Mr. Michael Belenkie reports

ENTROPY INC. PROVIDES OPERATIONAL AND CORPORATE UPDATE

Entropy Inc., a subsidiary of Advantage Energy Ltd., has provided a corporate update, including new performance achievements at the Glacier postcombustion carbon capture and storage (CCS) project in Alberta, Canada, and increasing activities in the United States.

Glacier CCS phase 1a operations update

Following the previously announced high-performance benchmarks at Glacier (please see press release dated Feb. 8, 2023), Entropy conducted a multimonth optimization protocol to further increase the efficiency of the Entropy modular CCS system. Highlights of the protocol results include:

• Phase 1a achieved a monthly capture and storage rate equivalent to 12,267 tonnes per annum (tpa), delivering 93 per cent of budgeted capacity despite operational intermittency primarily related to host plant disruptions.
• Consistently reinforced the global efficiency benchmark of 2.4 gigajoules/tonne at 90-per-cent capture rate on 5.3 per cent carbon dioxide flue gas.
• At 75-per-cent capture rate, achieved a 20-per-cent reduction to heat duty.
• At 95-per-cent capture rate, heat duty increased by only 8 per cent.
• Established optimal operating range between 90-per-cent and 93-per-cent capture rates, with stable capture rates up to 98 per cent.

All efficiency data were compiled at 10-second intervals from digital flow metering and control systems, and processed using EntropyIQ, the company's digital data gathering and processing engine, with independent verification by University of Regina researchers.

Based on current performance, Entropy remains on track to achieve operating costs of approximately $27/tonne at Glacier for phase 1 and $22/tonne upon completion of phase 2, including capture, compression, transportation and storage.

Glacier phase 1b and phase 2 update

Glacier phase 1b is on schedule to be commissioned in Q4 2023, with all major equipment modules under construction. This project is the first deployment of Entropy's Integrated Carbon Capture and Storage (iCCS) technology, which integrates Entropy's CCS technology into the design and fabrication of new industrial engines and boilers. Entropy's iCCS is expected to reduce total installed cost of capture by between 20 per cent and 25 per cent versus the cost of retrofitting a similar unit. Once commissioned, phase 1b will have the capacity to capture an additional 16,000 tpa from a new 5,000-horsepower gas-fired compressor engine, bringing the total emissions abatement for Glacier phase 1 to approximately 60,000 tpa, including avoided combustion. Total installed cost of phase 1b is expected to be $13.7-million.

Glacier phase 2, which is planned to capture an additional 137,000 tpa, remains shovel ready but awaiting additional clarity on carbon policy in Canada, including specifics on the federal investment tax credit (ITC) and carbon contract for differences (CCFDs). Once phase 2 reaches final investment decision (FID) it is expected to employ approximately 200 people across Western Canada during construction, with a total investment of approximately $100-million.

Corporate update

In addition to several previously announced projects that are progressing in Canada, Entropy has now entered into multiple agreements and memoranda of understanding with emitters in the United States. Projects now under development in the United States include gas-fired power generation, gas-fired steam generation and gas-fired compression, totalling approximately one million tpa in Texas, California and Pennsylvania.

We seek Safe Harbor.