Saturn Oil & Gas Announces Corporate Update Highlighted by Increased 2025 Forecast Production, Reduced Capital Expenditures, Strategic Tuck-In Activity and Appointment of Independent Board Member, Lynn Peterson

Executive Summary

• Saturn Oil & Gas Inc. announced a significant upward revision to its 2025 production guidance and a reduction in capital expenditures, driven by year-to-date drilling outperformance and strategic "tuck-in" acquisitions.
• The company is reallocating approximately $50-$60 million from its development budget to fund ~$85 million in accretive acquisitions in southeast Saskatchewan and Central Alberta, while maintaining its net debt leverage targets.
• Saturn also announced the appointment of Lynn A. Peterson, former Executive Chair of Chord Energy, to its Board of Directors.

Key Details

• Production Guidance Revision:
  • 2025 Exit Production Forecast: 43,000 to 44,000 boe/d (12% increase over original midpoint of 38,000-40,000 boe/d).
  • 2025 Annual Average Production Forecast: 41,000 to 43,000 boe/d (8% increase over previous estimates).
  • Per Share Impact: 8% increase in annual average production per share and 9% increase in forecast exit production per share.
• Capital Expenditures (Capex):
  • Budgeted Development Capex reduced by 18% to $245-$265 million (down from $300-$320 million).
  • Savings of $50-$60 million reallocated to acquisitions.
• M&A / Tuck-In Acquisitions:
  • Total strategic tuck-in acquisitions valued at approximately $85 million.
  • Acquired production volume: ~5,400 boe/d (weighted ~65% to oil and liquids).
  • Average acquisition cost: $15,900 per flowing barrel.
  • Saskatchewan Asset: Acquired in early August; includes ~255 gross (217 net) identified locations, with ~145 gross (125 net) specific to OHML Midale/Torquay development.
  • Alberta Asset: Corporate acquisition of an Alberta-based company announced in late August; includes >83 gross (73 net) locations for Cardium, Glauconite, and Bluesky development in the Greater Pembina region. Closing anticipated mid-October 2025.
  • Land Acquisition: Invested $17.5 million in August for ~5,100 hectares in the Viewfield Bakken, adding ~60 gross (60 net) OHML drilling locations.
• Financial Metrics & Leverage:
  • Net Debt to Adjusted EBITDA: Maintained at 1.2 to 1.4 times (unchanged from previous guidance).
  • Target: Net debt to adjusted EBITDA ratio approximating 1.0 times by year-end 2026.
  • Net Operating Expenses per boe: Forecast to decline ~3% to $19.50-$20.00/boe.
  • Royalties: Maintained at 12.0%-12.5% of gross petroleum and natural gas sales.
  • Transportation Expense: $1.45-$1.60/boe.
  • G&A Expenses: $1.45-$1.60/boe.
• Operational Highlights:
  • H1 2025 drilling outperformed internal type curves by >20%.
  • Viewfield 15-21 well (OHML) achieved IP30 of 331 boe/d.
  • Kaybob Montney pad completed with 3-mile extended reach laterals using a walking rig; wells expected on-stream in early October 2025.
• Board Appointment:
  • Lynn A. Peterson appointed as independent Board member.
  • Grant MacKenzie resigns as Board member, remaining as Corporate Secretary and Chief Legal Officer.

Notable Quotes

• "Our ability to enhance the Company's asset base and deliver higher production, increase our development inventory, and improve our per share metrics is a testament to the strength of our blueprint strategy and our disciplined execution," said John Jeffrey, CEO of Saturn.
• "Given prevailing uncertainty around commodity prices, we elected to curtail some of our drilling activity and instead further consolidate in our core areas at attractive valuation metrics. Not only does shifting capital to accretive tuck-in acquisitions extend our development runway for the future, it allows Saturn to preserve the value of our existing inventory when oil prices are depressed, offering a superior potential return on invested capital." — John Jeffrey, CEO