Perpetual Increases Proved Plus Probable Reserves Value by 12% and Announces Partial Repayment and Extension of Financing Arrangement

CALGARY, Feb. 9, 2017

The Company successfully executed on its asset base high-grading strategy, disposing of a large percentage of its high liability, low netback mature shallow gas properties in east central and northeast Alberta (the "Shallow Gas Disposition"). This transformational transaction included the disposition of 84.5 Bcfe of proved and probable reserves assigned to these properties which had contributed 10.2 Bcfe to 2016 production prior to the closing date of October 1, 2016. With a very limited capital spending program in 2016, Perpetual's proved and probable reserves were effectively flat year over year, adjusting for the Shallow Gas Disposition.

Despite a decrease in McDaniel's forecast for both oil and natural gas prices, and the 21 percent outright reduction in total proved and probable reserves driven by the Shallow Gas Disposition, the net present value ("NPV") of Perpetual's total proved plus probable reserves, discounted at ten percent before income tax, grew by 12 percent to $380.7 million (2015 - $338.6 million). Perpetual's reserve-based net asset value ("NAV") (discounted at ten percent) at year-end 2016 is estimated at $394.8 million ($7.33 per share). This increase in shareholder value reflects the successful debt and asset retirement liability reduction initiatives completed in 2016, coupled with the strategic high grading of the Company's asset base to focus its diversified commodity portfolio in East Edson and Mannville and provide a solid platform for economic growth for shareholders.

Perpetual is also pleased to announce the partial repayment and refinancing of its financial arrangement previously secured by 840,619 of the Company's shares of Tourmaline Oil Corp. ("TOU Shares") and maturing in March 2017. Perpetual sold TOU Shares for net proceeds of $5.7 million and reduced the loan amount outstanding to $18.9 million and extended the maturity to August 1, 2017. The number of shares pledged as collateral was increased to 891,645 TOU Shares, establishing a floor price on these shares of $21.14/TOU Share. Perpetual currently owns 1.67 million TOU Shares of which 1.54 million have been pledged as collateral against a total of $36.5 million TOU Share-based financing arrangements.

YEAR-END 2016 RESERVES

2016 Year-End Reserve Highlights

• Total proved and probable reserves were 61.3 MMboe at December 31, 2016, down 16.5 MMboe from year-end 2015. The Shallow Gas Disposition of 14.1 MMboe accounted for 85 percent of the reduction, while production of 5.1 MMboe was partially offset by positive additions of 2.7 MMboe. Adjusting for production and reserves related to the strategic Shallow Gas Disposition, total proved and probable reserves were effectively flat year over year.
  
  
• While proved and probable reserves were down 21 percent, the NPV10 of the proved and probable reserves increased by 12 percent at year-end 2016 to $380.7 million, highlighting the limited reserve value associated with the disposed Shallow Gas assets, as well as, increased value in the Company's core assets at Edson and Mannville, despite lower forecast commodity prices. The increase in value of the proved and probable reserves was driven by strong well performance in Perpetual's core retained assets as well as a 20 percent reduction to future development capital ("FDC").
  
  
• East Edson represented 93 percent (2015 – 73 percent) of total proved and probable reserves at year-end 2016. Despite the drilling and completion of only one new well in 2016 and production of close to 2.7 MMboe, proved and probable reserves at East Edson were virtually flat at 56.8 MMboe. Positive technical revisions were related to stronger performance from producing wells as well as upward adjustments to both initial productivity and the production decline profile in the type curve to match historical well performance. This increase in type curve resulted in fewer wells required to fill the Company's existing infrastructure and meet firm transportation commitments in the Edson area, largely driving the reduction in FDC within McDaniel's prescribed nine-year development plan. As a result, 8.5 net undeveloped wells at East Edson were shifted from the reserve report to the Company's prospect inventory.
  
  
• Heavy oil production at Mannville of 424 Mboe was offset by upward technical revisions to the proved reserves related to the positive impact of waterflood implementation during 2016. While Mannville Heavy Oil reserves account for just 5 percent of Perpetual's total proved and probable reserves, this core area accounts for 18 percent of Perpetual's total proved developed producing reserves and 14 percent of total proved and probable developed producing reserves.
  
  
• On a commodity basis, oil and natural gas liquids ("NGL") represent 11 percent of Perpetual's total proved and probable reserves (10 percent of proved reserves) at December 31, 2016.
  
  
• Positive technical proved reserve revisions in both East Edson and Mannville Heavy Oil areas nearly offset total Company annual production of 5.1 MMboe, highlighting strong operational performance from the Company's diversifying growth assets.
  
  
• Proved reserves of 35.1 MMboe at year-end 2016 were down from 44.4 MMboe at year-end 2015, reflecting production of 5.1 MMboe and the transformative Shallow Gas Disposition which included 8.5 MMboe of proved reserves. While proved reserves were down 21 percent, the NPV10 of the proved reserves increased by 64 percent at year-end 2016 to $210.9 million, highlighting the shareholder value created through the Shallow Gas Disposition as well as increased value in the Company's core assets at Edson and Mannville, despite lower forecast commodity prices.
  
  
• Perpetual's NAV (discounted at ten percent) at year-end 2016 is estimated at $394.8 million ($7.33 per share). See the detailed NAV calculation under the heading "NET ASSET VALUE".

Reserves Disclosure