Mr. Ken Gray reports

PETRUS RESOURCES ANNOUNCES THIRD QUARTER 2023 FINANCIAL & OPERATING RESULTS, DECLARES FIRST REGULAR MONTHLY DIVIDEND

Petrus Resources Ltd. has released its financial and operating results as at and for the three and nine months ended Sept. 30, 2023.

Q3 2023 highlights:

• Production up 49 per cent: Production was up 49 per cent from 6,639 boe/d (barrels of oil equivalent per day) (1) in the third quarter of 2022 to 9,880 boe/d in the third quarter of 2023 as a result of the new wells brought on production in late 2022 and 2023. Consistent with its 2023 revised budget guidance, Petrus has maintained relatively flat production year to date, averaging 10,580 boe/d (1).
• Operating expense down 21 per cent: Operating expense was $6.70 per barrel of oil equivalent (boe) in the third quarter of 2023, a decrease of 21 per cent from $8.47 per boe in the third quarter of 2022. The decrease per boe is due to Petrus's strategic advantage in owning and operating infrastructure.
• Funds flow 18 per cent higher: Petrus generated funds flow (2) of $16.2-million (13 cents per share (3)) for the third quarter of 2023, 18 per cent higher than funds flow of $13.8-million (11 cents per share) during the third quarter of 2022. The increase is mainly due to higher production and was achieved despite significantly lower commodity prices.
• Net debt (2) down 12 per cent: Net debt was $42.6-million at Sept. 30, 2023, 12 per cent lower than $48.5-million at the end of the third quarter of 2022. The net debt to annualized funds flow ratio (3) was 0.7 times, well below the target of less than 1.0 times.
• Commodity prices stabilize QoQ (quarter over quarter): Realized price per boe remained relatively flat quarter over quarter (Q2 2023 to Q3 2023). Year over year, realized pricing decreased by 33 per cent in the third quarter of 2023 ($31.05 per boe) compared with the third quarter of 2022 ($46.62 per boe).

2023 update (4)

Special and regular monthly dividends

Due to the company's impressive performance and the resulting free cash flow generated this year, Petrus declared its inaugural dividend, a special cash dividend of three cents per common share, on Oct. 10, 2023. Petrus expects to continue to create sustainable long-term results that will generate considerable free cash flow. As a result, Petrus's board of directors has approved the implementation of a regular dividend of one cent per common share per month (4). The initial regular monthly dividend is payable on Jan. 31, 2024, to shareholders of record at the close of business on Jan. 16, 2024. The dividend has been classified as an eligible dividend for the purpose of the Income Tax Act (Canada). These dividends serve as a tangible reward allowing Petrus's shareholders to realize the value created by the company's continued success.

Share buyback

During the third quarter of 2023, the company initiated its normal course issuer bid (NCIB) and purchased for cancellation 115,300 shares at an average price of $1.48 per share. Petrus believes that, at times, the prevailing share price does not reflect the underlying value of the common shares and the repurchase of its common shares for cancellation represents an attractive opportunity to enhance Petrus's shareholder value.

Capital activity

Drilling resumed during the third quarter of 2023 up to the middle of October; a total of eight (4.5 net) wells were drilled. The completion operations for these wells are scheduled for later in the fourth quarter to align with timing of the new North Ferrier pipeline coming into service. Construction on the North Ferrier infrastructure expansion project kicked off in early October and is expected to be completed in late November.

(1) Disclosure of production on a per-barrel-of-oil-equivalent basis consists of the constituent product types and their respective quantities.

(2) Non-GAAP (generally accepted accounting principles) measure.

(3) Non-GAAP ratio.

(4) All future dividend payments are subject to the approval of Petrus's board of directors at the time of declaration.

Operations update

Third quarter average production by area is provided in an attached table.

Third quarter average production was 9,880 boe/d in 2023, compared with 6,639 boe/d in 2022. The 49-per-cent increase in production was mainly a result of Petrus's capital program during late 2022 and year to date 2023. In the third quarter of 2023, four (4.0 net) wells were completed and put on production.

Third quarter production was down from second quarter production of 10,492 boe/d due to a combination of natural decline and production shut-ins for offsetting completion activities.

An updated corporate presentation can be found on the company's website.

We seek Safe Harbor.