Pengrowth Provides Operations Update and Models Cash Flow in 2018, 2019 and 2020 at Various Crude Pricing

CALGARY, Alberta, Sept. 10, 2018 (GLOBE NEWSWIRE) — Pengrowth Energy Corporation (“Pengrowth”) (TSX:PGF, OTCQX:PGHEF), today provided a model of potential cash flows at various West Texas Intermediate Crude (“WTI”) pricing and updated investors on production as well as oil market access. All amounts are stated in Canadian dollars unless otherwise specified. Pengrowth also announced their participation in the Peters & Co. 2018 Energy Conference.

“Production at Lindbergh and at the corporate level is on plan despite the need to allocate steam to stimulate our infill wells. Production at Lindbergh has eclipsed the 18,000 BBL/d threshold and our latest five day average is 18,137 BBL/d,” said Pete Sametz, President and Chief Executive Officer of Pengrowth. “Three of the eight infill wells drilled this year are now on pump and just starting to contribute to our overall production rates. That said, due to scheduled maintenance work at Lindbergh later this month, production will be reduced by approximately 40% for seven days.

“Our financial performance in 2018 has been held back by our current crude oil hedges; these hedges will no longer affect us in 2019. The key take away is that at current WTI pricing, we could self-fund our base capital plan for 2019 while also paying down the debt coming due next year.”

To provide investors with a better understanding of the cash flow that Pengrowth could generate after the hedges come off at the end of 2018, we provide a model of cash flow from operating activities, minus interest and financing charges, and before capital expenditures at various WTI levels. While not a forecast, we believe this will be helpful to investors trying to understand the impact of our hedges on 2018, the upside sensitivity to crude pricing in 2019 and beyond, and the cash available to pay down debt and fund capital expenditures at various WTI levels.

Pengrowth’s expected production in 2019 is the result of capital spent in prior years and is unlikely to vary with our level of capital spending in 2019. Our 2019 base capital expenditure program is $45 million. The discretionary expansion of the 2019 capital program to $125 million would only result in a 500 BBL/d difference in production for 2020. Further production growth in 2021 depends on whether Pengrowth chooses to expand capital spending to $125 in 2019 for engineering and the acquisition of long lead items to support 2021 volume growth.

Free Cash Flow* Before Capital Expenditures at Various WTI Prices:

*Free cash flow is a non-GAAP measure defined as cash flow from operating activities, less interest and financing charges, and before capital spending. Management believes free cash flow is a useful measure of the cash generated by the business that is available to pay down debt and fund capital expenditures.

The free cash flow model at various WTI assumes: 2018 actuals for the first half of the year, Exchange rate: CA$/US$ $0.77, AECO – CA$/mcf $2.00, WCS differential CA$/bbl $23.25 and total corporate production resulting from the 2019 base capital plan of $45 million. This corporate level cash flow model remains consistent with the model of Lindbergh’s field operating income provided earlier in 2018, while incorporating corporate level charges including interest and financing charges, hedging losses, expenditures on remediation, and general and administrative expenses.

Production Update:

Pengrowth continues to be on track to reach its 2018 production guidance.

Market Access:

Over the past 2 months, additional progress has been made on securing apportionment protection at fixed Western Canadian Select (“WCS”) price differentials, expanding the volume protected in 2019 by 2,500 bbl/d to 10,000 bbl/d.

Pengrowth will continue to work to secure apportionment protection through physical contracts on its Lindbergh production.

Peters & Co. 2018 Energy Conference

Pengrowth will be presenting at Peters & Co.’s 2018 Energy Conference on September 12^th in Toronto, ON.

About Pengrowth:

Pengrowth Energy Corporation is a Canadian energy company focused on the sustainable development and production of oil and natural gas in Western Canada from its Lindbergh thermal oil property and its Groundbirch Montney gas property. The Company is headquartered in Calgary, Alberta, Canada and has been operating in the Western Canadian basin for over 28 years. The Company’s shares trade on both the Toronto Stock Exchange under the symbol “PGF” and on the OTCQX under the symbol “PGHEF”.