Cona Resources Transaction

Management Information Circular

On November 1, 2019, Pengrowth announced that it had entered into a definitive arrangement agreement (the “Arrangement Agreement”) with Cona Resources Ltd. (the “Purchaser”), a portfolio company of Waterous Energy Fund, pursuant to which the Purchaser has agreed to repay the outstanding principal amount and accrued interest to the date of the Arrangement Agreement owing under the Company’s credit facility (the “Credit Facility”) and secured notes (the “Secured Notes”, and together with the Credit Facility, the “Secured Debt”) and acquire all of the outstanding common shares for cash consideration of CDN $0.05 per share and a potential Contingent Value Payment (as defined below) for each Pengrowth Share (the “Share Consideration”). The proposed transaction (the “Transaction”) is to be completed by way of plan of arrangement under the Business Corporations Act (Alberta).

The aggregate value of the Transaction, including the repayment of the Secured Debt and the assumption of the Transaction costs by the Purchaser, is approximately $740 million. As part of the consideration to be received by Pengrowth shareholders, each shareholder will be eligible to receive their pro-rata portion of any funds that may be received by Pengrowth as a result of a pending litigation matter (a “Contingent Value Payment”).

The Transaction will require the approval of (a) 66 2/3% of the votes cast by shareholders present in person or by proxy at the meeting of shareholders, and (b) a majority of Secured Debtholders in number holding not less than 66 2/3% of the Secured Debt voting together in a single class at the meeting of Secured Debtholders.

Investors are encouraged to consult the Management Information Circular for more information.

RECOMMENDATION OF THE PENGROWTH BOARD

After reviewing Pengrowth’s current circumstances and strategic options and alternatives, consulting with the Company’s financial and legal advisors, and considering the Fairness Opinion, the Pengrowth Board has unanimously: (i) determined that the Transaction is in the best interests of Pengrowth and its stakeholders; (ii) resolved to recommend that Pengrowth shareholders and Secured Debtholders vote in favor of the Transaction; and (iii) determined that the consideration to be received by Pengrowth shareholders and Secured Debtholders is fair to those stakeholders.

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For more information please contact them at:

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