Mr. Derek Evans reports

PENGROWTH ANNOUNCES PLAN TO REDUCE OUTSTANDING DEBT BY $530MM THROUGH RETIREMENT OF $127MM OF CONVERTIBLE DEBENTURES AND THE PREPAYMENT OF US $300MM OF THE 6.35% SENIOR NOTES DUE JULY 26, 2017

Pengrowth Energy Corp. plans to reduce its outstanding debt through the use of existing cash on hand. Following the closing of the 4-per-cent non-convertible gross overriding royalty on Lindbergh on Jan. 6, 2017, the company's cash position was approximately $530-million.

Pengrowth intends to use the cash on hand to retire the $127-million of convertible debentures, on maturity on March 31, 2017, and to use the remaining cash to prepay $300-million (U.S.) principal amount outstanding of the $400-million (U.S.) 6.35 per cent senior notes maturing July 26, 2017. The company has given notice to holders of the 6.35 per cent senior notes of its plan to prepay 75 per cent of the notes plus accrued interest and make-whole payments pursuant to the terms of the note purchase agreements. The prepayment will be made on a pro rata basis on March 30, 2017.

Following these payments, the company expects its pro forma debt to be reduced to approximately $1.1-billion and to comprise entirely senior term notes.

Pengrowth continues to seek out opportunities to further reduce its outstanding debt and improve its balance sheet, including through the disposition of assets. The company intends to apply the proceeds from potential asset divestitures, if any, to the prepayment of the remaining outstanding balance of the 6.35 per cent senior notes as well as proceeding to prepay the remaining notes outstanding in order of maturity. The corporation is also continuing with continuing negotiations with its remaining noteholders and bank lenders in an effort to obtain covenant relaxation.

About Pengrowth Energy Corp.

Pengrowth Energy is an intermediate Canadian producer of oil and natural gas. Pengrowth's assets include the Lindbergh thermal oil, Cardium light oil, Swan Hills light oil, and the Groundbirch and Bernadet Montney gas projects.

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