Prairie Provident Announces Completion of Recapitalization Transactions and Closing of Fully Subscribed C$4 Million Equity Financing - Seite 2

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 (NPV10%)⁽¹⁾ is C$588.8 million, or C$0.676 per Common Share on a fully diluted basis, and its 2P reserve life index⁽²⁾ is 20.1 years (based on estimated 2P reserves and current production levels). The Company has approximately C$860 million in tax pools (C$560 million of which are 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 C$0.18 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 33⅓% of all such Common Shares on each of the 6-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 C$0.09 per Unit for aggregate gross proceeds to the Company of C$4 million. The Equity Financing was led by Research Capital Corporation as the sole agent and sole bookrunner (the “Agent”).

Each Unit is comprised of one Common Share and one warrant (a “Warrant”) with each warrant entitling the holder thereof to subscribe for and purchase one Common Share at an exercise price of C$0.10 for a 5-year term ending May 16, 2028.

The net proceeds from the Equity Financing will be used for ongoing 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 ("NI 45-106") (the "Listed Issuer Financing Exemption") to purchasers resident in Canada, except Québec, 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 (the "Accredited Investor Exemption") 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 September 17, 2023.