Mr. Tom Connors reports

ACT ENERGY TECHNOLOGIES ACCELERATES U.S. GROWTH WITH ACQUISITION OF SB DIRECTIONAL SERVICES

ACT Energy Technologies Ltd. has entered into an agreement to acquire the directional drilling service business of SB Directional Services through a wholly owned subsidiary for total consideration of $47.0-million (U.S.) (approximately $64.3-million (Canadian)). The consideration for the transaction includes $30.0-million (U.S.) in cash and $17.0-million (U.S.) in ACT common shares. The transaction is expected to close in early April, 2026.

Founded in 2015 and headquartered in Oklahoma City, SB is a respected directional drilling service provider with a highly experienced management team and a strong operating history across the Anadarko and Permian basins. SB operates a fleet of 130 mud motors and 25 measurement-while-drilling kits, consistently running 20 to 25 active jobs with growing demand for rotary steerable technology. ACT expects that it will be able to generate cost synergies by replacing SB's rented RSS tools with ACT owned equipment. It is expected that SB's management team will continue to lead the business, and will be retained under employment and consulting agreements, ensuring long-term alignment with ACT shareholders.

Tom Connors, president and chief executive officer of ACT, stated: "We are excited to welcome SB's management team and employees to ACT. Their deep experience, strong customer relationships and established presence in high-quality basins will significantly strengthen our U.S. platform. SB's customer base and operating footprint are highly complementary to our own, and we see meaningful opportunities to enhance margins by deploying ACT's growing RSS fleet to replace SB's rented tools. We expect SB to generate a payback in just over 2-1/2 years, underscoring the strategic and financial value of this acquisition."

Transaction highlights:

• Complementary customer base, market presence and added scale: SB's current job count of approximately 20 adds meaningful scale, and introduces new customers and operating areas with attractive economics and long-term growth potential.
• Accretive financial impact: Including expected synergies and minimal follow-on capital investment, ACT anticipates a payback period of just over 2-1/2 years. The transaction is expected to be accretive to adjusted earnings before interest, taxes, depreciation, amortization, and stock-based compensation, free cash flow, and net income.
• Balanced financing structure maintains strong financial position: The transaction will be financed with a combination of cash and equity to support management alignment and preserve ACT's financial flexibility. Initial pro forma financed debt to EBITDA is expected to initially be 1.20 to 1.00, declining further throughout 2026.

Key terms of the transaction

Under the agreement, ACT has agreed to pay the following consideration to acquire SB:

• $30.0-million (U.S.) in cash;
• 3,624,232 common shares of ACT, having a value of $17.0-million (U.S.), valued at the volume-weighted average price of ACT common shares over the 10 trading days leading up to but not including the third business day prior to the signing of the agreement. The applicable exchange rate is the average Bank of Canada Canadian-dollar/U.S.-dollar daily rate over the same period.

Amended and restated credit facility

In connection with the agreement, ACT has entered into an arrangement with ATB Financial, as administrative agent, and ATB and Royal Bank of Canada, as co-lead arrangers, to increase the size of the company's existing syndicated credit facility from approximately $125-million (Canadian) to $145-million (Canadian), and increase the U.S.-dollar credit availability from $10-million (U.S.) to $30-million (U.S.). The U.S.-dollar committed credit facilities are composed of: (i) a $10-million (U.S.) revolving facility; and (ii) a new $20-million (U.S.) delayed-draw term facility, having a term of three years with equal quarterly repayments of $1.67-million (U.S.), available for purposes of refinancing a $20-million (U.S.) exchangeable promissory note issued in connection with a prior acquisition which matures in July, 2026. The financed debt to EBITDA covenant has increased to 3.00 to 1.00 from 2.50 to 1.00 as part of the transaction, which initial pro forma calculation is anticipated to be 1.20 to 1.00.

Select financial information (Canadian dollars)

The number of common shares (basic) immediately prior to and after the acquisition is estimated at 34.92 million and 38.54 million, respectively. Select financial information is summarized below in Canadian-dollar terms.

Other terms of the agreement

The agreement may be terminated by either party in certain circumstances, including by mutual agreement of the parties, upon a material breach of the agreement, or if the transaction does not close by April 10, 2026.

In addition to such other restrictions as may apply under applicable securities laws of jurisdictions outside of Canada:

• 2,984,662 acquisition shares to be placed into escrow, whereby 50 per cent of such acquisition shares are released on each of the dates that are 12 and 24 months following the closing date of the transaction;
• 639,570 acquisition shares to be placed into escrow, whereby 20 per cent of such acquisition shares are released each year for five years on the anniversary of the closing date of the transaction.

Closing of the transaction is subject to approval of the Toronto Stock Exchange.

Advisers

Peters & Co. Ltd. acted as financial adviser to ACT. Porter Hedges LLP acted as U.S. legal counsel, and Prelia Canada LLP (formerly called DS Lawyers Canada LLP) served as Canadian legal counsel to ACT and its subsidiaries.

Hartzog Conger Cason LLP acted as legal counsel to the seller.

About ACT Energy Technologies Ltd.

ACT Energy, headquartered in Calgary, Alta., operates in Canada under the brand Altitude Energy Partners and in the United States under the brands Altitude Energy Partners, Discovery Downhole Services, Rime Downhole Technologies and Stryker Directional. ACT's common shares trade on the Toronto Stock Exchange under the symbol ACX. ACT provides high performance directional drilling services and downhole technologies to North American energy companies, delivering tailored solutions that improve drilling efficiency and reduce project costs.

We seek Safe Harbor.