10:16:05 EDT Thu 28 Mar 2024
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or Name
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Pengrowth Energy Corp
Symbol PGF
Shares Issued 547,706,465
Close 2017-03-20 C$ 1.44
Market Cap C$ 788,697,310
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Pengrowth to unload Albertan assets for $180-million

2017-03-20 08:29 ET - News Release

Mr. Derek Evans reports

PENGROWTH REACHES AGREEMENT TO SELL NORTH CENTRAL ALBERTA PROPERTIES FOR $180 MILLION

Pengrowth Energy Corp. has entered into an agreement for the sale of a portion of its Swan Hills assets in north-central Alberta for total cash consideration of $180-million, subject to customary adjustments.

The sale of the Swan Hills assets is in keeping with the company's strategy to delever its balance sheet while allowing it to streamline and high grade its remaining portfolio, and to concentrate on its core assets that are expected to position the company for substantial per-share increases in reserves, production and cash flow.

The divested assets generated average daily production of approximately 4,920 barrels of oil equivalent per day (weighted approximately 82 per cent toward liquids) during the fourth quarter of 2016 and had proved plus probable (2P) reserves of 31 million boe as at Dec. 31, 2016, according to independent reserve evaluator GLJ Petroleum Consultants Ltd.

This transaction will allow Pengrowth to further reduce its level of debt. The company expects to use a portion of the sale proceeds to prepay the remaining outstanding $100-million (U.S.) ($134-million) of the 6.35 per cent senior term notes which are scheduled to mature on July 26, 2017. Following this prepayment, Pengrowth will have no outstanding debt maturities in 2017 and the company's pro forma net debt as of May 31, 2017, will fall to approximately $970-million.

The effective date of the sale is Jan. 1, 2017, and closing is expected to occur on May 31, 2017, subject to the receipt of all necessary regulatory approvals and the satisfaction of other customary closing conditions.

In light of the announced transaction, Pengrowth is taking this opportunity to update its 2017 corporate guidance to reflect the changes that result from the sale and its increased concentration on its core assets. Full-year 2017 average production guidance is expected to be impacted by approximately 3,100 boe per day, resulting in revised 2017 production to be between 47,000 and 49,000 boe per day. The remaining changes to 2017 guidance resulting from the sale are outlined in the table.

                                  CHANGES TO 2017 GUIDANCE

                                               Original guidance        Revised guidance

Average daily production (boe per day)          50,000 to 52,000        47,000 to 49,000
Total capital expenditures ($ millions)                     $125                    $125
Funds flow from operations ($ millions)                      195                     170
Royalties (% of sales)                                       9.0                     9.0
Operating costs ($ per boe)                       13.25 to 13.75          13.00 to 13.50
Cash G&A ($ per boe)                                3.50 to 4.00            3.50 to 4.00

About Pengrowth Energy Corp.

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.

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