Pengrowth Reports Third Quarter Results, Strong Production and Continued Progress on Thermal Strategy

Pengrowth Reports Third Quarter Results, Strong Production and Continued 
Progress on Thermal Strategy 
CALGARY, ALBERTA -- (Marketwired) -- 11/07/13 -- Pengrowth Energy
Corporation (TSX:PGF) (NYSE:PGH) today announced its financial and
operating results for the third quarter and first nine months of
During the quarter, Pengrowth delivered on its stated objectives of
fully funding the first commercial phase of its Lindbergh thermal
bitumen project by divesting over $700 million of non-core assets and
achieving solid operational results.  
Pengrowth's non-core asset disposition program has generated total
proceeds of over $1.0 billion so far this year and is now essentially
complete. In total, Pengrowth sold approximately 14,500 barrels of
oil equivalent per day (boe/d) of production at an average price of
approximately $70,000 per flowing barrel. As at September 30, 2013,
Pengrowth had approximately $580 million of cash on hand and expects
to use these proceeds to balance cash inflows and outflows through
the course of 2013 and 2014, while investing to bring the first
12,500 barrel per day (bbl/d) commercial phase of Lindbergh on
Production from the conventional program continued to be robust
during the quarter, even after taking into account the impact of
asset dispositions. The Lindbergh pilot is delivering strong results,
with the two well pairs producing a combined average of 2,000 bbl/d
during the quarter at an average quarterly Instantaneous Steam Oil
Ratio (ISOR) of 1.8x.  
"The asset dispositions completed during the first nine months of the
year provide us with the funds to build the first phase of Lindbergh,
which supports Pengrowth's transition to an oilier, lower decline
production mix, bolstered by thermal bitumen production," said Derek
Evans, Pengrowth's President and CEO. "Lower decline production
results in lower sustaining capital expenditure and greater free cash
flow, supporting future dividends and profitable growth
Third Quarter 2013 Highlights: 

--  Completed approximately $700 million of non-core asset dispositions in
    the quarter. 
--  Production of 83,275 boe/d for the third quarter.  
--  Funds Flow from Operations for the quarter was $162 million ($0.31 per
--  Pengrowth had approximately $580 million of cash on hand as at September
    30, 2013. This cash is expected to be used to fund capital expenditures
    in 2014, including the full funding of the first 12,500 bbl/d commercial
    phase of Lindbergh. 
--  Commenced civil and mechanical construction as well as drilling of the
    commercial well pairs for the first 12,500 bbl/d commercial phase at
    Lindbergh. The project remains on track and on budget to achieve first
    steam by the fourth quarter of 2014. 
--  The performance of the Lindbergh pilot continues to exceed expectations,
    with volumes from the two well pairs stabilizing at approximately 2,000
    bbl/d during the quarter at an ISOR of 1.8x. Cumulative production from
    the two well pairs was in excess of 840,000 barrels of bitumen, as of
    the end of the third quarter. 
--  Absent the $115 million after tax loss relating to asset dispositions,
    third quarter Adjusted Net Income would have been $7 million.
