Prairie Provident Resources Announces Strategic Asset Sales - Seite 2

The purchase price (before adjustments) represents a prior twelve month operating net income multiple of 3.5x.

For the quarter ended September 30, 2023, the production attributed to the Evi properties averaged 874 boe/d in sales volumes.¹

Provost Sale

The properties included in the Provost Sale comprise a portion of the Company’s asset base in the region.

The Company is selling the Provost assets for a base purchase price of $1.8 million payable in cash, subject to effective date adjustments based on an effective date of July 1, 2023. In addition, the Purchaser will upon completion become responsible for future ARO pertaining to the Provost assets, which carry AER deemed liabilities of approximately $2.6 million. The Provost Sale also provides for future contingent payments to the Company of up to $720,000 in aggregate based on the price of oil and production from the Provost assets during the 24-month period following closing as follows: (i) $10,000 for any month that WTI Cushing averages between USD $80.00 and $89.99; (ii) $20,000 for any month that WTI Cushing averages between USD $90.00 and $99.99; and (iii) $30,000 for any month that WTI Cushing averages USD $100 or more, prorated for any month in which production from the assets is less than 70 boe/d.

Production currently attributed to the Provost properties is approximately 70 boe/d.²

Advisor

National Bank Financial Inc. acted as financial advisor to Prairie Provident with respect to the Evi Sale.

About Prairie Provident

Prairie Provident is a Calgary-based company engaged in the exploration, development and production of low decline, long life oil reserves in Alberta. The Company maintains a significant portfolio of low-risk production enhancement and drilling opportunities.

For further information, please contact:

Prairie Provident Resources Inc.
1100, 640 5^th Avenue SW
Calgary, Alberta T2P 3G4

Investor Relations
Tel: [phone]
Email: [e-mail]

Barrels of Oil Equivalent

The oil and gas industry commonly expresses production volumes and reserves on a “barrel of oil equivalent” basis (“boe”) whereby natural gas volumes are converted at the ratio of six thousand cubic feet to one barrel of oil. The intention is to sum oil and natural gas measurement units into one basis for improved analysis of results and comparisons with other industry participants. A boe conversion ratio of six thousand cubic feet to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip. It does not represent a value equivalency at the wellhead nor at the plant gate, which is where Prairie Provident sells its production volumes. Boes may therefore be a misleading measure, particularly if used in isolation. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency ratio of 6:1, utilizing a 6:1 conversion ratio may be misleading as an indication of value.