Lycos Energy Inc. Announces Strategic Business Combination with Mahikan Oil Corporation and $30.0 Million Equity Offering

Executive Summary

• Lycos Energy Inc. entered into a definitive agreement to acquire Mahikan Oil Corp. in an all‑share transaction valued at approximately $49.7 million (including net debt).
• Simultaneously, Lycos announced a non‑brokered private placement of up to 25 million Lycos shares for gross proceeds of up to C$30.0 million.
• The combination is expected to close on or before 31 Mar 2026, creating a new core area of ~45 net contiguous Mannville sections with an estimated 1.44 billion barrels PIIP and ~698 drilling locations.

Key Details

• Consideration: 29,781,301 Lycos shares at a deemed price of C$1.20 per share, representing 0.60 Lycos share for each Mahikan share. Total consideration ≈ C$49.7 M (including assumed net debt).
• Share Issuance to Mahikan Stakeholders: 21,150,001 Lycos shares issued to directors/officers and 10% shareholders of Mahikan; subject to staggered hold‑period releases at 4, 8, 12 months. Remaining Mahikan shareholders’ shares subject to a four‑month hold period.
• Closing Timeline: Expected on or before 31 Mar 2026, subject to customary conditions and TSXV approval.
• Strategic Rationale: Combines complementary stacked Mannville assets, expands land base for pad‑style drilling, and adds ~1.44 billion barrels PIIP with 698 gross (net) drill locations.
• New Core Area: Approximately 45 net contiguous sections of stacked Mannville rights, offering multi‑zone development (Waseca, Sparky, G.P., Lloydminster).
• Management & Board Post‑Combination: Dave Burton remains President/CEO; Mahikan team members added as VP Exploration, Business Unit President, Director – Land. Board to have equal representation from both companies plus two new independent directors.
• Equity Offering Terms: Up to 25 M Lycos shares at C$1.20 per share; gross proceeds up to C$30.0 M. Expected net cash position post‑offering ≈ C$13.0 M after repayment of combination‑related debt.
• Use of Proceeds: Repay indebtedness from the combination, fund future development capital, and general corporate purposes.
• Insider Participation: Approximately C$5.0 M of the offering anticipated to be subscribed by directors, officers, and employees; insiders expected to hold >20% of outstanding Lycos shares after closing.
• Advisors & Counsel: National Bank Capital Markets (exclusive financial advisor to Lycos), Peters & Co. Ltd. (exclusive financial advisor to Mahikan); Stikeman Elliott LLP (legal counsel to Lycos); Torys LLP (legal counsel to Mahikan).
• Board Additions: Tom Coolen (Chairperson) and Steve Buytels (Director) appointed, bringing extensive senior‑level energy sector experience.

Notable Quotes

• “The combined teams’ experience developing stacked Mannville inventory provides a solid foundation to responsibly advance the newly acquired contiguous land base.” – Dave Burton, President & CEO, Lycos Energy Inc.