Conventional or Unconventional
In the Canadian oil and gas business today, we oftentimes will see oil and gas production techniques classified into two distinct categories; conventional and unconventional.
The main difference between the two is that conventional oil and gas production is considered as utilizing the traditional oil well method of production to produce oil and gas reserves. Often these are mature properties that are in their final states of depletion.
Unconventional operations are relatively new production techniques which utilize advanced methods of oil and gas recovery to maximize the production and extend the economic life of mature oil and gas fields.
Both methods of production have their advantages and disadvantages and it is Pengrowth’s belief that both conventional and unconventional development can add value. Economic factors specific to projects as well as the outlook for commodity prices determine the best options.
For more than 20 years, structured as an Income Trust, Pengrowth’s asset base consisted of a large diversified portfolio of conventional assets with low operatorship and a limited inventory of unconventional growth opportunities.
During the months leading up to our conversion to a traditional exploration and production oil and gas company, we began our asset transition from conventional to unconventional assets - yet at the same time, it was recognized that our conventional asset suite continued to offer great value.
Thus “Conventional Co.” as we call it, was created. Conventional Co. is an asset group focused solely on maximizing the production of Pengrowth’s existing conventional asset suite. This group is responsible for the ongoing efficient exploitation of Pengrowth’s existing conventional oil and gas producing assets in whichever method identified. Their mandate is simple "create value".
The transition for Pengrowth to become the leading value creator of unconventional resources plays in the next three years is well underway. Yet, we cannot forget about the valuable conventional assets we still own.
Throughout our asset transition –our promise is to maximize our production capacity. Conventional or unconventional doesn’t matter to us; creation of the utmost value is what we care about.
