Mr. Jeff Tonken reports

BIRCHCLIFF ENERGY LTD. ANNOUNCES Q2 2023 RESULTS AND DECLARATION OF Q3 2023 DIVIDEND OF $0.20 PER COMMON SHARE

Birchcliff Energy Ltd. has released its Q2 2023 financial and operational results and its board of directors has declared a quarterly cash dividend of 20 cents per common share for the quarter ending Sept. 30, 2023.

"In Q2 2023, we generated adjusted funds flow of $69.7-million and free funds flow of $4.9-million, with average production of 77,510 boe/d. In addition, we returned an aggregate of $63.5-million to shareholders in Q2 2023 through our base common share dividend and common share repurchases," commented Jeff Tonken, chief executive officer of Birchcliff.

"We are maintaining our production guidance at 77,000 to 80,000 boe/d for 2023 despite a significant outage on a third party NGLs pipeline that persisted into May. We are also maintaining our F&D capital expenditures guidance of $270-million to $280-million, which includes capital spent in the Elmworth area to provide Birchcliff with optionality for future growth beyond our assets in Pouce Coupe and Gordondale. We anticipate strong production performance for the remainder of 2023, which we expect will result in more than $100-million of free funds flow in the second half of the year."

Q2 2023 financial and operational highlights

• Achieved strong quarterly average production of 77,510 boe/d (barrels of oil equivalent per day), notwithstanding the impact of an unplanned system outage on Pembina Pipeline's Northern Pipeline system (the Pembina outage), which affected the corporation's production in Q2 2023. The strong performance from the new wells brought on production in the first half of the year helped to offset the negative impact of this outage.
• Generated quarterly adjusted funds flow of $69.7-million, or 26 cents per basic common share, and quarterly free funds flow of $4.9-million, or two cents per basic common share.
• Generated cash flow from operating activities of $62.4-million.
• Reported quarterly net income to common shareholders of $42.8-million, or 16 cents per basic common share.
• Realized an operating expense of $3.64/boe in Q2 2023.
• F&D capital expenditures were $64.8-million in Q2 2023.
• Total debt at June 30, 2023, was $278.5-million.
• Returned $63.5-million to shareholders in Q2 2023. During the quarter, the corporation paid an aggregate of $53.2-million in common share dividends and purchased an aggregate of 1,265,268 common shares under its normal course issuer bid at an average price of $8.10 per share, before fees.

Birchcliff's unaudited interim condensed financial statements for the three and six months ended June 30, 2023, and related management's discussion and analysis will be available on its website and on SEDAR+.

Declaration of Q3 2023 quarterly dividend

Birchcliff remains committed to the payment of its previously approved annual base dividend of 80 cents per common share in 2023. Accordingly, the board has declared a quarterly cash dividend of 20 cents per common share for the quarter ending Sept. 30, 2023. The dividend will be payable on Sept. 29, 2023, to shareholders of record at the close of business on Sept. 15, 2023. The ex dividend date is Sept. 14, 2023. The dividend has been designated as an eligible dividend for the purposes of the Income Tax Act (Canada).

Outlook and guidance

Birchcliff is on track to meet its 2023 annual average production guidance of 77,000 to 80,000 boe/d, which reflects the impact of the Pembina outage that negatively affected the corporation's production in the first half of the year. Although Birchcliff currently expects its annual average production to be on the lower end of this guidance range, the corporation anticipates solid production results from the remaining nine wells in its capital program scheduled to be brought on production in Q4 2023, which will help to offset the negative impact of the Pembina outage.

Birchcliff's F&D capital expenditures are expected to be in line with its guidance of $270-million to $280-million, which includes the bringing on production of 32 wells in Pouce Coupe and Gordondale and the drilling of two additional land retention wells in the Elmworth area. The drilling of these additional wells will continue a significant number of sections of Montney lands in Elmworth, thereby preserving Birchcliff's optionality for future growth in the area. Birchcliff invested approximately $20-million in the Elmworth area in the first half of 2023, which was not included in the corporation's initial capital budget announced on Jan. 18, 2023.

The attached tables set forth Birchcliff's guidance and commodity price assumptions for 2023 (which were previously disclosed on May 10, 2023), as well as its free funds flow sensitivity.

The corporation has initiated its formal budgeting process for 2024 and expects to release its preliminary 2024 budget on Nov. 14, 2023, along with Birchcliff's Q3 2023 results. Birchcliff currently expects its 2024 budget to remain focused on maintaining capital discipline, generating free funds flow and delivering significant returns to shareholders, with excess free funds flow, above current dividend levels, used to reduce indebtedness and invest in its business.

We seek Safe Harbor.