Mr. Jonathan Wright reports

FIRST QUARTER 2023 OPERATIONAL AND FINANCIAL HIGHLIGHTS

NuVista Energy Ltd. has released its financial and operating results for the three months ending March 31, 2023, and has provided an update on a number of key strategic initiatives. Commodity prices were volatile in the first quarter, but the quality and capacity of the company's asset base allowed it to continue to deliver outsized returns. The company continued to invest in a disciplined manner in new high-return wells to fill and optimize existing facilities. The company made meaningful progress on returning capital to shareholders under its existing normal course issuer bid (NCIB) while continuing with the reduction of debt. The company has also achieved another new corporate milestone, improving its financial flexibility further by moving to a covenant-based credit facility.

First quarter 2023 operational and financial highlights

During the first quarter of 2023, NuVista:

• Produced 71,209 Boe/d (barrels of oil equivalent per day) in the quarter as expected, despite the impact of unplanned outages at three separate third party midstream facilities which impacted quarterly production by approximately 1,500 Boe/d. This represented a 7-per-cent increase in production from the first quarter of 2022. First quarter production consisted of 32 per cent condensate, 9 per cent NGLs (natural gas liquids) and 59 per cent natural gas;
• Generated adjusted funds flow of $207.5-million (95 cents per share, basic) in the quarter, a 9-per-cent increase from the first quarter of 2022;
• Achieved net earnings of $80.7-million (37 cents/share, basic) in the quarter, compared with $70.3-million (31 cents/share, basic) in the first quarter of 2022;
• Delivered positive free adjusted funds flow of $27.9-million despite a high activity and capital spending quarter, with net capital expenditures of $169.9-million and ARO spending of $9.7-million;
• Executed a successful capital expenditure program, investing $195.9-million in well and facility activities including the drilling of 12 gross (11.7 net) wells and the completion of 17 gross (16.2 net) wells in the company's condensate-rich Wapiti Montney play;
• Received cash proceeds of $26.0-million for the disposal of a non-operated working interest in an underutilized gas processing facility. Approximately half of the proceeds are being reinvested this year to replace the sold processing capacity with higher efficiency operated capacity as part of the company's larger Elmworth compressor station expansion;
• Managed the company's exposure to commodity price fluctuations through its natural gas diversification strategy, in this quarter benefiting primarily from its Malin, Calif., exposure. The company realized an average natural gas price of $7.02/Mcf (thousand cubic feet), an improvement of 62 per cent compared with the average AECO monthly 7A index price of $4.34/Mcf for the first quarter;
• Exited the quarter with $65.6-million held in cash deposits and zero drawn on the company's $440-million credit facility. Net debt at the end of the quarter was $169.0-million, a 59-per-cent reduction from the first quarter of 2022 and 2-per-cent lower than year end 2022. The company maintained a favourable net debt to annualized first quarter adjusted funds flow of 0.2 times;
• Improved the company's financial flexibility through the successful transition from a reserve-based credit facility to a $450-million three-year covenant-based credit facility with the company's existing banking syndicate effective May 9, 2023. The credit facility has an accordion feature of an additional $300-million;
• Repurchased and subsequently cancelled 1.1 million common shares for an aggregate cost of $12.2-million or $11.54/share under the terms of the company's NCIB. As of today, the company has repurchased and subsequently cancelled 16.5 million common shares, completing 91 per cent of the NCIB.

Board of director changes

With sincere appreciation, the company bid Sheldon Steeves a fond farewell as he retires from the board after 10 years of dedicated service and leadership. Mr. Steeves has always provided calm and deft advice through the many industry challenges of the past decade, and the company thanks him deeply as it wishes him and his family all the very best in the future. With Mr. Steeves's retirement, the company welcomes Mary Ellen Lutey who will be joining the company's board. Ms. Lutey has deep experience in the leadership, production and development of resource plays, and the company looks forward to working with her as she brings her insights to growing shareholder value over the years to come.

2023 guidance update

The company is in an extremely fortunate position of having top tier assets and economics. With disciplined execution it is able to grow production and adjusted funds flow while generating significant positive free adjusted funds flow, despite the significant moderation of natural gas pricing during the first quarter of 2023. The company has hedged approximately 35 per cent of projected natural gas production for this summer with floor and ceiling prices of $4.17/Mcf and $7.31/Mcf (hedged and exported volumes converted to an AECO equivalent price). We have less than 2-per-cent exposure to AECO prices this summer due to its hedges and its diversified sales portfolio.

Due to the company's high condensate weighting, the company's execution economics remain very strong. As such, the company will continue with its capital execution plans unchanged at present, however it will remain nimble to adjust its activity levels downward should condensate and gas prices reach sustained lower levels.

The company anticipates that the cost inflation it has encountered over the past year will ease through the coming summer. It has remained limited but persistent through the first quarter of 2023, partially offset by improving execution and capital efficiency. The softening of natural gas prices is expected to affect gas-directed activity levels, reducing the competition for services. In addition, inventories of steel products and raw materials are building, and fuel costs have already moderated. The company also retains the pricing certainty provided in its long-term pressure pumping and sand contract. At this time, the company is maintaining its outlook for full year spending by optimizing phasing toward the end of the year. The company plans to reassess its budget in August in the context of commodity and service prices at that time.

The company's full year production and net capital expenditure guidance range is unchanged at 79,000 to 83,000 Boe/d (barrels of oil equivalent per day) and $425-million to $450-million, respectively. The company's guidance on capital expenditures is based on net capital expenditures which includes proceeds received on property dispositions which will be reinvested into the company's development plan to replace the sold production capacity. As a result of the wildfire situation in Grande Prairie region and the related production impacts, the company is choosing not to provide guidance for the second quarter production at this time. Once the situation has stabilized and facilities are restarted, the company intends to provide quarterly guidance.

The company intends to continue its record of carefully directing free adjusted funds flow toward a prudent balance of return to shareholders and debt reduction, while investing in production growth until the company's existing facilities are filled and debottlenecked to maximum efficiency. NuVista has an exceptional business plan that maximizes free adjusted funds flow and the return of capital to shareholders when the company's existing facilities are debottlenecked and filled to maximum efficiency at production levels of approximately 100,000 Boe/d through 2025.

NuVista has top quality assets and a management team focused on relentless improvement. The company has the necessary foundation and liquidity to continue adding significant value for its shareholders. The company will continue to adjust to the environment in order to maximize the value of its asset base and ensure the long-term sustainability of its business. The company would like to thank its staff, contractors and suppliers for their continued dedication and delivery, and the company thanks its board of directors and its shareholders for their continued guidance and support.

Please note that the company's corporate presentation will be available on the company website on May 9, 2023. NuVista's management's discussion and analysis, condensed consolidated interim financial statements for the three months ended March 31, 2023, and notes thereto, will be filed on SEDAR under NuVista Energy on May 9, 2023, and can also be accessed on NuVista's website.

We seek Safe Harbor.