Calgary-based independent oil and gas producer Seven Generations Energy Ltd. disclosed Jan. 10 that its board of directors has approved a C$1.25 billion capital expenditure budget for 2019, which will primarily focus on maintaining current production levels from its resources in northern British Columbia and northern Alberta.
The budget is half a billion dollars lower than the previous year's.
Around C$1.1 billion will be allocated for maintenance capital, which consists of C$780 million towards further developing its Nest 2 resources in the Lower Montney and Wapiti region and C$320 million for Nest 1 and Next 3 development. The Nest 3 spending includes key infrastructure and pipelines, which will add capacity of 40,000 barrels of oil equivalent per day.
Seven Generations also earmarked C$125 million for Lower Montney and Wapiti delineation drilling and advanced completion design testing along Nest 1. The company expects to test five to seven wells in Lower Montney this year.
Another C$25 million will be spent for value-enhancing infrastructure projects.
The company targets a total production of 200,000 boe/d to 205,000 boe/d, about even to its estimated 2018 production average of around 202,000 boe/d.
Seven Generations also extended the maturity of its currently undrawn C$1.4 billion credit facility to the fourth quarter of 2023, which could be hiked by another C$300 million.
As of Dec. 31, 2018, the company has repurchased and canceled 9.6 million, or 2.7%, of its issued shares at an average price of C$10.72 per share.
For the third quarter of 2018, Seven Generations' net income reached C$196.4 million, or 53 Canadian cents per share, up from C$85.7 million for the same period in 2017.