Lotus Creek sells non-core Saskatchewan assets for $13M

• Asset Disposition: Lotus Creek Exploration Inc. completed the sale of non-core assets in Tableland, Saskatchewan, for aggregate proceeds of $13.0 million on April 22, 2026.
• Use of Proceeds: The company intends to use the cash to repay outstanding debt under its existing credit facilities with ATB Financial.
• Credit Facility Update: A semi-annual borrowing base review was successfully completed. The borrowing base remains unchanged at $40.0 million, but the maturity date has been extended to May 31, 2028.
• Production Context: The sold assets produced approximately 300 boe/d (80% crude oil) as of March 2026 from Bakken and Torquay formations.
• Upcoming Events: Q1 2026 financial results are scheduled for release on April 27, 2026.

• Balance Sheet Strengthening: The $13 million proceeds directly address the company's net debt position. As of December 31, 2025, net debt was reported at $9.8 million. This sale effectively eliminates existing net debt and potentially leaves the company with a cash surplus or significantly reduced leverage.
• Liquidity Extension: Extending the credit facility maturity to May 2028 removes near-term refinancing risk for the next two years, providing stability in a volatile commodity environment.
• Production Impact: The divestiture involves non-core assets (300 boe/d). Given the company's Q4 2025 production of 3,391 boe/d and 2026 guidance of 3,600-4,000 boe/d, this sale represents a minor reduction in total volume (~7-8%) but improves asset quality by focusing on core Wilson Creek assets.
• Market Expectation: The move aligns with the strategy outlined in the Q4 2025 results (March 4, 2026), where management highlighted strong cash flow ($13.5M FFO) and low leverage (0.3x net debt/FFO). While positive, it confirms rather than surprises the market's expectation of deleveraging.
• Price Reaction: The stock price increased from $3.45 on April 21 to $3.60 on April 22, indicating a modest positive reaction consistent with routine balance sheet optimization rather than a fundamental pivot.

• Overview: Lotus Creek Exploration Inc. is an energy company focused on oil and gas exploration and production in Western Canada (Saskatchewan and Alberta).
• Flagship Project: The Wilson Creek asset in Saskatchewan is the primary growth driver, focusing on light-oil Belly River sands.
• Development Status: The company has successfully drilled multiple Belly River wells with strong initial production rates (e.g., well 104/06-26-05W5 averaging 1,200 boe/d in Feb 2026). Infrastructure includes a newly constructed 5,000 boe/d oil battery and gathering system.
• Reserves: As of December 31, 2025, total proved plus probable reserves were 11.2 Mboe with an after-tax NPV (10%) of $154.4 million.