Mr. Jean-Paul Lachance reports

PEYTO CELEBRATES 25 YEARS WITH Q3 2023 RESULTS

Peyto Exploration & Development Corp. is celebrating 25 years of successful operations in the Canadian energy industry with its financial results for the third quarter of 2023 and a preliminary capital plan for 2024.

Q3 2023 Highlights:

• Peyto announced on September 6, 2023, the acquisition of Repsol Canada Energy Partnership ("Repsol") for cash consideration of $US468 million ($636 million) prior to post-closing adjustments (the "Acquisition"). The Acquisition provides Peyto with over 800 low-risk, high-quality drilling locations1 and synergistic infrastructure to allow for the optimization of production and costs in the Greater Sundance Area. Peyto closed the Acquisition on October 17, 2023, therefore no contribution from the assets are included in third quarter results.
• Average production volumes of 97,981 boe/d (520.5MMcf/d of natural gas, 11,231 bbls/d of NGLs) delivered $148 million in funds from operations2 , 3 ("FFO"), or $0.84/diluted share, and $54 million of free funds flow4 in the quarter.
• Peyto generated earnings of $57 million, or $0.33/diluted share, in the quarter and $205 million or $1.16/diluted share, for the year to date. Of these profits to date, approximately 85% or $175 million ($1.00/share) have been returned to shareholders as dividends.
• Quarterly cash costs of $1.05/Mcfe, before royalties of $0.29/Mcfe, consist of operating costs of $0.44/Mcfe, transportation of $0.29/Mcfe, G&A of $0.04/Mcfe and interest expense of $0.28/Mcfe. Peyto continues to have the lowest cash costs in the Canadian natural gas industry.
• Total capital expenditures5 were $94 million in the quarter. Peyto drilled 19 wells (18.1 net), completed 19 wells (18.3 net), and brought 20 wells (18.9 net) on production for $81 million. The Company's drilling and completions costs per meter decreased 3% from Q2 2023 as the effects of inflation have moderated.
• Peyto delivered a 69% operating margin6 and a 25% profit margin7, resulting in a 12% return on capital employed8 ("ROCE") and a 14% return on equity8 ("ROE"), on a trailing 12-month basis.
• Peyto has increased its hedge position materially in conjunction with closing the Acquisition, which currently protects approximately 68% and 56% of forecast gas production for 2024 and 2025, respectively.
• Over the past three years, Peyto has increased production from 78,200 boe/d to 97,981 boe/d, returned over $300 million in dividends to shareholders, while reducing net debt by over $300 million.

1 See "Drilling Locations" in this news release for further information.

2 This press release contains certain non-GAAP and other financial measures to analyze financial performance, financial position, and cash flow including, but not limited to "operating margin", "profit margin", "return on capital", "return on equity", "netback", "funds from operations", "free funds flow", "total cash costs", and "net debt". These non-GAAP and other financial measures do not have any standardized meaning prescribed under IFRS and therefore may not be comparable to similar measures presented by other entities. The non-GAAP and other financial measures should not be considered to be more meaningful than GAAP measures which are determined in accordance with IFRS, such as earnings, cash flow from operating activities, and cash flow used in investing activities, as indicators of Peyto's performance. See "Non-GAAP and Other Financial Measures" included at the end of this press release and in Peyto's most recently filed MD&A for an explanation of these financial measures and reconciliation to the most directly comparable financial measure under IFRS.

3 Funds from operations is a non-GAAP financial measure. See "non-GAAP and Other Financial Measures" in this news release and in the Q3 2023 MD&A.

4 Free funds flow is a non-GAAP financial measure. See "non-GAAP and Other Financial Measures" in this news release and in the Q3 2023 MD&A.

5 Total capital expenditures is a non-GAAP financial measure. See "non-GAAP and Other Financial Measures" in this news release and in the Q3 2023 MD&A.

6 Operating Margin is a non-GAAP financial ratio. See "non-GAAP and Other Financial Measures" in this news release.

7 Profit Margin is a non-GAAP financial ratio. See "non-GAAP and Other Financial Measures" in this news release.

8 Return on capital employed and return on equity are non-GAAP financial ratios. See "non-GAAP and Other Financial Measures" in this news release and in the Q3 2023 MD&A.

