Mr. Marty Staples reports

TOPAZ ANNOUNCES THIRD QUARTER 2023 FINANCIAL RESULTS, CLEARWATER ROYALTY & INFRASTRUCTURE ACQUISITION AND DECLARES FOURTH QUARTER DIVIDEND

Topaz Energy Corp. has released financial results for the third quarter of 2023, will make a Clearwater royalty and infrastructure acquisition, and has declared the fourth quarter dividend of 31 cents per share. Select financial information is outlined herein and should be read in conjunction with Topaz Energy's interim consolidated financial statements and related management's discussion and analysis as at and for the three and nine months ended Sept. 30, 2023, which are available on SEDAR+ and on Topaz Energy's website.

Highlights:

• Generated 15-per-cent-higher Q3 2023 revenue and other income ($85.8-million or 59 cents per basic and diluted share) relative to second quarter 2023, composed of $67.6-million (79 per cent) royalty production revenue and $18.1-million (21 per cent) infrastructure processing revenue and other income;
• Q3 2023 cash flow of $74.7-million or 52 cents per basic and diluted share was 11 per cent higher than Q2 2023; during the third quarter, Topaz Energy generated free cash flow of $72.4-million (50 cents per basic and diluted share) and an 84-per-cent FCF margin;
• Royalty production averaged 18,556 barrels of oil equivalent per day in Q3 2023 and 18,617 boe/d year-to-date 2023, 13 per cent higher relative to YTD 2022; since the completion of the Deltastream royalty acquisition one year ago (effective Oct. 1, 2022), Topaz Energy's royalty production has increased 5 per cent per basic and diluted share; the growth is entirely attributed to operator development, at no cost to Topaz Energy;
• Topaz Energy continues to see a reliable and meaningful share of Western Canadian sedimentary basin production and drilling activity across its royalty portfolio; YTD 2023, the operator working interest production across Topaz Energy's royalty acreage represented approximately 8 per cent of total WCSB production, and YTD 2023, the 430 gross wells spudded across Topaz Energy's acreage represented approximately 13 per cent of the total rig releases across the WCSB;
• Paid a 31-cent-per-share dividend during the third quarter ($1.24 per share annualized), which represents a 5.7-per-cent trailing annualized yield to the third quarter average share price; on Oct. 30, 2023, Topaz Energy's board declared the fourth quarter dividend payment at 31 cents per share;
• Utilized excess FCF to date in 2023 to reduce net debt by $42.7-million (11 per cent) and finance $40.0-million of acquisitions;
• Entered into definitive agreements for a $26.3-million acquisition of infrastructure and royalty assets in the Clearwater area.

Dividend:

• Topaz Energy's board has declared the fourth quarter 2023 dividend at 31 cents per share, which is expected to be paid on Dec. 29, 2023, to shareholders of record on Dec. 15, 2023. The quarterly cash dividend is designated as an eligible dividend for Canadian income tax purposes, and the annualized dividend of $1.24 per share provides a 5.7-per-cent yield to Topaz Energy's current share price.

Guidance outlook

2023 guidance update:

• Topaz Energy's previously announced full-year guidance estimates are unchanged, and for the fourth quarter of 2023, Topaz Energy estimates royalty production of 18,800 to 19,000 boe/d (30 per cent total liquids) and estimates it will generate $17.0-million to $18.0-million of processing revenue and other income. Topaz Energy estimates its 2023 exit net debt will be approximately $335.0-million before any acquisitions, which represents an 18-per-cent reduction from year-end 2022.

2024 guidance estimates:

• Topaz Energy anticipates that the operators across its royalty acreage will continue to maintain 20 to 30 active rigs through 2024 and has established preliminary 2024 guidance estimates, subject to its key operators' final 2024 capital budgets and/or operational, or weather- or wildfire-related issues that may impact 2024 production. Topaz Energy estimates 2024 average annual royalty production of 18,800 to 19,600 boe/d and estimates its 2024 processing revenue and other income between $69.0-million and $71.0-million. Based on current commodity pricing and before consideration of acquisitions, Topaz Energy expects to exit 2024 with net debt between $195.0-million and $205.0-million.

Additional information

Additional information about Topaz Energy, including the interim consolidated financial statements and management's discussion and analysis, as at and for the three and nine months ended Sept. 30, 2023, is available on SEDAR+ under the company's profile and on Topaz Energy's website.

Q3 2023 conference call

Topaz Energy will host a conference call tomorrow, Tuesday, Oct. 31, 2023, starting at 6 a.m. MST (8 a.m. EST). To participate in the conference call, please dial 1-888-664-6392 (North American toll-free) a few minutes prior to the call. The conference ID is 52087367.

About Topaz Energy Corp.

Topaz Energy is a unique royalty and infrastructure energy company focused on generating FCF growth and paying reliable and sustainable dividends to its shareholders, through its strategic relationship with Canada's largest and most active natural gas producer, Tourmaline Oil Corp., an investment-grade senior Canadian exploration and production company, and leveraging industry relationships to execute complementary acquisitions from other high-quality energy companies, while maintaining its commitment to environmental, social and governance best practices. Topaz Energy focuses on top-quartile energy resources and assets best positioned to attract capital to generate sustainable long-term growth and profitability.

The Topaz Energy royalty and energy infrastructure revenue streams are generated primarily from assets operated by natural gas producers with some of the lowest greenhouse gas emission intensity in the Canadian senior upstream sector, including Tourmaline, which has received awards for environmental sustainability and conservation efforts. Certain of these producers have set long-term emission reduction targets and continue to invest in technology to improve environmental sustainability.

Topaz Energy's common shares are listed and posted for trading on the Toronto Stock Exchange under the trading symbol TPZ, and it is included in the S&P/TSX Composite Index. This is the headline index for Canada and is the principal benchmark measure for the Canadian equity markets, represented by the largest companies on the TSX.

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