Mr. Dustin Hoffman reports

PIPESTONE ENERGY CORP. ANNOUNCES SECOND QUARTER 2023 RESULTS, PROVIDES AN OPERATIONS UPDATE AND TRANSACTION UPDATE

Pipestone Energy Corp. has released its second quarter 2023 financial and operational results as well as provided an update on the previously announced proposed transaction between Pipestone and Strathcona Resources Ltd., pursuant to which Strathcona has agreed, subject to satisfaction of certain closing conditions, to acquire all the issued and outstanding common shares of Pipestone for 100-per-cent share consideration. Pursuant to the Transaction, Strathcona and Pipestone will be amalgamated and will continue as "Strathcona Resources Ltd." ("AmalCo"). Upon completion of the Transaction, existing Pipestone shareholders will receive approximately 9.05% of the equity in AmalCo on a fully diluted basis (approximately 8.87% basic), equating to an exchange ratio of 0.067967 AmalCo shares per Pipestone share. AmalCo is expected to become a public reporting issuer in Canada following completion of the Transaction. For further details regarding the Transaction, refer to the joint press release dated August 1, 2023 and the material change report of Pipestone in connection with the Transaction, which is or will be available under Pipestone's SEDAR+ profile at www.sedarplus.ca.

SECOND QUARTER 2023 CORPORATE HIGHLIGHTS

During Q2 2023, Pipestone delivered strong quarterly average production of 33,143 boe/d (41% liquids), despite the impact of the Alberta Wildfires in May 2023, with June 2023 setting a monthly record of 37,327 boe/d (42% liquids). The cumulative production impact of the wildfires was approximately 11,000 boe/d in May 2023 or 3,700 boe/d in Q2 2023. Forecast 2023 production remains on track to meet the Company's guidance range of 34,000 - 36,000 boe/d;

The Company delivered adjusted funds flow from operations( 1) of $53.4 million ($0.19 per basic and diluted share) in Q2 2023, which represents a decrease of $57.0 million or 52% from its Q2 2022 adjusted funds flow from operations(1) of $110.4 million ($0.58 per basic share and $0.39 per diluted share) in Q2 2022, as a result of weaker realized commodity prices; Pipestone continued to generate positive returns on invested capital with Q2 2023 annualized ROCE( 1) and CROIC(1) of 17% and 9%, respectively, as compared to Q2 2022 annualized ROCE(1) and CROIC(1) of 44% and 41%, respectively, impacted by lower year-over-year commodity prices;

The Company's capital expenditures in 2023 were front-loaded in 2023, as a result of delineation spending, as well as to provide surety on full year production guidance. In Q1 and Q2 2023 a significant portion of the 2023 capital budget was utilized to drill 16 of 27 planned wells (59%), complete 17 of 23 planned wells (74%) and invest in various infrastructure projects. The capital investment of $170.5 million, before capitalized G&A, in the six months ended June 30, 2023, represents 67% of the full year budget (using the $255.0 million mid-point of guidance);

Pipestone successfully renewed its reserve-based loan ("RBL") in Q2 2023 with the $280.0 million borrowing base and available capacity maintained. The maturity date of the RBL was extended to May 30, 2025. The Company exited the second quarter of 2023 with a net debt( 1) balance of $172.4 million (June 30, 2022 - $191.6 million) and a draw of $138.3 million against its RBL. The Company's ratio of net debt( 1) to annualized trailing quarter adjusted funds flow from operations(1) at June 30, 2023 was 0.8 times (June 30, 2022 - 0.4 times) which demonstrates the continued strength of Pipestone Energy's financial position;

On August 9, 2023, the Company's board of directors declared its third quarterly dividend of $0.030 per common share, which will be payable on September 29, 2023, to shareholders of record at the close of business on September 15, 2023.

Q2 2023 Operations Update:

During the second quarter, Pipestone continued to execute its development program. Total drilling capital was $19.6 million in the quarter. The Company drilled and rig-released a single well from the existing 14-14 pad-site located south of the Wapiti River, five additional wells at the 14-19 pad, as part of the second phase of operations, and one delineation well from its northern 15-34 pad, for a total of seven wells. The Company incurred completion costs of $26.5 million in the quarter, which includes its two southeastern delineations wells at the 11-09 pad and the 14-14 pad single well, for a total of three wells. Pipestone also invested $14.7 million in production equipment and facilities which included the equipping and tie-in of the 14-14 pad single well and a portion of the construction of a pipeline connecting the 11-09 pad to the 12-14 battery which remained in progress at the end of the quarter.

Delineation Update:

During 2023, Pipestone is spending approximately $45 million of its $245 - $265 million capital budget on high impact delineation activities, which includes four step-out wells drilled and completed, as well as significant gathering system additions. In June 2023, the Company brought the delineation well drilled off the 14-14 pad (south of the Wapiti River) on production. The well was drilled with a short lateral length of approximately 1,900 meters and has delivered an IP60 of 1.6 MMcf/d raw gas and 394 bbl/d of condensate which equates to a CGR of 241 bbl/MMcf. Future adjacent wells are expected to scale linearly to Pipestone's typical well length of greater than 3,200 metres. In addition, the two new wells drilled and completed earlier this year off the 11-09 pad will begin flowback operations into the 12-14 battery, once the new gathering pipeline is complete in September 2023. Flowback operations on the 15-34 pad delineation well has just commenced, with meaningful production results expected over the next few months.

Transaction Update:

The Company has called a special meeting of holders of common shares ("Shareholders") of Pipestone to be held on September 27, 2023 (the "Meeting"), to approve the Transaction. The record date for the Meeting is set as of August 25, 2023. The board of directors of Pipestone has approved the Transaction and it will recommend that Shareholders vote in favour of the Transaction at the Meeting.

Pipestone has retained Kingsdale Advisors as its strategic shareholder advisor and proxy solicitation agent in connection with the Meeting. Shareholders with questions are encouraged to contact Kingsdale Advisors by telephone at 1-877-659-1824 (North American Toll Free) or 416-623-2514 (Outside North America).

Q2 2023 Financial Results Conference Call Details:

A conference call has been scheduled for August 9th, 2023 at 10:00 a.m. Mountain Time (12:00 p.m. Eastern Time) for interested investors, analysts, brokers, and media representatives.

Please use the following participant URL to join the Q2 2023 financial results conference call: https://register.vevent.com/register/BI803001b7727c445f98bfa56893ebd7c6. This registration link can also be found on the Company's website at www.pipestonecorp.com. This link will provide each registrant with a toll-free dial-in number and a unique PIN to connect to the call.

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 EO100TM Standard for Responsible Energy Development. Pipestone shares trade under the symbol PIPE on the TSX. For more information, visit www.pipestonecorp.com .

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