Welcome to the forums!
You got me curious with the name of that attached file :)
So it looks like you have a jar which has a lib folder with the hibernate jars. What you should instead do is, remove those hibernate libraries and just add a dependency on the Hibernate module shipped in AS7. This might help https://docs.jboss.org/author/display/AS71/Class+Loading+in+AS7. Also consider moving to a latest released version instead of 7.1.1.Final.