January 24, 2012 / 1:28 PM / 6 years ago

UPDATE 2-Pengrowth Energy sees higher liquids output

(Adds details, background)

* Expects 2012 capital budget of C$625 mln

* 40 pct of capital budget earmarked for Swan Hills project

* Expects 2012 production of 74,500-76,500 boe/d

Jan 24 (Reuters) - Canadian oil and gas producer Pengrowth Energy Corp expects higher production for this year as it looks to spend more on its oil and liquids-rich gas fields in Alberta.

An increasing number of North American companies, including second-largest U.S. natural gas producer Chesapeake Energy , have curtailed gas output to stem a selloff that has pushed down prices to levels not seen in about a decade.

Pengrowth said in 2012 all of its drilling activities will be focused on oil and liquids-rich gas projects.

The percentage of liquids, which command a higher price than natural gas, is expected to rise to 54 percent of production, from 51 percent earlier.

The Calgary-based company expects to produce 74,500-76,500 barrels of oil equivalent per day (boe/d) in 2012, up from its 2011 estimate of 74,000 boe/d.

Capital budget for the current year is expected to be 3 percent higher at C$625 million, Pengrowth said in a statement.

About 40 percent of the budget has been earmarked to develop oil and liquids-rich assets at its Swan Hills project in north-central Alberta.

Shares of the Calgary-based company closed at C$10.72 on Monday on the Toronto Stock Exchange. (Reporting by Shounak Dasgupta in Bangalore; Editing by Joyjeet Das)

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