Pengrowth Energy Trust
NYSE : PGH
TSX : PGF.UN

Pengrowth Energy Trust

March 08, 2010 23:00 ET

Pengrowth Energy Trust Announces 2009 Year End Reserves Information

CALGARY, ALBERTA--(Marketwire - March 8, 2010) - Pengrowth Corporation, administrator of Pengrowth Energy Trust (TSX:PGF.UN) (NYSE:PGH) (collectively "Pengrowth"), is pleased to announce its 2009 year end reserves information.

The 2009 results were impacted by reduced capital spending compared to 2008 as necessitated by lower commodity prices, reduced cash flow and Pengrowth's objective to live within our means. As a consequence reserve replacement performance was down from the prior year. A breakdown of the components that contributed to the reserve replacement metrics is provided.

On a proved plus probable basis total reserves decreased from 323.5 million barrels of oil equivalent (mmboe) in 2008 to 295.7 mmboe in 2009. The key factors for this decline were a 48 percent reduction in development capital expenditures in 2009 versus 2008, and a prudent capital budget that only represented 38 percent of operating cash flow.

On a proved plus probable basis, Pengrowth's company interest reserves before deduction of royalties as at December 31, 2009 totaled 295.7 mmboe. Development additions through drilling activity and improved recovery amounted to 8.8 mmboe which was offset by net dispositions of 1.3 mmboe as well as net negative revisions of 6.2 mmboe. The net reduction of 6.2 mmboe due to technical revisions was primarily associated with probable undeveloped reserves where development of these assets was unlikely given the shifting corporate strategy to develop repeatable, low-cost resources and the outlook for natural gas prices.

On a proved basis, Pengrowth's company interest reserves as at December 31, 2009 totaled 216.6 mmboe. Total additions of 10.4 mmboe, including revisions and net dispositions, represent a 36 percent replacement ratio based on 29.0 mmboe of production during 2009.

Including technical revisions, finding, development and acquisition (FD&A) costs including future development capital (FDC) were $14.87 per boe for proved reserves and $57.15 per boe for proved plus probable reserves. Excluding the reserves being deleted as a result of the shift in corporate strategy, FD&A costs including changes in FDC were $14.74 per boe for proved reserves and $16.62 per boe for proved plus probable reserves. This is below Pengrowth's three year average (2007 - 2009) proved plus probable FD&A cost of $20.34 per boe.

Including technical revisions, finding and development costs including FDC were $14.12 per boe for proved reserves and $30.81 per boe for proved plus probable reserves. Excluding those negative revisions removed due to a shift in corporate strategy, Pengrowth's finding and development costs including FDC were $14.17 per boe for proved reserves and $15.33 per boe for proved plus probable reserves, which is below Pengrowth's three year average (2007 - 2009) proved plus probable finding and development costs of $21.70 per boe.

Pengrowth's estimated before tax net asset value per trust unit, based on the proved plus probable reserve value discounted at 10 percent, was $13.06 per trust unit at December 31, 2009 compared to $15.33 per trust unit at the end of 2008. After adjusting for year end debt levels, Pengrowth's estimated before tax net asset value per trust unit, based on the proved plus probable reserve value discounted at 10 percent, was $12.26 at December 31, 2009 compared to $12.86 per trust unit at the end of 2008.

The decrease in the before tax net asset value per trust unit is primarily the result of the increased number of trust units outstanding at year end 2009 versus 2008, reflecting Pengrowth's October 2009 equity issue which reduced debt.

On a debt adjusted per unit basis, using the year end trust unit price, proved plus probable reserves per unit were 0.74 in 2009 as compared to 0.76 in 2008.

Pengrowth has filed its Annual Information Form for the year ended December 31, 2009, which includes the disclosure and reports relating to reserves data and other oil and gas information required pursuant to National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities of the Canadian Securities Administrators. In addition, Pengrowth has filed its Form 40-F with the U.S. Securities and Exchange Commission. Copies of these documents may be obtained via www.sedar.com and www.sec.gov/edgar.shtml. These documents are also available on Pengrowth's website at www.pengrowth.com.

Reserves

Based on an independent engineering evaluation conducted by GLJ Petroleum Consultants Ltd. (GLJ) effective December 31, 2009 and prepared in accordance with National Instrument 51-101 (NI 51-101), Pengrowth's proved plus probable reserves were 295.7 mmboe. This represents a four percent replacement of proved plus probable reserves during 2009 through the addition of 2.6 mmboe resulting from a combination of drilling activity, improved recovery applications and technical revisions, and net dispositions of 1.3 mmboe, offset by 29.0 mmboe of production. Pengrowth's total proved reserves were 216.6 mmboe representing 36 percent replacement of production based on 11.3 mmboe of additions and revisions and net dispositions of 0.9 mmboe.

