Mr. Jean-Paul Lachance reports

PEYTO ANNOUNCES INCREASE TO PREVIOUSLY ANNOUNCED BOUGHT DEAL OFFERING TO C$175 MILLION

Due to strong demand, Peyto Exploration & Development Corp. has increased the size of the previously announced public offering of subscription receipts to 14.71 million subscription receipts at a price of $11.90 per subscription receipt for gross proceeds of approximately $175-million. The company previously entered into an agreement with a syndicate of underwriters led by BMO Capital Markets, CIBC Capital Markets and National Bank Financial. Peyto has also granted the underwriters an option, exercisable, in whole or in part, at any time up to the earlier of 30 days following the closing of the equity offering and the occurrence of certain termination events with respect to the subscription receipts, to purchase up to an additional 15 per cent of the number of subscription receipts purchased by the underwriters under the Equity offering at the offering price to cover overallotments, if any, and for market stabilization purposes. The gross proceeds from the equity offering, less the portion of the underwriters' fee that is payable on the closing of the equity offering, will be held in escrow and are intended to be used by Peyto to finance a portion of the purchase price for the acquisition of Repsol Canada Energy partnership, which holds the Canadian upstream oil and gas business of Repsol Exploracion SAU, including all related mid-stream facilities and infrastructure located predominantly in the Deep basin, for cash consideration of $468-million (U.S.) ($636-million), subject to closing adjustments.

Each subscription receipt will entitle the holder to receive, without payment of additional consideration and without further action, one common share of Peyto upon the closing of the acquisition.

Holders of the subscription receipts will be entitled to receive payments per subscription receipt equal to the cash dividends paid on Peyto's common shares, if any, actually paid or payable to holders of such common shares in respect of all record dates for such dividends occurring from the closing date of the equity offering to, but excluding, the last day on which the subscription receipts remain outstanding, to be paid to holders of subscription receipts concurrently with the payment date of each such dividend. The dividend equivalent payments will be made regardless of whether the acquisition is completed or not. If the acquisition is not completed on or before March 31, 2024, or in certain other events, then the subscription price for the subscription receipts will be returned to holders of subscription receipts, together with any unpaid dividend equivalent payments and any pro rata interest on such funds, if any.

The equity offering is expected to close on or about Sept. 26, 2023, and is subject to certain conditions, including, but not limited to, the receipt of all necessary approvals, including the approval of the Toronto Stock Exchange.

We seek Safe Harbor.