Pengrowth Energy- a successful driller

Pengrowth Energy released it's second quarter results last week and it was adequate but not great.Pengrowth is working hard to develop it's heavy oil property called Lindberg for the fourth quarter.So Pengrowth inked an agreement with Husky Oil for delivery of heavy oil.This will assure cash flow for it's new oil and should be seen as a good move although the cost is unknown.It also shows an increase in reserves at Lindberg which will extend the life of the Lindberg pool.
              The Cardium
  Pengrowth has spent a good portion of their capital expenditures on the Cardium area of Alberta.Pengrowth(PGF) has developed a few fields here and had an excellent drilling record.They report a 100 % drilling rate.But this is likely all horizontal drilling and vertical drilling in a well delineated pool or pools.They have not extended their field with any or not many exploratory drilling.There may be accessible oil that has not been explored which could easily increase their production if true.This will be important in the next quarter if production does not rise. As it should not be that expensive and PGF has a good cash balance on hand.
            The other areas
  PGF has significant acreage in the Mannville area of Alberta and in the Swan Hills area.This blog( in an earlier blog) advocated PGF to take a position in Perpetual Energy which has properties near it's properties and not a huge market cap.PGF missed this opportunity and Perpetual got another partner even though PGF needed this increase in production.Perpetual is also developing it's Mannville sands property and would make a good partner for PGF.PGF could get a JV agreement with Perpetual to develop it's Mannville property and pay some of it's cash on hand.
 PGF also has significant acreage in the Swan Hills area which is primarily a natural gas area.Perpetual might take a farm-in agreement here too . Or PGF could talk to Lightstream Resources which has just developed a battery that will eventually produce up to 3500 barrels of oil per day.Lightstream needs cash and would make an excellent partner.PGF expects to spend only about $220 million on capital expenses for the rest of the year and this will just not "cut it".They need new production in the third quarter before the well awaited Lindberg comes onstream.However PGF still produces almost double the barrels per day of Lightstream Resources and ten times juniors like Argent Energy or BNK Petroleum;so it seems to be fairly valued.