Mr. Dustin Hoffman reports

PIPESTONE ENERGY CORP. ANNOUNCES FIRST QUARTER 2023 RESULTS, PROVIDES AN UPDATE ON THE ALBERTA WILDFIRE IMPACT AND ANNOUNCES THE APPOINTMENT OF AN INTERIM CEO

Pipestone Energy Corp. has released its first quarter 2023 financial and operational results. The Company also announced today that Paul Wanklyn, President and Chief Executive Officer, will be taking an immediate leave of absence for health reasons. Pipestone's Board of Directors has appointed Dustin Hoffman, the Company's Chief Operating Officer, as Interim President and Chief Executive Officer, effective immediately.

As of May 9th, the Company's production curtailed by wildfires in the Grande Prairie region was reduced to approximately 5,000 boe/d from the previously reported approximately 20,000 boe/d. At this time, the Company has no known significant damage or loss to either its owned or any third-party infrastructure. Our thoughts are with the communities who have been or are continuing to be impacted by these wildfires.

Pipestone's objectives for 2023 are to deliver continued efficient production growth, unlock the value of its asset through high impact delineation, and to deliver on shareholder returns, which are underpinned by the Company's quarterly dividend and will be supplemented by share repurchases under the Normal Course Issuer Bid ("NCIB").

Pipestone had a very active first quarter, executing on approximately $106.6 million, or 42% of its planned 2023 capital expenditures at the midpoint of its $245 - $265 million guidance range. This development activity included drilling nine of the 27 planned 2023 drills and completing 14 of the 26 planned 2023 completions, effectively positioning the Company to deliver on its 2023 production guidance range of 34,000 - 36,000 boe/d. Production from Q1 2023 averaged 35,162 boe/d (41% liquids), which sits above the midpoint of full year guidance and represents the fourth consecutive quarter of record average production.

Pipestone Production History:

During the first half of 2023, Pipestone is engaging in several delineation activities in the southeastern portion of its acreage, situated within the Montney volatile oil window. In Q1 2023, Pipestone drilled two new wells on its 11-09 pad with an average lateral length of approximately 4,500 metres. These wells were drilled at an average cost of $3.4 million per well, or $765 per lateral metre drilled, which is approximately 14% below the Company's 2023 budget cost per lateral metre drilled. Pipestone completed these two wells in April 2023 and is currently constructing wellsite facilities to enable extended flow tests later in Q2 2023.

Pipestone also re-tested the original well (100-02-20-070-06W6) on the 11-09 pad, which was completed in 2018 by its predecessor company. Over seven days of flow test, the well has produced an average of 3.4 MMcf/d raw gas and 710 bbl/d condensate (condensate-gas-ratio ("CGR") of 209 bbl/MMcf). The two new wells on the 11-09 pad are nearly double the lateral length of the original well (2,300m vs. 4,500m). This summer, the Company plans to install a new gathering pipeline to tie the 11-09 pad into Pipestone's existing 12-14 battery.

In addition, the Company has engaged in various land swaps with offsetting operators south of the Wapiti River, to further consolidate its operated land position. As a result, Pipestone drilled an additional delineation well off the 14-14 pad, which was completed in April 2023 and is expected to commence initial flowback operations later in Q2 2023.

