Mr. Derek Evans reports

PENGROWTH ANNOUNCES PROPOSED AMENDMENTS TO CONVERTIBLE DEBENTURES

Pengrowth Energy Corp. has called a meeting of the holders of its 6.25-per-cent convertible unsecured subordinated debentures due March 31, 2017, to amend certain terms of the outstanding debentures.

Pengrowth has been focused on improving its balance sheet and has taken steps to bolster its cash position in 2016 in anticipation of the forthcoming debt maturities in the first seven months of 2017. Following the monetization of its 2018 and 2019 commodity risk management contracts, the company exited the third quarter with $139.5-million of cash on the balance sheet. Subsequent to the end of the quarter and through the monetization of its foreign exchange hedges and significantly all of its 2017 commodity risk management contracts, Pengrowth's cash balance increased to approximately $225-million as at Nov. 15, 2016. Following these transactions, in addition to its 2016 hedges as set out in its third quarter financial results, the company has 8,000 barrels per day of expected 2017 crude oil production hedged at a Canadian-dollar-equivalent price of $61.51 per barrel and no natural gas contracts in place. The company also re-entered into foreign exchange contracts on a significant portion of the principal amount of U.S.-dollar-denominated term notes at an average fixed exchange rate of $1 (Canadian)/74.8 U.S. cents.

The monetization efforts have resulted in the company having a substantial cash position, providing Pengrowth with additional financial flexibility for its debt reduction efforts. With the company having already repaid all drawings under its revolving credit facility and in keeping with its debt reduction objective, at this time, Pengrowth feels its best course of action is to use the cash on hand for the early retirement of approximately $127-million of outstanding debentures. Should the amendments be approved by debentureholders and the company proceed with the early redemption, the company's balance sheet strength is expected to improve by reducing its overall debt position. Following the redemption, the company expects to exit the year with approximately $100-million of cash on hand.

Indenture amendments

If approved, the amendments would permit Pengrowth, at its option, to redeem all of the outstanding debentures for cash consideration of $1,031.16 for each $1,000 debenture. This is equivalent to par plus interest to March 30, 2017.

If the proposed amendments are approved, it is expected that the company will redeem the debentures on Dec. 30, 2016.

Meeting to approve indenture amendments

The meeting of debentureholders will be held at 9 a.m. (Calgary time) on Dec. 22, 2016. The record date for determining the debentureholders entitled to receive notice of and vote at the meeting will be Nov. 17, 2016.

At the meeting, debentureholders will be asked to approve the amendments by an extraordinary resolution authorizing Pengrowth and the trustee of the debentures to amend the terms of the outstanding debentures. For the amendment to be approved, holders of not fewer than 25 per cent of the principal amount of the debentures outstanding must be represented in person or by proxy at the meeting, and the extraordinary resolution must be passed by debentureholders' votes representing no fewer than 66-2/3rds per cent of the principal amount of the debentures represented at the meeting. A proxy form and a management information circular will be mailed to debentureholders in connection with the meeting.

Pengrowth's board of directors has unanimously concluded that the proposed amendments are in the best interests of the company and recommends that debentureholders vote for the proposed amendments.

How to vote

Pengrowth debentureholders with questions or need help voting are encouraged to contact the proxy solicitation and information agent Kingsdale Shareholder Services at 1-866-581-1487 toll-free within North America, or 1-416-867-2272 (for collect calls outside North America), or e-mail at contactus@kingsdaleshareholder.com.

To vote for the amendments, please complete the applicable proxy form to be provided by your broker or other intermediary no later than 9 a.m. (Calgary time) on Dec. 20, 2016.

About Pengrowth

Pengrowth's assets include the Lindbergh thermal oil, Cardium light oil, Swan Hills light oil, and the Groundbirch and Bernadet Montney gas projects.

We seek Safe Harbor.