Summary of Financial & Operating Results                                    
                              Three months ended          Nine months ended 
(monetary amounts in  Sept. 30, Sept. 30,      % Sept. 30, Sept. 30,      % 
 millions)                 2013      2012 Change      2013      2012 Change 
Average daily                                                               
 production (boe/d)      83,275    94,284    (12)   86,938    82,965      5 
Funds flow from                                                             
 operations            $  161.5  $  141.1     14  $  455.0  $  349.1     30 
Funds flow from                                                             
 operations per share  $   0.31  $   0.28     11  $   0.88  $   0.82      7 
Oil and gas sales (1)  $  414.2  $  391.9      6  $1,210.4  $1,048.7     15 
Oil and gas sales per                                                       
 boe                   $  54.06  $  45.18     20  $  51.00  $  46.13     11 
Operating expense (2)  $  125.6  $  125.7      -  $  373.3  $  320.6     16 
Operating expense per                                                       
 boe                   $  16.39  $  14.49     13  $  15.73  $  14.10     12 
Royalty expense        $   72.6  $   67.5      8  $  212.3  $  208.0      2 
Royalty expense per                                                         
 boe                   $   9.47  $   7.78     22  $   8.95  $   9.15     (2)
Royalty expense as a                                                        
 percent of sales          17.5%     17.2%            17.5%     19.8%       
Operating netback per                                                       
 boe (2)               $  27.10  $  22.25     22  $  25.41  $  22.07     15 
Cash G&A expense (2)   $   20.0  $   21.9     (9) $   66.1  $   65.0      2 
Cash G&A expense per                                                        
 boe                   $   2.61  $   2.52      4  $   2.79  $   2.86     (2)
Capital expenditures   $  176.2  $  110.6     59  $  456.1  $  373.5     22 
Capital expenditures                                                        
 per share             $   0.34  $   0.22     55  $   0.88  $   0.88      - 
Net cash                                                                    
 dispositions (3)      $  623.4  $    9.7         $  948.5  $  (30.4)       
Net cash                                                                    
 dispositions per                                                           
 share (3)             $   1.20  $   0.02         $   1.84  $  (0.07)       
Dividends paid         $   62.2  $   75.4    (18) $  185.7  $  228.1    (19)
Dividends paid per                                                          
 share                 $   0.12  $   0.15    (20) $   0.36  $   0.57    (37)
Number of shares                                                            
 outstanding at period                                                      
 end (000's)            519,803   507,144      2   519,803   507,144      2 
Weighted average                                                            
 number of shares                                                           
 outstanding (000's)    518,802   504,277      3   516,170   426,170     21 
STATEMENT OF INCOME                                                         
 (LOSS) (3)                                                                 
Adjusted net Income                                                         
 (loss) (4)            $ (108.2) $  (18.8)        $ (146.5) $ (113.8)    29 
Net income (loss)      $ (107.3) $  (23.8)        $ (225.8) $   13.7    
Net income (loss) per                                                       
 share                 $  (0.21) $  (0.05)        $  (0.44) $   0.03        
DEBT (5)                                                                    
Long term debt         $1,366.8  $1,474.1     (7) $1,366.8  $1,474.1     (7)
Convertible debentures $  236.3  $  237.3      -  $  236.3  $  237.3      - 
Total debt excluding                                                        
 working capital       $1,603.1  $1,711.4     (6) $1,603.1  $1,711.4     (6)
Total debt including                                                        
 working capital       $1,235.7  $1,878.8    (34) $1,235.7  $1,878.8    (34)
CONTRIBUTION BASED ON                                                       
 OPERATING NETBACKS                                                         
Light oil                    59%       73%              64%       69%       
Heavy oil                    21%       10%              15%       13%       
Natural gas liquids          11%       13%              10%       16%       
Natural gas                   9%        4%              11%        2%       
(1) Includes the impact of realized commodity risk management contracts.    
(2) Prior periods restated to conform to presentation in the current period.
(3) Percentages in excess of 100 have been omitted.                         
(4) See Management's Discussion and Analysis for explanation of Adjusted Net
    Income (Loss).                                                          
(5) Debt includes the current and long term portions.                       

Third quarter 2013 average daily production was 83,275 boe/d, a
decrease of five percent compared to second quarter 2013 production
of 87,909 boe/d. The decline in production was due to the absence of
production volumes associated with the completed dispositions, partly
offset by production additions from Cardium development.  
Average daily production for the third quarter of 2013 decreased 12
percent compared to the third quarter of 2012 average production of
94,284 boe/d. The decline was primarily due to the loss of production
volumes associated with dispositions and natural gas production
declines, partly offset by production additions from Cardium
development and the inclusion of the Lindbergh thermal pilot
production in 2013 operating results.  
