Pengrowth Energy (PGH) to Sell Bodo Property in $95M Deal

Pengrowth Energy (NYSE: PGH) announced that it has entered into an agreement for the sale of its non-core Bodo property in eastern Alberta for $95 million. The expected net proceeds from the non-core asset sale will be directed towards reducing Pengrowth's outstanding debt as part of the Company's strategy of strengthening its balance sheet. With the sale of the Bodo asset and including signed letters of intent (LOI's) as well as previously closed dispositions, total expected disposition proceeds in 2015 amount to approximately $260 million of the Company's 2015 disposition target of $600 million.

The Bodo property produced an average of approximately 2,700 barrels of oil equivalent per day (boe/d) (87 percent liquids), year-to-date, ending August 31, 2015 and had proved plus probable (2P) reserves of 12.9 million barrels assigned to it at December 31, 2014, according to the independent reserve evaluators GLJ Petroleum Consultants Ltd.

The following are some of the key metrics and implied transaction multiples for the Bodo disposition:

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Average daily production (boe/d)                     2,700

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2P Reserves (Million boe)                             12.9

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Annualized net operating income ($ million)           18.2

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Implied production multiple                  $35,185/boe/d

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Implied reserve multiple                         $7.35/boe

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Implied net operating income multiple                 5.2x

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Subject to customary regulatory and other closing conditions, the Bodo disposition is expected to close on October 30, 2015 and will have an effective date of April 1, 2015.

"This transaction is in keeping with our goal of selling $600 million of non-core assets by the end of 2015 and applying the proceeds to reducing debt" said Derek Evans, President and Chief Executive Officer of Pengrowth. "This disposition is another step in improving our financial flexibility by strengthening our balance sheet. We continue to take a disciplined and proactive approach to our disposition program in order to maximize the value for the remaining assets that we currently have in the market and ultimately achieve our disposition target."

Outlook

The sale of the Bodo property is not expected to materially affect full-year 2015 average production guidance and Pengrowth expects 2015 production to remain between 70,000 and 72,000 boe/d. The Company remains confident that it will successfully achieve its disposition target. In addition to the asset packages that are currently in the market, Pengrowth has engaged third party firms to help market two additional disposition packages encompassing the Swan Hills and the Greater Olds/Garrington areas. While the Company does not see a need to sell all of the current packages in order to achieve its target, it does want to maintain all available options.

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