NVA NuVista Energy Ltd

NuVista Energy Ltd. ("NuVista" or the "Company") (TSX: NVA) is pleased to announce record-setting quarterly production and share repurchases in the fourth quarter of 2023.

Production for the quarter ended December 31, 2023 achieved a new record for NuVista, reaching a field-estimated 85,900 Boe/d, well above our fourth quarter guidance range of 82,000 – 84,000 Boe/d. This production included approximately 31% condensate, 9% NGLs, and 60% natural gas. The increased production is the result of strong performance from the new wells in the 2023 development program across all assets, coupled with continued success in the debottlenecking of NuVista and 3rd party midstream facilities. Full year 2023 production is estimated to be approximately 77,200 Boe/d, above the previous guidance range of 76,000 – 77,000 Boe/d.

In the fourth quarter, progress on our return of capital to shareholders was significant with a record total of $103 million deployed as promised towards return of capital (shares repurchased on NCIB and share-based compensation settled with cash). In 2023 in total, we repurchased and subsequently cancelled 15.3 million common shares, bringing the total to 28.8 million common shares since inception of our share repurchase program in mid-2022, with a weighted average price of $11.85 per share.

NuVista is pleased to note that during 2023, we added 15.5 gross sections (98% working interest) of land in our Wapiti area, most of which closed in the fourth quarter. This low risk and well delineated land is located directly adjacent to existing NuVista land and infrastructure, and adds to our inventory of high-quality locations. Additionally, it enhances land configuration efficiency and optimizes pipeline and field facility utilization for growth beyond 100,000 Boe/d. These land acquisitions are expected to lead to immediate reserves additions, and to augment drilling locations planned for the 2024 and 2025 program.

With fourth quarter activity as expected, and the aforementioned land acquisitions, net capital expenditures(1) for 2023 have been increased from the originally expected $475 million to approximately $520 million. Net debt(2) for year-end 2023 is estimated to be $180 million, well below the Company soft ceiling of approximately $350 million. The net debt ceiling ensures that based on current production levels, our net debt to adjusted funds flow ratio(2) remains comfortably below 1.0x in a stress test price environment of US$45/Bbl WTI oil and US$2.00/MMBtu NYMEX natural gas. NuVista exited 2023 with $17 million drawn on our $450 million covenant-based credit facility.

Drilling, completion, and pipeline operations have resumed efficiently after a well-earned Christmas break for our crews. At Wapiti, two rigs are drilling on a 6-well pad in Elmworth, after which they will move to Pipestone South and Gold Creek. In addition, we have begun completion operations at a 12-well pad in Pipestone North. The new cogeneration unit at our Wembley Gas Plant in the Pipestone North area was commissioned and has started up smoothly in the fourth quarter of 2023, with commissioning of the gas plant heat utilization portion ongoing as planned. The project was built in partnership with our gas plant working interest partners, and five Indigenous Nations on whose traditional territories NuVista operates. The investment in the cogeneration project was facilitated by the Alberta Indigenous Opportunities Corporation, and the project benefited from the Alberta Environment and Parks “Industrial Energy Efficiency and Carbon Capture Utilization and Storage” (IEE CCUS) grant program. The project is expected to provide stable and predictable revenues to the Nations while reducing NuVista’s costs and carbon emissions.

Production for the first quarter of 2024 is expected to be in the range of 77,000 – 80,000 Boe/d, followed by a significant ramp-up of production through the remainder of the year as new pads are brought online. This first quarter guidance includes an allowance for the shut-in of existing adjacent wells during the fraccing of new wells. Guidance for 2024 is re-affirmed at 83,000 – 87,000 Boe/d of production and approximately $500 million of capital expenditures.

We look forward to releasing our full financial results for the quarter and year ended December 31, 2023 prior to the opening of markets on February 29, 2024.Notes:

(1)   ”Net capital expenditures” is a non-GAAP measures. Reference should be made to the section entitled "Non-GAAP and other financial measures" in this news release for further information.(2)   “Net debt” and “net debt to adjusted funds flow ratio” are capital management measures. Reference should be made to the section entitled "Non-GAAP and other financial measures" in this news release for further information.