Funds Flow from Operations  
Third quarter 2013 Funds Flow from Operations was $162 million ($0.31
per share), an 11 percent increase from the second quarter 2013 funds
flow of $146 million ($0.28 per share). The increase in funds flow
resulted primarily from higher realized light and heavy oil prices,
offset by lower production volumes due to dispositions and increased
realized losses on commodity risk management activities.  
Funds Flow from Operations for the third quarter of 2013 increased 14
percent compared to $141 million ($0.28 per share) in the third
quarter of 2012. The increase in funds flow year over year was
primarily a result of higher realized prices and lower differentials,
offset by realized losses on commodity risk management activities and
decreased volumes due to dispositions.  
Adjusted Net Income (Loss)  
Pengrowth recorded an Adjusted Net Loss of $108 million in the third
quarter of 2013, compared to Adjusted Net Losses of $37 million
during the second quarter of 2013 and $19 million during the third
quarter of 2012. The increase in the Adjusted Net Loss during the
quarter is mainly due to losses associated with the disposition of
properties, partly offset by an increase in Funds Flow from
Operations and lower Depletion, Depreciation and Amortization
expense. These are non-cash charges and do not affect Pengrowth's
ability to fund operations and or pay dividends.  
Operating Expenses 
Third quarter operating expense of $126 million ($16.39/boe) was
higher than anticipated, largely as a result of significantly higher
than budgeted power prices, higher non-operated partner expenses,
taxes and fees and increased fluid trucking costs. As many of these
items are expected to continue to affect operating costs in the
fourth quarter, Pengrowth has revised its 2013 full year operating
expense guidance from $14.75/boe to $15.70/boe.  
The primary driver for the increasing operating costs is power. Since
2010, Pengrowth's power costs have increased by approximately
$2.00/boe, as realized generating and transmission costs in Alberta
have almost doubled in price.  
Power is a large component (approximately 22 percent) of Pengrowth's
overall operating cost structure, but when broken out on a commodity
basis, represents approximately 40 percent of oil operating expenses.
Pengrowth's low decline, high netback ($35.00/boe), mature waterflood
cash flow engines have high operating costs ($20.00/boe) due to the
large water volumes that are produced and re-injected daily. As a
result, Pengrowth's operating cost structure is very sensitive to
power prices.  
To mitigate some of this power price volatility from the operating
cost structure, we continue to hedge power in 2014. Pengrowth has 65
percent of expected 2014 power consumption hedged at $56.30/MWh as
compared to year-to-date average Alberta power pool price of
$88.15/MWh. In addition Pengrowth is currently working with a third
party provider on the installation of 26 MW (68 percent of load at
Swan Hills), of internal power generation projects in the Swan Hills
area, as well as advancing a similar project at the Olds facility.
The Lindbergh processing facility will also have its own
co-generation plant, which will reduce Pengrowth's exposure to the
volatile power prices and reliability challenges of the power
transmission grid.  
Development Capital 
Capital investments in the third quarter of 2013 were $176 million,
with $63 million spent on conventional development activities and $94
million directed to development activities at Lindbergh. Capital
investments in the quarter followed Pengrowth's strategy of selecting
and executing on projects that maximize cash flow and provide the
highest rates of return in its conventional oil and gas business,
while continuing to invest in the first commercial phase of the
Lindbergh thermal project. Approximately 89 percent of the capital
expenditures in the quarter were invested in drilling, completions
and facilities, with Pengrowth participating in the drilling of 31
(18.9 net) wells.  
Pengrowth's substantial conventional oil and gas portfolio includes a
large contiguous land base in the Greater Olds/Garrington area,
comprising over 500 gross sections of land with stacked opportunities
in the Cardium, Viking and Mannville sands, as well as in the
Mississippian carbonates. An extensive gathering and processing
infrastructure provides an efficient platform for continued
development in this area. Pengrowth also controls large conventional
oil and gas accumulations in the Swan Hills area, pro
viding ongoing
development projects with low decline production and strong cash
In the third quarter, Pengrowth continued to achieve strong drilling
and completion results, including 23 (14.2 net) wells being drilled
in the Cardium formation, with 100 percent success. Based on initial
test data and early production results, the Cardium wells appear to
be meeting or exceeding type curve expectations.  
