Mr. Ken Gray reports

PETRUS RESOURCES ANNOUNCES FIRST QUARTER 2023 FINANCIAL AND OPERATING RESULTS

Petrus Resources Ltd. has released its financial and operating results as at and for the three months ended March 31, 2023.

Q1 2023 highlights:

• Higher production -- Production was up 54 per cent from 7,379 boe/d (barrels of oil equivalent per day) in the first quarter of 2022 to 11,385 boe/d in the first quarter of 2023. The increase was primarily due to a full quarter of production realized from the wells drilled in the fourth quarter of 2022 as well as one month of production from the three (3.0 net) new wells brought on stream this quarter. Production was up 25 per cent quarter over quarter from 9,113 boe/d during the fourth quarter of 2022.
• Funds flow increased 58 per cent -- Generated funds flow of $26.2-million (21 cents per share) for the first quarter of 2023, 58 per cent higher than funds flow of $16.6-million (17 cents per share) in the first quarter of 2022, despite the realized price per boe being 23 per cent lower.
• Net income increased 58 per cent -- Petrus reported net income of $17.3-million (14 cents per share) during the first quarter, up 58 per cent from the first quarter of 2022 ($10.9-million; 11 cents per share).
• Increased capital activity -- Petrus invested $29.8-million of capital during the first quarter of 2023, a 484-per-cent increase from the first quarter of 2022. The majority of capital was allocated toward the drilling of seven (7.0 net) new wells, of which three (3.0 net) were completed and brought on stream during the quarter.
• Net debt to funds flow improvement -- The net debt to annualized funds flow ratio was 0.51 at March 31, 2023, in comparison with 0.75 at March 31, 2022, despite higher capital spending in the current quarter. The company will continue to strengthen its balance sheet by further reducing net debt and maintaining a net debt to funds flow ratio of under one.

2023 capital budget and guidance

The current price environment and outlook for the remainder of the year is materially lower than the assumptions used to develop the 2023 capital budget. As a result, the company is re-evaluating the budget and has already deferred some of the planned capital spending. Completion activities for the four wells drilled near the end of the first quarter will be delayed until there is a more constructive price environment, possibly until the winter gas season. Petrus has elected not to provide updated guidance during this reporting cycle, but would like to reiterate that it remains committed to keeping capital spending within cash flow and only investing capital where it will generate exceptional returns. The company looks forward to providing further updates with second quarter results, if not sooner.

Operations update

First quarter average production by area was as shown in the attached table.

First quarter average production was 11,385 boe/d in 2023 compared with 7,379 boe/d in 2022. The increase in production was mainly a result of Petrus's capital program during 2022 and three (3.0 net) new 2023 drilled wells brought on stream in late February and early March.

Annual general meeting

The company's annual general meeting will be held at 240FOURTH (previously BP Centre) 240, 4th Ave. SW, Calgary, Alta., on Monday, June 26, 2023, at 1:30 p.m. (Calgary time). The company does not plan to have a formal presentation at the conclusion of the meeting. Shareholders and guests can listen to the meeting via teleconference at 1-888-433-2192 (participant code 9350829); however, shareholders and proxyholders will not be able to vote their shares via teleconference. The company encourages all shareholders to submit their proxies in advance of the meeting.

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

We seek Safe Harbor.