Mr. Alex Verge reports

JOURNEY ENERGY INC. ANNOUNCES YEAR-END 2023 RESERVES

Journey Energy Inc. has released its year-end 2023 oil and gas reserves evaluation.

2023 Reserve Report Highlights:

• Proved developed producing reserves decreased 7 per cent to 36.9 MMboe (million barrels of oil equivalent), with a corresponding decrease of 25 per cent in NPV (net present value) at 10 per cent to $361.9-million ($368.4-million including the Countess power project (CPP)). The PDP reserve life index increased to 8.4 years from 8.3 years.
• Proved reserves decreased 2 per cent to 50.0 MMboe, with a corresponding decrease of 17 per cent in NPV at 10 per cent to $504.1-million ($581.5-million including the CPP, Gilby power project (GPP)) and Mazeppa power project (MPP).
• Proved plus probable developed producing reserves decreased 5 per cent to 48.6 MMboe, with a corresponding decrease of 22 per cent in NPV at 10 per cent to $450.5-million ($457.0-million including the CPP). The proved plus probable developed producing reserve life index increased to 10.8 years from 10.5 years.
• Proved plus probable reserves decreased 1 per cent to 80.4 MMboe, with a corresponding decrease of 14 per cent in NPV at 10 per cent to $772.2-million ($849.6-million including the CPP, GPP and MPP projects).
• Proved developed producing and proved plus probable developed producing reserve life index of 8.4 and 10.8 years, respectively, are testaments to Journey's low decline asset base, and the YoY (year-over-year) increase in reserve life index demonstrates Journey's ability to grow the company's base production base while simultaneously reducing its corporate decline rate.
• Realized attractive F&D (finding and development) and FD&A (finding, development and acquisition) recycle ratios of 2.4 and 2.5 respectively for proven reserves; and 8.9 and 8.5, respectively, for proven plus probable reserves.
• The $247-million of total proved plus probable undeveloped future development cost (FDC) in Journey's reserve report generates $299-million in future NPV at 10 per cent. The development wedge generates development cost of approximately $8.25/boe, a cost which is consistent with Journey's historical averages.

Unaudited financial information and 2023 update guidance

The preliminary financial information contained in this press release is not a comprehensive statement of the company's financial results for the fourth quarter and year ended Dec. 31, 2023. Journey's actual results may differ materially from these estimates due to the currently continuing finalization of the company's financial statements. The company's audited financial results for the year ended Dec. 31, 2023, are expected to be released on March 12, 2024. Journey will be providing an update on its 2024 guidance and capital program at that time.

Company gross working interest oil and gas reserves and net present values

The attached table provides summary information presented in the GLJ Petroleum Consultants Ltd. (GLJ) independent reserves assessment and evaluation effective Dec. 31, 2023. GLJ evaluated 100 per cent of Journey's crude oil, natural gas liquids and natural gas reserves. The evaluation of all of its oil and gas properties was prepared in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook (COGE Handbook) and National Instrument 51-101 -- Standards of Disclosure for Oil and Gas Activities.

The 2023 GLJ reserve report includes the abandonment and reclamation liability associated with all active and inactive wells, facilities, pipelines, and gathering systems.

Detailed reserve information will be presented in the company's upcoming statement of reserves data and other oil and gas information section of the company's annual information form scheduled to be filed on SEDAR+ on or before March 31, 2024.

The forecast prices and foreign exchange rates used in the GLJ Report are as shown in the attached table.

Reserves reconciliation

The attached table sets out the reconciliation of Journey's total gross reserves based on forecast prices and costs by principal product type as at Dec. 31, 2023, relative to Dec. 31, 2022.

Finding, development and acquisition costs

Journey's finding and development (F&D) and finding, development and acquisition (FD&A) costs for 2023, 2022 and the three-year average are presented in the next attached tables. The capital costs used in the calculations are those costs related to: land acquisition and retention, seismic, drilling, completions, tangible well site, tie-ins, and facilities, plus the change in estimated future development costs (FDC) as per the independent evaluator's reserve report. Net acquisition costs are the cash outlays in respect of acquisitions; minus the proceeds from the disposition of properties during the year. Due to the timing of capital costs and the subjectivity in the estimation of future costs, the aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated FDC's generally will not necessarily reflect total FDC's related to reserve additions for that year. The reserves used in this calculation are working interest reserve additions, including technical revisions and changes due to economic factors. The 2023 and the three-year average capital expenditures are currently unaudited as the 2023 financial results are in the process of being finalized. For the unaudited information see the reconciliation of the capital expenditures herein which are as of the date of this press release.

Future development costs

The attached table provides the breakdown of future development costs deducted in the estimation of the future net revenue attributable to the proved and proved plus probable reserve categories noted herein.

Reserve life index

The company's reserve life index (RLI) is calculated by taking the company gross reserves from the GLJ report and dividing them by the projected 2024 production as estimated in the GLJ report.

Net asset value

The attached table provides a calculation of Journey's estimated net asset value (NAV) and net asset value per share (NAVPS) as at Dec. 31, 2023, based on the estimated future net revenues associated with Journey's reserves as presented in the GLJ report. NAV does not include any provision for Journey's undeveloped land or seismic database. However, NAV in the attached table includes the future discounted cash flows of Journey's Countess power project, Gilby power project and Mazeppa power projects based upon an economic run completed by GLJ and using their pricing assumptions.

Operations update

Journey is happy to report that it has now completed expenditures and obligations in association with the March, 2023, flow-through share issuance. Journey's exploration and development program costs were well under the originally forecast amount, thereby allowing the company to expand its drilling program. During the fourth quarter of 2023 and to date in 2024, Journey has drilled 16.0 wells (13.1 net) in four of its core areas. A total of 12.0 wells (10.3 net) are now on production. A total of 4.0 wells (2.9 net) were drilled in 2024 to date in Medicine Hat and are currently forecast to be producing by mid-March. The net capital expenditures for this drilling program were approximately $25-million. Current sales volumes (net to Journey) from the new wells that are currently producing is approximately 1,100 boe/d (79 per cent crude oil and NGLs).

About Journey Energy Inc.

Journey is a Canadian exploration and production company focused on oil-weighted operations in Western Canada. Journey's strategy is to grow its production base by drilling on its existing core lands, implementing water flood projects and by executing on accretive acquisitions. Journey seeks to optimize its legacy oil pools on existing lands through the application of best practices in horizontal drilling and, where feasible, with water floods.

We seek Safe Harbor.