivalency measures may be misleading, particularly if
used in isolation. A conversion ratio of six thousand cubic feet of
natural gas to one barrel of oil is based on an energy equivalency
conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the well head. For the six
months ended June 30, 2016, the value
ratio between crude oil and natural gas was approximately 30:1.
This value ratio is significantly different from the energy
equivalency ratio of 6:1. Using a 6:1 ratio would be misleading as
an indication of value. The term "liquids" is used to represent
oil, condensate.
SOURCE Paramount Resources Ltd.