FIRST QUARTER 2023 CORPORATE HIGHLIGHTS

• In Q1 2023, Pipestone achieved record average quarterly production totaling 35,162 boe/d (29% condensate, 41% total liquids), which was a 7,581 boe/d or 27% increase over Q1 2022 production of 27,581 boe/d (29% condensate, 43% total liquids) and a 1,346 boe/d or 4% increase over Q4 2022 production of 33,816 boe/d (29% condensate, 42% total liquids). The Company remains well on track to achieve its annual production guidance of between 34,000 boe/d and 36,000 boe/d, with Q1 2023 production volumes already within this range;
• As a result of increased production volumes, the Company's Q1 2023 adjusted funds flow from operations( 1) of $84.9 million ($0.30 per share diluted) remained largely consistent with adjusted funds flow from operations(1) of $86.3 million ($0.30 per share diluted) in Q1 2022 despite weaker commodity prices realized. Pipestone's adjusted funds flow from operations( 1) in Q1 2023 was enhanced by $8.8 million or $2.78 per boe of realized gains on its commodity risk management contracts. Subsequent to the quarter, the Company has continued to opportunistically layer on additional WTI hedges to reduce its exposure to oil volatility in the remainder of 2023; Pipestone generated strong returns on invested capital with Q1 2023 annualized CROIC( 1) and ROCE(1) of 26.5% and 20.9%, respectively, compared to Q1 2022 annualized CROIC(1) and ROCE(1) of 34.7% and 35.4%, respectively;
• The Company has front-loaded its capital expenditures in 2023 which will de-risk the Company's ability to deliver on its annual production guidance. In Q1 2023 a significant portion of the 2023 capital budget was utilized to drill nine of 27 planned wells (33%) and complete 14 of 26 planned wells (54%). This capital investment of $106.6 million, before capitalized general and administrative expense, represents 42% of the full year budget (using the $255.0 million mid-point of guidance);
• The Company exited the first quarter of 2023 with a net debt( 1) balance of $150.4 million (March 31, 2022 - $204.5 million). The Company's ratio of net debt( 1) to annualized trailing quarter adjusted funds flow from operations(1) at March 31, 2023 was 0.4 times (March 31, 2022 - 0.6 times) which demonstrates the continued strength of Pipestone Energy's financial position;
• Pipestone executed upon its enhanced shareholder return framework with the payment of its inaugural quarterly dividend of $0.030 per common share ($8.4 million total) on March 31, 2023, to common shareholders of record on March 15, 2023. The dividend was designated as an "eligible dividend" for Canadian income tax purposes. The quarterly dividend is the cornerstone of the Company's strategy to return capital to shareholders and represents an annualized yield of 4.3% based on the March 31, 2023 closing price of the common shares on the TSX of $2.77; and
• On May 10, 2023, the Company's board of directors declared its second quarterly dividend of $0.030 per common share, which will be payable on June 30, 2023, to shareholders of record at the close of business on June 15, 2023. The dividend is designated as an "eligible dividend" for Canadian income tax purposes

Q1 2023 Operations Update

Since the beginning of 2023, Pipestone has drilled and rig-released the final three of four wells on the second occupation of the 02-31 pad, rig-released four wells during the second occupation of the 02-25 pad and drilled a water disposal well at the 06-30 pad. In addition to the delineation activity South of the Wapiti River at the 11-09 and 14-14 pad-sites, the Company also commenced drilling on five additional wells in April 2023 on the second occupation of the 14-19 pad, north of the Wapiti River.

In late December 2022, the Company commenced frac operations on the six wells located at the 11-05 pad which continued into January 2023. The 11-05 pad facilities were constructed in February 2023 and the six wells were brought on production at the beginning of March 2023. The six wells achieved an average IP60 of 4.4 MMcf/d raw gas and 382 bbls/d wellhead condensate (CGR of 87 bbl/MMcf), meeting the VRGC1 type curve expectation. In March 2023, the eight additional wells drilled at the 02-31 and 02-25 pad-sites were also completed with initial flow back operations ongoing with all wells expected to be on production by mid May 2023. In April 2023, the two wells drilled at the 11-09 pad site and single well drilled at the 14-14 were also completed with flow back operations expected later in Q2 2023.

2023 Guidance and 2024 Outlook

With the positive Q1 2023 results the Company is reaffirming its 2023 Guidance and 2024 Outlook as outlined below:

Banking Update:

Pipestone has closed on its Reserve Based Loan ("RBL" or "Credit Facility") renewal with its corporate banking syndicate, consisting of National Bank Financial Inc., Bank of Montreal, ATB Financial, Canadian Western Bank and Business Development Bank of Canada. The Credit Facility's borrowing base and available capacity has been maintained at $280 million on a fully conforming basis. The maturity date for the RBL has been extended to May 30, 2025.

Risk Management Update:

Pipestone views commodity price risk management as integral to protecting its capital program and preserving optionality with respect to its shareholder return objectives. The Company capitalized on improvements in the price of West Texas Intermediate ("WTI") crude oil in early April to add to its hedge positions for the remainder 2023, as shown in the updated hedging table below.

Q1 2023 Financial Results Conference Call Details:

A conference call has been scheduled for May 10, 2023 at 10:00 a.m. Mountain Time (12:00 p.m. Eastern Time) for interested investors, analysts, brokers, and media representatives.

Please register on-line to join the Q1 2023 financial results conference call. This registration link can also be found on the Company's website. This link will provide each registrant with a toll-free dial-in number and a unique PIN to connect to the call.

Annual Meeting of Shareholders:

Pipestone will host its Annual Meeting of Shareholders in a virtual-only format via live audio webcast at 10:00 a.m. Mountain Time (12:00 p.m. Eastern Time) on June 22, 2023.

Pipestone Energy Corp.

Pipestone is an oil and gas exploration and production company focused on developing its large contiguous and condensate rich Montney asset base in the Pipestone area near Grande Prairie. Pipestone is committed to building long term value for our shareholders while maintaining the highest possible environmental and operating standards, as well as being an active and contributing member to the communities in which it operates. Pipestone has achieved certification of all its production from its Montney asset under the Equitable Origin EO100(TM) Standard for Responsible Energy Development. Pipestone shares trade under the symbol PIPE on the TSX.

We seek Safe Harbor.