Page 1

PRAIRIESKY ANNOUNCES 2021 THIRD QUARTER RESULTS AND SUSTAINABILITY - LINKED CREDIT FACILITY Calgary , Alberta ( October 25 , 2021 ) PrairieSky Royalty Ltd. ( " PrairieSky " or the " Company " ) ( TSX : PSK ) is pleased to announce its third quarter operating and financial results for the period ended September 30 , 2021 ( " Q3 2021 " ) . PrairieSky is also pleased to announce an extension and expansion of the Company's credit facility which has been reconstituted as a sustainability - linked loan , reinforcing PrairieSky's environmental , social and governance leadership and performance . Third Quarter 2021 Highlights : • Total revenues increased to $ 78.1 million , a 12 % increase over Q2 2021 and 80 % over Q3 2020 , comprised of royalty production revenues of $ 76.0 million and other revenues of $ 2.1 million . Funds from Operations grew to $ 66.2 million ( $ 0.30 per common share basic and diluted ) , a 17 % increase over Q2 2021 and a 75 % increase over Q3 2020 . • Royalty production averaged 19,871 BOE per day with liquids royalty production reaching 10,138 barrels per day , representing 51 % of royalty production as compared to 49 % in Q2 2021 and 48 % in Q3 2020 . Natural gas royalty volumes of 58.4 MMcf per day , down 3 % from Q2 2021 , were impacted by seasonal turnarounds and third - party downtime in the Montney and Alberta Foothills . • Completed acquisitions totaling $ 190.1 million , including a previously announced $ 155.0 million investment in a 5.0 % gross overriding royalty in the Clearwater and $ 34.8 million , before adjustments , in complementary Fee Lands and GORR Interests in Central Alberta . Declared a third quarter dividend of $ 20.0 million ( $ 0.09 per common share ) , representing a payout ratio of 30 % , with remaining cash flow allocated to acquisitions . Common share repurchases of $ 8.0 million under the normal course issuer bid ( " NCIB " ) at an average price per share of $ 13.71 . Sustainability - Linked Loan : Credit facility expanded to $ 425 million , with a permitted increase to $ 500 million , and extended maturity to February 28 , 2025 . • Sustainability - linked pricing mechanism provides the Company the opportunity to achieve positive pricing adjustments on drawn and undrawn balances based on sustainability performance . PrairieSky's royalty production revenue increased to $ 76.0 million in Q3 2021 , our second highest quarter since inception in 2014. The growth in revenue was due primarily to strong commodity prices for all products , resulting in a 17 % increase in funds from operations over Q2 2021 and a 75 % increase over Q3 2020. During the quarter , PrairieSky completed acquisitions totalling $ 190.1 million , including the previously announced 5.0 % gross overriding royalty agreement in the core of the Clearwater oil play in the Marten Hills area of Alberta . On August 25 , 2021 , PrairieSky also completed the acquisition of 138,000 acres of Fee Land and 125,000 acres of GORR Interests in Central Alberta adding approximately 200 BOE per day of royalty production ( 74 % liquids ) for total cash consideration of $ 34.8 million , before adjustments . Both acquisitions were financed using PrairieSky's credit facility which was subsequently increased to $ 425 million and now incorporates sustainability - linked performance criteria . Net debt at September 30 , 2021 totaled $ 187.7 million , which assuming current strip pricing , could be repaid within a year . During Q3 2021 , third - party operators were active across Western Canada and on PrairieSky's royalty lands with 193 wells spud ( 98 % oil ) . Wells spud during the quarter included 101 wells on our GORR acreage , 71 wells on our Fee Lands and 21 unit wells . There were 190 oil wells spud in Q3 2021 , including 84 Viking wells , 51 Clearwater wells , 23 Mannville heavy and light oil wells , 5 Duvernay light oil wells and 1