The drilling operation on Seven Generations Energy Ltd.’s Kakwa River Project is shown in a handout photo.
Seven Generations Energy Ltd. is selling $260-million of shares in a private placement, despite sputtering oil and gas markets that have kept pressure on energy stocks.
Seven Generations said it is issuing 18.6 million shares at $14 apiece in what has become a rare occurrence of oil and gas stock offerings. The company's shares closed down nearly 5 per cent at $14.38 on the Toronto Stock Exchange on Tuesday.
The company aims to use the proceeds to help fund capital spending in its Montney oil and gas operations south of Grande Prairie, Alta., known as Kakwa River.
Seven Generations plans to spend $900-million to $950-million in 2016, it said.
"We continue to be well-funded through 2016 and this additional equity will improve our net debt-to-cash flow ratio during this time of significant commodity price weakness and volatility," said Chris Law, the company's chief financial officer, said in a statement.
The offering is being led by Peters & Co. Ltd. and RBC Dominion Securities.
Jeffrey Jones