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 
FOR: Pengrowth Energy Corporation 
JUNE 24, 2014 
Pengrowth Announces Doubling of Value of 2P Reserves at Lindbergh from $1.0
Billion to $2.2 Billion 
CALGARY, ALBERTA--(Marketwired - June 24, 2014) - 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
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,
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
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
Fred Kerr
Vice President, Investor Relations
Wassem Khalil
Manager, Investor Relations
INDUSTRY:  Energy and Utilities - Oil and Gas  
-0- Jun/24/2014 20:32 GMT
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