Pengrowth Energy Corporation says that its Board of Directors has sanctioned Phase 1 of its Lindbergh thermal bitumen project and approved its 2013 capital budget and production guidance.

The Phase 1 Lindbergh project is expected to produce 12,500 barrels of bitumen per day (bbpd) when fully operational in Q2 2015, which is approximately one year ahead of prior estimates. Capital expenditures for Phase 1 are targeted at $590 million, of which $300 million is budgeted in 2013. This includes an additional $150 million compared to earlier guidance to accelerate the ramp-up and expand oil handling capacity of the plant, based on the excellent performance of the Lindbergh pilot operations.

Pengrowth plans to invest a total of $770 million in 2013 to develop its focused set of oil and liquids-rich natural gas opportunities, including Lindbergh. The 2013 capital program will focus on maximizing cash flow to fund dividends, while investing significant long-lead capital related to Phase 1 of the low decline Lindbergh project. The 2013 program will be funded by operating cash flow and proceeds from non-core asset dispositions, including the $315 million Weyburn disposition announced in December.

Tags: Pengrowth Energy Trust