Proved producing reserves are estimated at 183.8 mmboe; these reserves represent approximately 85 percent of the total proved reserves of 216.6 mmboe. The total proved reserves account for 73 percent of the proved plus probable reserves. These percentages have not changed from 2008.Using a 10 percent discount factor and GLJ January 1, 2010 forecast pricing, the proved producing reserves account for 70 percent of the proved plus probable before tax value while the total proved reserves account for 79 percent of the proved plus probable before tax value. Using a 6:1 boe conversion rate for natural gas, approximately 38 percent of Pengrowth's proved plus probable reserves are light/medium crude oil, nine percent are heavy oil, 10 percent are NGLs, 40 percent are natural gas and three percent are coal bed methane.

Although focused in strategic core areas, Pengrowth is a geographically diversified energy trust with properties located across Canada in the provinces of British Columbia, Alberta, Saskatchewan and offshore Nova Scotia. On a proved plus probable reserve basis, the Alberta, Saskatchewan, British Columbia and offshore Nova Scotia holdings account for 82 percent, 11 percent, four percent and three percent, respectively of reserves reported by GLJ.



Reserves Summary 2009
(Company Interest)
GLJ January 1, 2010 forecast prices and costs

---------------------------------------------------------------
Light & Heavy Natural 2009 Oil 2008 Oil
Medium Crude Oil NGLs Gas Equivalent Equivalent
Oil (mbbl) (mbbl) (mbbl) (bcf) (mboe) (mboe)
----------------------------------------------------------------------------
Proved
producing 65,640 14,370 19,253 507.4 183,835 200,580
Proved
developed
non-producing 805 139 1,030 18.5 5,055 5,004
Proved
undeveloped 16,358 1,846 1,190 49.6 27,665 29,640
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Total proved 82,803 16,355 21,473 575.5 216,554 235,224
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Total proved
plus probable 112,249 27,724 29,587 757.0 295,734 323,463
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(i) Table may have rounding differences


RESERVE RECONCILIATION

Pengrowth added a net 1.3 mmboe of proved plus probable reserves during 2009, replacing production by four percent. Reserve additions from drilling and improved recovery projects amounted to 8.8 mmboe. Most significant were infill drilling and extensions at Carson Creek and in the Twining CBM area and improved recovery and infill drilling additions at Weyburn. Reserve increases in the proved producing category also resulted from reclassification of proved or probable undeveloped reserves to producing primarily for infill drilling and drilling extensions at Carson Creek, Weyburn, Sable Island and Monogram.

The additions were offset by net negative technical revisions of 6.2 mmboe to the proved plus probable reserves. These relate to various performance revisions made to previous estimates and certain probable undeveloped reserves being deleted where development of these properties was unlikely given the shifting corporate strategy and the outlook for natural gas prices. The deleted proved plus probable reserves amounted to 9.7 mmboe and were primarily at the Olds property. At Olds, 6.4 mmboe in proved plus probable reserves were revised due to their one-off and high-cost nature as well as the outlook for natural gas prices.

A net decrease of 1.3 mmboe to proved plus probable reserves from acquisitions and dispositions was due to the sale of some minor non-core properties mainly at Niton, Karr and Pine Creek, offset by some small strategic asset acquisitions at House Mountain and Carson Creek.



RESERVES RECONCILIATION 2009
Company Interest
GLJ January 1, 2010 forecast prices and costs

