Pengrowth Announces 51 Percent Increase in Proved Plus Probable Reserves at Lindbergh

Pengrowth Announces 51 Percent Increase in Proved Plus Probable Reserves at 
Lindbergh 
CALGARY, ALBERTA -- (Marketwired) -- 07/15/13 -- Pengrowth Energy
Corporation (TSX:PGF) (NYSE:PGH) today announced that, in conjunction
with the July 12, 2013 Alberta Environment Protection and Enhancement
Act (EPEA) approval of the first commercial phase of the Lindbergh
thermal bitumen project (Lindbergh), GLJ Petroleum Consultants Ltd.
(GLJ) has provided an update of bitumen reserves and contingent
resources for Lindbergh. The July 15, 2013 update, effective July 31,
2013, results in the reclassification of 69.2 million barrels (MMbbl)
of probable reserves to the proved (1P) category and an increase of
48.1 MMbbl in proved plus probable (2P) reserves, based upon receipt
of regulatory approvals, continued delineation drilling and new 3D
seismic data.  
GLJ attributed 82.0 MMbbl of 1P reserves and 142.9 MMbbl of 2P
reserves to the Lindbergh project. The additional proved reserves at
Lindbergh represent an increase of 541 percent from December 31,
2012, while 2P reserves increased by 51 percent.  
In addition, GLJ has assigned best estimate contingent resources (2C)
of 163.0 MMbbl to the Lindbergh property, as of July 31, 2013, a 25%
reduction from December 31, 2012, reflecting reclassification of
contingent resources to reserves.  
Reserves and Resources Summary 
The following tables summarize the December 31, 2012 and updated July
31, 2013 GLJ reserve and resource estimates for the Lindbergh
property. The July 31, 2013 evaluation is based on GLJ's July 1, 2013
price forecast. 


 
                                         31-Dec-  31-Jul-   Change % Change 
                                            2012     2013      (1)      (1) 
----------------------------------------------------------------------------
Reserves (MMbbl)                                                            
----------------------------------------------------------------------------
Proved                                      12.8     82.0     69.2      541%
Proved Plus Probable                        94.8    142.9     48.1       51%
Proved Plus Probable Plus Possible         154.9    196.0     41.1       27%
----------------------------------------------------------------------------
Contingen
t Resources (MMbbl)                                                
----------------------------------------------------------------------------
Low Estimate                               194.0    124.1    -69.9      -36%
Best Estimate                              218.2    163.0    -55.2      -25%
High Estimate                              327.7    275.6    -52.1      -16%
1. Change in contingent resources reflects conversions of contingent        
resources to reserves.                                                      

 
The increase in 2P reserves at Lindbergh represents 9.4% of
Pengrowth's total corporate 2P reserves reported at December 31, 2012
and 153% replacement of 2013 production based on the mid-point of our
current production guidance. 
Net Present Value Summary as at July 31, 2013 
The following table summarizes GLJ's estimates of values for reserves
and contingent resources at July 31, 2013. The value of the 2P
reserves alone is estimated at $973 million (BTAX PV10) or $1.88 per
share. 


 
                                                               Before Income
                                                              Tax Discounted
                                                                 at 10%/Year
                                                                 (BTAX PV10)
                                                                 ($millions)
----------------------------------------------------------------------------
Reserves                                                                    
----------------------------------------------------------------------------
Proved                                                                   687
Proved Plus Probable                                                     973
Proved Plus Probable Plus Possible                                     1,241
----------------------------------------------------------------------------
Contingent Resources                                                        
----------------------------------------------------------------------------
Low Estimate                                                             307
Best Estimate                                                            699
High Estimate                                                          1,688