The remainder of the third quarter operated and non-operated oil
development program was executed in the Caroline, Garrington (Elkton)
and Jenner areas with 8 (4.7 net) wells being drilled. 
Pengrowth's 100 percent owned and operated Lindbergh thermal project
is located in the Cold Lake area of Alberta and comprises 43 sections
of land. Cost advantages of the Lindbergh resource include superior
bitumen quality and flow characteristics, which should result in
higher netbacks compared to other thermal projects. Based on the
positive pilot results during 2012, the 12,500 bbl/d first commercial
phase of Lindbergh was sanctioned by Pengrowth's Board of Directors
in January 2013 and final regulatory approval was received in July
2013. With the recently announced asset dispositions, the first
commercial phase of Lindbergh is fully funded. 
Civil construction commenced in August with $170 million of the total
project capital being spent by the end of the third quarter.
Engineering is 90 percent complete, all major equipment has been
ordered and skid fabrication is underway. 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 commenced on schedule in September.  
Pengrowth has also been investing in multiple transportation options
at Lindbergh to ensure market access and best price. This includes
negotiating access to neighboring pipeline infrastructure, building a
truck terminal with excess capacity and taking advantage of rail.
Approximately half of the first phase investment has been committed
and the project remains on budget and on schedule. Pengrowth expects
first steam in the fourth quarter of 2014 and first oil in early
Operations at the pilot project continued to show strong results
during the quarter, with combined field production from the two well
pairs averaging approximately 2,000 bbl/d of bitumen with an average
ISOR for the quarter of 1.8x. Since steaming commenced in February of
2012, cumulative production from the two well pairs has been in
excess of 840,000 bbls of bitumen to September 30, 2013 or 35 percent
of the estimated ultimate recovery of reserves for the pilot, at a
Cumulative Steam Oil Ratio (CSOR) of 2.0x.  
Pengrowth expects the two Lindbergh pilot well pairs to achieve
cumulative production of 1.2 million barrels per well pair and
achieve a recovery factor in excess of previous expectations prior to
pilot results. With significantly higher than expected production
rates and the greater volume of reserves recovered to date,
engineering analysis and type curve forecasts suggest that the
production rates from the pilot well pairs will soon commence their
natural decline and as expected, the ISOR will start to increase.
Recovering Lindbergh reserves sooner than originally forecast
enhances the net present value of the project. Total Lindbergh
project decline rates are expected to remain in the range of 10
percent annually, as previously disclosed, due to the commercial
project's production being spread over many wells of various ages. 
Lindbergh offers Pengrowth the potential to develop up to 50,000
bbl/d of bitumen over three phases. This is expected to be strong
netback production with low decline rates and long reserve life with
low sustaining capital requirements, resulting in a sustainable
financial model that supports growth in cash flow per share and the
ability to fund an attractive dividend. 
Financial Flexibility 
Pengrowth remains committed to ensuring its financial health and
flexibility during the transition to becoming a sustainable, dividend
paying energy producer. The company has taken several measures
intended to safeguard its dividend, maintain its financial and
balance sheet strength and provide additional flexibility to ensure
that it has the financial means and discipline to develop the
Lindbergh thermal project. These measures include: 

--  Selling over $1 billion of non-core properties in 2013 
--  Reducing indebtedness 
--  Expanding commodity hedging 
--  Managing interest costs through terming out of debt at fixed rates 

Following the closing of the non-core dispositions, Pengrowth had
approximately $580 million of cash on hand as at September 30, 2013.