Third Quarter 2023 in Review

Production volumes averaged 97,981 boe/d in the quarter, 6% lower than Q3 2022 due mainly to a reduced capital expenditure program in response to the sharp decline in natural gas prices in early 2023. Additionally, Peyto had an extended turnaround at the Oldman deep-cut gas plant in September that decreased production by approximately 1,000 boe/d in the quarter. Total capital expenditures were $298 million for the year to date, $94 million lower than the same period of 2022. Natural gas prices stabilized in the quarter from the sharp decline in the first half of 2023. Henry Hub daily averaged US$2.58/MMBtu, and AECO daily averaged $2.46/GJ, down 68% and 38%, respectively, year over year. Peyto's systematic hedging program resulted in realized hedging gains of $33.7 million and helped deliver another strong quarter of funds from operations, which totaled $148.0 million. Operating costs improved to $0.44/Mcfe in the quarter, down from $0.47/Mcfe in Q2 2023 as inflationary cost pressures have stabilized. Interest costs included an incremental $0.05/Mcfe due to financing fees incurred in the quarter for the Acquisition. The Company's operating margin and profit margin remain strong at 69% and 25%, respectively. Earnings totaled $57.4 million and $59.8 million in dividends were declared in the quarter.

Exploration & Development

The third quarter 2023 activity was spread out amongst the existing core areas of Greater Sundance and Greater Brazeau. Target formations were also widespread, as summarized in the following table.

Peyto's average drilling and completion costs decreased in the third quarter both on an aggregate and on a per unit basis. Drilling cost per meter was reduced by 3% while completion cost per meter and cost per stage were reduced by 3% and 7%, respectively, over Q2 2023. Inflationary costs have stabilized and Peyto continues to optimize its operations through drilling extended reach horizontal (ERH) wells as well as taking advantage of pad drilling to maximize efficiency. Peyto also drilled a larger proportion of Notikewin wells in the quarter which resulted in a slight reduction in average lateral length over the previous quarter in which Peyto drilled a larger proportion of Wilrich wells.

Marketing

Commodity Prices

During Q3 2023, Peyto realized a natural gas price after hedging and diversification of $3.33/Mcf, or $2.90/GJ, 18% higher than the average AECO daily price of $2.46/GJ. Peyto's natural gas hedging activity resulted in a realized gain of $0.76/Mcf ($36 million) due to the sharp decline in AECO and Henry Hub natural gas prices.

Condensate and pentanes volumes were sold in Q3 2023 for an average price of $100.52/bbl, which is down 7% from $107.83/bbl in Q3 2022, while Canadian WTI decreased 8% to $119.46/bbl over the same period. Butane and propane volumes were sold in combination at an average price of $32.47/bbl, or 29% of light oil price, down 31% from $46.96/bbl in Q3 2022. NGL hedging losses decreased the combined realized NGL price of $72.64/bbl by $2.38/bbl to $70.25/bbl in the quarter.

Hedging

The Company has been active in hedging future production with financial and physical fixed price contracts to protect a portion of its future revenue from commodity price and foreign exchange volatility. Currently, Peyto has 405 MMcf/d of natural gas hedged at $4.19/mcf for Q4 2023, 459 MMcf/d hedged at $3.91/Mcf for 2024, and 402 MMcf/d hedged at $4.08/Mcf for 2025. Commodity price risk on condensate and pentane production is managed through WTI swaps and collars and Peyto currently has 4,000 bbls/d hedged for Q4 2023, and 2,700 bbls/d hedged for 2024.

Peyto is exposed to volatility in the Canadian/US dollar exchange ratio since commodities are effectively priced in US dollars and converted to Canadian dollars. The Company protects a portion of its US dollar exposure with foreign exchange forward contracts and has hedged US$55.5 million for Q4 2023 at 1.3565 CAD/USD, US$290 million at 1.3481 CAD/USD for 2024, and $US156 million at 1.3459 CAD/USD for 2025.

The Company's fixed price contracts combined with its diversification to the Cascade power plant, expected to commence in Q1 of 2024, and other premium market hubs in North America allow for revenue security and support continued shareholder returns through dividends and debt reduction. Details of Peyto's ongoing marketing and diversification efforts are available on Peyto's website.

