Mr. Mackenzie Loree reports

CERUS ENERGY GROUP LTD. BI-MONTHLY UPDATE

Cerus Energy Group Ltd. and Vital Energy are still in the final stages of frac fluid recovery and stabilization of 101/14-15-18-17W3. Once a stabilized fluid rates are achieved, the operator and Cerus will provide a joint news release announcing production results. Cerus and Vital will perform a program and geological review to assess the mechanical efficiencies and performance versus theoretical modelling.

The company remains positive in the results that have been observed to date.

Cerus financed the program through the Lomac syndicate program to a non-arm's-length financier. The financier will retain 160 per cent of the total 180-per-cent penalty payout on the Pennant play in Saskatchewan. The tailing 20-per-cent and 5-per-cent gross overriding royalty will be retained by Cerus as an earned margin and retained royalty.

Objective

The objective of Cerus Energy Group is to build a premier energy portfolio of development interest through its proprietary CWI (carried working interest) capitalization structure.

Strategy/investment process

Cerus uses a formal development finance program (DFP) structure to enhance the management and placement of investment capital. The company's finance program is suitable for long-term and short-term capital projects with the capability of retained expansion through the provision of rolling development options. The DFP both uses and optimizes a series of revenue-sharing mechanisms to recover investment capital and associated fees from inner corporate investments.

We seek Safe Harbor.