These proceeds will be used to provide the capital for the
development of the first 12,500 bbl/d commercial phase of Lindbergh,
as well as provide Pengrowth with a balanced cash flow profile
through 2014, whereby cash outflows are equal to cash inflows and
cash on hand. As a result, Pengrowth expects that no additional debt
will be required through 2014, prior to anticipated funding
requirements for future phases of Lindbergh.  
Pengrowth continues to mitigate commodity price risk and provide a
measure of stability and predictability to cash flows through the
utilization of hedging. Pengrowth has 65 percent of its expected 2013
oil production hedged at Cdn$93.87 per barrel and 65 percent of 2014
expected production hedged at Cdn$94.51 per barrel. Natural gas
hedges account for 63 percent of expected 2013 gas production at
Cdn$3.34 per Mcf and 46 percent of 2014 expected production hedged at
Cdn$3.83 per Mcf. Pengrowth also hedges portions of its power
consumption in order to mitigate volatility in operating expenses.
Pengrowth has hedged 22 percent of expected 2013 power consumption at
$61.40/MWh and 65 percent of expected 2014 power consumption at
Additional details of Pengrowth's risk management contracts in place
for 2013, 2014 and 2015 are outlined in the Management's Discussion
and Analysis and accompanying Notes to the September 30, 2013
unaudited Financial Statements.  
Pengrowth's total long-term debt was approximately $1.6 billion as at
September 30, 2013, comprising $1.4 billion of fixed rate term notes
and $0.2 billion of convertible debentures. At September 30, 2013,
Pengrowth's $1.0 billion bank facility continued to be undrawn and
the company had $580 million of cash on hand.  
Pengrowth remains on track to achieve its estimated full year 2013
average production target of approximately 82,000 to 84,000 boe/d.
This target range incorporates the impact of the non-core asset
dispositions carried out in 2013.  
Operating expenses continued to be a challenge during the quarter and
the first nine months of 2013, primarily as a result of higher than
anticipated power costs related to mature oil properties. Pengrowth
now expects 2013 average operating costs per boe to be $15.70/boe, up
from prior guidance of $14.75/boe.   
Pengrowth looks forward to updating shareholders on the progress of
the Lindbergh project. Pengrowth plans to update shareholders on
operating milestones and 2014 guidance at an investor day
presentation on January 16, 2014.  
Pengrowth's unaudited Financial Statements for the three and nine
months ended September 30, 2013 and related Management's Discussion
and Analysis can be viewed on Pengrowth's website at They have been filed on SEDAR at and
on EDGAR at  
Conference call:  
Pengrowth will host a conference call for investors at 3:30 p.m.
Mountain Time on Thursday, November 7, 2013. To participate, callers
may dial in via telephone or participate online in listen only mode
via the audio webcast. To ensure timely participation in the
teleconference, callers are encouraged to dial in 10 minutes prior to
commencement of the call to register. 
Dial-in numbers: (866) 225-0198 or Toronto local (416) 340-8061 
Live listen only audi
o webcast: 
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 the 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 
All amounts are stated in Canadian dollars unless otherwise
Advisory Regarding Production Information 
All amounts are stated in Canadian dollars unless otherwise
specified. All production information herein is based upon
Pengrowth's company interest working interest share of 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.  
Caution Regarding Engineering Terms: 
When used herein, the term "boe" means barrels of oil equivalent on
the basis of one boe being equal to one barrel of oil or NGLs or
6,000 cubic feet of natural gas (6 Mcf: 1 bbl). Barrels of oil
equivalent may be misleading, particularly if used in isolation. A
conversion ratio of six Mcf of natural gas to one boe is based on an
energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the
wellhead. All production figures stated are based on company interest
before the deduction of royalties. 
Pilot production results and steam oil ratio 
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 Lindbergh project. 
