Mr. Philip Hodge reports

PINE CLIFF ENERGY LTD. ANNOUNCES SECOND QUARTER 2023 RESULTS, OPERATIONAL UPDATE, UPDATE TO 2023 GUIDANCE AND DECLARATION OF MONTHLY DIVIDEND

Pine Cliff Energy Ltd. has released its second quarter financial and operating results, has provided an operational update and an update to 2023 guidance, and has declared the monthly dividend.

Second quarter 2023 results

Results from the second quarter include:

• Generated $12.0-million (three cents per basic and fully diluted share) and $31.9-million (nine cents per basic and fully diluted share) of adjusted funds flow for the three and six months ended June 30, 2023, compared with $55.8-million (16 cents per basic and 15 cents per fully diluted share) and $88.1-million (26 cents per basic and 25 cents per fully diluted share) for comparable periods in 2022;
• Paid dividends of $11.5-million (three cents per basic and fully diluted share) and $22.9-million (six cents per basic and fully diluted share) during the three and six months ended June 30, 2023, compared with $2.9-million (one cent per basic and fully diluted share) for the comparable periods in 2022;
• Positive net cash of $49.3-million at June 30, 2023;
• Production averaged 20,198 Boe/d (barrels of oil equivalent per day) and 20,137 Boe/d for the three and six months ended June 30, 2023, 5 per cent and 3 per cent lower than the comparable periods in 2022;
• Drilled one gross (0.7 net) North Twining unit (NTU) Pekisko oil well and completed and tied-in three (2.1 net) NTU Pekisko oil wells during the second quarter;
• Generated net loss of $900,000 ((zero cents) per basic and fully diluted share) and net earnings of $4.0-million (one cent per basic and fully diluted share) for the three and six months ended June 30, 2023, compared with net earnings of $50.2-million (15 cents per basic and 14 cents per fully diluted share) and net earnings of $65.6-million (19 cents per basic and 18 cents per fully diluted share) for comparable periods in 2022.

Operational update

Pine Cliff drilled one gross (0.7 net) NTU Pekisko oil well in the second quarter that, along with two gross (1.4 net) NTU Pekisko oil wells drilled during the first quarter, were all completed, tied-in and placed on production by the end of the second quarter. Average production from these three gross (2.1 net) wells in the month of July was approximately 1,150 Boe/d per well, (815 Boe/d net), resulting in average total company production for the month of July of approximately 20,750 Boe/d.

The wildfires in the Edson area during the second quarter impacted Pine Cliff's entire area production at times and reduced second quarter production by an average 250 Boe/d. No wells or infrastructure were damaged by the fires. Pine Cliff would like to recognize the Edson area field staff and all the first responders for their quick and decisive actions to minimize the impact.

2023 production guidance update

With the recent volatility in commodity pricing and positive performance of the Pekisko wells drilled in 2023 to date, Pine Cliff has elected to defer the drilling of its remaining budgeted one gross (0.7 net) NTU Pekisko oil well until 2024 and replace a portion of this expenditure with recompletion work in the Twining area. The deferred Pekisko well will be part of the 2024 capital expenditure program to maximize capital efficiency by benefiting from economies of scale. The company's 2023 capital expenditure budget is unchanged with the capital being redeployed to well reactivation and recompletion opportunities.

As a result, Pine Cliff has narrowed its 2023 annual production guidance from a range of 20,000 Boe/d to 21,000 Boe/d to a range of 20,000 Boe/d to 20,500 Boe/d, weighted 85 per cent to natural gas.

Monthly dividend

The company's board of directors has approved the declaration and payment of a monthly dividend in the amount of 1.083 cents per common share payable Aug. 31, 2023, to shareholders of record on Aug. 15, 2023.

Dividends paid on Pine Cliff's common shares will be designated as eligible dividends for Canadian federal income tax purposes. The declaration of dividends is at the sole discretion of the board and will be evaluated on a regular basis.

About Pine Cliff Energy Ltd.

Pine Cliff is a natural gas and oil company with a long-term view of creating shareholder value. Pine Cliff's current focus is on acquiring, developing and operating long-life assets that generate adjusted funds flow that allows for capital to be returned to shareholders in the form of a dividend.

We seek Safe Harbor.