Mr. Patrick Oliver reports

BONTERRA ENERGY ANNOUNCES 2023 RESERVES AND PROVIDES OPERATIONAL UPDATE

Bonterra Energy Corp. has released the summary results of its independent reserve report prepared by Sproule Associates Ltd. with an effective date of Dec. 31, 2023, and has provided an operational update on key fourth quarter highlights and recent activities. The company has not released its audited 2023 financial results, and therefore, the financial figures provided herein are estimates and are unaudited.

The disclosure herein provides a summary of specific details from the Sproule report, which was created following the guidelines, criteria and methodologies outlined in the Canadian oil and gas evaluation handbook and National Instrument 51-101 (Standards of Disclosure for Oil and Gas Activities). Further reserves-related information, as mandated by NI 51-101, will be incorporated into Bonterra Energy's annual information form, to be submitted on the company's profile no later than March 31, 2024.

2023 reserves and operational highlights:

• Annual production averaged 14,204 barrels of oil equivalent per day in 2023, representing a 6-per-cent increase over 2022, and exceeded Bonterra Energy's previously stated 2023 guidance range of 13,500 and 13,700 boe per day.
• Capital investments totalled approximately $126.5-million during 2023 and included the drilling of Bonterra Energy's first exploratory Montney well while staying within the original budget. The company drilled 52 gross (41.2 net) development wells in 2023, and completed, equipped and tied in 48 gross (37.6 net) development wells. The four remaining wells are expected to be placed on production in the first quarter of 2024.
• Production costs of approximately $13.37 per boe in Q4 2023 were 20 per cent lower than $16.61 per boe in third quarter 2023, resulting in annual average production costs of $16.02 per boe. This quarter-over-quarter per-unit cost decrease was largely due to the impact of increased production from new wells coming on stream in Q4 2023, combined with fewer well workovers in Q4.
• A targeted 2023 capital program resulted in year-end proven developed producing reserves of 32.8 million boe (59 per cent oil and liquids), total proven reserves of 80.1 million boe (62 per cent oil and liquids) and total proven plus probable reserves of 100.7 million boe (62 per cent oil and liquids). On a year-over-year basis, TP and TPP reserves remained relatively unchanged.
• TP represented 80 per cent of total TPP in 2023, consistent with 80 per cent in 2022, showcasing the predictable and low-risk nature of Bonterra Energy's asset base.
• Net present value of future net revenue discounted at 10 per cent (before tax) for TPP totalled $1.4-billion while TP totalled $1.0-billion and PDP totalled $557.3-million.
• Future development capital for TP is forecast to be $716-million, an increase of 8 per cent or $55-million compared with 2022 TP FDC of $660-million, due primarily to inflation.
• A recycle ratio included future development capital of 1.0 times on TP reserves and 1.1 times on TPP reserves, and a recycle ratio excluded FDC of 1.4 times on TP reserves and 1.6 on TPP reserves.
• Reserve life index for TPP, TP and PDP was approximately 19.4 years, 15.5 years and 6.3 years, respectively (based on 2023 average production of 14,204 boe per day), providing a lengthy development runway for Bonterra Energy's future.

Future development capital, F&D costs and recycle ratios

FDC reflects Sproule's best estimate of the costs to bring Bonterra Energy's proven and probable developed and undeveloped reserves on production. Changes in forecasted FDC occur annually because of development activities, acquisition and disposition activities, changes in capital cost estimates based on improvements in well design and performance, changes in service costs, and changes to cost estimates for capital activities that do not directly drive additions in reserves or production.

Over the past three years, Bonterra Energy has incurred finding, development and acquisition and finding and development costs both excluding and including FDC.

Operational update

Building on a highly successful capital program during the first nine months of 2023, Bonterra Energy invested capital of $14-million during the last quarter of the year, which was allocated to bring four gross (2.3 net) new development wells onto production, all of which were drilled in the third quarter of 2023, along with the completion of the company's first exploratory Montney well.

Subsequent to year-end 2023, the company has remained focused on the execution of its 2024 capital program, budgeted at $90-million to $100-million. To date in 2024, Bonterra Energy has drilled five gross operated (4.8 net) wells, which are expected to be completed, equipped and placed on production by the end of first quarter 2024, along with four gross operated (3.6 net) wells that were drilled in Q4 2023.

Bonterra Energy is pleased to reiterate its previously announced 2024 guidance:

• Capital expenditure budget ranging from $90-million to $100-million, allocated approximately 66 per cent to drilling and completion activities and approximately 24 per cent to non-operated activities, infrastructure and facilities, with the balance to land and ARO;
• 2024 production volumes are expected to average between 13,800 and 14,200 boe per day, weighted approximately 60 per cent to oil and liquids;
• Based on pricing (assuming $73 (U.S.) West Texas Intermediate) and production assumptions for 2024, as outlined fully in the company's Dec. 13, 2023, press release, Bonterra Energy anticipates generating approximately $125-million to $130-million in corporate funds flow for the year. As a result, the company anticipates generating free funds flow of approximately $20-million to $25-million, a portion of which could be allocated to debt reduction, contributing to a targeted year-end net debt to EBITDA of 0.8 to 0.9 times.

Bonterra Energy remains committed to prioritizing free funds flow generation with its 2024 budget, which affords capital allocation flexibility to further strengthen the balance sheet and achieve modest production growth. This approach supports the company's ultimate goal of implementing a sustainable dividend once specific metrics are achieved and commodity prices are conducive. As previously communicated, these required metrics include a targeted net debt range of $135-million to $145-million and a net debt to EBITDA ratio of under 1.0 times. Should low commodity prices persist, the company intends to maintain its focus on responsibly managing the balance sheet and enhancing financial flexibility.

Certain financial and operating information included in this press release, such as production information and F&D costs, is based on estimated unaudited financial results for the quarter and year ended Dec. 31, 2023, and is subject to limitations. These estimated amounts may change upon the completion of audited financial statements for the year ended Dec. 31, 2023, and changes could be material.

Montney asset update

Bonterra Energy has continued to advance development of its significant Montney discovery at Valhalla following the drilling of the company's first Montney test well in Q3 2023 at 04-03-074-6W6, located on a block of 100-per-cent-owned lands covering 45 sections.

As outlined in the company's Dec. 13, 2023, press release, Bonterra Energy was pleased with preliminary test results of the 04-03 well, which achieved a peak daily rate of 753 boe per day (469 barrels per day and 1,707,000 cubic feet per day) during the flow test, despite flow rates being restricted. The company has secured natural gas egress through third party infrastructure and expects to flow the Montney well in the second quarter of 2024, with plans to consider a second well. The results of Bonterra Energy's first Montney well support continued testing and delineation in the area, although the company will take a disciplined approach to align the pace of future development with available egress solutions. This exciting development could position the company's Valhalla asset to emerge as a new core area offering optionality for shareholders and an expanded future development runway for Bonterra Energy.

About Bonterra Energy Corp.

Bonterra Energy is a conventional oil and gas corporation forging a grounded path forward for Canadian energy. Operations include a large, concentrated land position in Alberta's Pembina Cardium, one of Canada's largest oil plays. Bonterra Energy's liquids-weighted Cardium production provides a foundation for implementing a return of capital strategy over time, which is focused on generating long-term, sustainable growth and value creation for shareholders. An emerging Montney exploration opportunity is expected to provide enhanced optionality and an expanded potential development runway for the future. Its shares are listed on the Toronto Stock Exchange under the symbol BNE, and it invites stakeholders to follow it on LinkedIn and X (formerly Twitter) for continuing updates and developments.

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