 
Status of 12,500 barrel per day (bbl/d) Lindbergh Phase I 
Pengrowth has ordered all major equipment and over 60% of the minor
equipment required. Process design is 90% complete and mechanical
design is 40% complete. Vendor packages have been ordered and skid
fabrication has commenced. Engineering and procurement work is on
track and Pengrowth plans to commence civil construction activities
this summer. Mechanical construction of the central processing
facility and drilling of 23 additional well pairs to supplement the
two well pairs currently producing at the Lindbergh pilot will
commence in September 2013. The $590 million project remains on time
and on budget, with first steam expected in the fourth quarter of
2014. 
Next Expansion Phase 
Subject to Board and regulatory approvals, Pengrowth plans to follow
up with two subsequent phases of development at Lindbergh. Production
from Phase 2 is expected to commence in early 2017, with a ramp-up to
30,000 bbl/d, to be followed by Phase 3, which is expected to
increase total production to approximately 50,000 bbl/d by the end of
2018. Pengrowth plans to submit a formal Environmental Impact
Assessment (EIA) application for the next expansion to 30,000 bbl/d
in the first quarter of 2014.  
Lindbergh Pilot Project Update 
The Lindbergh pilot continues to exceed Pengrowth's expectations,
with May 2013 production reaching record levels following a two week
planned maintenance outage in April. Cumulative production from the
two well pairs was approximately 640,000 bbls at the end of June.  


 
                                    Monthly Average  Instantaneous steam oil
2013                             Production (bbl/d)                    ratio
----------------------------------------------------------------------------
April                                         1,200                      1.7
May                                           2,500                      1.3
June                                          2,300                      1.4