----------------------------------------------------------------
Light & Medium
Crude Oil Heavy Oil NGLs Natural Gas Oil Equivalent
(mbbl) (mbbl) (mbbl) (bcf) (mboe)
----------------------------------------------------------------------------
TOTAL PROVED
December 31, 2008 90,415 16,277 23,543 630 235,224
Extensions 252 139 934 7 2,532
Infill Drilling 137 0 656 12 2,721
Improved Recovery 1,173 225 7 1 1,620
Technical Revisions (1,556) 2,349 (16) 21 4,191
Discoveries 100 129 0 0 229
Acquisitions 877 0 214 1 1,329
Dispositions (258) (8) (365) (10) (2,267)
Production (8,337) (2,757) (3,500) (87) (29,025)
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December 31, 2009 82,803 16,355 21,473 576 216,554
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PROVED PLUS PROBABLE
December 31, 2008 121,289 27,728 32,442 852 323,463
Extensions 704 68 1,223 10 3,616
Infill Drilling 269 0 655 15 3,425
Improved Recovery 657 288 24 2 1,259
Technical Revisions (3,378) 2,235 (1,060) (24) (6,194)
Discoveries 300 172 0 0 472
Acquisitions 1,083 0 260 2 1,633
Dispositions (338) (10) (456) (13) (2,915)
Production (8,337) (2,757) (3,500) (87) (29,025)
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December 31, 2009 112,249 27,724 29,587 757 295,734
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NET PRESENT VALUE SUMMARY 2009

At GLJ January 1, 2010 forecast prices and costs

Before Income Taxes
Discounted Discounted Discounted Discounted
Undiscounted at at at at
($ millions) 5% 10% 15% 20%
----------------------------------------------------------------------------
Proved Developed
Producing 5,793 4,301 3,442 2,888 2,502
Proved Developed
Non-Producing 162 118 93 77 66
Proved Undeveloped 1,046 571 335 203 124
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Total Proved
Reserves 7,002 4,989 3,870 3,168 2,691
Probable Reserves 3,141 1,641 1,015 696 510
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Total Proved Plus
Probable Reserves 10,143 6,630 4,885 3,865 3,202
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BEFORE TAX NET ASSET VALUE AT DECEMBER 31, 2009

In the following table, Pengrowth's net asset value is measured with reference to the ten percent discount present value of future net cash flows from reserves, as estimated by GLJ and prior to consideration of income tax. The calculation is shown using GLJ's forecast prices.



Net Asset Value (NAV)
BEFORE TAX
Forecast Prices
NAV at December 31, 2009

$Thousands, except per unit amounts 10% Discount
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Value of Proved plus Probable Reserves Discounted at 10% $ 4,884,877
Undeveloped Lands (1) 266,720
Working Capital Deficit (2) (16,286)
Reclamation Funds 34,837
Long Term Debt (3) (1,128,024)
Other Liabilities (4) (84,375)
Asset Retirement Obligations (5) (144,561)
Fair Value of Commodity Contracts (6) (9,034)
Fair Value of FX Contracts (6) (17,789)
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Net Asset Value $ 3,786,365
Units Outstanding (000's) 289,835
NAV/Unit $ 13.06
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(1) Pengrowth's internal estimate
(2) Excludes distributions payable, current portion of risk management
contracts, current portion of LTD, and future income taxes
(3) Represents the fair value of long term debt in the notes to the
financial statements (including the current portion of LTD)
(4) Other liabilities include convertible debt at fair value and non-current
contract liab.
(5) The asset retirement obligation is based on Pengrowth's estimate of
future site restoration and abandonment liabilities less that portion
of these costs that are included in the value of proved plus probable
reserves
(6) Represents the total fair value of risk management contracts on
Pengrowth's year end financial statements


RESERVE LIFE INDEX

Pengrowth's proved reserve life index (RLI) increased to 8.3 years from 8.0 years last year. The proved plus probable RLI of 10.6 years remained the same as last year. The changes are mainly due to Pengrowth's ongoing development efforts which are aimed at increasing reserves and production and extending the life of its fields, as well as divestitures of shorter life RLI properties.



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Reserve Life Index 2009 2008 2007
----------------------------------------------------------------------------
Total Proved 8.3 8.0 8.2
Proved Plus Probable 10.6 10.6 10.4
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FINDING, DEVELOPMENT AND ACQUISITION COSTS

FINDING AND DEVELOPMENT COSTS

During 2009, Pengrowth spent $202.2 million on development and optimization activities, which added 7.1 mmboe of proved reserves and 8.8 mmboe of total proved plus probable reserves excluding revisions. The largest additions were for drilling extensions at Carson Creek, additional infill drilling locations for CBM at Twining and infill drilling and improved recovery at Weyburn.

In total, Pengrowth participated in drilling 169 gross wells (89 net wells) during 2009 with a 95 percent success rate. Drilling activity was down significantly from 2008 when Pengrowth drilled 507 gross or 217 net wells.

