Cavvy Energy Announces Exercise of Warrants

• On March 31, 2026, Cavvy Energy announced the cashless exercise of 19,804,414 common share purchase warrants held by PCEP Canadian Holdco, LLC.
• The warrants were exercised at a weighted-average price of $0.4485 per share, resulting in the issuance of 13,030,536 new common shares to the holder.
• Following this transaction, Cavvy has 309,080,041 common shares outstanding and zero remaining share purchase warrants.
• The warrants originated from 2023 and 2024 debt financing arrangements when the company operated under the Pieridae Energy Limited name.
• Management framed the cashless exercise as a capital structure optimization move, emphasizing efficient balance sheet management without requiring new equity capital.

• The news is administrative and expected, as the warrant terms and holder were previously disclosed.
• The cashless mechanism means the company receives $0 in proceeds, offering no immediate liquidity boost or balance sheet strengthening.
• Dilution is confirmed at approximately 4.4% relative to the pre-exercise share count, but the complete elimination of the warrant overhang removes a persistent structural discount and future dilution risk.
• The transaction aligns with the company's broader deleveraging narrative highlighted in the March 18, 2026 earnings release, which detailed $27 million in Q1 debt repayments and a $26.7 million sulphur prepayment used for loan retirements.
• Given the stock trades significantly above the $0.4485 exercise price, the cashless structure was mathematically inevitable and does not alter the fundamental investment thesis.

• Cavvy Energy is a Western Canadian natural gas producer and midstream processor, operating primarily in Alberta and British Columbia.
• The flagship assets are the Caroline and Waterton gas processing plants, which handle both proprietary production and significant third-party raw gas volumes.
• Third-party processing has grown rapidly, reaching 136.6 MMcf/d in Q4 2025, driven by multi-year take-or-pay agreements and capacity absorption from nearby facility shutdowns.
• The company generates substantial sulphur byproduct, which is marketed globally and structured through forward pricing agreements to mitigate volatility.
• Royalty status is not explicitly detailed in the provided releases; standard provincial Crown and private landowner royalties apply to production assets.