Mr. Dustin Hoffman reports

PIPESTONE ANNOUNCES THAT ISS REAFFIRMS RECOMMENDATION THAT SHAREHOLDERS VOTE "FOR" PROPOSED COMBINATION WITH STRATHCONA TO CREATE A LEADING CANADIAN ENERGY PRODUCER; ISS SAYS DISSIDENT'S ARGUMENTS "DO NOT APPEAR WELL SUPPORTED"

Leading proxy advisory firm Institutional Shareholder Services (ISS) has reviewed the arguments of GMT Capital Corp. in its dissident proxy circular dated Sept. 15, 2023, and reaffirmed its recommendation that Pipestone Energy Corp. shareholders vote for the proposed arrangement with Strathcona Resources Ltd. that would see Pipestone and Strathcona combine to become one of Canada's largest energy producers.

"Upon review, the dissident arguments do not appear well supported and there is no clear indication as to whether a rejection of the deal would enhance shareholder value or lead to an enduring improvement in PIPE's share price. As such, ISS continues to recommend shareholders vote for the transaction," ISS said.

Shareholders of Pipestone should not be distracted by GMT's flawed and misleading arguments.

As Pipestone has outlined in detail, the dissident circular of United States-based GMT is rife with flawed assumptions and misleading arguments against this value-creating transaction.

There is nothing new in GMT's speculative arguments in its dissident proxy circular, which focuses on short-term, cherry-picked data, nor does GMT have a value-enhancing plan for the stand-alone company.

GMT's argument can be summarized as nothing more than "kill the deal and hope for the best." But hope is not a strategy the board of directors of Pipestone and Pipestone can support. Neither should shareholders.

By contrast, Pipestone believes that the arrangement offers numerous advantages for shareholders. The all-share consideration will enable shareholders to fully participate in the upside of a much larger and more diversified producer that is expected to benefit from scale at 185,000 barrels of oil equivalent/day (boe/d); a well-positioned reserves base and much longer life at over 38 years; better access and lower cost to capital; extending Pipestone's tax shelter by over two years; and a potential positive rerating by markets.

The independent committee (the special committee) of the board and the board have determined that the arrangement is in the best interests of Pipestone and the shareholders and it has the full, signed backing of management of Pipestone.

"We are pleased to see the continued support for the arrangement from independent parties such as ISS. Management fully supports the arrangement which we believe is superior to the status quo, significantly reducing the go-forward technical risk of the business while allowing Pipestone shareholders to participate in future upside," said Dustin Hoffman, chief operating officer and interim president and chief executive officer of Pipestone.

The determinations of the special committee and the board came after an extensive and robust strategic review process that considered all alternatives available to Pipestone, including the arguments and options put forward by GMT, and was supported by the advice of Pipestone's financial and legal advisers.

The 18-month strategic review process that began in early 2022 evaluated over 75 potential counterparties. In February, 2023, Pipestone received an initial proposal from Strathcona. The terms of the Strathcona proposal were improved through several revised proposals. The definitive arrangement agreement with Strathcona was signed on July 31, 2023, and includes support agreements from management and Riverstone Holdings LLC, a significant and highly sophisticated shareholder in Pipestone.

Throughout Pipestone's thorough strategic review process, the special committee and the board consistently compared the Strathcona transaction with the status quo as a stand-alone single-asset producer, and against other potential alternatives for the company. Those included alternatives identified during the long and robust strategic review process and included those put forward by GMT.

The recommendations that shareholders vote for the arrangement by the independent proxy advisory firms ISS and Glass Lewis underscore the board's recommendation. The job of ISS and Glass Lewis is to review transaction terms and process in detail and offer proxy voting guidance to investment managers, mutual funds, pension funds and other institutional investors.

Pipestone once again thanks shareholders for the strong support they have shown so far by voting for the arrangement and encourages all shareholders to vote for the arrangement before 10 a.m. (Calgary time) on Monday, Sept. 25, 2023. Details on how to do so can be found below.

Pipestone special shareholder meeting

Shareholders must take action to vote by proxy before 10 a.m. (Calgary time) on Monday, Sept. 25, 2023.

On Aug. 28, 2023, Pipestone filed a management information circular and related meeting materials in connection with the special meeting of shareholders. The meeting is scheduled to be held 10 a.m. (Calgary time) on Sept. 27, 2023, and will be held in a virtual-only format that will be conducted via live audio webcast.

The sole purpose of the meeting is for the shareholders to consider and, if deemed advisable, approve the arrangement. Further details regarding the meeting are set forth in the circular.

The board of Pipestone has approved the arrangement and recommends that shareholders vote for the arrangement at the meeting.

Copies of the meeting materials are available on the Pipestone-Strathcona website and under Pipestone's SEDAR+ profile.

How to vote

Pipestone has retained Kingsdale Advisors as its proxy solicitation agent and strategic shareholder and communications adviser in connection with the meeting. Shareholders with questions are encouraged to contact Kingsdale Advisors by e-mail or at one of the numbers below:

North America (toll-free): 1-877-659-1824

Outside of North America (collect calls): 416-623-2514

E-mail: contactus@kingsdaleadvisors.com

Visit: the Pipestone-Strathcona website

Vote for now

Details on how to vote can also be found in the circular under voting information. All shareholders are encouraged to vote in advance of the meeting by proxy, whether or not a shareholder is intending to attend the meeting in person (virtually).

About 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 its 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 Standard for Responsible Energy Development. Pipestone shares trade under the symbol PIPE on the Toronto Stock Exchange.

We seek Safe Harbor.