Prairie Provident Resources : Q1 2023 Financial Statements

Prairie Provident Resources Inc.

Condensed Interim Consolidated Financial

Statements (Unaudited)

As at and for the Three Months Ended March 31, 2023

Dated: May 15, 2023

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)

As at		March 31,	December 31,
($000s)	Note	2023	2022
ASSETS
Cash		6,452	6,565
Restricted cash	18	4,137	4,137
Accounts receivable	18	8,867	9,541
Derivative instruments - current	18	88	-
Inventory		857	857
Prepaid expenses and other assets		3,842	4,493
Total current assets		24,243	25,593
Exploration and evaluation	4	3,804	3,832
Property and equipment	5	187,846	192,306
Right-of-use assets	6	464	780
Other assets		619	619
Total assets		216,976	223,130
LIABILITIES
Accounts payable and accrued liabilities	18	34,599	36,661
Current portion of long-term debt	7	52,234	126,350
Lease liabilities - current portion	9	88	494
Derivative instruments - current	18	-	1,882
Current portion of decommissioning liability	10	5,500	5,500
Warrant liability	8	2,057	4,115
Total current liabilities		94,478	175,002
Lease liabilities - non-current portion	9	150	154
Derivative instruments	18	-	140
Long-term Debt	7	66,785	-
Decommissioning liabilities	10	108,862	108,719
Other liabilities		8,446	8,228
Total liabilities		278,721	292,243
SHAREHOLDERS' EQUITY
Share capital	11	101,549	101,549
Contributed surplus		39,156	39,084
Accumulated deficit		(201,776)	(209,629)
Accumulated other comprehensive income ("AOCI")		(674)	(117)
Total equity		(61,745)	(69,113)
Total liabilities and shareholders' equity		216,976	223,130
Going concern (note 2b)
See accompanying notes to the condensed interim consolidated financial statements.

2 | Page

Prairie Provident Resources Inc.

CONDENSED CONSOLIDATED STATEMENTS OF PROFIT (LOSS) AND COMPREHENSIVE PROFIT (LOSS) (UNAUDITED)

For the three months ended
($000s)	Note	March 31, 2023	March 31, 2022
REVENUE
Oil and natural gas revenue	14	20,105	29,372
Royalties		(3,432)	(3,577)
Oil and natural gas revenue, net of royalties		16,673	25,795
Unrealized gain (loss) on derivative instruments	18	2,110	(10,118)
Realized loss on derivative instruments	18	(594)	(5,552)
		18,189	10,125
Other income		139	189
EXPENSES
Operating	15	12,147	10,075
General and administrative	16	2,855	1,979
Depletion and depreciation	5	4,508	5,479
Exploration and evaluation	4	28	178
Depreciation on right-of-use assets	6	316	455
Gain on property dispositions		-	(20)
(Gain) loss on warrant liability	8	(2,058)	4,801
Impairment reversal	5	-	(15,000)
Gain on foreign exchange		(62)	(1,090)
Change in other liabilities		144	43
Finance costs	17	6,083	4,052
Transaction and restructuring costs		-	1,259
Gain on extinguishment of financial liabilities	7	(10,369)	-
Gain on revaluation of financial liabilities	7	(3,117)	-
Total expenses - net		10,475	12,211
Net profit (loss)		7,853	(1,897)
Other comprehensive profit (loss)
Items that may be reclassified to net profit (loss):
Foreign currency translation adjustment		(557)	102
Comprehensive profit (loss)		7,296	(1,795)
Net profit (loss) per share
Basic	11	0.06	(0.01)
Diluted	11	0.05	(0.01)

See accompanying notes to the condensed interim consolidated financial statements.

3 | Page

Prairie Provident Resources Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT) (UNAUDITED)

		Share Capital	Contributed	Accumulated		Total
($000s)	Note	Amount	Surplus	Deficit	AOCI	Equity
Balance at December 31, 2022		101,549	39,084	(209,629)	(117)	(69,113)
Share-based compensation	12	-	72	-	-	72
Exchange differences on translation of		-	-	-	(557)	(557)
foreign operations
Net profit		-	-	7,853	-	7,853
Balance at March 31, 2023		101,549	39,156	(201,776)	(674)	(61,745)
		Share Capital	Contributed	Accumulated		Total
($000s)		Amount	Surplus	Deficit	AOCI	Equity
Balance at December 31, 2021		101,421	38,772	(207,227)	474	(66,560)
Share-based compensation		-	18	-	-	18
Settlement of share-based compensation, net of	3	(7)	-	-	(4)
withholding tax
Exchange differences on translation of foreign	-	-	-	102	102
operations
Net loss		-	-	(1,897)	-	(1,897)
Balance at March 31, 2022		101,424	38,783	(209,124)	576	(68,341)

See accompanying notes to the condensed interim consolidated financial statements.

4 | Page

Prairie Provident Resources Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

For the three months ended
($000s)	Note	March 31, 2023	March 31, 2022
OPERATING ACTIVITIES
Net profit (loss)		7,853	(1,897)
Adjustments for non-cash items:
Impairment reversal	5	-	(15,000)
Unrealized (gain) loss on derivative instruments	18	(2,110)	10,118
Depletion and depreciation	5	4,508	5,479
Depreciation on right-of-use asset	6	316	455
Exploration and evaluation expense	4	28	178
Accretion and non-cash finance costs	17	1,691	2,255
Unrealized foreign exchange gain		(77)	(1,093)
Change in other liabilities		131	43
Gain on sale of properties		-	(20)
(Gain) loss on warrant liability	8	(2,058)	4,801
Gain on extinguishment of financial liabilities	7	(10,341)	-
Gain on revaluation of financial liability	7	(3,117)	-
Share-based compensation	12	72	15
Non-cash other income		(140)	(189)
Settlements of decommissioning liabilities	10	(530)	(2,124)
Deferred interest on Senior Notes	7,17	1,586	535
Other, net		(193)	35
Change in non-cash working capital	13	(1,977)	(1,122)
Net cash from (used in) operating activities		(4,358)	2,469
FINANCING ACTIVITIES
Settlement of share-based compensation, including withholding
taxes and net of proceeds	11,12	-	(3)
Repayments of principal related to lease obligations	9	(407)	(643)
Change in borrowings	7,13	4,759	2,420
Change in non-cash working capital	13	313	300
Net cash from financing activities		4,665	2,074
INVESTING ACTIVITIES
Property and equipment expenditures	5	(226)	(7,328)
Proceeds from dispositions (net of acquisitions)		178	20
Change in non-cash working capital	13	(372)	2,948
Net cash used in investing activities		(420)	(4,488)
Change in cash and restricted cash		(113)	55
Cash and restricted cash beginning of period		10,702	6,183
Cash and restricted cash end of period		10,589	6,238

See accompanying notes to the condensed interim consolidated financial statements.

5 | Page

Prairie Provident Resources Inc.