Troubled Canadian heavy oil producer Pengrowth Energy (NYSE: PGH) knows that it is sitting on a lot of oil at its Lindbergh resource in western Canada. The company was able to further confirm the value of that asset after petroleum engineers reclassified some of Lindbergh's reserves, adding nearly $1 billion to their value. That said, turning the value of the reserves into value for shareholders is going to take a lot more work.
Pengrowth Energy recently received approval to move forward with the phase two expansion of Lindbergh to boost its capacity from 12,500 barrels-a-day up to 30,000 barrels per day. As a result, the company was able to move 44.5 million barrels of oil to its proved reserves, which are those that Pengrowth is reasonably certain it can produce in the future. That boosts the company's total proved reserves at Lindbergh by 43% and up to 147.9 million barrels. In addition to that, the company was able to add 55.7 million barrels to its probable reserves, boosting them up to 319.1 million barrels, which is 21% more than it had at the end of last year.