The Montney has some of the best economics The New Kid On The Block Is Generating Controversy Feb. 12, 2015 7:55 AM ET | by Oil and Gas Investments Bulletin | about: svrgfSummarySeven Generations Energy has a large land base in arguably the sweetest spot (Kakwa) of the most economic energy play (the Montney) in Canada.Take-or-pay provisions are forcing them to spend $1.6 billion this year in the face of low commodity prices.Seven Generations Energy will outspend cash flow by 300% in both 2015 and 2016.As energy prices hit 6 year lows in January 2015, energy producers across North America cut their budgets, and reduced growth expectations-often to zero.But not one Montney producer.So far, newly-listed and highly-regardedSeven Generations Energy (VII-TSX) (OTC:SVRGF) is standing by their 2015 spend of $1.6 billion in the very liquids rich gas area called Kakwa, in Alberta but near the B.C. border in the Montney gas play. The Montney has some of the best economics of any play in North America."7Gen" does have the proven management, they have the hedges and they have the premium valuation to skate through the current commodity price slump for 2015.But it will come at a cost-drilling their best plays for a 31% IRR at $45 WTI and US$2.80/mcf natural gas-and that takes into account their (great) hedging. It takes a pristine, net-cash balance sheet to just under 2x debt-to-cash-flow.