Mr. Doug Bartole reports

INPLAY OIL CORP. ANNOUNCES FIRST QUARTER 2023 FINANCIAL AND OPERATING RESULTS

InPlay Oil Corp. has released its financial and operating results for the three months ended March 31, 2023. InPlay's condensed unaudited interim financial statements and notes, as well as management's discussion and analysis (MD&A) for the three months ended March 31, 2023, will be available at SEDAR and at the company's website. InPlay's corporate presentation will soon be available on its website.

First quarter 2023 financial and operating highlights:

• Achieved average quarterly production of 9,020 boe/d (barrels of oil equivalent per day) (58 per cent light crude oil and NGLs (natural gas liquids)), an increase of 21 per cent on a debt-adjusted per-share basis, compared with 8,221 boe/d (59 per cent light crude oil and NGLs) in the first quarter of 2022.
• Generated strong quarterly adjusted funds flow (AFF) of $21.3-million (24 cents per weighted average basic share).
• Maintained balance sheet strength with a low net debt to earnings before interest, taxes and depletion (EBITDA) ratio of 0.4 on a trailing 12-month basis, down from one in the first quarter of 2022.
• Executed the most active quarter in the company's history, drilling four (3.2 net) extended-reach horizontal (ERH) wells in Willesden Green, two (two net) ERH wells in Pembina and two (0.3 net) non-operated Willesden Green ERH wells. InPlay also started the upgrade of an operated gas facility in Willesden Green, providing additional capacity. One (0.95 net) additional Willesden Green well, which was planned for the second quarter, was drilled in March and drilling operations began on another one (0.95 net) Willesden Green well in the first quarter.
• Returned $4.4-million in the quarter directly to shareholders through $4-million in dividends and $400,000 of share repurchases under the company's normal course issuer bid.
• Realized net income of $9.3-million (11 cents per basic share or 10 cents per diluted share).
• Financial capability to deliver consistent returns to shareholders with the dividend supportable at a $55 WTI (West Texas Intermediate) pricing environment until 2025.

First quarter 2023 financial and operations overview

InPlay's capital program for the first quarter of 2023 was the company's most active quarter in its history. During the quarter, InPlay invested $29.6-million drilling, completing and equipping four (3.2 net) ERH wells in Willesden Green, two (two net) ERH wells in Pembina and two (0.3 net) non-operated Willesden Green ERH wells. Completion operations on two wells were advanced into the quarter that were originally planned to occur in the second quarter to ensure these wells could be brought on production prior to spring breakup. InPlay also advanced the initiation of its second-quarter capital program into the first quarter by drilling in Willesden Green an additional one (0.95 net) ERH well in March and beginning the drilling operations on another one (0.95 net) ERH well. During the quarter, the company also started construction on the first of two planned natural gas facility upgrades in Willesden Green in 2023.

In one area of Pembina, as published in the company's March 15, 2023, press release, the company had natural gas production curtailments beginning Feb. 15, from a third party natural gas facility due to capacity constraints. This impacted production in the quarter by approximately 475 boe/d (68 per cent natural gas). InPlay actively responded to mitigate the impact of this curtailment on revenue by shutting in wells with high gas weightings, maximizing oil production and AFF in the strong oil pricing environment. The impact of the constraints was also mitigated by the fact that due to expected weaker natural gas pricing in 2023, InPlay previously shifted 2023 drilling plans away from this prolific production area due to its higher gas-weighted production, and its higher gas processing fees in comparison with the company's Willesden Green property.

In Willesden Green, two (1.6 net) ERH wells that were brought on production in early February had average initial production (IP) rates per well of 579 boe/d (73 per cent light crude oil and NGLs) and 428 boe/d (70 per cent light crude oil and NGLs) over their first 30 days and 60 days, respectively. The company also brought on production another two (1.6 net) ERH Willesden Green wells in early March. The average IP rates for these wells was 722 boe/d (82 per cent light crude oil and NGLs) and 564 boe/d (81 per cent light crude oil and NGLs) per well over their first 30 days and 60 days, respectively. These four wells have delivered IP rates significantly above internal expectations and their high production rates led to increased back pressure in the area, resulting in operated and non-operated curtailments of approximately 150 boe/d (57 per cent light crude oil and NGLs) during the quarter due to temporarily backing out production from the company's older lower-pressured offsetting wells. During April, InPlay completed the upgrade on the first of two natural gas processing facilities in the Willesden Green area which allowed curtailed production to be brought back on-line.

Production averaged 9,020 boe/d (58 per cent light crude oil and NGLs) in the first quarter of 2023 resulting in $21.3-million of AFF. The impact on production due to the two above mentioned curtailments was approximately 625 boe/d (48 per cent light crude oil and NGLs) in the first quarter of 2023. During the quarter, InPlay increased light oil and NGLs weighting by approximately 1.5 per cent over the fourth quarter of 2022, and this weighting is expected to continue to increase as the company is focused on drilling in areas with higher oil weightings.

Outlook and operations update

InPlay continues to be excited about 2023 as its drilling continues to outperform its expectations, including the two oil-focused wells drilled in Pembina in the first quarter and brought on production in April. The two (two net) ERH wells had average IP rates over their first 25 days of 307 boe/d (89 per cent light crude oil and NGLs) per well, exceeding the company's internal forecasts with a strong oil and liquids weighting. These wells are expected to remain at an elevated oil weighting and flat for a few months as the company continues to see strong pressures, decreasing water cuts and the artificial lift equipment is operating at maximum pumping capacity.

