Highwood Asset Management Ltd. announces 2022 fourth quarter and year end results, 2022 year end reserves along with operational update

• Within the upstream oil & gas production business unit, the Company delivered average production of 119 bbl/d of oil in the fourth quarter of 2022. Current net production from Highwood is approximately 130 bbl/d of oil.
• During the fourth quarter of 2022, the Company and its 50% working interest partner in the EVI terminal completed the reactivation of the blending portion of the facility, which was commissioned on October 2, 2022. The Company is planning to reactivate the heavy trucking terminal located at EVI in the first half of 2023.
• Corporately, net debt at December 31, 2022 was $255 thousand and the Company is in a working capital surplus position of $411 thousand. The Company has reduced net debt, from $2.2 million at December 31, 2021, including a bank draw of $1.1 million.
• Overall, the Company saw an increase in Proved Developed Producing reserves of ~21%, Proved reserves of 8% and Proved and Probable reserves of 5%. The increase is reserves and impact of economic factors resulted in before tax net present value, discounted at 10%, to increase 36%, 63% and 75%, respectively for each of the reserve categories.

With the continued strong commodity prices and increased interest in Canadian energy, the Company’s focus in the fourth quarter was reviewing and assessing several potential acquisitions for its upstream operations. The Company will continue to review and assess opportunities which are accretive to the Company as Highwood seeks to grow this segment of its operations. The Company will also assess land offerings in strategic areas where the Company sees significant growth opportunities. During the fourth quarter of 2022, the Company acquired Viking Kinsella lands which the Company plans to drill one well within  the next 18 months and another within the next 24 months.

The Company also focused time and resources in Q4 2022 on extraction technologies for Lithium from Brine.

As of today, the Company is minimally drawn on its credit facility and has a working capital surplus, which provides considerable financial and operational flexibility. The Company remains open to completing accretive acquisitions through the balance of 2023 and beyond.  The Company is currently engaged in several encouraging dialogues regarding various acquisitions and partnership opportunities.

While Highwood sold the majority of its producing oil assets in the first quarter of 2021, the Company has, and will continue to evaluate opportunities in the mergers and acquisitions (“M&A”) market but will remain disciplined to pursue only those opportunities that are accretive with low to moderate liability profiles.

Highwood is continuing to evaluate its undeveloped lands for drilling opportunities, particularly on its W4 lands, which the Company anticipates drilling at least 2 wells by the end of 2024.

Corporately, the Company intends to build a growing profile of recurring free funds flow that will provide maximum flexibility for growth and / or other strategic M&A opportunities in a non-dilutive fashion.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.