Financial Results

The Company's realized natural gas and NGL sales yielded a combined revenue stream of $3.67/Mcfe before hedging gains of $0.62/Mcfe, resulting in a net sales price of $4.29/Mcfe in the quarter. This net sales price was 12% lower than the $4.88/Mcfe realized in Q3 2022 due to the sharp decline in natural gas prices, partially offset by hedging. Total cash costs of $1.34/Mcfe were 15% lower than the $1.57/Mcfe in Q3 2022 due to lower royalties. Peyto's cash netback (net sales price including other income, third-party sales net of purchases, realized gain on foreign exchange, less total cash costs), was $2.98/Mcfe resulting in a strong 69% operating margin.

Depletion, depreciation, and amortization charges of $1.37/Mcfe, along with provisions for current tax, deferred tax and stock-based compensation payments resulted in earnings of $1.08/Mcfe, or a 25% profit margin. Dividends to shareholders totaled $1.11/Mcfe.

9 Total Cash costs is a non-GAAP financial ratio. See "non-GAAP and Other Financial Measures" in this news release.

10 Cash netback is a non-GAAP financial ratio. See "non-GAAP and Other Financial Measures" in this news release and in the Q3 2023 MD&A.

Activity Update

Since the end of the quarter, Peyto activity has been steady with four rigs running across the core lands in Greater Sundance and Greater Brazeau. Peyto plans to maintain this level of activity for the remainder of the year and into 2024. Since the beginning of October, Peyto has drilled 9 gross (8.4 net) wells and has brought 10 gross (9.6 net) wells on-stream in the Notikewin, Falher and Wilrich at an average lateral length of over 2,000 meters.

On October 17, 2023, Peyto closed the Acquisition of Repsol's remaining Canadian upstream assets, primarily in the Alberta Deep Basin and which are adjacent to the Company's greater Sundance area. Peyto recognizes over 800 drilling locations on these lands which have not been developed and where Peyto has had significant operational success. These opportunities are directly adjacent to many of Peyto's best wells and will receive the added benefit of the latest drilling and completion designs to further improve results. Peyto's activity, after closing the Acquisition, has immediately shifted to begin the development of the newly acquired assets. Already, Peyto has rig released 1 gross (1 net) well, spud another 2 gross (2 net) wells and has plans to drill a total of 7 gross (7 net) wells on the acquired lands before the end of the year. These locations are comprised of high quality Notikewin and Falher targets which will be followed by an additional 40 locations in 2024, making up a significant portion of Peyto's activity next year. The Company's 2023 capital program, which is now expected to total approximately $425 million, continues to deliver strong results. The projected before tax full-cycle internal rate of return on this capital is estimated to be approximately 60% based on current strip pricing, year-to-date results, and current drilling plans for the remainder of the year.

2024 Preliminary Budget and Plans

Peyto's preliminary capital budget for 2024 includes a low-risk development program on both the recently acquired Repsol assets and the Company's legacy core properties. Well activity will be dispersed across all core areas but with a larger portion in the Greater Sundance area where the Company now operates 11 gas plants and where aggregate utilization is approximately 56% excluding two temporarily suspended facilities. Peyto will continue to apply its successful ERH drilling design across all lands where applicable and pursue a mix of liquid rich formations across the Deep Basin stratigraphic stack. The Company expects to utilize 4 drilling rigs for this capital program with well-related costs representing approximately 80% of the 2024 budget.

Major facility projects for 2024 include a maintenance turnaround at the recently acquired Edson Gas Plant, modifications at the Oldman and Oldman North plants, and a variety of pipeline and plant optimization projects to take advantage of the significant infrastructure synergies in the Greater Sundance area. Additionally, the Company plans to spend approximately $10 million on closure related activities to proactively reduce abandonment retirement obligations.

While specific details of the 2024 budget are still being finalized, a capital program between $450-$500 million is anticipated and is estimated to add approximately 40,000 to 45,000 boe/d of new production by the end of the year. This volume addition would be more than sufficient to offset the annual forecast decline of 25% on anticipated 2023 exit production of between 126,000 to 128,000 boe/d.

This production addition cost represents an improvement of current capital efficiency due to the increased quality of the largely under-developed opportunities on the Repsol lands. Similar to prior years, there may also be opportunities throughout the year for unplanned acquisitions or infrastructure investments that the Company chooses to pursue. As always, Peyto will ensure any capital plans will be nimble with the ability to react to changes in commodity prices, service costs and the global economic environment.

