Saturn Oil & Gas Inc. announces 62.9 million BOE of reserves and proved developed producing net asset value (NPV10 BT) increases 54% to $6.92 per fully diluted share

Reserves Evaluation Highlights

The Company’s Reserve Report, prepared by Ryder Scott Company-Canada (“Ryder Scott“), evaluated the Company’s assets in Southeast Saskatchewan (the “Oxbow Asset“) and in West Central Saskatchewan (the “Viking Asset“) and is highlighted by:

• 62.9 million BOE of Total Proved + Probable (“TP+P“) reserves, representing a 24% year over year increase.
• $791.5 million net present value of future net revenue of the Proved Developed Producing (“PDP“) reserves discounted at 10% (“NPV10%“), in addition to $883.7 million of PDP NPV10% of Ridgeback reserves, as further described below.
• 452 booked gross drilling locations, 64% located in the Oxbow Asset and 36% in the Viking Asset.
• High oil weighting with TP+P reserves comprise 95% light & medium oil and natural gas liquids (“NGL“).
• Long reserve life index (“RLI“) of 6.6 years for PDP reserves and 13.8 years for TP+P¹ reserves.
• Two year average TP+P F&D costs of $13.93 /boe (4.6x recycle ratio)¹.
• Two year average TP+P FD&A costs of $12.99 /boe (4.6x recycle ratio)¹.
• Net asset value per fully diluted share⁴:
  • Proved Developed Producing of $6.92;
  • Total Proved of $9.27; and
  • Total Proved + Probable of $12.88.

Summary of Gross Oil and Gas Reserves and Net Present Value of Revenue

The following tables are a summary of the Ryder Scott estimated Company reserves (Company share gross volumes) and net present values (“NPV“) of future net revenue, before tax, based on forecast price and costs as contained in the Reserve Report². The Reserve Report encompasses 100% of the Company’s oil and gas properties at December 31, 2022.

Net Asset Value

The following table sets out a calculation of NAV based on the estimated before-tax estimated net present value of future net revenue discounted at 10% (“NPV10 BT“) associated with the PDP, Total Proved (“TP“) and TP+P reserves, as evaluated in the Reserve Report, including deductions for future development costs, abandonment and reclamation obligations:

Reconciliation of Reserves

The following table provides a summary of the reconciliation of the changes in the Company’s gross reserves as of December 31, 2022 against reserves at December 31, 2021, based on forecast prices and costs assumptions in effect at the applicable reserve evaluation date:

Future Development Costs

The following table provides a summary of the estimated Future Development Costs (“FDC“) required to bring Saturn’s Total Proved and Total Proved + Probable undeveloped reserves to production, as reflected in the Reserve Report, which costs have been deducted in Ryder Scott’s estimation of future net revenue associated with such reserves:

Performance Measures

The following table highlights Finding, Development and Acquisition (“FD&A“)¹ costs and associated recycle ratios based on the evaluation of reserves prepared by Ryder Scott:

The following table highlights Finding and Development (“F&D“)¹ costs and associated recycle ratios based on the evaluation of reserves prepared by Ryder Scott:

Price Forecast

The following table summarizes the commodity price forecasts and foreign exchange rate assumptions of three consultant’s average forecasts⁵ as of January 1, 2023 as applied in the Reserve Report, for the next five years.

Total Location Summary

The following table summarizes the gross drilling locations identified for future development in the Reserve Report:

Ridgeback Resources Inc. Summary of Gross Oil and Gas Reserves and Net Present Value of Revenue

Saturn completed the acquisition of Ridgeback Resources Inc. on February 28, 2023. The following tables are a summary of the Ridgeback’s estimated corporate reserves (Ridgeback’s share of gross volumes) and net present values of future net revenue, before tax, based on escalated prices and costs as forecasted by Sproule Associates Ltd. (“Sproule“) effective December 31, 2022. The evaluation of Ridgeback’s reserves, dated February 17, 2023, encompasses 100% of Ridgeback’s oil and gas properties at December 31, 2022 (the “Sproule Report“) and was prepared in accordance with NI 51-101 by Sproule:

Price Forecast for Sproule Report

The following table summarizes the commodity price forecasts and foreign exchange rate assumptions as of December 31, 2022 as applied in the Sproule Report, for the next five years.

Total Location Summary of Sproule Report

The following table summarizes the gross drilling locations identified for future development in the Sproule Report:

Granting of Incentive Stock Options and Expiry of Warrants.

The board of directors of Saturn has authorized the granting of inventive stock options to directors, officers, employees and consultants entitling them to purchase up to a total of 1,508,000 common shares at a price of $2.50 per share for a period of five years, vesting as to 1/3 per year on the first, second and third anniversary of the date of grant. In addition, the Company issued an aggregate of 97,500 restricted share units at a reference price of $2.50 vesting as to 1/3 per year on the first, second and third anniversary of the date of grant.

On February 28, 2023 approximately 2.2 million share purchase warrants, that were issued to a previous lender to the Company, expired unexercised.

On March 1, 2023: Net debt was estimated at approximately $550 million; Saturn has approximately 138.5 million common shares outstanding; warrants and options issued that are convertible into approximately 48.9 million common shares with an average exercise price of $3.12 per share for aggregate exercise proceeds of approximately $152.8 million.

Year End Disclosures

The 2022 financial information in this news release is unaudited and accordingly, such financial information is subject to change based on the results of the Company’s year-end audit, schedule to be released on or about March 28, 2023.

Additional reserve information as required under NI 51-101 will be included in the Company’s annual information form which will be filed on SEDAR on or about March 28, 2023.