Caution Regarding Forward Looking Information: 
This press release contains forward-looking statements within the
meaning of securities laws, including the "safe harbour" provisions
of the 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, statements with
respect to Pengrowth's strategy, plans and objectives; balancing cash
inflows and outflows in 2013 and 2014; funding of the first
commercial phase of the Lindbergh project; future production mix and
decline rates; future sustaining capital requirements; free cash flow
and ability to pay dividends; the use of cash on hand; the timing of
first steam at the first commercial phase of the Lindbergh project;
Lindbergh operating costs; expected operating costs; the installation
of power generation at Swan Hills; the installation of cogeneration
facilities at Olds and Lindbergh; future reductions in operating
costs; anticipated ultimate production from the Lindbergh pilot and
commercial projects and anticipated recovery factors and ultimate
production; cost advantage at Lindbergh; anticipated decline rates at
Lindbergh; Lindbergh project status, timing and budget;
transportation options and pricing for Lindbergh production;
maintaining dividend levels; future dividends; the sources of funding
for additional future commercial phases of the Lindbergh project and
the timing associated therewith; the use of proceeds from asset
sales; anticipated use of cash on hand at September 30, 2013;
financing plans; future production, debt levels and operating
expenses; financing arrangements for future development of Lindbergh
infrastructure; and the anticipated Investor Day on January 16, 2014.
Statements relating to "reserves" and "resources" are deemed to be
forward-looking statements, as they involve the implied assessment,
based on certain estimates and assumptions that the reserves and
resources described exist in the quantities predicted or estimated
and can profitably be produced in the future. 
Forward-looking statements and information are based on current
beliefs as well as assumptions made by and information currently
available to Pengrowth concerning anticipated financial performance,
business prospects, strategies and regulatory developments. Although
management considers these assumptions to be reasonable based on
information currently available to it, they may prove to be
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: changes in general economic,
market and business conditions; the volatility of oil and gas prices;
fluctuations in 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; geological,
technical, drilling and processing problems and other difficulties in
producing 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;
fluctuations in interest rates; inadequate insurance coverage;
compliance with environmental laws and regulations; inability to
receive regulatory and other third party approvals; actions by
governmental or regulatory agencies, including changes in tax laws;
Pengrowth's ability to access external sources of debt and equity
capital; the impact of foreign and domestic government programs and
the occurrence of unexpected events involved in the operation and
development of oil and gas properties. Although the Corporation
currently intends to maintain its monthly dividend, dividends can and
may fluctuate in the future. Actual future cash dividends, if any,
will be subject to the discretion of our Board of Directors and may
vary depending on a variety of factors and conditions existing from
time to time, including fluctuations in commodity prices, production
levels, capital expenditure requirements, debt service requirements,
operating costs, royalty burdens, foreign exchange rates and the
satisfaction of the liquidity and solvency tests imposed by the ABCA
for the declaration and payment of dividends. 
Further information regarding these factors may be found under the
heading "Business Risks" in our most recent management's discussion
and analysis and under "Risk Factors" in our Annual Information Form
dated February 28, 2013. 
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 requ
ired by
applicable laws. 
The forward-looking statements contained in this press release are
expressly qualified by this cautionary statement. 
Additional Information - Supplemental and Additional Non-IFRS
In addition to providing measures prepared in accordance with
International Financial Reporting Standards (IFRS), Pengrowth
presents supplemental and additional non-IFRS measures, Adjusted Net
Income (Loss), operating netbacks and Funds Flow from Operations.
These measures do not have any standardized meaning prescribed by
IFRS and therefore are unlikely to be comparable to similar measures
presented by other companies. These supplemental non-IFRS measures
are provided to assist readers in determining Pengrowth's ability to
generate cash from operations. Pengrowth believes these measures are
useful in assessing operating performance and liquidity of
Pengrowth's ongoing business on an overall basis.  
These measures should be considered in addition to, and not as a
substitute for, net income (loss), cash provided by operations and
other measures of financial performance and liquidity reported in
accordance with IFRS. Further information with respect to these
additional and non-IFRS measures can be found in Pengrowth's most
recent management's discussion and analysis. 
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.
Investor Relations
(403) 233-0224 or Toll Free: 855-336-8814
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