2023 Sustainability Report

Peyto has released its 2023 Sustainability Report which details the Company's environmental, social, and governance activities for the year ended December 31, 2022. The complete Sustainability report (the "Report") can be found at www.peyto.com. Peyto believes good environmental, social, and governance performance is essential to managing a long-term sustainable business. The Company has reported on environmental and safety performance over the past 8 years through its annual sustainability reports. The Company's core values of efficiency, cost control, and operational excellence naturally lead to less environmental impact, strong social conscience and effective corporate governance. Longstanding relationships with suppliers, regulators, and local communities has allowed Peyto to conduct business safely and responsibly for 25 years.

Key highlights in the report include:

• 63% reduction of methane emissions and flared volumes since 2016.
• Continued reduction in new land disturbances using pad drilling and existing infrastructure.
• Lower fresh water use intensity through high flowback recovery and more effective stimulations.

During 2024, Peyto will re-establish baseline quantities for emissions, land and water use intensity and re-evaluate targets and priorities including the new Repsol assets. Ongoing initiatives include further methane emissions reducing projects and investigation of carbon capture and sequestration options.

Peyto's 25th Anniversary

This past October marks the Company's 25th anniversary. During the past 25 years Peyto has invested $7.6 billion into the development of Alberta's natural gas resource plays, contributing approximately $1 billion to Alberta royalty coffers, generating $3.3 billion in earnings, of which $2.8 billion was returned to shareholders in distributions and dividends. One thousand dollars invested in the Company in October 1998 would have generated a cumulative total return of approximately $500,000 (inclusive of share price appreciation, distributions and dividends). This enduring performance has proven that the Peyto strategy continues to be successful.

Management Changes

Peyto is pleased to announce the promotion of Riley Frame to Chief Operating Officer effective January 1, 2024. Mr. Frame has been with Peyto for 10 years as an exploitation engineer, Manager of Exploitation, and most recently, the VP Engineering. Mr. Frame has been instrumental to the growth of the Company's reserves, enhancing well designs, and integral to managing Peyto's development programs. Mr. Frame has a deep understanding of the Peyto business model and unique culture. Mr. Frame will be responsible for all the operations of the Company.

As part of the Peyto's orderly leadership succession process, Kathy Turgeon is retiring as Chief Financial Officer (CFO) effective March 31, 2024. Ms. Turgeon started with Company in 2004 as Controller and was appointed Vice President of Finance in January 2006 and later appointed CFO in January 2008. The Board would like to thank Ms. Turgeon for her contributions and dedication to the Company over the last 20 years and wish her all the best in retirement. Peyto is pleased to announce that Tavis Carlson, VP Finance will be promoted to the role of CFO effective April 1, 2024. Mr. Carlson joined the Company in March 2022 and has been a key contributor to recent financings including playing a critical role in the recent Repsol acquisition. Prior to Peyto, Mr. Carlson was the VP Finance and CFO at Altura Energy Inc. from 2015 to 2021 and has over 20 years of industry experience.

Peyto's purposeful approach to senior management appointments has always been to promote from within to ensure the culture and core values of the Company are maintained. With the addition of the Repsol assets, the leadership team is focused and excited to embark on a new chapter in Peyto's rich history of operational excellence, profitable growth and shareholder returns.

Outlook

Peyto expects to grow production to over 160,000 boe/d by the end of 2026 through capital investments ranging between $450-$500 million per year and believes this growth plan is well-timed with the expansion of LNG facilities in both the US and Canada. Peyto's low cost, long reserve life assets, combined with a systematic hedging approach provides assurance against market volatility over that period. The Company's diversification to gas markets across North America provides excellent exposure to premium seasonal markets such as Malin in California, Ventura and Chicago in the US mid-west, and to local Alberta power markets which reduces the risk of selling into potential dislocated markets like AECO. The securing of revenues coupled with a disciplined capital program provides confidence for future dividends and continued strengthening of the balance sheet.

Conference Call and Webcast

A conference call will be held with senior management of Peyto to answer questions with respect to the Company's Q3 2023 results on Thursday, November 9, 2023, at 9:00 a.m. Mountain Time (MT), or 11:00 a.m. Eastern Time (ET).

Participants will be issued a dial in number and PIN to join the conference call and ask questions. Alternatively, questions can be submitted prior to the call at info@peyto.com. The conference call will be archived on the Peyto Exploration & Development website.

Management's Discussion and Analysis and Financial Statements

A copy of the third quarter report to shareholders, including the MD&A, unaudited consolidated financial statements and related notes, is available on the company's website and will be filed at SEDAR+ at a later date.

We seek Safe Harbor.