Various performance related revisions were made to previous estimates. Also, certain probable undeveloped reserves were deleted where development of these natural gas properties was unlikely given the shifting corporate strategy and the outlook for natural gas prices. This resulted in an overall increase in proved reserves of 4.2 mmboe and a net negative change in total proved plus probable reserves of 6.2 mmboe. The largest positive revisions occurred at Sable Island and Carson Creek while the largest negative revisions occurred at Olds, Judy Creek and Jenner.

AQUISITIONS AND DISPOSITIONS

Pengrowth made strategic acquisitions during 2009 aimed at increasing ownership in existing core areas. Pengrowth spent $35.7 million on acquisitions adding 1.3 mmboe of proved and 1.6 mmboe of proved plus probable reserves. Asset acquisitions were made at Carson Creek and House Mountain, increasing existing interests in the core Judy Creek area. In addition, Pengrowth increased its land ownership in the Horn River Basin shale gas play with an acquisition which closed late in the year.

During 2009, Pengrowth disposed of some small, non-core properties, mainly at Niton, Karr and Pine Creek, and undeveloped acreage in Dawson. Total proceeds were $41.9 million and resulted in a decrease of 2.3 mmboe total proved reserves and 2.9 mmboe proved plus probable reserves.

FINDING, DEVELOPMENT AND ACQUISITION COSTS

Pengrowth's finding, development and acquisition costs are summarized below. These are determined separately for exploration and development activity and acquisition and disposition transactions, and include change in future development capital. Future development capital reflects the amount of estimated capital that will be required to bring non-producing, undeveloped or probable reserves on stream. These forecasts of future development capital will change with time due to ongoing development activity, inflationary changes in capital costs and acquisition or disposition of assets.



FD&A Costs - Company Interest Reserves 2009 YE
----------------------------------------------------------------------------
Proved plus
Proved Probable
----------------------------------------------------------------------------

FD&A Costs Including Future Development Capital
Exploration and Development Capital Expenditures -
$millions 202.2 202.2
Exploration and Development Change in FDC - $millions (42.8) (122.8)
Exploration and Development Capital including Change
in FDC - $millions 159.4 79.4
Exploration and Development Reserve Additions
including Revisions - mmboe 11.3 2.6
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Finding and Development Cost - $/boe 14.12 30.81
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Acquisition Capital - $millions 35.7 35.7
Acquisition FDC - $millions 2.3 2.3
Acquisition Capital including FDC - $millions 38.0 38.0
Acquisition Reserve Additions - mmboe 1.3 1.6
----------------------------------------------------------------------------
Acquisition Cost - $/boe 28.55 23.24
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Disposition Capital - $millions 41.9 41.9
Disposition FDC - $millions 1.5 1.5
Disposition Capital including FDC - $millions 43.4 43.4
Disposition Reserve Additions - mmboe 2.3 2.9
----------------------------------------------------------------------------
Disposition Cost - $/boe 19.14 14.88
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Net Acquisition Capital - $millions (6.2) (6.2)
Net Acquisition FDC - $millions 0.8 0.8
Net Acquisition Capital including FDC - $millions (5.4) (5.4)
Net Acquisition Reserve Additions - mmboe (0.9) (1.3)
----------------------------------------------------------------------------
Net Acquisition Cost - $/boe 5.79 4.23
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Total Capital Expenditures including Net Acquisitions
- $millions 196.0 196.0
Total Change in FDC - $millions (42.0) (122.0)
Total Capital including Change in FDC - $millions 154.0 74.0
Reserve Additions including Net Acquisitions - mmboe 10.4 1.3
----------------------------------------------------------------------------
Finding Development and Acquisition Cost including FDC
- $/boe 14.87 57.15
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As reported elsewhere, certain probable undeveloped reserves were removed due to the shifting corporate strategy and outlook for natural gas prices. The table below indicates what proved plus probable finding and development and finding, development and acquisition (including changes in FDC) would have been if these 9.7 mmboe of probable undeveloped reserves had not been removed.



