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Canada : Pengrowth announces a 63 percent increase in value of 2p reserves at lindbergh from $1.56 billion to $2.55 billion.

Pengrowth Energy Corporation today announced that GLJ Petroleum Consultants Ltd. (GLJ) has provided an update of bitumen reserves and contingent resources for its 100 percent owned Lindbergh project in east central Alberta, as of September 30, 2016. The reserves and resources update reflects the successful application approval allowing for the expansion of the project to 30,000 barrels per day (bbl per day), coupled with ongoing positive production performance.

The updated report highlights changes in reserves and resources as a result of the approval of the Phase Two expansion as well as the addition of reserves associated with, future infill wells and the Cyclic Steam Stimulation area. Overall, an additional 44.5 million barrels (MMbbls) of bitumen are being attributed to Proved (1P) reserves, primarily due to the reclassification of probable reserves to the proved category, as a result of the Phase Two expansion approval. This represents a 43 percent increase to 1P reserves from year end 2015, to a volume of 147.9 MMbbls. Proved plus Probable (2P) reserves at Lindbergh increased by 21 percent from year end 2015, to a volume of 319.1 MMbbls. A total of 55.7 MMbbls were added to the 2P category, primarily as a result of the reclassification of resources to reserves, as well as reserves being assigned to future infill wells and the Cyclic Steam Stimulation area.

Based on the updated report, Pengrowth now estimates that the before tax net present value (NPV) of Lindbergh 2P reserves, using a 10 percent discount rate, has increased by 63 percent from a value of $1.56 billion ($2.87 per share) as at December 31, 2015 to a value of $2.55 billion ($4.66 per share) as at September 30, 2016.

"We are delighted to see that the updated GLJ report not only reflects the exceptional performance that we have seen from this project, but also points to Lindbergh's key role in driving growth in both production and shareholder value," said Derek Evans, President and Chief Executive Officer of Pengrowth. "The 63 percent growth in Lindbergh 2P reserve value since year end 2015 to a value in excess of $4.50 per share is impressive and a reflection of the high quality of the asset."

Lindbergh continues to represent a significant and growing component of Pengrowth's value and long-term growth strategy. The reported 2015 year end reserve value for Lindbergh of $1,559 million (BTAX NPV10) represented approximately 48 percent of Pengrowth's total 2P 2015 year end reserve value of $3,268 million and equated to $2.87 per share (based on 543,033,300 shares outstanding at December 31, 2015). The 2P reserve value in the current Lindbergh update has increased by approximately 63 percent compared to the 2015 year end estimate, representing an even larger portion of the corporate 2P reserve value and equates to $4.66 per share (based on 547,445,394 shares outstanding as at September 30, 2016).

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Publication:Mena Report
Date:Oct 15, 2016
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