SLIDE 42 42 CORPORATE PRESENTATION
ADVISORIES
Caution Regarding Forward Looking Information: This presentation 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. In particular, forward-looking statements in this presentation include, but are not limited to: increasing focus on oil and gas and liquids development; statements with respect anticipated 2017 capital budget with Lindbergh production being optimized to 18,000 bbl/d; capital budget of $125 million; expected daily production in 2017 of 50,000 to 52,000 boe/d; focus in budget on safety, maintenance and integrity activities; expectation of 2017 capital budget to be fully funded from
- perating funds flow; hedging; 2017 full year guidance for production, capital expenditures, funds flow from operations, royalties, operating costs and cash G&A; expectation of $11 billion of long-term
development and resource opportunities; expected large accumulations, long life assets, low declines, low cost structure and low sustaining capital of the resource base; short term strategy of prudent capital spending, cost reductions, debt reduction and continued asset dispositions; asset optimization; upcoming long term debt maturities; asset disposition strategy, criteria for dispositions and targeted disposition candidates; development opportunities at Lindbergh and Groundbirch/Bernadet; Lindbergh characteristics of best in class economics, large resource with low risk growth, ultra-long life and sizable, organic low risk growth opportunities; $6.8 billion of future capital reinvestment potential at Lindbergh; Lindbergh type curves and expected ultimate recoveries; high bitumen quality and low quality discounts at Lindbergh; lower blending requirements and higher expected realized pricing at Lindbergh; lower transportation costs and expected higher netbacks at Lindbergh; expected high operating netbacks at Lindbergh; expected breakeven pricing at Lindbergh; expected phase two capital costs, steam capacity and nameplate capacity of the second commercial phase at Lindbergh; $4.7 billion of future capital reinvestment potential at Groundbirch/Bernadet; 900 net (unrisked) drilling locations at Groundbirch/Bernadet; anticipated liquids yields at Bernadet; expectation of thirty years of flat life, non-thermal liquids inventory at Bernadet; expected productivity at Groundbirch/Bernadet; Montney play economics; Groundbirch type curves and expected ultimate recovery; expected drilling inventory at Olds/Garrington; multiple zones with horizontal well potential at Olds/Garrington; extensive inventory at Olds/Garrington; and expectation of ability to deliver on what is promised. By their very nature, the forward-looking statements included in this presentation 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
- il and gas reserves; environmental claims and liabilities; incorrect assessments of value when making acquisitions; increases in debt service charges; ability to remain in compliance of debt covenants and the
availability of credit; 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; changes in environmental or other legislation applicable to our operations, and our ability to comply with current and future environmental and other laws and regulations; actions by governmental or regulatory authorities including changes in royalty structures and programs and income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry laws; our ability to access external sources of debt and equity capital on acceptable terms, which will be negatively impacted and our bank line made unavailable should we violate a debt covenant, and the implementation of greenhouse gas emissions legislation. 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 with respect to Pengrowth, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Furthermore, the forward-looking statements contained in this presentation are made as of the date of this presentation and we do 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 presentation are expressly qualified by this cautionary statement Additional Information – Supplemental Non-IFRS Measures Readers should refer to Pengrowth’s most recent Annual Information Form under the heading “Business Risks” in the most recent year-end Management’s Discussion and Analysis and most recent consolidated financial statements, management information circular, quarterly reports, material change reports and news releases for additional information with respect to the Company, its operations and risks faced. Copies of our Canadian public filings are available on SEDAR at www.sedar.com. Our U.S. public filings, including our most recent annual report form 40-F as supplemented by
- ur filings on form 6-K, are available at
www.sec.gov.edgar.shtml. In addition to providing measures prepared in accordance with International Financial Reporting Standards (IFRS), Pengrowth presents supplemental non-IFRS measures, operating netbacks and funds flow from operations. These measures do not have any standardized meaning prescribed by IFRS and therefore are unlikely to be comparable to similar measures presented by other companies. These supplemental non-IFRS measures are provided to assist readers in determining Pengrowth’s ability to generate cash from operations. Pengrowth believes these measures are useful in assessing operating performance and liquidity of Pengrowth’s ongoing business on an overall basis. These measures should be considered in addition to, and not as a substitute for, net income, funds flow from operating activities and other measures of financial performance and liquidity reported in accordance with IFRS. 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, given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a six to one basis may be misleading as an Indication of value. The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation. In addition, Pengrowth uses the following frequently-recurring industry terms in this presentation: “bbls” refers to barrels, “Mbbls” refers to a thousand barrels, “MMbbls refers to a million barrels, “Mboe” refers to a thousand barrels of oil equivalent, “MMboe” refers to a million barrels of oil equivalent, “Mcf” refers to thousand cubic feet, “Bcf” refers to billion cubic feet.