FD&A Costs - Company Interest Reserves Excluding
Off-Strategy Revisions 2009 YE
----------------------------------------------------------------------------
Proved plus
Proved Probable
-----------------------

Finding and Development
Exploration and Development Capital Expenditures -
$millions 202.2 202.2
Exploration and Development Change in FDC - $millions 5.1 (13.7)
-----------------------
Exploration and Development Capital including Change
in FDC - $millions 207.3 188.5
Exploration and Development Reserve Additions - mmboe 7.1 8.8
Exploration and Development Reserve Revisions - mmboe 7.5 3.5
-----------------------
Exploration and Development Reserve Additions
including Revisions - mmboe 14.6 12.3
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Finding and Development Cost, including FDC - $/boe 14.17 15.33
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Finding, Development and Acquisition
Total Capital Expenditures including Net Acquisitions
$millions 196.0 196.0
Total Change in FDC - $millions 5.9 (12.9)
-----------------------
Total Capital including Change in FDC - $millions 201.9 183.1
Reserve Additions including Acquisitions and
Dispositions - mmboe 6.2 7.5
Total Revisions - mmboe 7.5 3.5
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Total Reserve Additions including Acquisitions and
Dispositions - mmboe 13.7 11.0
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Finding, Development and Acquisition Cost, including
FDC - $/boe 14.74 16.62
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TOTAL FUTURE NET REVENUE (UNDISCOUNTED)

GLJ January 1, 2010 forecast pricing and costs:


Operating Development Abandonment
($ millions) Revenue Royalties Costs Costs Costs(1)
----------------------------------------------------------------------------
Proved Producing 12,826 2,406 4,187 219 220
Proved Developed
Non-Producing 318 79 54 20 3
Proved Undeveloped 2,514 546 613 297 12
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Proved Reserves 15,658 3,031 4,853 537 235
Total Probable 6,731 1,395 1,817 351 27
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Proved Plus Probable 22,388 4,426 6,670 887 262
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Revenue Revenue
Before Income After Income
($ millions) Income Tax Tax(2) Tax
----------------------------------------------------------------------------
Proved Producing 5,793 604 5,189
Proved Developed Non-Producing 162 58 104
Proved Undeveloped 1,046 373 673
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Proved Reserves 7,002 1,035 5,967
Total Probable 3,141 781 2,360
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Proved Plus Probable 10,143 1,816 8,327
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(1) Well abandonment costs and the cost to abandon Sable Island facilities
and pipelines as reported by GLJ.
(2) Income tax as estimated by Pengrowth


TAX POOLS

On a combined basis, Pengrowth's tax pools total approximately $2.88 billion. The table below provides an estimate of tax pools at both the trust and the operating entity level as at December 31, 2009. These estimates are based upon forecasts prepared internally and have not been verified by any provincial or federal taxing authority. They have been included for information purposes only.



($ millions)
----------------------------------------------------------------------------
Trust Tax Pools $ 1,326

Operating Entity Tax Pools
COGPE 75
CDE 293
UCC 527
CEE 5
Other (Injectants, etc.) 658
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Total Tax Pools $ 2,884
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GLJ's January 1, 2010 forecast prices are shown below:

----------------------------------------------------------------------------
Edmonton
Light Crude Natural Gas at
WTI Crude Oil Oil AECO (Cdn
Year (US $/bbl) (Cdn $/bbl) $/mmbtu)
----------------------------------------------------------------------------
2009 61.56 66.43 4.20
2010 80.00 83.26 5.96
2011 83.00 86.42 6.79
2012 86.00 89.58 6.89
2013 89.00 92.74 6.95
2014 92.00 95.90 7.05
2015 93.84 97.84 7.16
2016 95.72 99.81 7.42
2017 97.64 101.83 7.95
2018 99.59 103.88 8.52
2019 101.58 105.98 8.69
Thereafter +2%/yr +2%/yr +2%/yr
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PENGROWTH CORPORATION

Derek W. Evans, President and Chief Executive Officer

Advisory:

All amounts are stated in Canadian dollars unless otherwise specified. All reserves, reserve life index, and production information herein is based upon Pengrowth's company interest (Pengrowth's working interest share of reserves or production plus Pengrowth's royalty interest, being Pengrowth's interest in production and payment that is based on the gross production at the wellhead), before royalties and using GLJ's January 1, 2010 forecast prices and costs as disclosed herein.

Caution Regarding Engineering Terms:

When used herein, the term "boe" means barrels of oil equivalent on the basis of one boe being equal to one barrel of oil or NGLs or 6,000 cubic feet of natural gas (6 mcf: 1 bbl). Barrels of oil equivalent may be misleading, particularly if used in isolation. A conversion ratio of six mcf of natural gas to one boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

In addition, Pengrowth uses the following frequently recurring industry terms in this press release: "bbls" refers to barrels, "mbbls" refers to a thousand barrels, "mboe" refers to a thousand barrels of oil equivalent, "mcf" refers to thousand cubic feet, "bcf" refers to billion cubic feet.

