Mr. Patrick McDonald reports

PRAIRIE PROVIDENT ANNOUNCES COMPLETION OF RECAPITALIZATION TRANSACTIONS AND CLOSING OF FULLY SUBSCRIBED C$4 MILLION EQUITY FINANCING

Prairie Provident Resources Inc. has completed its previously announced recapitalization transactions. The recapitalization included the following principal transactions:

• Closing today of the company's brokered private placement offering of units of the company at a price of nine cents per unit, for aggregate gross proceeds to the company of $4-million.
• Completion on March 30, 2023, of the company's issuance and sale of second lien notes due Dec. 31, 2024, in the principal amount of $3.64-million (U.S.) (approximately $5-million at the then-prevailing exchange rate) to certain affiliates of the former noteholder (as defined herein).
• Settlement today of all outstanding indebtedness under the outstanding subordinated notes previously held by PCEP Canadian Holdco LLC (the former noteholder), in the aggregate amount of $53.4-million (U.S.) (approximately $72-million at the current exchange rate), through the issuance of 514.4 million common shares of the company at an agreed repayment price equal to 14 cents per common share (representing a 56-per-cent premium to the unit offering price under the equity financing).
• Concurrently with the subordinated notes settlement, exercise by the former noteholder, on a cashless basis, of the 34,292,360 warrants of the company held by it and exercisable at 1.92 cents per share, for an issuance of an additional 26.5 million common shares.
• Amendments to the agreement governing its senior secured credit facility to, among other things, waive certain defaults, provide additional covenant flexibility and extend the maturity date to July 1, 2024.

Completion of the recapitalization positions the company with the flexibility and capital to execute its long-term strategy to optimize its current producing assets as well as develop its currently undeveloped land base. Significant improvements to the company's overall leverage and non-cash interest burden are expected to allow the company to direct more of its operating cash flow toward additional low-risk well reactivations, optimization and development drilling, and execute on non-dilutive, non-core asset dispositions and/or other transaction opportunities.

Based on its year-end 2022 reserves data evaluation, the company's estimated net present value of future net revenue from proved plus probable (2P) reserves (10 per cent) is $588.8-million, or 67.6 cents per common share on a fully diluted basis, and its 2P reserve life index is 20.1 years (based on estimated 2P reserves and current production levels). The company has approximately $860-million in tax pools ($560-million of which is available as tax shelter against current income) to complement its reserves value. These tax pools represent significant potential value to the company and its shareholders; if all of the pools were immediately deductible, they could shelter an equivalent amount of the company's income, thus representing up to 18 cents per common share in value.

In connection with the subordinated notes settlement, the former noteholder has agreed with the company to certain lock-up restrictions pursuant to which it will not, without the company's consent, dispose of common shares acquired by it pursuant to the subordinated notes settlement, otherwise than in connection with a business combination, a reorganization or restructuring, or an acquisition of all or substantially all of the common shares, or pursuant to a private sale, or to an affiliate or other related party. The lock-up restrictions will cease to apply as to 33-1/3 per cent of all such common shares on each of the six-month, 12-month and 18-month anniversaries, respectively, of the subordinated notes settlement.

The former noteholder now has the right to nominate and/or have appointed a majority of the directors of the company and will do so at or before the company's annual meeting of shareholders to be held in June, 2023.

Equity financing

The company has closed its previously announced equity financing, and issued 44,444,444 units at a price of nine cents per unit for aggregate gross proceeds to the company of $4-million. The equity financing was led by Research Capital Corp. as the sole agent and sole bookrunner.

Each unit comprises one common share and one warrant with each warrant entitling the holder thereof to subscribe for and purchase one common share at an exercise price of 10 cents for a five-year term ending May 16, 2028.

The net proceeds from the equity financing will be used for continuing field operations, working capital requirements and other general corporate purposes.

