Cardinal Energy arranges $8.65-million financing

Mr. Shawn Van Spankeren reports CARDINAL ENERGY LTD. ANNOUNCES $86.5 MILLION BOUGHT DEAL OFFERING OF COMMON SHARES, OFFICIAL SANCTIONING OF REFORD 2, AND UPDATED 2026 GUIDANCE Cardinal Energy Ltd. has entered into an agreement with a syndicate of underwriters co-led by RBC Capital Markets and CIBC Capital Markets, acting as joint bookrunners, pursuant to which the underwriters have agreed to purchase for resale to the public, on a bought deal basis, 10 million common shares in the capital of the company at an issue price of $8.65 per common share for gross proceeds of $86.5-million. The company has granted the underwriters an overallotment option, exercisable by the underwriters in whole or in part, from time to time, at any time up to and including the date that is 30 days following the closing of the offering, to purchase up to an additional one million common shares at the offering price. In the event that the overallotment option is exercised in full, the gross proceeds of the offering will be approximately $95.15-million. The offering is expected to close on or about Feb. 4, 2026. The offering is anticipated to close after the Jan. 30, 2026, record date for the dividend that the company will pay to its shareholders on Feb. 17, 2026. Accordingly, if closing of the offering occurs after Jan. 30, 2026, purchasers of the common shares under the offering will not be eligible to receive the monthly dividend that will be paid by the company on Feb. 17, 2026, to shareholders of record on Jan. 30, 2026. Official sanctioning of Reford 2 The company intends to use the net proceeds of the offering to first repay and reduce the indebtedness of its outstanding senior credit facility, to advance the development of Reford 2 (described below) and for general corporate purposes. Concurrent with this financing, Cardinal announces the final investment decision for its new steam-assisted gravity drainage (SAGD) oil development project (Reford 2), located approximately 10 kilometres north of its current Reford SAGD thermal project (Reford 1). Cardinal is excited to begin construction on the second project in its SAGD thermal heavy oil portfolio following the strong success of its first project. Reford 2 has analogous geological and reservoir attributes to Reford 1, and will adopt the same proven facility and SAGD well design. Reford 1 was delivered on budget, ahead of schedule, and is currently forecasted to produce 6,500 barrels per day (bbl/d) (100 per cent heavy oil) in Q1 (first quarter) 2026, which is 8 per cent ahead of nameplate capacity. Recent steam-oil-ratios (SORs) observed from Reford 1 are below 2.5 times, in line with some of the premier SAGD assets across the Western Canadian sedimentary basin. The initial scope of Reford 2 is expected to be a 4,250-barrel-per-day (bbl/d) project with an estimated capital cost of approximately $140-million (plus applicable taxes). This project is expandable to 6,500 bbl/d for an incremental capital cost of approximately $40-million. The decision to complete the expansion will be made at a future date and be contingent on various factors. The company has sized the production profile of Reford 2 with a projected operating life of approximately 20 years. With formal commencement of this project, the construction phase is anticipated to take approximately 18 months, with first steam in the summer of 2027 and production ramp to nameplate capacity by early Q4 (fourth quarter) 2027. At $60 (U.S.) per barrel (bbl) West Texas Intermediate (WTI), the project payout will be approximately two years once Reford 2 reaches nameplate capacity (4,250 bbl/d). A further step-change in Cardinal's corporate sustainability measures is expected once the project is fully operational due to the low decline, high margin and low sustaining capital required on thermal oil production. Update to 2026 budget Upon completion of the financing, the company expects to sanction Reford 2 and enter into fixed price contracts to manufacture the facilities and other related agreements with the same vendors utilized in the construction of Reford 1. The fixed price contracts are expected to account for approximately two-thirds of Reford 2 capital costs, which derisks successful project delivery on time and on budget. With the commitment to proceed with Reford 2, Cardinal will be increasing its 2026 capital expenditures budget by approximately $85-million. The net proceeds of the offering will support the incremental 2026 capital expenditures allowing the company's net debt to remain flat to exit 2025 levels at current strip pricing. Cardinal's updated budget for 2026 will total $160-million, together with the original 2026 capital budget of $75-million announced Jan. 21, 2026, to support existing conventional and thermal operations. Prior guidance for 2026 average corporate production volumes remains unchanged at 25,000 to 25,500 barrels of oil equivalent per day (boe/d) with Reford 2 volume contributions not expected until early Q4 2027. The impact of Reford 1, which was completed in 2025, is forecasted to drive year-over-year production growth of 15 per cent in 2026. The company expects Reford 2 to provide similar catalysts to production, cash flow and reserves in 2027 and beyond. Equity offering details The common shares will be distributed in all provinces of Canada (other than the province of Quebec) by way of a prospectus supplement to the company's base shelf prospectus dated March 28, 2024, and by private placement in the United States to qualified institutional buyers pursuant to Rule 144A of the U.S. Securities Act of 1933. Access to the base shelf prospectus, the prospectus supplement and any amendments to the documents are provided in accordance with securities legislation relating to procedures for providing access to a base shelf prospectus, a prospectus supplement and any amendment to the documents. The base shelf prospectus, the prospectus supplement (when filed) and any amendments to these documents may be accessed for free on SEDAR+. Alternatively, electronic or paper copies of the foregoing documents may be obtained, without charge, from: RBC Dominion Securities Inc., attention: distribution centre, 180 Wellington St. W (eighth floor), Toronto, Ont., M5J 0C2, or by e-mail at [email protected]; or CIBC Capital Markets, 161 Bay St. (fifth floor), Toronto, Ont., M5J 2S8, or by telephone at 1-416-956-6378 or by e-mail at [email protected], by providing the contact with an e-mail address or address, as applicable. The base shelf prospectus and the prospectus supplement contain important, detailed information about the company and the proposed offering. Prospective investors should read the base shelf prospectus and prospectus supplement (when filed) before making an investment decision. The offering is subject to customary regulatory approvals, including the approval of the Toronto Stock Exchange. About Cardinal Energy Ltd. Cardinal is a Canadian oil and natural gas production company with operations focused on low-decline sustainable oil production in Western Canada. The company's portfolio of conventional and SAGD project inventory offers a complementary low-decline, long-life resource base that is ideally suited to sustain its commitment to meaningful dividend returns to shareholders. We seek Safe Harbor.