Caution Regarding Forward Looking Information:

This press release contains forward-looking statements within the meaning of securities laws, including the "safe harbour" provisions of Canadian securities legislation and the United States Private Securities Litigation Reform Act of 1995. Forward-looking information is often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "intend", "forecast", "target", "project", "guidance", "may", "will", "should", "could", "estimate", "predict" or similar words suggesting future outcomes or language suggesting an outlook. Forward-looking statements in this press release include, but are not limited to, capital expenditures, reserves, reserve life indices, estimated production, production additions from Pengrowth's 2010 development programs, remaining producing reserves lives, operating expenses, royalty rates, net present values of future net revenue from reserves, commodity prices and costs, exchange rates, the impact of contracts for commodities, development plans and programs, tax horizon, future income taxes, abandonment and reclamation costs and tax pools. Statements relating to reserves are forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the reserves described exist in the quantities predicted or estimated and can profitably be produced in the future.

Forward-looking statements and information are based on Pengrowth's current beliefs as well as assumptions made by, and information currently available to, Pengrowth concerning anticipated financial performance, business prospects, strategies and regulatory developments future oil and natural gas commodity prices and differentials between light, medium and heavy oil prices, future oil and natural gas production levels, future exchange rates, the proceeds of anticipated divestitures, the amount of future cash distributions paid by Pengrowth, the cost of expanding our property holdings, our ability to obtain equipment in a timely manner to carry out development activities, our ability to market our oil and gas successfully to current and new customers, the impact of increasing competition, our ability to obtain financing on acceptable terms, and our ability to add production and reserves through our acquisition, development and exploration activities. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution readers not to place undue reliance on these statements as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations and anticipations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to: the volatility of oil and gas prices; production and development costs and capital expenditures; the imprecision of reserve estimates and estimates of recoverable quantities of oil, natural gas and liquids; Pengrowth's ability to replace and expand oil and gas reserves; environmental claims and liabilities; incorrect assessments of value when making acquisitions; increases in debt service charges; the loss of key personnel; the marketability of production; defaults by third party operators; unforeseen title defects; fluctuations in foreign currency and exchange rates; inadequate insurance coverage; counterparty risk; compliance with environmental laws and regulations; changes in tax and royalty laws; the failure to qualify as a mutual fund trust; Pengrowth's ability to access external sources of debt and equity capital; the implementation of International Financial Reporting Standards; and the implementation of greenhouse gas emissions legislation. Further information regarding these factors may be found under the heading "Risk Factors" in our most recent Annual Information Form, under the heading "Business Risks" in our most recent year-end Management's Discussion and Analysis, and in our most recent consolidated financial statements, management information circular, quarterly reports, material change reports and news releases.

Readers are cautioned that the foregoing list of factors that may affect future results is not exhaustive. When relying on our forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Furthermore, the forward-looking statements contained in this press release are made as of the date of this press release, and Pengrowth does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

Note to US Readers

Current SEC reporting requirements permit oil and gas companies, in their filings with the SEC, to disclose probable and possible reserves, in addition to the required disclosure of proved reserves. Under current SEC requirements, net quantities of reserves are required to be disclosed, which requires disclosure on an after royalties basis and does not include reserves relating to the interests of others. Because we are permitted to prepare our reserves information in accordance with Canadian disclosure requirements, we have included contingent resources, disclosed reserves before the deduction of royalties and interests of others and determined and disclosed our reserves and the estimated future net cash therefrom using forecast prices and costs. See "Presentation of our Reserve Information" in our most recent Annual Information Form or Form 40-F for more information.

We report our production and reserve quantities in accordance with Canadian practices and specifically in accordance with NI 51-101. These practices are different from the practices used to report production and to estimate reserves in reports and other materials filed with the SEC by companies in the United States.

We incorporate additional information with respect to production and reserves which is either not generally included or prohibited under rules of the SEC and practices in the United States. We follow the Canadian practice of reporting gross production and reserve volumes; however, we also follow the United States practice of separately reporting these volumes on a net basis (after the deduction of royalties and similar payments). We also follow the Canadian practice of using forecast prices and costs when we estimate our reserves. The SEC permits, but does not require, the disclosure of reserves based on forecast prices and costs.

We include herein estimates of proved, proved plus probable and possible reserves, as well as contingent resources. The SEC permits, but does not require the inclusion of estimates of probable and possible reserves in filings made with it by United States oil and gas companies. The SEC does not permit the inclusion of estimates of contingent resources in reports filed with it by United States companies.

Contact Information