Pengrowth warns hedging program will bite into 2018 profits

Pengrowth warns hedging program will bite into 2018 profits

Pengrowth Energy says its Lindbergh in-situ facility has now topped 18,000 bbl/day, producing 18,137 bbl/day for five consecutive days.

Three of eight infill wells drilled this year are now producing bitumen, adding to the facility’s total output. CEO Pete Sametz warned that production will be reduced by approximately 40% for seven days, while the plant undergoes scheduled maintenance work later this month.

The CEO admitted that the company's hedging program will cut into its profits this year, but those hedges will not be a factor in 2019.

Sametz says that at current WTI prices, capital spend and debt repayments will be fully funded next year. At US$70 WTI, free cash flow is expected to be $189 million, more than triple previous estimates.

Company wide, Pengrowth averaged 22,869 boe/day in August, up from 22,600 boe/day in the second quarter.

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