PetroShale Announces Second Quarter 2021 Financial and Operating Results

About PetroShale

PetroShale is an oil company engaged in the acquisition, development and production of high quality oil-weighted assets in North Dakota Bakken / Three Forks.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Note on Forward-Looking Statements and Other Warnings:

This press release contains forward-looking statements and forward-looking information (collectively “forward-looking information”) within the meaning of applicable securities laws relating, among other things, to available aspects of the management approach, objectives, strategies, and business opportunities. More particularly and without limitation, this press release contains forward-looking information about the Company’s expectations: that PetroShale will continue to focus on further streamlining unit cash costs to optimize margins, the Company’s anticipated capex for the year full 2021 and the rest of the year; the upcoming review of the Company’s indebtedness base, the Company’s intention to direct any free cash flow to debt reduction; the Company’s intention to prioritize the management of capital expenditures in accordance with the broader commodity price environment and the expectation of a limited capital program, primarily aimed at maintaining production and maintaining long-term integrity of the assets of the Company; the Company’s anticipated average production rates for 2021; the Company’s expectations regarding the continued availability of DAPL and other alternative transportation options and the possible effects on spreads; PetroShale Liquidity for Next Year; and the general outlook of the Company. PetroShale provided such forward-looking statements based on certain expectations and assumptions that it believes are reasonable at the time, including expectations and assumptions about prevailing commodity prices, weather, regulatory approvals, liquidity, Bakken oil spreads. (including as a result of any disruption by DAPL or otherwise), the Company’s ability to transport its production via DAPL or other forms of transportation (and the continued availability and capacity of such means of transportation); the willingness of the Company’s lenders to maintain the Company’s borrowing capacity; activities of third party operators; exchange rates, interest rates, applicable royalty rates and tax laws; future production rates and estimates of operating costs; performance of existing and future wells; plant response times and continuous rail service to transport products; reserve volumes; business prospects and opportunities; the future trading price of the Company’s shares; the availability and cost of financing, labor, and services; the impact of increased competition; ability to successfully market oil and natural gas; and the Company’s ability to access capital (including its senior credit facility).

Although the Company believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because the Company cannot guarantee that they will be correct. Forward-looking information addresses future events and conditions that, by their very nature, involve inherent risks and uncertainties. The actual results, performance or achievements of the Company could differ materially from those expressed or implied in the forward-looking information and, accordingly, no event can be guaranteed that any of the events anticipated by the forward-looking information will or will occur. , or if any of them do, what benefits the Company will get from them. Management has included the above summary of assumptions and risks related to the forward-looking information provided in this press release to provide security holders with a more complete perspective on the Company’s future operations and such information may not be appropriate for other purposes. .

Readers are cautioned that the above factor lists are not exhaustive. Additional information on these and other factors that could affect our operations or financial results is included in the reports filed with the relevant securities regulatory authorities and can be accessed through the SEDAR website ( These forward-looking statements are made as of the date of this press release and the Company rejects any intention or obligation to publicly update any forward-looking information, whether as a result of new information, future events or results or otherwise, other than as required. by applicable securities laws.

All references in this document to the fully diluted share basis are based on the weighted average number of fully diluted shares as described in the Company’s Management Analysis and Discussion at June 30, 2021 and for the three and six months ended June 30, 2021 and 2020 – “Financial and Operational Highlights”.

This press release contains forward-looking financial information and financial outlook information (collectively, “FOFI”) on the Company’s prospective results of operations, including the generation of free cash flow in 2021 or 2022, which is subject to the same assumptions, risk factors, limitations and ratings as set forth above, as well as the following additional assumptions: 2021 average annual production rates of between 10,500 and 11,500 Boe / d, $ 60.00 WTI, Bakken differential of US $ 3.00, and US $ 1 = C $ 1.25. Readers are cautioned that the assumptions used in the preparation of such information, while believed to be reasonable at the time of preparation, may prove to be inaccurate and, as such, no undue reliance should be placed on FOFI. The actual results, performance or achievements of the Company could differ materially from those expressed or implied in these FOFIs, or if any of them do, the benefits that the Company will derive from them. Such financial outlook or forward-looking financial information is provided for the purpose of providing information on management’s reasonable expectations of the anticipated results of its proposed future business activities. The Company disclaims any intention or obligation to update or revise any FOFI statement, whether as a result of new information, future events, or otherwise, except as required by law.

Non-IFRS measures:

In this press release, references are made to “operating netback”, “operating netback before hedging”, “net debt”, “adjusted EBITDA” and “free cash flow”, which are not defined by IFRS and, therefore, they may not be comparable. to performance measures presented by others. Operating netback represents revenue, plus or minus any realized gain or loss on financial derivatives less royalties, production taxes, operating costs, and transportation expenses. The operating netback is then divided by the working interest production volumes to derive the operating netback per Boe. The operating netback before hedging represents the operating netback before any realized gain or loss on financial derivatives. Net debt represents the total liability, excluding decommissioning obligations, lease liabilities and any derivative financial liabilities, less current assets. Adjusted EBITDA represents cash flow from operating activities before changes in non-cash working capital. The Company believes that Adjusted EBITDA provides useful information to the reader, as it measures the Company’s ability to generate funds to service its debt and other obligations and to finance its operations, without the impact of changes in non-working capital. monetary that can vary depending only on the time of settlement of accounts receivable and accounts payable. Free cash flow is a non-IFRS measure and should not be considered an alternative or more significant than cash flow from operating activities as determined in accordance with IFRS. Free cash flow is presented to help management and investors analyze the Company’s performance as a measure of financial liquidity and the Company’s ability to pay debt and pursue other corporate objectives. Free cash flow equals cash flow from operating activities less capital expenditures. Management believes that in addition to net income (loss) and cash flow from operating activities, operating netback, adjusted EBITDA and free cash flow are useful supplementary measures as they help determine operating performance, leverage and the liquidity of the Company. Investors often use operating netback to assess the performance of oil and gas properties and the potential impact of future changes in commodity prices on power producers. However, investors should be cautioned that these measures should not be construed as an alternative to net income (loss) or cash flow from operating activities, which are determined in accordance with IFRS, as indicators of the performance of the company. Company.

The reconciliation between adjusted EBITDA and cash flow from operating activities, and the net debt calculation, can be found in the Company’s 2021 second quarter 2021 financial and MD&A statements for the three and six months ended. June 30, 2021 and 2020.

Oil and Gas Notices:

When quantities are expressed in barrels of oil equivalent (“Boe”), natural gas volumes have been converted to Boe using a ratio of 6,000 cubic feet of natural gas per barrel of oil (6 Mcf: 1 Bbl). This Boe conversion ratio is based on an energy equivalency conversion method that is applied primarily at the burner tip and does not represent a value equivalency at the wellhead. Since the value ratio based on the current price of crude oil compared to natural gas is significantly different from the energy equivalence of 6 Mcf: 1 Bbl, using a conversion ratio of 6 Mcf: 1 Bbl can be misleading as a value indication. In this release, Mmboe refers to millions of barrels of oil equivalent.

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