 
Production at the two well pair pilot is expected to level out at
approximately 2,000 bbl/d with an ISOR of 1.7. 
Reserves Classification  
Reserves and contingent resources included herein are stated on a
company interest basis (working interest before deduction of
royalties and including any company royalty interests) unless noted
otherwise. All reserve information has been prepared in accordance
with National Instrument 51-101, Standards of Disclosure for Oil and
Gas Activities ("NI 51-101") and the Canadian Oil and Gas Evaluation
Handbook ("COGEH"). Pengrowth's Annual Information Form, dated
February 28, 2013, which contains more detailed information relating
to our reserves and resources, including a description of
contingencies associated with the estimates of contingent resources,
can be accessed on our website at www.pengrowth.com, and has been
filed on SEDAR at www.sedar.com
 and as a Form 40-F on EDGAR at
www.sec.gov/edgar.shtml. 
Updated Independent Reserves Evaluation  
The updated estimates of reserves and resources contained in this
news release are based on an independent evaluation of reserves and
contingent resources attributable to the Lindbergh project effective
July 31, 2013 conducted by GLJ, using the July 1, 2013 GLJ price
forecast and prepared in accordance with the definitions, standards
and procedures contained in COGEH and NI 51-101. 
About Pengrowth:  
Pengrowth Energy Corporation is a dividend-paying, intermediate
Canadian producer of oil and natural gas, headquartered in Calgary,
Alberta. Pengrowth's assets include Swan Hills light oil, Cardium
light oil and Lindbergh thermal bitumen projects. Pengrowth's shares
trade on both the Toronto Stock Exchange under the symbol "PGF" and
on the New York Stock Exchange under the symbol "PGH". 
PENGROWTH ENERGY CORPORATION 
Derek Evans, President and Chief Executive Officer 
Caution Regarding Forward Looking Information: 
This press release contains forward-looking statements within the
meaning of securities laws, including the "safe harbour" provisions
of Canadian securities legislation and the United States Private
Securities Litigation Reform Act of 1995. Forward-looking information
is often, but not always, identified by the use of words such as
"anticipate", "believe", "expect", "plan", "intend", "forecast",
"target", "project", "guidance", "may", "will", "should", "could",
"estimate", "predict" or similar words suggesting future outcomes or
language suggesting an outlook. Forward-looking statements in this
press release include, but are not limited to, Lindbergh pilot and
commercial phase expectations; the status of the pilot project and
commercial phases, including the ordering of major and minor
equipment, process design, mechanical design, skid fabrication,
engineering and procurement work, number of wells; expected
production and steam oil ratios and timing of submission of an EIA
application for the next expansion phase. Statements relating to
reserves, resources and their net present values are forward-looking
statements, as they involve the implied assessment, based on certain
estimates and assumptions that the reserves described exist in the
quantities predicted or estimated and can profitably be produced in
the future.  
Forward-looking statements and information are based on Pengrowth's
current beliefs as well as assumptions made by, and information
currently available to, Pengrowth concerning anticipated financial
performance, business prospects, strategies and regulatory
developments, future oil and natural gas commodity prices and
differentials between light, medium and heavy oil prices, future oil
and natural gas production levels, future exchange rates, the
proceeds of anticipated divestitures, the amount of future cash
dividends paid by Pengrowth, the cost of expanding our property
holdings, our ability to obtain equipment in a timely manner to carry
out development activities, our ability to market our oil and gas
successfully to current and new customers, the impact of increasing
competition, our ability to obtain financing on acceptable terms, and
our ability to add production and reserves through our acquisition,
development and exploration activities. Although management considers
these assumptions to be reasonable based on information currently
available to it, they may prove to be incorrect. 
By their very nature, forward-looking statements involve inherent
risks and uncertainties, both general and specific, and risks that
predictions, forecasts, projections and other forward-looking
statements will not be achieved. We caution readers not to place
undue reliance on these statements as a number of important factors
could cause the actual results to differ materially from the beliefs,
plans, objectives, expectations and anticipations, estimates and
intentions expressed in such forward-looking statements. These
factors include, but are not limited to: the volatility of oil and
gas prices; production and development costs and capital
expenditures; the imprecision of reserve estimates and estimates of
recoverable quantities of oil, natural gas and liquids; Pengrowth's
ability to replace and expand oil and gas reserves; environmental
claims and liabilities; incorrect assessments of value when making
acquisitions; increases in debt service charges; the loss of key
personnel; the marketability of production; defaults by third party
operators; unforeseen title defects; fluctuations in foreign currency
and exchange rates; inadequate insurance coverage; counterparty risk;
compliance with environmental laws and regulations; changes in tax
and royalty laws; Pengrowth's ability to access external sources of
debt and equity capital; the implementation of International
Financial Reporting Standards; and the implementation of greenhouse
gas emissions legislation. Further information regarding these
factors may be found under the heading "Risk Factors" in our most
recent Annual Information Form, under the heading "Business Risks" in
our most recent year-end Management's Discussion and Analysis, and in
our most recent consolidated financial statements, management
information circular, quarterly reports, material change reports and
news releases.  
Readers are cautioned that the foregoing list of factors that may
affect future results is not exhaustive. When relying on our
forward-looking statements to make decisions, investors and others
should carefully consider the foregoing factors and other
uncertainties and potential events. Furthermore, the forward-looking
statements contained in this press release are made as of the date of
this press release, and Pengrowth does not undertake any obligation
to update publicly or to revise any of the included forward-looking
statements, whether as a result of new information, future events or
