Pengrowth clears final regulatory hurdle, announces probable reserve increase
Canada's Pengrowth Energy (NYSE:PGH) had a good day on Monday as it secured final regulatory approval for its Lindbergh thermal oil sands development in east-central Alberta and announced a 51% increase in proven and probable reserves at the site.
After 18 months of deliberation, a review under the Environmental Protection and Enhancement Act gave Pengrowth the green light to produce 12,500 barrels of bitumen per day at the Lindbergh mine.
"We are delighted to have received final regulatory approval to proceed with the first commercial phase of Lindbergh, which we expect will be among the best thermal bitumen projects in western Canada," said Derek Evans, president and CEO of the company.
Evans added that the project could ultimately produce about 50,000 barrels per day.
The company also completed an update of the sites' reserves and has reclassified 69.2 million barrels of probable reserves to the proved category – a 541% increase from its December 2012 estimates. Proved plus probable reserves jumped by 48.1 million barrels.
Pengrowth is now moving forward with construction on the $590 million project and will begin drilling 23 additional well pairs in September. Lindbergh currently has two producing well pairs which churned out an average of 2,300 barrels per day in June.
The company saw some gains on the New York exchange on Monday, climbing 0.59%.
Creative Commons image by: PeterJBellis