Mr. Chris Carlsen reports

BIRCHCLIFF ENERGY LTD. ANNOUNCES UNAUDITED 2023 FULL-YEAR AND FOURTH QUARTER RESULTS AND 2023 RESERVES HIGHLIGHTS

Birchcliff Energy Ltd. has released its unaudited full-year and fourth quarter 2023 financial and operational results and highlights from its independent reserves evaluation, effective Dec. 31, 2023.

"In 2023, we delivered annual average production of 75,699 [barrels of oil equivalent per day] and adjusted funds flow of $306.8-million and returned $224.8-million to shareholders through common share dividends and share repurchases under our normal course issuer bid," commented Chris Carlsen, president and chief executive officer of Birchcliff. "We achieved a [proven developed producing finding and development] operating netback recycle ratio of 1.1 times in a low commodity price environment, notwithstanding $58.0-million of capital spent on strategic priorities that did not add reserves or production in 2023. We believe that there is significant intrinsic shareholder value embedded in Birchcliff's asset base that is not reflected in our current share price, as demonstrated by our PDP reserves net asset value per common share of $8.22, and $18.38 and $23.60 per share for our proved and proved plus probable reserves, respectively. In addition, our Elmworth asset consisting of approximately 140 net sections of Montney lands is largely unbooked from a reserves basis, providing us with significant inventory and a large potential future development area.

"We are excited about our 2024 capital program, which utilizes our latest wellbore and completions design and targets high rate-of-return wells with strong capital efficiencies and attractive paybacks. Our 2024 capital budget reflects our commitment to maintaining a strong balance sheet and capital discipline while focusing on sustainable shareholder returns and the continued development of our world-class asset base. We are closely monitoring commodity prices, and the previously announced deferral of 13 wells to the second half of the year provides us with the flexibility to adjust our 2024 capital program if necessary to achieve these priorities. As announced on Jan. 17, 2024, our board of directors declared a cash dividend of 10 cents per common share for the quarter ending March 31, 2024, which equates to an annual base dividend of 40 cents per common share for 2024 (approximately $107-million in aggregate)."

2023 financial and operational highlights:

• Delivered annual average production of 75,699 boe/d (82 per cent natural gas and 18 per cent liquids) in 2023 and quarterly average production of 76,546 boe/d (81 per cent natural gas and 19 per cent liquids) in Q4 2023;
• Generated annual adjusted funds flow of $306.8-million in 2023 and quarterly adjusted funds flow of $76.2-million in Q4 2023;
• Cash flow from operating activities was $320.5-million in 2023 and $79.0-million in Q4 2023;
• Reported annual net income to common shareholders of $9.8-million in 2023 and a quarterly net loss to common shareholders of $5.5-million in Q4 2023;
• F&D capital expenditures were $304.6-million in 2023 and $58.2-million in Q4 2023;
• Birchcliff drilled 30 (30.0 net) wells in 2023 and brought 32 (32.0 net) wells on production in 2023;
• Returned $213.3-million to shareholders in 2023 through its base common share dividend; in addition, Birchcliff purchased an aggregate of 1,427,868 common shares under its normal course issuer bid.

2023 reserves highlights:

• Birchcliff delivered PDP F&D costs of $13.16 per boe and a PDP F&D operating netback recycle ratio of 1.1 times, notwithstanding $58.0-million in F&D capital expenditures spent on strategic priorities, for which there was no production or reserves assigned at year-end 2023;
• Proven and proven plus probable reserves increased by 3 per cent and 1 per cent, respectively, from Dec. 31, 2022. Birchcliff's proven reserves totalled 691.9 million boe at Dec. 31, 2023, which reflects an F&D reserves replacement of 144 per cent. Birchcliff's proved plus probable reserves totalled 993.9 MMboe at Dec. 31, 2023, which reflects an F&D reserves replacement of 103 per cent.
• Birchcliff's PDP reserves totalled 220.5 MMboe at Dec. 31, 2023. Birchcliff added 23.1 MMboe of PDP reserves on an F&D basis in 2023, after adding back 2023 actual production of 27.6 MMboe.
• At Dec. 31, 2023, the net present value of future net revenue (before income taxes, discounted at 10 per cent) was $2.6-billion for Birchcliff's PDP reserves, $5.4-billion for its proven reserves and $6.8-billion for its proven plus probable reserves.
• Reserves life index at Dec. 31, 2023, of 8.0 years on a PDP basis, 25.1 years on a proven basis and 36.0 years on a proven plus probable basis.
• The net asset value per common share of Birchcliff's PDP, proven and proven plus probable reserves at Dec. 31, 2023, was $8.22, $18.38 and $23.60, respectively, which is 66 per cent, 271 per cent and 376 per cent higher than the closing price of its common shares on the Toronto Stock Exchange on Feb. 12, 2024, of $4.96.

Birchcliff anticipates filing its annual information form and audited financial statements and related management's discussion and analysis for the year ended Dec. 31, 2023, on March 13, 2024.

Year-end 2023 reserves

The reserves data set forth herein at Dec. 31, 2023, are based upon the Deloitte report, which has been prepared in accordance with the standards contained in the Canadian oil and gas evaluation handbook and National Instrument 51-101 (Standards of Disclosure for Oil and Gas Activities).

The reserves data provided in this press release present only a portion of the disclosure required under NI 51-101. The disclosure required under NI 51-101 will be contained in Birchcliff's annual information form for the year ended Dec. 31, 2023, which is expected to be filed on SEDAR+ on March 13, 2024.

In certain of the attached tables, numbers may not add due to rounding. The estimates of future net revenue contained herein do not represent fair market value.

Reserves summary

An attached table summarizes the estimates of Birchcliff's gross reserves at Dec. 31, 2023, and Dec. 31, 2022, estimated using the forecast price and cost assumptions in effect as at the effective date of the applicable reserves evaluation.

An attached table sets forth Birchcliff's light crude oil and medium crude oil, conventional natural gas, shale gas, and natural gas liquids reserves at Dec. 31, 2023, estimated using the 2023 price forecast.

Net present values of future net revenue

An attached table sets forth the net present values of future net revenue attributable to Birchcliff's reserves at Dec. 31, 2023, estimated using the 2023 price forecast, before deducting future income tax expenses and calculated at various discount rates.

Net asset value

Net asset value is a snapshot in time as at year-end and is primarily impacted by the net present value (before income taxes, discounted at 10 per cent) of the corporation's reserves as evaluated by Deloitte using forecast prices and costs. The net present value of the corporation's reserves can vary significantly depending on the oil and natural gas price assumptions used by Deloitte, and assumes only the reserves identified in the applicable reserves report, with no further acquisitions or incremental development.

An attached table sets forth Birchcliff's net asset value for its PDP, total proven and total proven plus probable reserves at Dec. 31, 2023.

Pricing assumptions

An attached table sets forth the 2023 price forecast used in the Deloitte report.

Reconciliation of changes in reserves

An attached table sets forth the reconciliation of Birchcliff's gross reserves at Dec. 31, 2023, as set forth in the Deloitte report, estimated using the 2023 price forecast, to Birchcliff's gross reserves at Dec. 31, 2022.

About Birchcliff Energy Ltd.

Birchcliff is a dividend-paying, intermediate, oil and natural gas company based in Calgary, Alta., with operations focused on the Montney/Doig resource play in Alberta. Birchcliff's common shares are listed for trading on the Toronto Stock Exchange under the symbol BIR.

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