Prospera produces 859 boepd from July 1 to July 23

Executive Summary

• Prospera Energy Inc. provided a comprehensive operations update highlighting strong production performance across its Cuthbert, Hearts Hill, and Luseland pools, with total gross production averaging 859 boe/d (97% oil) from July 1 to July 23, 2025.
• The company announced a significant amendment to its $11-million promissory note, increasing the principal to $18.7 million to fund production-increasing capital projects, and closed a $900,000 unsecured promissory note offering with related party insiders.
• Additional material updates include entering into an oil price hedge for Sept 2025–Feb 2026, settling vendor payables via share issuance, and enhancing transparency with a new production and workover tracker.

Key Details

• Corporate Production: Averaged 859 boe/d (97% oil) from July 1 to July 23, 2025. This excludes production from the recently acquired White Tundra assets, which are pending TSX-V acceptance.
• Operational Activity:
  • Nine additional wells came online in the last 10 days, currently in load fluid recovery or initial optimization.
  • Service rig working through an inventory of over 150 remaining workover and reactivation candidates.
  • More than 50 projects completed; Q3 and Q4 service rig programs finalized, including nine Luseland reactivations.
• Cuthbert Pool:
  • Production averaged 356 boe/d (100% oil) from July 1 to July 23, 2025.
  • Completed remediation on 16-28 HZ well (downhole bridge plug installed).
  • Remediation on 08-02 HZ well financed and awaiting mobilization (casing cut and cementing).
• Hearts Hill Pool:
  • Production averaged 230 boe/d (91% oil) from July 1 to July 23, 2025.
  • Completed line-by-line pipeline review; Sparky zone recompletions delivering consistent oil.
  • Evaluating uphole recompletion opportunities in Waseca and Rex zones.
• Luseland Pool:
  • Production averaged 193 boe/d (100% oil) from July 1 to July 23, 2025.
  • Five reactivated wells brought online in past 10 days; two additional wells awaiting start-up.
  • Initiatives include recycle pump installation, sand suspension chemicals, and increased pump speeds.
  • Strategy focuses on converting No Reserves Associated (NRA) wells into Proved Developed Producing (PDP) reserves.
• Price Hedging:
  • Hedged 100 barrels of oil per day from September 2025 through February 2026.
  • Average hedge price: ~$67 USD per barrel of WTI.
• Shares for Debt Settlement:
  • Vendor 1: Settled $28,900.45 via 125,000 common shares (deemed price 23.1 cents/share).
  • Vendor 2: Settled $7,392.55 via 40,000 common shares (deemed price 18.5 cents/share).
  • Shares subject to 4-month, 1-day trading restriction and TSX-V acceptance.
• Loan Amendment:
  • Promissory note increased by $2 million, bringing total principal to $18.7 million.
  • Terms: 12% interest rate, two-year maturity. Proceeds earmarked for production-increasing capital projects.
  • Subject to TSX-V acceptance.
• Promissory Note Offering (Closed):
  • Aggregate gross proceeds: $900,000.
  • Structure: Units priced at $1,000 each, consisting of a one-year unsecured promissory note (12% interest) and 5,000 common share purchase warrants (exercisable at $0.05 for one year).
  • Total warrants issued: 4.5 million.
  • Gross Overriding Royalty (GORR): 5% on revenue from incremental production above 1,363 boe/d until principal is repaid.
  • Facility fee: 2%.
  • Interest paid quarterly.
• Related Party Transactions (Insiders):
  • Summerhill Investments Corp.: $500,000 subscription, 2.5 million warrants.
  • Mantl Canada Inc.: $200,000 subscription, 1 million warrants.
  • Countryman Investments Ltd.: $100,000 subscription, 500,000 warrants.
  • Transaction relies on exemptions under TSX-V Policy 5.9 and MI 61-101.

Notable Quotes

• "Prospera continues to demonstrate strong operational performance... This sustained growth follows the successful completion of numerous projects across the company's properties, including well reactivations, rod repairs, sand control upgrades, engine maintenance and tune-ups, lease upgrades, mineral rights acquisitions, coil-tubing cleanouts, and waterflood optimizations."
• "The corporation is pleased to announce that it has entered into a contract to hedge a portion of its oil production... This strategic initiative is aimed at providing improved cash flow stability, strengthening corporate governance through pro-active risk management and capitalizing on current favourable market pricing."