Advisories Regarding Oil and Gas Information

BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. As the value ratio between natural gas and crude oil based on the current prices of natural gas and crude oil is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

Analogous Information

Certain information in this news release may constitute "analogous information" as defined in National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities ("NI 51-101"), including, but not limited to, information relating to the lands acquired in the fourth quarter which is believed to be on trend with the Company's adjacent properties. Management believes the information is relevant as it helps to define the characteristics of the acquired lands. NuVista is unable to confirm that the analogous information was prepared by a qualified reserves evaluator or auditor. Such information is not an estimate of the reserves or resources attributable to lands held or to be held by NuVista and there is no certainty that the production and reserves information for the acquired lands will be similar to the information presented herein. The reader is cautioned that the data relied upon by NuVista may not be analogous to the acquired lands.

Basis of presentation

Unless otherwise noted, the financial data presented in this news release has been prepared in accordance with Canadian generally accepted accounting principles (“GAAP”) also known as International Financial Reporting Standards (“IFRS”). The reporting and measurement currency is the Canadian dollar. NI 51-101 - "Standards of Disclosure for Oil and Gas Activities" includes condensate within the product type of natural gas liquids. NuVista has disclosed condensate values separate from natural gas liquids (“NGLs”) herein as NuVista believes it provides a more accurate description of NuVista's operations and results therefrom.

Production split for Boe/d amounts referenced in the news release are as follows:

Reference	Total Boe/d	Natural Gas%		Condensate%		NGLs%
Q4 2023 production guidance	82,000 – 84,000	61	%	30	%	9	%
2023 annual production guidance	76,000 – 77,000	61	%	30	%	9	%
Q1 2024 production guidance	77,000 – 80,000	61	%	30	%	9	%
2024 annual production guidance	83,000 – 87,000	61	%	30	%	9	%

Advisory regarding forward-looking information and statements

This news release contains forward-looking statements and forward-looking information (collectively, “forward-looking statements”) within the meaning of applicable securities laws. The use of any of the words “will”, “expects”, “believe”, “plans”, “potential” and similar expressions are intended to identify forward-looking statements. More particularly and without limitation, this news release contains forward looking statements, including but not limited to, management's assessment of: NuVista’s future focus, strategy, plans, opportunities and operations; NuVista’s commitment to returning capital to shareholders through its value-adding growth strategy; NuVista’s estimate of production for the fourth quarter and year end of 2023; expectation regarding the development opportunities from acquired lands and anticipated timing and benefits therefrom; NuVista’s expectation of production growth beyond 100,000 Boe/d; NuVista’s estimate of capital expenditures, net capital expenditures and net debt for 2023; NuVista’s drilling plans and expected timing thereof; expected benefits from the cogeneration unit at NuVista’s Wembley Gas Plant; NuVista’s Q1 2024 production guidance; NuVista’s 2024 annual production and capital expenditure guidance and the anticipated timing of NuVista’s 2023 annual financial results. Statements relating to "reserves" are also deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated and that the reserves can be profitably produced in the future.

By their nature, forward-looking statements are based upon certain assumptions and are subject to numerous risks and uncertainties, some of which are beyond NuVista’s control, including the impact of general economic conditions, industry conditions, current and future commodity prices and inflation rates, the impact of ongoing global events including European tensions, with respect to commodity prices, currency and interest rates, anticipated production rates, borrowing, operating and other costs and adjusted funds flow, allocation and amount of capital expenditures and the results therefrom, anticipated reserves and the imprecision of reserve estimates, the performance of existing wells, the success obtained in drilling new wells, the sufficiency of budgeted capital expenditures in carrying out planned activities, access to infrastructure and markets, competition from other industry participants, availability of qualified personnel or services and drilling and related equipment, stock market volatility, effects of regulation by governmental agencies including changes in environmental regulations, tax laws and royalties, the ability to access sufficient capital from internal sources and bank and equity markets, that we will be able to execute our drilling plans and infrastructure expansion plans as expected, those risks considered under “Risk Factors” in our Annual Information Form. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. NuVista’s actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements, or if any of them do so, what benefits NuVista will derive therefrom. NuVista has included the forward-looking statements in this news release in order to provide readers with a more complete perspective on NuVista’s future operations and such information may not be appropriate for other purposes. NuVista disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

NuVista's 2024 guidance is based on various commodity price scenarios and economic conditions; certain guidance estimates may fluctuate with commodity price changes and regulatory changes. NuVista's guidance provides readers with the information relevant to management's expectation for financial and operational results for 2024. Readers are cautioned that the guidance estimates may not be appropriate for any other purpose.