Capital activity planned for the second quarter will include completing and bringing on production three (2.9 net) ERH wells in Willesden Green which commenced drilling in March and finished in April. These wells are expected to be completed in late May and brought on production in early June. Continued work on the company's second significant upgrade to an operated natural gas plant in Willesden Green is also planned for the quarter. This upgrade is expected to be on-line in the second half of July, and provides InPlay with considerable increased operated natural gas capacity to facilitate continued development and growth in Willesden Green in the current and future years. Drilling activity is expected to resume in late June or early July but overall capital spending in the second quarter is expected to be significantly lower than the first quarter, providing strong free adjusted funds flow.

A three-week turnaround at the company's largest non-operated midstream natural gas facility is expected to occur in June. InPlay pro-actively secured capacity at alternative facilities for a significant amount of impacted gas production, and the production of oil and NGLs in the second quarter of 2023 is not expected to be materially affected.

InPlay responded quickly and effectively to address the production curtailments impacting the company in the first quarter. Natural decline of InPlay and other operators' production in Pembina continues to reduce the impact of curtailed production, which is currently estimated at 825 boe/d (68 per cent natural gas), compared with the 950 boe/d (68 per cent natural gas) impact during the last half of the first quarter. InPlay expects natural declines will continue to reduce the impact of curtailed production through the summer, and alternative options to bring the remaining curtailed production fully back on-line are currently being evaluated. The company anticipates all curtailed production to be back on-line early in the fourth quarter of 2023, which will be sold into the much higher future winter natural gas prices.

Strong fundamentals have InPlay continuing to focus on high-oil-weighted properties as the company has a much more favourable outlook for oil prices versus natural gas prices, specifically in the second half of 2023. This focus is due to light oil and NGLs representing an estimated 86 per cent of the company's overall forecasted corporate revenue in 2023. The 2023 capital program will remain flexible and the company will revisit this program should commodity prices continue to remain volatile.

Similar to other operators, InPlay has had production in the Pembina region affected by the recent wildfires in Alberta. The company's first priority was ensuring the safety of its employees, contractors, the community and the company's infrastructure, which, to date, has been accomplished. The company started shutting-in production and facilities late on May 4, and had concluded shutting in all affected wells and facilities by late in the day on May 5. Affected production shut-in peaked at approximately 3,400 boe/d (52 per cent light oil and liquids). Since the weekend, the fire hazard has somewhat diminished in the area. Production has started to be brought back on over the past few days and the company will continue to restart the remaining production down as services allow. InPlay will continue to monitor the hazards and act accordingly. The company thanks its field employees for their diligent and quick action in safely shutting-in operations.

Strong results from the company's 2023 drilling program to date has InPlay reiterating its previous production guidance of 9,500 boe/d to 10,500 boe/d. However, given the curtailments experienced to date in 2023, and their expected impact over the next few quarters, the company is forecasting 2023 average production to be within the lower half of this guidance at 9,500 boe/d to 10,000 boe/d, but at the higher end of its light crude oil and NGLs weighting guidance at 59 per cent to 61 per cent.

The company continues to expect near-term volatility in commodity prices, specifically natural gas prices, but with the United States refined product inventory levels at five-year lows, oil inventory at the five-year average and refineries starting back up after maintenance downtime, the company anticipates the second half of 2023 to have higher oil prices. The company's downside exposure to lower forward summer 2023 natural gas prices are protected with hedges put in place of 12,500 GJ/day (gigajoules per day) swaps at $3.73 AECO (Alberta Energy Company) per GJ for April to October, 2023. InPlay forecasts 2023 AFF of $117-million to $123-million with FAFF of $37-million to $48-million. The company's leverage metrics are forecasted to remain at very low levels, with net debt to EBITDA forecast to be nil to 0.2 times for 2023.

The company continues to remain focused on providing strong returns to shareholders through the payment of its monthly dividend of 1.5 cents/share (which is expected to be only 13 per cent to 14 per cent of forecasted 2023 AFF), timely share repurchases under the company's normal course issuer bid and top-tier production per debt adjusted share growth. The company's strong debt position, disciplined and adaptable capital allocation, and high-quality asset base provides InPlay with a competitive advantage to continue to provide strong returns to shareholders in a volatile commodity pricing environment. The company forecasts its base monthly dividend to be sustainable in a scenario where WTI dropped to $55 (U.S.)/bbl (barrel) through to the end of 2025.

On behalf of its employees, management team and board of directors, InPlay would like to thank its shareholders for their support and looks forward to updating you on the company's progress throughout the year.

Production breakdown by product type

Disclosure of production on a per-boe basis in this press release consists of the constituent product types as defined in National Instrument 51-101 and their respective quantities disclosed in the associated table.

References to crude oil, light oil, NGLs or natural gas production in this press release refer to the light and medium crude oil, natural gas liquids, and conventional natural gas product types, respectively, as defined in National Instrument 51-101 -- Standards of Disclosure for Oil and Gas Activities.

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