otherwise, except as required by applicable law. The forward-looking
statements contained in this press release are expressly qualified by
this cautionary statement. 
Pilot Production Results and Steam Oil Ratios 
This press release references pilot production results and steam oil
ratios for the Lindbergh pilot project. These results are not
necessarily reflective of long-term production results, production
profiles, steam oil ratios or ultimate performance of these wells or
the project. 
Advisory Regarding Reserves, Resources and Production Information 
All amounts are stated in Canadian dollars unless otherwise
specified. All reserves, resources, reserve life index, and
production information herein is based upon Pengrowth's company
interest working interest share of reserves or production plus
Pengrowth's royalty interest, being Pengrowth's interest in
production and payment that is based on the gross production at the
wellhead, before royalties and using GLJ's July 1, 2013 forecast
prices and costs in respect of the July 15, 2013 Lindbergh reserve
and resource update and using GLJ's January 1, 2013 forecast prices
and costs in respect of the December 31, 2012 Lindbergh reserve and
resource estimate. Numbers presented may not add due to rounding.  
Caution Regarding Engineering Terms 
The estimated values of future net revenue disclosed in this press
release do not represent fair market value.  
In addition, Pengr
owth uses the following frequently-recurring
industry terms in this press release: "bbls" refers to barrels,
"Mbbls" refers to a thousand barrels, "MMbbls" refers to a million
barrels, "Mboe" refers to a thousand barrels of oil equivalent,
"MMboe" refers to a million barrels of oil equivalent, "Mcf" refers
to thousand cubic feet, "MMcf" refers to million cubic feet, "Bcf"
refers to billion cubic feet. 
Contingent Resource Assessments 
Contingent resources are those quantities of petroleum estimated to
be potentially recoverable from known accumulations using established
technology or technology under development, but which are not
currently considered to be commercially recoverable due to one or
more contingencies. Contingencies may include factors such as
economic, legal, environmental, political and regulatory matters or a
lack of markets. Contingent resources are further classified in
accordance with the level of certainty associated with the estimates.
Contingent resources do not constitute, and should not be confused
with, reserves. There is no certainty that it will be commercially
viable to produce any portion of the contingent resources.  
Lindbergh contingent resources require further delineation drilling,
regulatory applications and approvals and commitments to proceed
before additional volumes can be converted to reserves. 
The accuracy of resource estimates is, in part, a function of the
quality and quantity of available data and of engineering and
geological interpretation and judgment. These resource volumes are
classified as a resource rather than a reserve because they are
contingent upon further reservoir studies, delineation drilling and
facility design, preparation of firm development plans, regulatory
application approval and company approvals. The size of the resource
estimate could be positively impacted, potentially in a material
amount, if additional delineation wells determine that the aerial
extent, reservoir quality and/or the thickness of the reservoir is
larger than what is currently estimated based on the interpretation
of seismic and well control. The size of the resource estimate could
be negatively impacted, potentially in a material amount, if
additional delineation wells determine that the aerial extent,
reservoir quality and/or the thickness of the reservoir are less than
what is currently estimated based on the interpretation of the
seismic and well control. 
A best estimate is the estimate of the quantity of resource that will
be recovered from the accumulation, which under probabilistic
methodology reflects a fifty percent confidence level. A low estimate
is the estimate of the quantity of resource that will be recovered
from the accumulation, which under probabilistic methodology reflects
a ninety percent confidence level. A high estimate is the estimate of
the quantity of resource that will be recovered from the
accumulation, which under probabilistic methodology reflects a ten
percent confidence level. 
Note to US Readers 
Current SEC reporting requirements permit oil and gas companies, in
their filings with the SEC, to disclose probable and possible
reserves, in addition to the required disclosure of proved reserves.
Under current SEC requirements, net quantities of reserves are
required to be disclosed, which requires disclosure on an after
royalties basis and does not include reserves relating to the
interests of others. Because we are permitted to prepare our reserves
information in accordance with Canadian disclosure requirements, we
have included contingent resources, disclosed reserves before the
deduction of royalties and interests of others and determined and
disclosed our reserves and the estimated future net cash therefrom
using forecast prices and costs. See "Presentation of our Reserve
Information" in our most recent Annual Information Form or Form 40-F
for more information. 
We report our production and reserve quantities in accordance with
Canadian practices and specifically in accordance with NI 51-101.
These practices are different from the practices used to report
production and to estimate reserves in reports and other materials
filed with the SEC by companies in the United States. 
We incorporate additional information with respect to production and
reserves which is either not generally included or prohibited under
rules of the SEC and practices in the United States. We follow the
Canadian practice of reporting gross production and reserve volumes;
however, we also follow the United States practice of separately
reporting these volumes on a net basis (after the deduction of
royalties and similar payments). We also follow the Canadian practice
of using forecast prices and costs when we estimate our reserves. The
SEC permits, but does not require, the disclosure of reserves based
on forecast prices and costs. 
We include herein estimates of proved and proved plus probable
reserves, as well as contingent resources. The SEC permits, but does
not require the inclusion of estimates of probable reserves in
filings made with it by United States oil and gas companies. The SEC
does not permit the inclusion of estimates of contingent resources in
reports filed with it by United States companies.
Contacts:
Pengrowth
Investor Relations
(403) 233-0224 or Toll Free: 855-336-8814
investorrelations@pengrowth.com
www.pengrowth.com