Perpetual Energy : 2021 Management Information Circular

MANAGEMENT INFORMATION CIRCULAR

Notice of Annual Meeting of Shareholders and Management Information Circular and Proxy Statement

May 17, 2022 at 9:00 a.m. (Calgary time)

Calgary Petroleum Club 319 - 5 Avenue SW | Calgary, Alberta T2P 0L5

TABLE OF CONTENTS

LETTER TO SHAREHOLDERS .................................................................................................................... 1

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS .................................................................................. 2

MANAGEMENT INFORMATION CIRCULAR AND PROXY STATEMENT ........................................................... 4

GENERAL INFORMATION ......................................................................................................................... 4

MATTERS TO BE CONSIDERED AT THE MEETING ..................................................................................... 4

DIRECTOR NOMINEES ............................................................................................................................. 9

STATEMENT OF EXECUTIVE COMPENSATION ......................................................................................... 15

DIRECTOR COMPENSATION ................................................................................................................... 34

CORPORATE GOVERNANCE DISCLOSURE ............................................................................................... 37

GENERAL PROXY MATTERS .................................................................................................................... 48

INTEREST OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE ACTED UPON ............................... 51

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS ................................................................... 51

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS .......................................................... 51

ADDITIONAL INFORMATION .................................................................................................................. 52

LETTER TO SHAREHOLDERS

March 22, 2022

Dear Shareholder:

We are pleased to invite you to attend the annual meeting of shareholders of Perpetual Energy Inc. to be held at the Calgary Petroleum Club, 319 - 5th Avenue S.W., Calgary, Alberta, at 9:00 a.m. (Calgary time) on Tuesday, May 17, 2022.

At the meeting you will have the opportunity to participate in our meeting and ask questions and vote on a number of important matters, which we strongly encourage you to do. This is your opportunity to hear from the Board of Directors and management, learn more about our performance in 2021, the current state of our industry and our top strategic priorities for 2022, and vote on the items of business which include the election of our directors, the appointment of our auditors and the approval of unallocated entitlements under our security-based compensation plans. A short presentation will follow the formal portion of the meeting.

More information about Perpetual may be found in our 2021 Annual Report and atwww.perpetualenergyinc.com.

The attached notice of meeting and management information circular includes important information about the meeting and how to vote as well as our director and executive compensation and corporate governance practices. Please take the time to read these documents and to vote. If you cannot attend the meeting, please complete the enclosed form of proxy and submit it as soon as possible and listen to the live webcast on our website (www.perpetualenergyinc.com).

We wish you and your loved ones well during these challenging times and we thank you for your continued support of Perpetual.

Sincerely,

Susan L. Riddell Rose

President and Chief Executive Officer

PERPETUAL ENERGY INC.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 17, 2022

NOTICE IS HEREBY GIVEN that the annual meeting (the "Meeting") of the holders ("Shareholders") of common shares ("Shares") of Perpetual Energy Inc. ("Perpetual" or the "Corporation") will be held at the Calgary Petroleum Club, 319 - 5th Avenue S.W., Calgary, Alberta on May 17, 2022 at 9:00 a.m. (Calgary time) for the following purposes:

• (a) to receive and consider the audited consolidated financial statements of the Corporation for the year ended December 31, 2021, together with the auditor's report thereon;

• (b) to elect the directors of the Corporation;

• (c) to appoint auditors of the Corporation and to authorize the directors to fix their remuneration as such;

• (d) to approve the unallocated options under the Corporation's share option plan;

• (e) to approve the unallocated rights under the Corporation's restricted rights plan; and

• (f) to transact such further and other business as may properly be brought before the Meeting or any adjournment thereof.

Specific details of the matters to be put before the Meeting are set forth in the attached Management Information Circular dated March 22, 2022 (the "Information Circular"). The Information Circular also contains important information on how to vote at and participate in the Meeting. Please read the Information Circular carefully.

Perpetual has elected to use the notice-and-access provisions under National Instrument 54-101 and National Instrument 51-102 (the "Notice-and-Access Provisions") for this Meeting. The Notice-and-Access Provisions are a set of rules developed by the Canadian Securities Administrators that reduce the volume of materials that must be physically mailed to Shareholders by allowing Perpetual to post the Information Circular and any additional materials online. See "General Proxy Matters - Notice and Access" in the Information Circular for further information on the Notice-and-Access Provisions. Perpetual has posted the Information Circular and additional materials on their website atwww.perpetualenergyinc.com.A Shareholder may also use the toll-free number 1-800-811-5522 to obtain additional information about the Notice-and-Access Provisions or to receive a paper copy of the Information Circular.

The record date (the "Record Date") for determination of Shareholders entitled to receive notice of and to vote at the Meeting is March 31, 2022. Shareholders of record as at the Record Date are entitled to receive notice of the Meeting and to vote those Shares included in the list of Shareholders entitled to vote at the Meeting prepared as at the Record Date, unless any such Shareholder transfers Shares after the Record Date and the transferee of those Shares, having produced properly endorsed certificates evidencing such Shares or having otherwise established that he or she owns such Shares, demands, not later than 10 days before the Meeting, that his or her name be included in the list of Shareholders entitled to vote at the Meeting, in which case such person shall be entitled to vote such Shares at the Meeting.

Each Share outstanding on the Record Date is entitled to one vote at the Meeting.

A Shareholder may attend the Meeting in person or may be represented by Proxy. If you are a registered Shareholder and are unable to attend the Meeting or any adjournment thereof in person, please exercise your right to vote by dating, signing and returning the accompanying form of proxy to Odyssey Trust Company ("Odyssey"), the Corporation's transfer agent. To be valid, proxy forms must be dated, completed, signed and deposited with Odyssey, (i) by mail using the enclosed return envelope or one addressed to Odyssey Trust Company, Proxy Department, 702, 67 Yonge Street, Toronto, Ontario, M5E 1J8, (ii) by hand delivery to Odyssey Trust Company, 702, 67 Yonge Street, Toronto, Ontario, M5E 1J8, (iii) by facsimile to 1-800-517-4553, or (iv) by internet by clicking "Vote" athttps://login.odysseytrust.com/pxlogin and following the instructions provided. You will require your 12 digit Control Number found on your proxy form. If you vote through the Internet, you may also appoint another person to be your proxyholder. Your proxy or voting instructions must be received in each case no later than 9:00 a.m. (Calgary time) on Friday, May 13, 2022, or, if the Meeting is adjourned, 48 hours (excluding Saturdays and holidays) before the beginning of any adjournment of the Meeting.

A replay of the Meeting will be posted as soon as practical at:www.perpetualenergyinc.com along with answers to questions pertinent to the matters being considered at the Meeting and that are received in connection with the Meeting that cannot be answered due to time constraints.

DATED at the City of Calgary, in the Province of Alberta, this 22nd day of March, 2022.

BY ORDER OF THE BOARD OF DIRECTORS OF PERPETUAL ENERGY INC.

Susan L. Riddell Rose

President and Chief Executive Officer