Tenth Avenue Petroleum Announces 2023 Year-End Results and Reserves

NOT FOR DISTRIBUTION IN THE UNITED STATES OR DISSEMINATION IN THE UNITED STATES

CALGARY, AB / ACCESSWIRE / April 23, 2024 / Tenth Avenue Petroleum Corp. ("TPC" or the "Company") (TSXV:TPC) is pleased to announce its financial and operating results for the three months and twelve months ended December 31, 2023, and highlights of the Company's year-end independent reserve evaluation.

During 2023, the Company increased production by 24% to average 144 boe/d compared to 116 boe/d in 2022, negative $13,667 of adjusted funds flow from operations and shallowing production declines at the Murray Lake and Hays properties aided in the production increase on a modest 2023 capital program of $482,554. The Company exited 2023 at approximately 134 boe/d which excluded approximately 15 boe/d of curtailed production due to a saltwater disposal line failure at Murray Lake. The Company has recently received AER approval to convert an existing horizontal well into an injection well, which should improve overall field injection volumes across the entire pool and plans are in place to rectify this curtailment once existing road bands in the area have been lifted. Operating costs and field netbacks in Q4/23 have been negatively impacted by the curtailment.

The Company spent the majority of the second half of 2022 and all of 2023 increasing pumping capacity on most of its producing wells within its core areas of Murray Lake, currently being waterflooded, and at Hays. The Company also increased its water handling capacity at Murray Lake in Q3/22 which allowed the Company to gradually increase water injection rates that resulted in improved waterflood performance and positive technical reserve additions as reported in the independent reserve evaluation dated December 31, 2023.

"Our 2023 year-end reserves highlight the benefits of the capital investments made in late 2022 and 2023 in our core areas. At our Murray Lake and Hays properties, our 2P reserve volumes increased by 36% and 35% respectfully, while the Net Present Value (NPV10%) also increased by 59% and 42%, year over year. These positive results were offset in particular by a downward technical revision at our Vulcan 102/6-11-15-26W4 gas well and our Swan Hills Unit (non-operated) properties. These technical revisions were due in part to lower productivity, paired with lower future AECO gas prices and higher future operating costs, which negatively impacted the economic cut-off and associated reserves assigned to these two properties.

The Company achieved many accomplishments in 2023. It realized positive waterflood results in Murray Lake which led to shallower production declines and an increase in reserves and furthered its workover program with successful results in Hays which also lead to positive reserve additions. The Company was also able to reduce operating costs on its two core operated areas of Hays and Murray Lake in H2/23 which will become realized on a per boe basis once the Company brings its curtailed production back online in mid-2024. The Company will continue to prudently invest on its longer-term core assets and improve netbacks focussing on return on investments, said Cameron MacDonald, President & CEO."

Subsequent to December 31, 2023, the Company has entered into the following hedges: 50 bbls/d at C$104/bbl, effective April 1 to December 31, 2024, and 25 bbls/d at C$108.25/bbl effective May 1 to December 31, 2024. These hedges represent approximately 75% of its current oil production.

Selected financial and operational information is set out below and should be read in conjunction with Tenth Avenue's audited annual financial statements and related management's discussion and analysis (" MD&A ") for the years ended December 31, 2023 and 2022, which are available at www.sedarplus.ca and the Company's website at www.tenthavenuepetroleum.com . The highlights reported in this press release include certain non-GAAP financial measures and ratios which have been identified using capital letters. The reader is cautioned that these measures may not be directly comparable to other issuers; please refer to additional information under the heading "Reader Advisories - Non-GAAP Measures and Ratios".

2023 FINANCIAL AND OPERATING HIGHLIGHTS

• Average 2023 production of 144 boe/d (80% oil and natural gas liquids ("NGLs"), an increase of 24% from 116 boe/d (92% oil and NGLs) in 2022.
• Gross Revenues in 2023 of $3,853,361, a 2% decrease from $3,923,501 in 2022, while commodity prices during the same period decreased by 23% from $100.15/boe in 2022 to $71.31/boe in 2023.
• During the third quarter the Company entered into a physical crude oil agreement to hedge 50 bbls/d at a price of CAD$116.50 per barrel, resulting in a realized gain of $44,938 and unrealized gain on derivatives of $68,603, for a total of $2.16/boe during 2023.
• During 2023, the Company made a significant investment upgrading its pumping equipment on all of its core assets that are currently under waterflood. Total capital spent in 2023 was $482,554, a 43% decrease from $843,802 in 2022, while increasing production by 24% during the same period.
• As at December 31, 2023, the Company had $22,923,000 of tax pools, of which $16,503,000 were non-capital losses.

The table below summarizes the Company's financial and operating results for the three month and twelve months ended December 31, 2023, and December 31, 2022: