SEDAR Interim Financial Statements

Yangarra Resources Ltd. Condensed Interim Consolidated Financial Statements For three and nine months ended September 30, 2025 and 2024 Yangarra Resources Ltd. Condensed Interim Consolidated Statements of Financial Position (in thousands of Canadian dollars) The accompanying notes are an integral part of these condensed interim consolidated financial statements. 2 September 30 2025 December 31 2024 (unaudited) (audited) Assets Current Accounts receivable (note 10) $ 24,267 $ 28,878 Prepaid expenses and inventory 10,379 9,223 Commodity contracts (note 10c iii) 1,291 93 Total current assets 35,937 38,194 Non-current Property and equipment (note 2) 804,590 786,521 Exploration and evaluation assets 35,668 35,668 Commodity contracts (note 10c iii) 2 – Total assets $ 876,197 $ 860,383 Liabilities Current Accounts payable and accrued liabilities 15,430 25,463 Commodity contracts (note 10c iii) 886 2,332 Current portion of lease obligations (note 4) 1,188 957 Current portion of decommissioning liability (note 5) 506 545 Total current liabilities 18,010 29,297 Non-current Bank debt (note 3) 119,874 115,785 Lease obligations (note 4) 251 1,203 Other liabilities 928 969 Commodity contracts (note 10c iii) 4 307 Decommissioning liability (note 5) 16,630 16,185 Deferred tax liability 132,320 127,009 Total liabilities 288,017 290,755 Shareholders' equity Share capital (note 6) 199,862 197,013 Contributed surplus 35,906 34,658 Retained earnings 352,412 337,957 Total shareholders’ equity 588,180 569,628 Total liabilities and shareholders’ equity $ 876,197 $ 860,383 Contingency (note 14) Yangarra Resources Ltd. Condensed Interim Consolidated Statements of Income and Comprehensive Income For the three and nine months ended September 30 (unaudited, in thousands of Canadian dollars except per share amounts) The accompanying notes are an integral part of these condensed interim consolidated financial statements. 3 Three months ended September 30 Nine months ended September 30 2025 2024 2025 2024 Revenue Petroleum and natural gas sales (note 13) $ 24,401 $ 26,260 $ 88,055 $ 102,403 Royalties (1,116) (1,679) (5,226) (6,275) 23,285 24,581 82,829 96,128 Commodity price risk contracts (note 10c iii) Gain (loss) on commodity contract settlement 1,452 297 559 (688) Unrealized change in fair value of commodity contracts 262 67 2,949 455 24,999 24,945 86,337 95,895 Expenses Production 4,812 5,943 14,764 19,174 Transportation 2,795 1,375 9,136 5,067 General and administrative 1,422 877 3,861 4,027 Finance (note 12) 2,627 2,980 7,794 8,964 Share-based compensation (note 7) 1,010 840 3,038 2,548 Abandonment expense 234 91 234 91 Depletion and depreciation (note 2) 8,756 7,690 27,744 26,269 21,656 19,796 66,571 66,140 Income before tax 3,343 5,149 19,766 29,755 Deferred tax expense 1,049 1,185 5,311 7,411 Net income and total comprehensive income $ 2,294 $ 3,964 $ 14,455 $ 22,344 Earnings per share (note 8) Basic $ 0.02 $ 0.04 $ 0.14 $ 0.23 Diluted $ 0.02 $ 0.04 $ 0.13 $ 0.21 Yangarra Resources Ltd. Condensed Interim Consolidated Statements of Changes in Equity For the nine months ended September 30 (unaudited, in thousands of Canadian dollars) The accompanying notes are an integral part of these condensed interim consolidated financial statements. 4 2025 2024 Share capital (note 6) Balance, beginning of period $ 197,013 $ 192,715 Exercise of stock options 383 2,093 Fair value transferred on exercise of stock options 184 977 Fair value transferred on vesting of Restricte --- d Share Units (“RSUs”) 2,282 1,228 Balance, end of period 199,862 197,013 Contributed surplus Balance, beginning of period 34,658 32,154 Share-based compensation (note 7) 3,714 3,567 Fair value transferred on exercise of stock options (184) (977) Fair value transferred on vesting of RSUs (2,282) (1,228) Balance, end of period 35,906 33,516 Retained earnings Balance, beginning of period 337,957 311,729 Net income 14,455 22,344 Balance, end of period 352,412 334,073 Total shareholders’ equity $ 588,180 $ 564,602 Yangarra Resources Ltd. Condensed Interim Consolidated Statements of Cash Flows For the three and nine months ended September 30 (unaudited, in thousands of Canadian dollars) The accompanying notes are an integral part of these condensed interim consolidated financial statements. 5 Three months ended September 30 Nine months ended September 30 2025 2024 2025 2024 Operating Net income for the period $ 2,294 3,964 $ 14,455 $ 22,344 Add back non-cash items: Unrealized change in fair value of commodity contracts (262) (67) (2,949) (455) Finance expense (note 12) 2,627 2,980 7,794 8,964 Share-based compensation (note 7) 1,010 840 3,038 2,548 Depletion and depreciation (note 2) 8,756 7,690 27,744 26,269 Deferred tax provision 1,049 1,185 5,311 7,411 Cash interest and finance costs paid (note 12) (2,293) (2,874) (6,711) (7,693) Decommissioning costs incurred (note 5) (357) (526) (357) (526) Change in non-cash working capital (note 9) 1,430 1,114 (451) (3,118) Net cash flow from operating activities 14,254 14,306 47,874 55,744 Financing Exercise of stock options (note 6) – – 383 2,093 Bank debt (repayment) advance (note 3) (1,077) (1,880) 3,551 (5,995) Lease obligation repayment (note 4) (222) (248) (739) (851) Lease interest paid (note 12) (18) (32) (67) (110) Repayment of other liabilities – – (41) – Net cash flow (used in) from financing activities (1,317) (2,160) 3,087 (4,863) Investing Additions to property and equipment (note 2) (12,440) (15,667) (44,834) (39,736) Change in non-cash working capital (note 9) (497) 3,521 (6,127) (11,145) Net cash flow used in investing activities (12,937) (12,146) (50,961) (50,881) Change in cash – – – – Cash, beginning of period – – – – Cash, end of period $ – $ – $ – $ – Yangarra Resources Ltd. Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2025 and 2024 (in thousands of Canadian dollars, except per share and per unit amounts) 6 1. Basis of preparation and statement of compliance and authorization Yangarra Resources Ltd. ("Yangarra" or the “Company”) is a publicly-traded company involved in the production, exploration and development of resource properties in Western Canada. The address of the registered office is 1530, 715 – 5 Avenue SW, Calgary Alberta, T2P 2X6. These condensed interim consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Yangarra Resources Corp., Yangarra Production Partnership and Yangarra Holding Corp., after the elimination of intercompany transactions and balances These consolidated financial statements are presented in Canadian dollars, which is the functional currency of the Company and its subsidiaries. The condensed interim consolidated financial statements were authorized for issuance by the Company’s Board of Directors on October 28, 2025. These condensed interim consolidated financial statements statements have been prepared in accordance with IFRS Acc --- ounting Standards (“IFRS”) as issued by the International Accounting Standards Board and interpretations of the IFRS Interpretations Committee. These condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34 – Interim Financial Reporting on a basis consistent with the accounting, estimation and judgement policies described in the Company’s audited consolidated financial statements as at and for the year ended December 31, 2024 (the “Annual Financial Statements”). These condensed interim consolidated financial statements have been prepared on a historical cost basis, except for certain financial instruments, stock options and RSUs which are recognized at fair value. All financial information is reported in Canadian dollars, unless otherwise noted. Certain information and disclosures normally included in the notes to the Annual Financial Statements prepared in accordance with IFRS have been condensed or omitted. These condensed interim consolidated financial statements should be read in conjunction with the Annual Financial Statements. 2. Property and equipment Oil and Natural Gas Interests Well and Plant Equipment Other Assets Total Cost Balance, December 31, 2024 $ 943,494 $ 175,517 $ 20,904 $ 1,139,915 Cash additions 34,578 9,596 660 44,834 Share-based compensation (note 7) 676 – – 676 Decommissioning liability (note 5) 303 – – 303 Balance, September 30, 2025 $ 979,051 $ 185,113 $ 21,564 $ 1,185,728 Depletion and depreciation Balance, December 31, 2024 313,055 26,833 13,506 353,394 Depletion and depreciation 23,855 2,480 623 26,958 ROU asset depreciation – – 786 786 Balance, September 30, 2025 $ 336,910 $ 29,313 $ 14,915 $ 381,138 At December 31, 2024 $ 630,439 $ 148,684 $ 7,398 $ 786,521 At September 30, 2025 $ 642,141 $ 155,800 $ 6,649 $ 804,590 Yangarra Resources Ltd. Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2025 and 2024 (in thousands of Canadian dollars, except per share and per unit amounts) 7 2. Property and equipment (continued) At September 30, 2025, all of the Company’s properties are pledged as security for the bank debt (note 3). The calculation of depletion for the nine months ended September 30, 2025 included estimated future development costs of $449,374 (December 31, 2024 – $494,800) associated with the development of the Company’s proved plus probable reserves. Cash additions for the nine months ended September 30, 2025 include $644 (2024 – $593) of recoveries related to the Company's working interest in operated capital expenditure programs on which overhead has been charged in accordance with standard industry operating agreements and $nil (2024 – $200) of capitalized salaries and consulting expenses directly related to geological, drilling and completions. Included in property and equipment at September 30, 2025 is $1,832 (December 31, 2024 – $2,617) of right-of-use (“ROU”) assets associated with the Company’s lease obligations. 3. Bank debt Balance, December 31, 2024 $ 115,785 Advance 3,551 Accretion of debt transaction costs 538 Balance, September 30, 2025 $ 119,874 Current – Non-current $ 119,874 As at September 30, 2025, the maximum amount available under the syndicated credit facility was $140,000 (December 31, 2024 – $130,000) comprised of a $120,000 (December 31, 2024 – $105,000) extendable revolving term credit facility and a $20,000 (December 31, 2024 – $25,000) oper --- ating facility. The amount available under these facilities is re-determined at least twice a year and is primarily based on the Company’s oil and gas reserves, the syndicate of lending institutions’ forecast commodity prices, the current economic environment and other factors as determined by the syndicate (the “Borrowing Base”). If the total advances made under the credit facilities are greater than the re-determined Borrowing Base, the Company has 60 days to repay any shortfall. The facilities last for a 364-day period and will be subject to the next 364-day extension by May 29, 2026. If not extended by May 30, 2026, the facilities will cease to revolve, and all outstanding balances will become repayable on May 29, 2027. The facilities are secured by a general security agreement over all assets of the Company. The Company is required to ensure that not less than 30% of the forecasted daily production for a rolling twelve- month period is hedged and subject to commodity swaps with a minimum of 15% of such forecasted production being subject to commodity swaps that are swaps only (as opposed to a combination of swaps, collars and/or puts/calls). The Company is subject to a financial covenant requiring an adjusted working capital ratio above 1:1 (current assets plus the undrawn availability under the revolving facility, divided by the current liabilities less the drawn portion of the revolving facility and excluding unrealized commodity contracts). The Company was in compliance with this covenant as at September 30, 2025 and December 31, 2024. The total standby fees on the revolving facility range, depending on the debt to EBITDA ratio, between 200 bps to 400 bps on bank prime borrowings and between 300 bps and 500 bps on bankers’ acceptances. The undrawn portion of the revolving facility is subject to a standby fee in the range of 75 bps to 125 bps. As at September 30, 2025, the $119,874 (December 31, 2024 – $115,785) reported amount of bank debt was comprised of $11,769 (December 31, 2024 – $11,395) drawn on the operating facility and $110,000 (December 31, 2024 – $105,000) drawn on the revolving facility and net of unamortized transaction costs of $1,895 (December 31, 2024 – $610). During the nine months ended September 30, 2025, the weighted average effective interest rate for the bank debt was approximately 6.98% (nine months ended September 30, 2024 – 8.46%). Yangarra Resources Ltd. Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2025 and 2024 (in thousands of Canadian dollars, except per share and per unit amounts) 8 4. Lease obligations The Company incurs lease payments related to the oil hauling fleet, operator/crew trucks and the head office. Leases are entered and exited in coordination with specific business requirements which includes the assessment of the appropriate durations for the related leased asset. Balance, December 31, 2024 $ 2,160 Lease payments (739) Accretion 18 Balance, September 30, 2025 $ 1,439 Current 1,188 Non-current $ 251 Maturity analysis – contractual undiscounted cash flows Less than one year $ 1,188 One to six years 559 Total undiscounted lease obligations 1,747 5. Decommissioning liability The following table presents the reconciliation of the carrying amount of the liability associated with the decommissioning of the Company’s property and equipment: Balance, December 31, 2024 $ 16,730 Liabilities incurred 473 Effect of change in es --- timates (170) Accretion 460 Expenditures (357) Balance, September 30, 2025 $ 17,136 Current 506 Non-current $ 16,630 The current portion of decommissioning liability relates to wells the Company plans to abandon and reclaim in the next 12 months as part of the Alberta Energy Regulator’s mandatory spend target. The following significant assumptions were used to estimate the decommissioning liability: Undiscounted cash flows $ 22,663 Discount rate 2.46% - 3.61% Inflation rate 2% Weighted average expected timing of cash flows 5 years Yangarra Resources Ltd. Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2025 and 2024 (in thousands of Canadian dollars, except per share and per unit amounts) 9 6. Share capital Authorized: Unlimited number of common shares, without nominal or par value. Unlimited number of First Preferred Shares and an unlimited number of Second Preferred Shares, both issuable in series. Issued: Common shares Number of shares Amount Balance, December 31, 2024 98,734 $ 197,013 Fair value transferred on vesting of RSUs 1,950 2,282 Exercise of stock options 592 383 Fair value transferred on exercise of stock options – 184 Balance, September 30, 2025 101,276 $ 199,862 7. Share-based compensation During the nine months ended September 30, 2025, the Company issued 4,678 (2024 – 4,893) RSUs that vest equally over 3 years. The RSUs are exercisable in either cash or shares at the option of the Company. As it is the Company’s intention to settle in shares, the RSUs are treated as share-based compensation with a fair value on the date of issue of $1.02 (2024 – $1.17) per RSU. The following table provides a continuity of RSUs outstanding: Number of RSUs Balance, December 31, 2024 5,435 Granted 4,678 Vested (1,950) Forfeited (73) Balance, September 30, 2025 8,090 The following table provides a continuity of stock options outstanding: Number of stock Weighted – average options exercise price Balance, December 31, 2024 2,565 $0.99 Exercised (592) (0.65) Cancelled (888) (1.28) Balance, September 30, 2025 1,085 $0.95 The following provides a summary of stock options outstanding as at September 30, 2025: Range of exercise price Number outstanding Weighted-average remaining contractual life (years) Weighted- average exercise price Number exercisable Weighted- average exercise price $ 0.50 – $ 1.00 868 0.17 0.59 868 0.59 $ 1.01 – $ 1.50 15 0.59 1.27 15 1.27 $ 2.00 – $ 2.50 189 1.55 2.45 189 2.45 $ 2.51 – $ 3.00 13 1.50 2.90 13 2.90 1,085 0.43 $ 0.95 1,085 $ 0.95 Yangarra Resources Ltd. Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2025 and 2024 (in thousands of Canadian dollars, except per share and per unit amounts) 10 7. Share-based compensation (continued) During the nine months ended September 30, 2025, the Company recognized $3,038 (2024 – $2,548) of share-based compensation in the condensed interim consolidated statements of income and comprehensive income and capitalized $676 (2024 – $1,019) of share-based compensation to property and equipment (note 2). 8. Earnings per common share Basic earnings per share is calculated as follows: Three months ended September 30 Nine months ended September 30 2025 2024 2025 2024 Net income for the period $ 2,294 $ 3,964 $ 14,455 $ 22,344 Weighted average number of shares (basic) Issued common shares at beginning of period 101,276 98,734 98,734 94,801 Effect of common s --- hares issued in the period – – 2,305 3,081 Weighted average number of common shares - basic 101,276 98,734 101,039 97,882 Net income per share - basic 0.02 0.04 0.14 0.23 Diluted earnings per share is calculated as follows: Three months ended September 30 Nine months ended September 30 2025 2024 2025 2024 Weighted average number of shares (diluted) Weighted average number of shares (basic) 101,276 98,734 101,039 97,882 Effect of outstanding options 370 672 358 717 Effect of outstanding RSUs 8,090 5,647 8,090 5,647 Weighted average number of common shares - diluted 109,736 105,053 109,487 104,246 Net income per share – diluted 0.02 0.04 0.13 0.21 The average market value of the Company’s shares for purpose of calculating the dilutive effect of stock options and RSUs was based on quoted market prices for the period that the options and RSUs were outstanding. Out-of-the- money stock options are excluded from diluted share calculations. For the three months ended September 30, 2025, 217 (2024 – 1,126) options were excluded based on an average share price of $1.02 (2024 – $1.07) for the period. For the nine months ended September 30, 2025, 216 (2024 – 1,034) options were excluded based on an average share price of $1.00 (2024 – $1.12) for the period. Yangarra Resources Ltd. Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2025 and 2024 (in thousands of Canadian dollars, except per share and per unit amounts) 11 9. Change in non-cash working capital Three months ended September 30 Nine months ended September 30 2025 2024 2025 2024 Accounts receivable $ 2,079 $ 2,053 $ 4,611 $ 2,597 Prepaid expenses and inventory 1,234 (846) (1,156) (936) Accounts payable and accrued liabilities (2,380) 3,428 (10,033) (15,924) $ 933 $ 4,635 $ (6,578) $ (14,263) The change in non-cash working capital has been allocated to the following activities: Operating $ 1,430 $ 1,114 $ (451) $ (3,118) Investing (497) 3,521 (6,127) (11,145) $ 933 $ 4,635 $ (6,578) $ (14,263) 10. Financial instruments and financial risk management a. Accounts receivable and credit risk Purchasers of the Company’s natural gas and liquids are subject to credit review to minimize the risk of non-payment. The maximum exposure to credit risk for accounts receivable by type of customer: As at September 30, 2025 December 31, 2024 Natural gas and liquids marketers $ 7,916 $ 11,315 Partners on joint operations 9,580 9,920 Other 6,771 7,643 $ 24,267 $ 28,878 The Company has not experienced any significant collection issues with its natural gas and liquids marketers. The majority of the revenue accruals and receivables from natural gas and liquids marketers were collected in October 2025. The Company’s receivables are aged as follows: As at September 30, 2025 December 31, 2024 Under 30 days $ 12,144 $ 15,757 30 to 60 days 182 575 60 to 90 days 162 461 Over 90 days 11,779 12,085 $ 24,267 $ 28,878 As at September 30, 2025, 98% (December 31, 2024 – 99%) of the over 90-day receivables are due from four (December 31, 2024 – four) industry partners, for which a significant portion of the balances are in dispute (note 14). The Company has performed an analysis of each partner’s financial situation and has determined they have the ability to pay. Yangarra Resources Ltd. Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2025 and 2024 (in thousands of Canadian dollars, except per sh --- are and per unit amounts) 12 10. Financial instruments and financial risk management (continued) b. Liquidity risk As at September 30, 2025, the contractual maturities of the Company’s obligations are as follows: Carrying Amount Contractual Cash Flows Less than 1 Year 1-2 Years 2-5 Years Accounts payable and accrued liabilities $ 15,430 $ 15,430 $ 15,430 $ – $ – Bank debt (note 3) 119,874 121,769 121,769 – – Lease obligations (note 4) 1,439 1,747 1,188 393 166 Other liabilities 928 928 – – 928 Commodity contracts (note 10c iii) 890 890 886 4 – $ 138,561 $ 140,764 $ 139,273 $ 397 $ 1,094 c. Market risk The Company has exposure to the following market risks: i. Interest rate risk Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. The Company is exposed to interest rate fluctuations on its bank debt which bears interest at a floating rate and to mitigate this risk, the Company may enter into interest rate contracts. For the nine months ended September 30, 2025, if interest rates had been 1% lower with all other variables held constant, net income would have been $864 (2024 – $895) higher, due to lower interest expense. An equal and opposite impact would have occurred had interest rates been higher by the same amount. The Company had no interest rate contracts in place as at September 30, 2025. ii. Currency risk Foreign currency exchange rate risk is the risk that the fair value or future cash flows will fluctuate as a result of changes in foreign exchange rates. All of the Company’s petroleum and natural gas sales are denominated in Canadian dollars, however, the underlying market prices in Canada for petroleum and natural gas are impacted by changes in the exchange rate between the Canadian and United States dollar. The sensitivity of the fair value of a 10% change in foreign exchange rates would have an immaterial impact the condensed interim consolidated statements of income and comprehensive income. iii. Commodity price risk Commodity price risk is the risk that the fair value or future cash flows will fluctuate as a result of changes in commodity prices. As the Company had a limited number of derivatives in place as at September 30, 2025, the sensitivity of the fair value of a 10% volatility in commodity prices would have an immaterial impact on unrealized gains (losses) reported in the consolidated statements of income and comprehensive income. Yangarra Resources Ltd. Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2025 and 2024 (in thousands of Canadian dollars, except per share and per unit amounts) 13 10. Financial instruments and financial risk management (continued) iii. Commodity price risk As at September 30, 2025 the Company was committed to the following commodity price risk contracts: Year Volume Term Reference Type Strike Price Fair Value Oil 2025 200 bbl/d Oct 25 WTI-USD Collar USD $55.00 - $69.25 $ – 2025 400 bbl/d Oct 25 WTI-USD Collar USD $55.00 - $68.25 1 2025 200 bbl/d Nov 25 WTI-USD Collar USD $55.00 - $69.00 1 2025 400 bbl/d Nov 25 WTI-USD Collar USD $55.00 - $69.00 2 Natural Gas 2025 10,000 GJ/d Apr 25 - Oct 25 AECO - 7A Swap CAD $1.815 524 2025 4,000 GJ/d May 25 – Nov 25 AECO - 7A Swap CAD $1.76 126 2025 2,000 GJ/d Apr 25 - Oct 25 AECO - 7A Swap CAD $1.98 125 2025 1,000 GJ/d Apr 25 – Nov 25 AECO - 7A Swap CAD $1.75 31 2025 10,000 GJ/d Nov 25 AECO - 7A Swap CAD $2.435 27 2025/2026 1 --- 0,000 GJ/d Nov 25 - Mar 26 AECO - 7A Call CAD $3.50 (235) 2025/2026 2,000 GJ/d Dec 25 - Mar 26 AECO - 7A Swap CAD $3.49 136 2025/2026 2,000 GJ/d Dec 25 - Mar 26 AECO - 7A Swap CAD $3.665 178 2025/2026 3,000 GJ/d Dec 25 - Mar 26 AECO - 7A Swap CAD $3.00 28 2025/2026 2,500 GJ/d Dec 25 - Mar 26 AECO - 7A Swap CAD $3.00 24 2025/2026 7,500 GJ/d Dec 25 - Jun 26 AECO - 7A Collar CAD $1.50 - $4.00 (140) 2025/2026 2,000 GJ/d Dec 25 - Jun 26 AECO - 7A Collar CAD $1.00 - $3.75 (55) 2025/2026 2,500 GJ/d Dec 25 - Jun 26 AECO - 7A Collar CAD $1.50 - $3.00 (55) 2026 1,000 GJ/d Apr 26 - Oct 26 AECO - 7A Swap CAD $2.505 (27) 2026 1,000 GJ/d Apr 26 - Oct 26 AECO - 7A Swap CAD $2.70 14 2026 7,500 GJ/d Apr 26 - Jun 26 AECO - 7A Swap CAD $2.355 (143) 2026 5,000 GJ/d Jul 26 - Sep 26 AECO - 7A Swap CAD $2.51 (57) 2026 2,500 GJ/d Jul 26 - Sep 26 AECO - 7A Swap CAD $2.64 1 2026 2,500 mmbtu/d Jul 26 - Sep 26 NYMEX Swap USD $3.84 (18) 2026 2,500 mmbtu/d Jul 26 - Sep 26 NYMEX Collar USD $3.50 - $4.11 (39) 2026 2,000 mmbtu/d Jul 26 - Sep 26 NYMEX Collar USD $3.50 - $4.25 (19) 2026/2027 2,000 GJ/d Nov 26 - Mar 27 AECO - 7A Swap CAD $3.465 (22) NGLs 2025 550 bbl/d Apr 25 - Nov 25 Conway C3 Swap USD 0.70/g 76 2025 300 bbl/d Apr 25 - Nov 25 Conway C4 Swap USD 0.8325/g (81) Total $ 403 Yangarra Resources Ltd. Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2025 and 2024 (in thousands of Canadian dollars, except per share and per unit amounts) 14 10. Financial instruments and financial risk management (continued) d. Fair value of financial instruments The Company’s commodity contract assets and liabilities are financial instruments measured at fair value through profit or loss. The fair value of commodity contracts is a level 2 measurement based on inputs other than quoted prices that are observable for the asset or liability. As at September 30, 2025 and December 31, 2024, the carrying amount of commodity contract assets and liabilities was equal to their fair values. 11. Capital disclosures The Company’s objective when managing capital is to maintain a flexible capital structure which will allow it to execute its capital expenditure program, which includes expenditures in oil and gas activities which may or may not be successful. Therefore, the Company monitors the level of risk incurred in its capital expenditures to balance the proportion of debt and equity in its capital structure. The Company considers its capital structure to include shareholders’ equity and debt: September 30, 2025 December 31, 2024 Shareholders’ equity $ 588,180 $ 569,628 Bank debt $ 119,874 $ 115,785 12. Finance expense Three months ended September 30 Nine months ended September 30 2025 2024 2025 2024 Cash interest and finance costs $ 2,293 $ 2,874 $ 6,711 $ 7,693 Interest on lease obligations 18 32 67 110 Accretion of decommissioning liability (note 5) 177 146 460 419 Accretion of debt transaction costs (note 3) 133 214 538 593 Accretion of lease obligations (note 4) 6 (286) 18 149 $ 2,627 $ 2,980 $ 7,794 $ 8,964 13. Revenue The Company derives its revenue from contracts with customers primarily through the sale of commodities at a point in time representing the following major product types: Three months ended September 30 Nine months ended September 30 2025 2024 2025 2024 Crude Oil $ 13,630 $ 15,348 $ 45,236 $ 59,307 Natural Gas 2,506 2,385 16,174 15,816 Natural Gas Liquids 8,265 8,527 26,645 27,280 $ 24,401 $ 26,260 $ 88,055 --- $ 102,403 At September 30, 2025, receivables from contracts with customers, which are included in trade accounts receivable, were $10,737 (December 31, 2024 – $15,061). Yangarra Resources Ltd. Notes to the Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2025 and 2024 (in thousands of Canadian dollars, except per share and per unit amounts) 15 14. Contingency In the normal conduct of operations, there are pending claims by and against the Company. Litigation is subject to many uncertainties, and the outcome of individual matters is not predictable with assurance. In the opinion of management, based on the advice and information provided by its legal counsel, the final determination of these other litigations will not materially affect the Company’s financial position or results of operations.