HIGHWOOD ASSET MANAGEMENT LTD. ANNOUNCES FOURTH QUARTER AND FULL-YEAR 2025 RESULTS, 2025 YEAR-END RESERVES AND OPERATIONAL UPDATE

Executive Summary

• Highwood reported Q4 2025 Adjusted EBITDA of $10.9 M ($0.72/share) and full‑year Adjusted EBITDA of $53.3 M, with adjusted funds flow of $10.6 M for the quarter.
• Year‑end 2025 reserves increased across all categories (PDP +7% to 19,594 Mboe; 1P +7% to 39,600 Mboe; 2P +9% to 66,441 Mboe), delivering a PDP NAV of $7.96/share and a 2P NAV of $41.23/share.
• Production rose to an average 5,040 boe/d in Q4 2025 with guidance for Q1 2026 around 6,000 boe/d; two newly‑drilled Belly River wells (13‑02 and 11‑33) are delivering >2,050 boe/d combined net production.

Key Details

• Financial Highlights – Q4 2025
• Adjusted EBITDA: $10.9 M ($0.72/share).
• Adjusted funds flow: $10.6 M ($0.70/share).
• Net debt (Dec 31 2025): $116.7 M.

• Shareholder’s equity (Dec 31 2025): $154.1 M.

• Full‑Year 2025 Financials

• Total revenues, net of royalties: $101.9 M (‑7% YoY).
• Adjusted EBITDA: $53.3 M (‑33% YoY).

• Capital expenditures: $59.6 M (‑10% YoY).

• Production

• Q4 2025 average corporate production: 5,040 boe/d (‑16% vs Q4 2024).
• Crude oil price realized: C$72.71/bbl (‑21% YoY).

• Natural gas price realized: C$2.23/mcf (+91% YoY).

• Reserves – Year End 2025 (GLJ independent evaluation)

• PDP reserves: 19,594 Mboe (+7%).
• 1P reserves: 39,600 Mboe (+7%).
• 2P reserves: 66,441 Mboe (+9%).
• NAV per share – PDP: $7.96 (basic), $7.74 (fully diluted).
• NAV per share – 1P: $22.39 (basic), $21.78 (fully diluted).

• NAV per share – 2P: $41.23 (basic), $40.10 (fully diluted).

• Hedging Program

• Oil hedged for 2026: ~2,400 bbl/d; for 2027: ~1,400 bbl/d at avg. CAD $94/bbl and $91/bbl respectively.
• Additional layered hedges (2026/27): 350 bbl/d and 1,300 bbl/d.
• Natural gas hedged for 2026: ~6,975 GJ/d at avg. CAD $3.15/GJ.

• Gain on commodity contracts Q4 2025: $3.1 M.

• Operational Update

• Two Belly River wells (13‑02 & 11‑33) brought online Dec 2025; combined gross production >2,050 boe/d net (~75–80% liquids).
• Current inventory: 16.5 net booked and 13 net unbooked locations in Wilson Creek.
• Q1 2026 drilling activity: two booked gross wells (1.1 net) – one in Brazeau, one in Wilson Creek.

• Planned 2026 drilling: 4–7 additional Belly River wells, with summer‑2026 start.

• Outlook

• Target Q1 2026 production ~6,000 boe/d (+20% vs Q4 2025).

• Focus on reducing leverage, growing free cash flow per share, and maintaining flexibility for organic growth or strategic M&A.

• Shareholder Compensation – Long‑Term Incentive Plan (effective March 16 2026)

• Options granted: 185 k (exercise price = closing market price on Mar 17 2026).
• RSUs granted: 69 k; PSUs granted: 143 k; DSUs to directors: 22 k.
• Vesting: Options/RSUs – 1/3 each year over three years; PSUs – 100% on third anniversary; DSUs – 100% on first anniversary.

Notable Quotes

• “Our top priority remains shareholder value, and we are encouraged by the strong production from our new Belly River wells and the continued growth in our reserve base,” – Joel MacLeod, Executive Chairman.