Ms. Delayne Weeks reports

ANGKOR RESOURCES ACQUIRES OIL PRODUCTION & EXPANDS CARBON/GAS CAPTURE

Angkor Resources Corp.'s 100-per-cent-owned energy subsidiary, EnerCam Exploration Ltd., signed agreements on Dec. 12, 2023, with project operator Eyehill Creek Exploration Ltd. and 358140 Alberta Ltd. to acquire a 40-per-cent interest in the Evesham/Macklin production project, including the oil production from 33 vertical wells and the gas capture facility and all related pipelines and equipment. The transaction values the total project at $11.5-million, making the purchase price of the 40-per-cent interest with adjustments at $4,392,000.

Highlights:

• GLJ Petroleum Consultants was contracted to provide an independent assessment of the project. Its report indicates proved developed producing (PDP) oil reserves at 376,300 barrels and gas reserves at 95 million cubic feet from the project.
• Additional probable reserves add 109,000 barrels of oil and 28 million cubic feet of gas to provide total proven and probable (TPP) of 485,000 barrels oil and 123 million cubic feet of gas.
• The report indicates a net present value (NPV) of PDP with a 10-per-cent discount to be $11,171,000 and an NPV of TPP and a 10-per-cent discount of $13.93-million value.
• GLJ tracked a historical 10-year period up to September, 2023, and forecasted a period to September, 2033.
• The financing for the acquisition is a loan of $4.84-million from a private lender to EnerCam, and the acquired 40-per-cent interest is the security held by the lender. Repayment terms of interest and principal are over a 10-year period, at 10-per-cent interest, payable monthly, and adjusted every three years. The lender is also entitled to 20 per cent of potential carbon credits on the project for the life of the project. The loan includes $540,000 of debt repayment which was previously in place from the lender for costs of the original gas capture project and additional workovers and improvements to the pipelines, infrastructure and equipment.
• The project produces in excess of 225 barrels of oil produced daily (BOPD) and the recent lifting costs (costs of production before taxes) are below $24 per barrel.
• Effective date for production allocation posttransaction is Nov. 1, 2023.
• No finder's fee will be paid in regard to the transaction.
• One of the two vendor companies, 358140, has a 50-per-cent shareholder who is a related party to Angkor.
• Eyehill shall continue to be the operator for the project.
• Posttransaction, the percentage interest of the three parties, each with a working participating vested interest, is:
• • EnerCam: 40 per cent;
  • 358140: 35 per cent;
  • Eyehill: 25 per cent.
• The report was completed in accordance with National Instrument 51-101 and Canadian Oil and Gas Evaluation Handbook (COGEH) standards.

The project currently generates oil and/or gas production from 33 wells, and handles its water with two water disposal/injection wells and its own trucking service. It also captures the emissions from the wells through pipelines to a processing facility, where gas is dehydrated and then sold into the provincial energy distribution system. EnerCam was previously involved only in the gas capture portion of this project. This transaction adds oil revenue, water production and disposal, and added capacity for gas capture to EnerCam's holdings.

Angkor is pleased to note that it has obtained conditional approval from the TSX Venture Exchange for the transaction and expects full approval on completion of all agreements and disbursements.

The production zone of 32 of the 33 wells is in the Mannville Sparky formation. One well is producing from the Cummings formation. The earliest of the wells started producing in 2001; the original field of 30 wells was completely shut in 2018 and the Eyehill and 358140 teams acquired the project to refurbish, rebuild and restart production in 2019. They added several other wells to the project as they advanced production. The Mannville is known to have multizone potential in the area and the company will continue to evaluate additional production opportunities as they arise.

Delayne Weeks, chief executive officer of Angkor, comments on the transaction: "We are very excited to close this transaction and advance the company to a phase with recurring monthly cash flow and an opportunity to expand the environmental benefits by reducing greenhouse gas emissions from flaring and venting. The capture of the carbons (methane, ethane etc.) redirects the energy to processing and provincial sales instead of sending it to atmosphere. We would like nothing less than to capture three million cubic feet of emission gas daily and this transaction paves a path to reach surrounding producers who are flaring or venting and offer them a solution. It really is a win-win, and the cash flow from the oil proceeds will support operations of EnerCam and Angkor."

Qualified person

Dennis Ouellette, BSc, PGeo, is a member of the Association of Professional Engineers and Geoscientists of Alberta (APEGA No. 104257) and a qualified person as defined by National Instrument 43-101. He is the company's vice-president, exploration, and has reviewed the technical report provided by third party certified oil and gas technical appraisers.

About Angkor Resources Corp.

Angkor Resources is a public company, listed on the TSX Venture Exchange, and is a leading resource optimizer in Cambodia working toward mineral and energy solutions across Canada and Cambodia. Angkor's carbon capture and gas conservation project in Saskatchewan, Canada, is part of its long-term commitment to environmental and social projects and cleaner energy solutions across expanding jurisdictions.

The company holds three mineral exploration licences in Cambodia and its subsidiary, EnerCam Resources, was granted an onshore oil and gas licence of 7,300 square kilometres in the southwest quadrant of Cambodia.

We seek Safe Harbor.