Pursuant to the equity financing, 28,309,425 units were issued in reliance on the listed issuer financing exemption (LIFE) in Part 5A of National Instrument 45-106 -- Prospectus Exemptions to purchasers resident in Canada, except Quebec, and other qualifying jurisdictions. The balance of the total equity financing, being 16,135,019 units, were issued in reliance on the accredited investor exemption under Section 2.3 of NI 45-106 and other available exemptions from the prospectus requirements of applicable Canadian securities laws, to eligible purchasers resident in Canada and other qualifying jurisdictions. All common shares and warrants issued in reliance on the accredited investor exemption (and any common shares issued on exercise of such warrants) are subject to a restricted hold period of four months and one day, ending Sept. 17, 2023.

The company is pleased to announce that White Tundra Investments was a significant participant in the equity offering. White Tundra Investments is a Canadian oil- and gas-focused private fund specializing in combining technical property evaluation, financial special situations, and boots-on-the-ground experience and connections to generate returns through structural bull cycles in the oil and gas sector.

Certain directors and officers of the company participated in the equity financing under applicable securities laws, acquiring 7,424,423 units in total. Insider participation in the equity financing constituted a related party transaction within the meaning of Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions, for which the company was exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to sections 5.5(a) and 5.7(1)(a) thereof, as neither the fair market value (as determined under MI 61-101) of the securities issued to insiders under the equity financing nor the consideration paid by insiders exceeded 25 per cent of the company's market capitalization, all as determined under MI 61-101. The company did not file a material change report 21 days before closing of the equity financing as the details of the insider participation was not known at that time.

In connection with the equity financing, the agent received a cash commission equal to 8 per cent of the gross proceeds from the sale of units pursuant to the brokered portion of the equity financing, as well as 2,627,604 broker warrants. Each broker warrant entitles the holder to subscribe for and purchase one unit at an exercise price of nine cents per unit for a five-year term ending May 16, 2028. The agent also received an advisory fee of $83,500 plus an additional 927,951 advisory broker warrants, each having the same terms as the broker warrants.

Early warning disclosure -- PCEP Canadian Holdco

The former noteholder, PCEP Canadian Holdco, acquired 514,408,902 common shares pursuant to the subordinated notes settlement, and a further 26,516,207 common shares pursuant to the warrant exercise, for an aggregate holding of 540,925,109 common shares. The acquired shares were not acquired in a market. The common shares acquired pursuant to the subordinated notes settlement were in settlement and satisfaction of $53,397,528.20 (U.S.) of indebtedness ($72,017,246.28 based on the exchange rate of 1.3487 quoted by the Bank of Canada on May 15, 2023). The common shares acquired pursuant to the warrant exercise were on the cashless exercise of 34,292,360 previously issued warrants.

Immediately before the subordinated notes settlement and the warrant exercise, the former noteholder held the 34,292,360 warrants exercised in the warrant exercise, which at that time represented approximately 20.8 per cent of the common shares then outstanding on a partially diluted basis, assuming only the exercise of the warrants but no other convertible securities of the company.

Immediately after the subordinated notes settlement and the warrant exercise, the former noteholder holds the 540,925,109 acquired shares, which represent approximately 75.6 per cent of the total common shares now outstanding on a non-diluted basis. The former noteholder does not hold any securities of the company other than the acquired shares.

The subordinated notes settlement and warrant exercise were undertaken in furtherance of the recapitalization, and the acquired shares are now held for investment purposes. The former noteholder may in the future acquire additional securities, or may in the future sell the securities, in either case in the open market, through private transactions or otherwise, depending on market conditions, alternative investment opportunities, changing priorities and other relevant factors.

An early warning report relating to the subordinated notes settlement and warrant exercise will be filed by the former noteholder on SEDAR, under the company's profile. A copy of that report may be obtained by contacting William H. Bulmer at william.bulmer@prudential.com, by telephone at 214-720-6204, or by mail at PCEP Canadian Holdco, suite 4300W, 2200 Ross Ave., Dallas, Tex., 75201,

The former noteholder is a Delaware limited liability company.

About Prairie Provident Resources Inc.

Prairie Provident is a Calgary-based company engaged in the exploration, development and production of its low-decline, long-life oil reserves in Alberta. The company is currently producing oil and gas in Western Canada with significant growth opportunities from a deep inventory of low-risk horizontal drilling locations and waterflood potential.

We seek Safe Harbor.