FIDDLEHEAD RESOURCES DISPOSITION OF NON-CORE ACREAGE, DEBT REPAYMENT AND OPERATIONAL UPDATE

Executive Summary

• Fiddlehead Resources sold a non‑core working interest in nine sections, generating $1.4 M cash proceeds.
• Proceeds will be used to reduce borrowings under the secured credit facility and fund a four‑well workover program expected to add ~124 boe/d of operated production with a two‑month payback.
• The disposition lowers abandonment liabilities by ~$316 k, cuts production by 24.7 boe/d and eliminates $8 k/month (≈$96 k annually) of field‑level cash flow.

Key Details

• Disposition proceeds: $1.4 M cash from sale of minority, non‑operated working interest in nine sections of non‑core acreage.
• Abandonment liability reduction: ~​$316 k based on AER minimum estimates for wells in the sold area.
• Production impact of sale: Decrease of approximately 24.7 boe/d; removal of ~$8 k/month (~$96 k annually) of field‑level cash flow.
• Valuation metric: Implied multiple of ~16× annual field‑level cash flow, indicating strong value realization.
• Use of proceeds – Debt repayment: Portion allocated to reduce borrowings under the company’s secured credit facility, lowering net debt and future interest expense.
• Use of proceeds – Workover program: Remaining funds will finance a four‑well workover program projected to add ~124 boe/d of Company‑operated production.
• Economic rationale for workovers: Expected two‑month payback; anticipated reduction in per‑unit operating expenses and increase in netbacks through use of existing owned/operated facilities.
• CEO comment (Brent Osmond): Emphasized execution of long‑term plan for Ferrier assets, recent operatorship transfer (late 2025), and the workover program as the first step toward responsible production growth and shareholder value creation.

Notable Quotes

“Fiddlehead is pleased to begin executing on our long‑term plan for safe and responsible development of the Ferrier assets… This workover program is the first step in our broader plan to responsibly grow production and deliver meaningful value for our shareholders.” – Brent Osmond, Chairman, President & CEO

Materiality Assessment: Material – Positive (significant cash inflow, balance‑sheet strengthening, and near‑term production upside).