CALGARY, ALBERTA–(Marketwired – Feb. 21, 2017) – Pengrowth Energy Corporation (TSX:PGF)(NYSE:PGH) is pleased to announce its plan to reduce its outstanding debt through the use of existing cash on hand. Following the closing of the four percent non-convertible gross overriding royalty on Lindbergh on January 6, 2017, the Company’s cash position was approximately $530 million.
Pengrowth intends to use the cash on hand to retire the $127 million of convertible debentures, on maturity on March 31, 2017 and to use the remaining cash to pre-pay US $300 million principal amount outstanding of the US $400 million 6.35% senior notes maturing July 26, 2017 (the “6.35% Senior Notes”). The Company has given notice to holders of the 6.35% Senior Notes of its plan to prepay 75 percent of the notes plus accrued interest and make whole payments pursuant to the terms of the Note Purchase Agreements. The prepayment will be made on a pro-rata basis on March 30, 2017.
Following these payments, the Company expects its pro-forma debt to be reduced to approximately $1.1 billion and comprised entirely of senior term notes.
Pengrowth continues to seek out opportunities to further reduce its outstanding debt and improve its balance sheet, including through the disposition of assets. The Company intends to apply the proceeds from potential asset divestitures, if any, to the prepayment of the remaining outstanding balance of the 6.35% Senior Notes, as well as proceeding to prepay the remaining notes outstanding in order of maturity. The Corporation is also continuing with ongoing negotiations with its remaining noteholders and bank lenders in an effort to obtain covenant relaxation.
Pengrowth Energy Corporation is an intermediate Canadian producer of oil and natural gas, headquartered in Calgary, Alberta. Pengrowth’s assets include the Lindbergh thermal oil, Cardium light oil, Swan Hills light oil and the Groundbirch and Bernadet Montney gas projects. Pengrowth’s shares trade on both the Toronto Stock Exchange under the symbol “PGF” and on the New York Stock Exchange under the symbol “PGH”.