Journey Energy Inc T.JOY

Results

[CanadianKia]

• Produced 8,492 boe/d in the first quarter. (53% natural gas production; 37% crude oil; 10% NGL's). Almost all of Journey's production is currently unhedged. Year-over-year production volumes increased 12%.

• Realized adjusted funds flow of $20.4 million or $0.42 per basic share and $0.36 per diluted share.

• Reduced net debt by 55% from $85.6 million at the end of the first quarter of 2021 to $38.5 million at March 31, 2022.

• Closed a Canadian Development Expense flow-through-share financing of 2.5 million shares at $4.25/share for gross proceeds of $12.1 million.

• Closed the acquisition of a private company in the Carrot Creek area effective April 1, 2022, adding approximately 625 boe/d of low decline production (54% crude oil and NGL's).

• Initiated the 2022 capital program with the drilling of 3 (3.0 net) wells in Skiff. These wells are on primary production with waterflood implementation scheduled for later in the year. In addition to Skiff one new well (31% WI) was drilled and completed on the acquired assets. This well is now on production at a restricted rate of 115 boe/d net to Journey's working interest. The impact of first quarter activities has increased current production levels to 9,400 boe/d (46%) crude oil and NGL's, an 11% increase over first quarter average production. In March and April of 2022 Journey drilled two, 1.5 mile horizontal wells in the Crystal light oil pool. These wells will be completed in June and are expected to be brought on-production early in the third quarter.

• Closed the previously announced acquisition of infrastructure and gathering facilities in the Gilby area on May 9, 2022 for $5 million before closing adjustments. Journey has applied to install its second power generation facility, which will be located in Gilby. In anticipation of this, Journey has proactively acquired 8.4 megawatts (3 X 2.8 megawatt units) of generation capacity. These generators are currently in the process of being transported to the Gilby site. In order to account for the delivered purchase price of these units and for the preliminary design engineering for the project, Journey has added $3.3 million to the power generation component of the 2022 capital budget. Since the currently anticipated on-stream date for this project will be in 2023, the added capital will not impact production or cash flow guidance for 2022.

• Produced 7,550 megawatts of electricity at Journey's electricity generation facility in Countess, Alberta at an average price of $111/MWH. The run-rate during the first quarter was 88% of capacity.