Mr. Scott Ratushny reports

CARDINAL ENERGY LTD. ANNOUNCES FIRST QUARTER 2020 FINANCIAL RESULTS

Cardinal Energy Ltd. has released its operating and financial results for the first quarter ended March 31, 2020.

Selected financial and operating information is shown in the attached table and should be read in conjunction with Cardinal's unaudited condensed interim financial statements and related management's discussion and analysis (MD&A) for the three months ended March 31, 2020, which are available on SEDAR and on the company's website.

                     FINANCIAL AND OPERATING HIGHLIGHTS
      (in thousands of dollars, except per-share and operating amounts)

                                                   Three months ended March 31,
                                                               2020       2019
Financial                                                                   
Petroleum and natural gas revenue                          $ 63,473   $ 94,050
Cash flow from operating activities                          22,041     27,506
Adjusted funds flow (1)                                      14,948     29,639
Basic and diluted per share                                $   0.13   $   0.25
(Loss)                                                     (450,944)   (16,506)
Basic and diluted per share                                $  (3.98)  $  (0.14)
Development capital expenditures (1)                         21,782     11,152
Other capital expenditures                                      359        432
Total capital expenditures                                   22,141     11,584
Dividends declared                                            3,511      3,619
Per share                                                  $   0.03   $   0.03
Net debt (1)                                                273,805    257,880
Net debt to adjusted funds flow ratio (1)                       2.6        2.9
Operating                                                                  
Average daily production                                                   
Light oil (bbl/d)                                             7,792      8,246
Medium/heavy oil (bbl/d)                                      9,301      8,542
Natural gas liquid (NGL) (bbl/d)                                836        964
Natural gas (mcf/d)                                          14,368     15,930
Total (boe/d)                                                20,323     20,407
Netback (1)                                                                 
Petroleum and natural gas revenue                          $  34.32   $  51.21
Royalties                                                     (5.56)     (7.37)
Net operating expenses                                       (20.58)    (22.63)
Transportation                                                (0.31)     (0.19)
Netback                                                        7.87   $  21.02
Realized gain (loss) on commodity contracts                    4.44      (0.79)
Netback after risk management (1)                             12.31   $  20.23
Interest and other                                            (1.59)     (1.83)
General and administrative (G&A)                              (2.64)     (2.26)
Adjusted funds flow netback (1)                                8.09   $  16.14

(1) Non-GAAP (generally accepted accounting principles) measures.

First quarter overview

Cardinal's first quarter 2020 was focused on drilling seven (7.0 net) horizontal wells, earning additional undeveloped land in the company's Southern Alberta business unit. Six (6.0 net) of these wells were completed during the first quarter and the company also completed three (3.0 net) wells that were drilled in 2019. These well results, which were above expectations, along with the continued low-decline performance of the company's asset base, led Cardinal to achieve daily production levels over 21,500 barrels of oil equivalent per day (boe/d) midway through the first quarter ahead of the company's initial forecast. In March, as world oil prices rapidly dropped due to supply disagreements between Russia and Saudi Arabia, combined with the demand destruction caused by the COVID-19 pandemic, Cardinal reacted swiftly, shutting in these wells along with other uneconomic production, to preserve the long-term value of its reserves. The company expects the success of its first quarter drilling program will allow Cardinal to return to 2019 average production levels without any additional drilling when oil prices recover.

First quarter net income was negatively impacted as forward oil price forecasts were slashed by reserve evaluators impacting the estimated future recoverable value of the company's reserves. During the first quarter of 2020, Cardinal took a non-cash accounting impairment charge of $343-million on its property, plant and equipment net book value of $1.0-billion. In addition, Cardinal's deferred tax asset was derecognized as there is not sufficient certainty the tax asset can be utilized given the current environment resulting in a deferred tax expense of $102.9-million. The company's tax pools are unaffected by the derecognition of the asset.

Cardinal's response to the current low oil pricing environment has been swift. A summary of the company's immediate initiatives is as follows:

• Reduced the 2020 annual capital budget by 54 per cent to $31-million, of which $22-million was spent in the first quarter;
• Suspended the dividend effective March, 2020, saving the company approximately $1.8-million per month;
• Shut in approximately 20 per cent to 25 per cent of the company's higher-operating-cost production, allowing Cardinal to retain the long-term value of its reserves;
• Reduced its board, executive, office and field staff salaries and retainers by 20 per cent;
• Ceased its corporate bonus program;
• Applied for the Canada emergency wage subsidy;
• Reduced the company's corporate savings plan contributions;
• Negotiated various cost reductions with key service providers;
• Submitted over 1,000 applications for projects eligible to access phase 1 financing associated with the recently announced Alberta site rehabilitation program.

The corporate compensation reduction and elimination of the company's dividend are estimated to save the company approximately $3.4-million per month or $40-million annually, which materially reduces Cardinal's cost structure during these uncertain times.

The company has started its annual renewal process with Cardinal's syndicate of banks. The reduction in commodity pricing has impacted Cardinal's projected future cash flows and together with market conditions could impact the company's borrowing base. Cardinal believes it is eligible for announced government liquidity support programs should the need arise. At March 31, 2020, Cardinal had a working capital deficiency of $35.9-million and unused capacity of $130.4-million on its bank facility, after taking into effect outstanding letters of credit.

Outlook

Cardinal's focus through this pandemic and economic crisis are the health and safety of the company's employees and service providers, and maintaining its liquidity through disciplined efficient management of its assets, production and costs. During these unprecedented times, the company is proud of its staff, who have safely worked hard to manage the company's assets through this crisis. Cardinal is taking this pandemic seriously, and has implemented social distancing and preventative procedures to ensure it does not compromise the health and safety of its employees, as shown by no known Cardinal office staff, field employees or contract operators having tested positive for COVID-19.

As a result of the uncertain market conditions, Cardinal is withdrawing its 2020 corporate guidance originally announced on Dec. 9, 2019, and updated on March 17, 2020. Cardinal continues to manage its assets with a view to long-term sustainability and will shut in uneconomic production when it is safe and rational to do so. The company has a limited capital budget for the remainder of 2020 and does not have any immediate plans to drill any more wells in the year. Cardinal's top-tier low-decline rate will support the company's oil production and the company can rapidly bring shut-in wells back on with limited additional costs when the price recovery occurs.

Cardinal will continue to navigate through these challenging times by acting quickly to implement change and reduce costs. The company thanks its shareholders and stakeholders for their perseverance, and looks forward to coming out of this crisis with a stronger sustainable company.

About Cardinal Energy Ltd.

One of Cardinal's goals is to continually improve its environmental, safety and governance mandate, and to operate its assets in a responsible and environmentally sensitive manner. As part of this mandate, Cardinal injects and conserves more carbon than it emits, making the company one of the few Canadian energy companies to have a negative carbon footprint.

Cardinal is a Canadian oil-focused company with operations focused on low-decline light-, medium- and heavy-quality oil in Western Canada.

We seek Safe Harbor.