Pengrowth Announces Doubling of Value of 2P Reserves at Lindbergh from $1.0 Billion to $2.2 Billion

Pengrowth Announces Doubling of Value of 2P Reserves at Lindbergh from $1.0 
Billion to $2.2 Billion 
CALGARY, ALBERTA -- (Marketwired) -- 06/24/14 --   Pengrowth Energy
Corporation (TSX: PGF)(NYSE: PGH) today announced that GLJ Petroleum
Consultants Ltd. (GLJ) has provided an update of bitumen reserves and
contingent resources for its Lindbergh project.  
GLJ has attributed 101.0 MMbbl of 1P reserves and 229.7 MMbbl of 2P
reserves to the Lindbergh project. The additional proved reserves at
Lindbergh represent an increase of 24 percent from December 31, 2013,
while 2P reserves increased by 61 percent.  
The GLJ Lindbergh report has an effective date of May 31, 2014 and
results in 19.6 million barrels (MMbbl) of probable reserves being
reclassified to the proved (1P) category and an increase of 87.4
MMbbl in proved plus probable (2P) reserves, offset by 236,200 bbl of
production in 2014 to May 31, 2014. The reserves update is based upon
existing regulatory approvals, the application for expansion of the
project to 30,000 bbl/d, ongoing positive pilot performance,
continued delineation drilling and additional, new 3D seismic data.  
In addition, GLJ has assigned best estimate contingent resources (2C)
of 96.0 MMbbl to the Lindbergh property, as of May 31, 2014, a 41
percent decrease from December 31, 2013, reflecting the transfer of
volumes from the contingent resource category to probable reserves.  
As a result of the work done by GLJ, Pengrowth now estimates that the
before tax net present value (NPV) of Lindbergh 2P reserves, using a
10 percent discount rate, has more than doubled, from $1.95 per share
at year end, 2013 to $4.20 per share at May 31, 2014. 
"We are very pleased to have received independent confirmation of the
value Pengrowth is generating for our shareholders with the Lindbergh
project," said Derek Evans, President and Chief Executive Officer of
Pengrowth. "We look forward to putting steam into the ground this
fall as we prepare for first commercial production from Lindbergh and
expect significant corporate cash flow growth per share in 2015." 
Reserves and Resources Summary 
The following tables summarize the December 31, 2013 and updated May
31, 2014 GLJ reserve and resource estimates for the Lindbergh
property. The May 31, 2014 evaluation is based on GLJ's April 1, 2014
price forecast. 

                                      31-Dec-2013 31-May-2014  Change Change
 Reserves                                MMbbl       MMbbl     MMbbl     %  
 Proved (1P)                              81.7       101.0     +19.3    +24 
 Proved Plus Probable (2P)               142.6       229.7     +87.1    +61 
 Proved Plus Probable Plus Possible                                         
 (3P)                                    195.7       330.8     +135.1   +69 
 Contingent Resources                    MMbbl       MMbbl     MMbbl     %  
 Low Estimate (1C)                       124.1        48.0     (76.1)  (61) 
 Best Estimate (2C)                      163.0        96.0     (67.0)  (41) 
 High Estimate (3C)                      275.6       156.1    (119.5)  (43) 

The increase in 2P reserves at Lindbergh is equivalent to 18 percent of
Pengrowth's total corporate 2P reserves reported at December 31, 2013
and 332 percent replacement of estimated 2014 production based on the
mid-point of Pengrowth's current production guidance. 
Lindbergh Net Present Value Summary  
The following table summarizes GLJ's estimates of net present value
for Lindbergh reserves and contingent resources as at December 31,
2013 and May 31, 2014. 

                                                         Before Income Tax, 
                                         Discounted at 10%/Year (BTAX NPV10)
                                            31-Dec-2013 31-May-2014  Change 
Reserves                                        $MM         $MM         %   
Proved (1P)                                     749        1,194       +59  
Proved Plus Probable (2P)                      1,020       2,215      +117  
Proved Plus Probable Plus Possible (3P)        1,255       2,800      +123  
Contingent Resources                            $MM         $MM         %   
Low Estimate (1C)                               238         215       (10)  
Best Estimate (2C)                              710         374       (47)  
High Estimate (3C)                             1,744       1,263      (28)  

The Lindbergh 2P reserve value reported at 2013 year-end represented 20
percent of Pengrowth's total 2P 2013 year-end reserve value of $5,148
million (BTAX NPV10) and equated to $1.95 per share (based on
522,031,117 shares outstanding at December 31, 2013). The 2P reserve
value in the current Lindbergh update has more than doubled compared
to the 2013 year-end estimate, representing an even larger portion of
the corporate 2P reserve value and equates to $4.20 per share (based
on 527,470,168 shares outstanding as at May 31, 2014). 
Lindbergh Operations Update 
The Lindbergh pilot continues to exceed type curve expectations, with
average production of approximately 1,785 bbl/d and an instantaneous
steam oil ratio of approximately 2.4 in the month of June, 2014 up to
June 14th.  
Construction of the well pads and Central Processing Facility for the
first 12,500 bbl/d phase of the commercial project remains on
schedule, with all major equipment on site and more than 80 percent
of the wells drilled. Pengrowth expects to commission the plant and
begin steam circulation during the fourth quarter of 2014. As at June
24th, 2014, Lindbergh remains on track with the revised budget
announced on May 12, 2014, with approximately 85 percent of the
planned expenditures for the first commercial phase having been made
or committed.  
Lindbergh's first commercial bitumen production is expected to be
achieved in the first quarter of 2015, as a prelude to expected
annual average Lindbergh production of 12,500 bbl/d. 
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, 2014, 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 found
on the company's website at and has been filed on
SEDAR at and as a Form 40-F on EDGAR at 
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
May 31, 2014 conducted by GLJ, using the April 1, 2014 GLJ price
forecast and prepared in accordance with the definitions, standards
and procedures contained in COGEH and NI 51-101. 
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 status of construction, expected
first steam, commissioning and production and expected cash flow
growth per share in 2015. 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 commercial 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 April 1, 2014 forecast
prices and costs in respect of the May 31, 2014 Lindbergh reserve and
resource update and using GLJ's January 1, 2014 forecast prices and
costs in respect of the December 31, 2014 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, Pengrowth 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.  
Possible reserves are those additional reserves that are less certain
to be recovered than probable reserves. There is a 10% probability
that the quantities actually recovered will equal or exceed the sum
of proved plus probable plus possible reserves. 
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. 
Fred Kerr
Vice President, Investor Relations
Wassem Khalil
Manager, Investor Relations
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