This news release contains information that may be considered a financial outlook under applicable securities laws about NuVista's potential financial position, including, but not limited to, net debt, net capital expenditures, capital expenditures and net debt to adjusted funds flow, all of which are subject to numerous assumptions, risk factors, limitations and qualifications, including those set forth herein. The actual results of operations of NuVista will vary from the amounts set forth in this news release and such variations may be material. This information has been provided for illustration only and with respect to future periods are based on budgets and forecasts that are speculative and are subject to a variety of contingencies and may not be appropriate for other purposes. Accordingly, these estimates are not to be relied upon as indicative of future results. Except as required by applicable securities laws, NuVista undertakes no obligation to update such financial outlook. The financial outlook contained in this news release was made as of the date of this news release and was provided for the purpose of providing further information about NuVista's potential future business operations. Readers are cautioned that the financial outlook contained in this news release is not conclusive and is subject to change.

Non-GAAP and other financial measures

This news release uses various specified financial measures (as such terms are defined in National Instrument 52-112 – Non-GAAP Disclosure and Other Financial Measures Disclosure ("NI 51-112")) including "non-GAAP financial measures", and “capital management measures" (as such terms are defined in NI 51-112), which are described in further detail below. Management believes that the presentation of these non-GAAP measures provide useful information to investors and shareholders as the measures provide increased transparency and the ability to better analyze performance against prior periods on a comparable basis.

Non-GAAP financial measures

NI 52-112 defines a non-GAAP financial measure as a financial measure that: (i) depicts the historical or expected future financial performance, financial position or cash flow of an entity; (ii) with respect to its composition, excludes an amount that is included in, or includes an amount that is excluded from, the composition of the most directly comparable financial measure disclosed in the primary financial statements of the entity; (iii) is not disclosed in the financial statements of the entity; and (iv) is not a ratio, fraction, percentage or similar representation.

These non-GAAP financial measures are not standardized financial measures under IFRS and might not be comparable to similar measures presented by other companies where similar terminology is used. Investors are cautioned that these measures should not be construed as alternatives to or more meaningful than the most directly comparable IFRS measures as indicators of NuVista's performance. Set forth below are descriptions of the non-GAAP financial measures used in this news release.

Net capital expenditures

Net capital expenditures are equal to cash used in investing activities, excluding changes in non-cash working capital, and other asset expenditures. The Company includes funds used for property acquisition or proceeds from property dispositions within net capital expenditures as these transactions are part of its development plans. NuVista considers net capital expenditures to be a useful measure of cash flow used for capital reinvestment. Reference should be made to NuVista’s Interim Financial Statements for the three and nine months ended September 30, 2023 for additional disclosure on non-GAAP measures, including net capital expenditures which is referenced in this news release.

Capital management measures

NI 52-112 defines a capital management measure as a financial measure that: (i) is intended to enable an individual to evaluate an entity’s objectives, policies and processes for managing the entity’s capital; (ii) is not a component of a line item disclosed in the primary financial statements of the entity; (iii) is disclosed in the notes to the financial statements of the entity; and (iv) is not disclosed in the primary financial statements of the entity. Reference should be made to NuVista’s Interim Financial Statements for the three and nine months ended September 30, 2023 for additional disclosure on capital management measures, including net debt and net debt to adjusted funds flow ratio which are referenced in this news release.

FOR FURTHER INFORMATION CONTACT:

Jonathan A. Wright	Ivan J. Condic	Mike J. Lawford
President and CEO	VP, Finance and CFO	Chief Operating Officer
(403) 538-8501	(403) 538-1945	(403) 538-1936