Strategic Acquisition of Monterey Exploration Ltd July 12, 2010
Corporate Profile PreAcquisition Trading Symbols PGF.UN (TSX), PGH(NYSE) Market Capitalization 3.0 Billion Current Distribution CAD 0.07 (monthly) 2010 Production 74,000 76,000 boe/d Production Mix 50% liquids Operated Production…
Acquisition Overview On July 12, 2010, Pengrowth announced the acquisition of Monterey Exploration based on an exchange ratio of 0.8298 of Pengrowth trust unit per Monterey common share Effective price of 8.30 per Monterey share…
Acquisition Highlights Montney Positions Pengrowth in one of the best unconventional gas plays in North America. The concentrated assets in the Groundbirch area provide Pengrowth with a new Montney resource focused asset base in…
Acquisition Highlights Net production of 1,793 boe per day (Q1 2010), with 8.9 mmcf per day of gas and 305 boe per day of liquids with expected 2010 exit production in excess of 6,000 boe/d Acquisition adds 23,755 mboe of proved…
On Strategy Acquisition Monterey is on target with Pengrowths acquisition criteria checklist Operated Highly focused unconventional resource play Repeatable and scalable drilling program (provides for future growth) Sustainable…
Acquisition Metrics The total consideration for the 82 percent of Monterey not currently owned by Pengrowth is approximately 296 MM and includes 30 MM of Monterey net debt and after adjusting for the estimated value of undeveloped…
Good Address/Nice Neighbourhood Up-Dip Trend Spectra Main Resource McMahon Main resource trend Trend Crew Septimus Over pressured Monterey Thicker net pay Groundbirch Spectra Storm West Doe Parkland Minor liquids and no water…
Upper Montney Structure Pressure/Thickness Monias Septimus 22 Mpa 26 Mpa 10 m Upper 100 m Upper Parkland 21 Mpa DPIIP NET 2.46 Tcf 65 m Upper Groundbirch 37-40 Mpa 140 m Upper Dawson 26 Mpa 30 m Upper Swan Lake 30 Mpa…
Regional Schematic Cross Section West to East Phi*h Cross-Section from Groundbirch to Pouce Coupe for the Upper and Lower Montney
Groundbirch Type Logs 2350 Upper Montney Conventional gas sand 2400 Thickness: 400500 feet U p p e r M o n tn e y Upper Upper Montney Hz target Porosity: 47% (3 wells per section) 2450 DPIIP of 125130 Bcf per section (GLJ…
Monterey Groundbirch Activity
Monterey Well Results Developing a 21 (19.0 net) section Vertical Stratigraphic Test Wells (no project in the heart of the Montney 13278021 (75% W.I.) completions or production tests) 48 hr. test 6.0 MMcf/d fairway 450 psi…
Groundbirch Type Curves Groundbirch HZ Montney T-Curves 5,000 4,500 Groundbirch Actual curve is comprised of 29 wells 4,000 Groundbirch intitially Actual with only curve is in 6 remaining comprised of 29 wells the 18th month…
Decreasing Costs, Increasing Productivity Drilling Costs Per Meter (/m) Industry drilling costs per meter have decreased 1,200 1,025 from 753/m to 398/m 1,000 907 753 Industry horizontal well completion costs have 800 decreased…
Groundbirch Development Economics 2011 Horizontal Well Avg depth 2600m Initial Royalty 25% Avg well cost 5.5MM Avg Royalty 16% Initial Rate 4.2 MMcfd Avg Opex 1.10/Mcf Ultimate Recovery 5.0 Bcf Groundbirch Average Type Curve…
Groundbirch Single Well Economic Sensitivities NPV at 10% Btax, M Realized Price* Type Curve Est Ult Recovery /Mcf 3 Bcf 4 Bcf 5 Bcf 4 46 1,447 2,571 5 1,379 3,148 4,564 6 2,720 4,858 6,574 GLJ April 2010 2,553 4,655 6,374 *…
Uncaptured Upside at Groundbirch Upper Montney Development Potential Pengrowth Estimated Incremental Incremental Reserves Recovery Factor Existing 15 well Reserve Booking 101 BCF 4% Develop to 5 wells per section 405 Bcf 17%…
Uncaptured Upside at Groundbirch Doig Development 2200 Upper Doig Lower Doig: 60 to 80 feet of net pay Original Gas in Place of 241.5 Bcf 2250 18.5 Bcf per section Lower Doig Doig Phosphate 2300 Original Gas in Place of…
Uncaptured Upside at Groundbirch Lower Montney Development +/ 300 feet net pay +/ 3% Porosity Original Gas In Place (OGIP) of 1.92 Tcf 100 Bcf per section 300 Feet Economic at Prices 7.50 per mcf
Conclusion Acquisition of Monterey is an important step forward in Pengrowths value creation strategy Acquiring new unconventional resource at attractive metrics in one of the most economic plays in the Western Canadian…
Pengrowth Asset Base Large, diversified asset base Horn Approximately Mon RIve tney r 860, 000 net acres Gas of undeveloped land Monterey Tight Carbonates acquisition adds to unconventional Heavy Oil opportunities on…
Appendix
Upper Montney Test Rates 06058120 (Shell) 14288020 (Shell) 06128120 (ARC) 08128020 (Shell) 16298018 (Shell) 48 hour test rate 1.2 MMcf/d 114 hour test rate 11.7 MMcf/d Drilled 530 hour test rate 0.7 MMcf/d 9 well pad with 5 1,582 kPa…
Upper Montney Hz Test Rates Final Test Hz Length Flowing Well Surface Location Stimulation N2/CO2 Test Hours Rate (m) Pressure (psi) Stages (mmscfpd) 4288021w6 2218021w6 7 N2 toe 1638 37 7.5 526 FCP 8328021w6 13278021w6 7 N2 toe…
TCurve Comparatives
Hz Montney Type Curves West lands 1st month IP 3.4 mmcf/d (raw) with Low Case and High Case EURs of 3.4 & 4.4 Bcf respectively Plant lands 1st month IP 5.15 mmcf/d (raw) with Low Case and High Case EURs of 5.4 & 6.9 Bcf…
Brassey R19W6 Defined Cadomin trend with industry British Columbia drilling over 200 Hz locations on trend with Montereys land Alberta Sundown Up d Monterey 55% W.I. over 22 sections ip W at er Monterey operates…
Squirrel Play types include Notikewan, Bluesky, Dunlevy, Gething, Baldonnel and Doig formations Current production of 0.8 MMcfe/d from 7 (4.8 net) wells Reserves of 9.3 Bcfe (1.6 MMboe) 50% ownership in production facility…
For more information: Tollfree: 18887441111 www.pengrowth.com
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