Altura Energy Inc. Provides a Corporate Update

The COVID-19 pandemic and the recent actions of OPEC and Russia abandoning production quotas has resulted in an unprecedented decline in crude oil prices. In response to these events Altura is voluntarily curtailing production volumes in April to its hedged oil production of 300 barrels of oil per day, which is approximately 550 boe per day, including NGLs and natural gas. Altura plans to continue the production curtailment in May to produce at 100% of hedged oil volumes if low oil prices persist.

Altura currently has the following crude oil contracts for 300 barrels of oil per day hedged to December 31, 2020:

Using actual prices for the first quarter of 2020 and strip pricing at April 6, 2020, Altura’s hedging gains in 2020 are estimated at $2.4 million, providing the Corporation with positive forecasted adjusted funds flow.

As a result of capital expenditures incurred in January and February as part of its first quarter of 2020 drilling and completion program, Altura’s net debt at March 31, 2020 is estimated to be $6.4 million. In March, Altura halted all capital expenditures and will leave one well drilled but uncompleted that is on an existing pad and can be completed and brought on production at any time.

In addition, Altura has implemented cost cutting measures with its ongoing production operations and in other areas of the Corporation. Altura also has a work-from-home program to protect the community, employees, and the Corporation from the COVID-19 pandemic and these measures are not expected to have a negative impact on operations.

In April, Altura’s credit facility was amended on an interim basis to $7.5 million from $9.0 million as a result of the unprecedented decline and volatility in crude oil prices. The Corporation’s credit facility will undergo its annual review in May 2020.

The Corporation is planning to close the second transaction of the previously announced sale with a private company (“PrivateCo”) in the second half of 2020, where PrivateCo will acquire an additional 5.5% working interest in Altura’s production, wells, lands and facilities for $3.5 million. As per the agreement, the proceeds from the second transaction will primarily be used to drill a horizontal well in either the Entice or Leduc-Woodbend areas.

The Corporation is focused on protecting balance sheet strength in the current volatile commodity price environment.

On behalf of the Board of Directors and the Altura management team, we would like to thank our shareholders for their ongoing support.

ABOUT ALTURA ENERGY INC.

Altura is a junior oil and gas exploration, development and production company with operations in central Alberta. Altura predominantly produces from the Rex member in the Upper Mannville group and is focused on delivering per share growth and attractive shareholder returns through a combination of organic growth and strategic acquisitions.