Mr. Patrick Oliver reports

BONTERRA ENERGY ANNOUNCES FULLY FUNDED CHARLIE LAKE ASSET ACQUISITION TO ESTABLISH NEW COMPLEMENTARY CORE AREA

Bonterra Energy Corp. has acquired a high-quality, undeveloped Charlie Lake asset that is prospective for light oil, composed of 79 net sections of land in Bonanza, Alta., and 330 barrels of oil equivalent per day (1) of production, for total cash consideration of $24.1-million. The acquisition, which closed on March 1, 2024, is complementary to the company's existing 37 net sections of land, resulting in Bonterra Energy now having 116 net sections of contiguous land in the light-oil-prone Charlie Lake.

"This acquisition enables Bonterra to establish a meaningful position in the expanding Charlie Lake play, featuring a long-term development runway with highly economic drilling locations, all of which drives an increasing and sustainable free cash flow profile," said Pat Oliver, chief executive officer of Bonterra Energy. "Upon closing, the company's property portfolio will be comprised of over 14,500 boe per day (2) of light-oil-weighted production from the Cardium, along with two emerging and exciting light oil core areas: the Charlie Lake and the Montney, both of which offer high-impact growth potential, superior economics and significant free funds flow (3) potential."

Acquisition highlights (4)

Charlie Lake footprint forms new core area:

• New core area with an overall 94-per-cent working interest in one of North America's top oil plays;
• 50,560 net acres (79 net sections) of land contiguous to Bonterra Energy's existing 23,680 net acres (37 net sections) of land assembled through a broker in Crown land sales over the past two years;
• Resultant Charlie Lake position totalling 74,240 net acres (116 net sections), enhancing the company's oil- and liquids-weighted asset base;
• 330 boe per day of oil- and liquids-weighted production currently.

(1) Composed of 160 barrels per day of light crude oil and natural gas liquids and 1.02 million cubic feet per day of conventional natural gas.

(2) Composed of 6,860 bbl per day of light crude oil, 1,455 natural gas liquids and 37,110 Mcf per day of conventional natural gas.

(3) Non-international financial reporting standard measure.

(4) Forecasts based on: West Texas Intermediate $75 (U.S.) per bbl; differential $3.50 (U.S.) per bbl; foreign exchange: 0.725; and Alberta Energy Company: $3 per gigajoule.

Top-tier well economics:

• Top-tier well economics enable strategic capital allocation to projects within the company's portfolio with the highest return on capital employed;
• Wells pay out in approximately 10 months (1), generate internal rates of return in excess of 100 per cent and have half-cycle capital efficiencies of $11,000 to $12,000 per flowing boe (2);
• Estimated per-well capital costs to drill, complete, equip and tie in range from $3-million to $5-million depending on lateral length.

Derisked drilling inventory:

• Four gross (3.6 net) Charlie Lake wells targeted for drilling and completion in the second half of 2024;
• Five existing horizontals and related production contribute to the play's derisked profile;
• In excess of 100 Tier 1 net extended-reach horizontal drilling locations identified;
• The company's operational expertise with Cardium light oil development is directly applicable to Charlie Lake, including horizontal development, marketing and field optimization.

Charlie Lake growth plan:

• Charlie Lake production is forecasted to reach approximately 6,000 boe per day (3) by 2026, which can be maintained for over a decade given conservative estimates of drilling inventory identified.
• Estimated average annual funds flow (4) of $55-million (5) to be generated from the area, with estimated average annual free funds flow (4) of nearly $25-million (5) upon achieving production of 6,000 boe per day.

Corporate sustainability focus:

• Future development of Bonterra Energy's three core operating areas is anticipated to result in production growth and continued debt repayment and advance the commitment to a sustainable return of capital model.

Owned and operated infrastructure:

• Strategic ownership in pipeline infrastructure and two multiwell batteries provides egress and operational flexibility to support near- and longer-term production growth;
• Excess gas plant capacity in the area accommodating the company's development plan.

Strategic rationale

The acquisition represents a compelling strategic move for Bonterra Energy and upon development will align with the company's commitment to corporate sustainability, while fortifying the company's long-term prospects. With the integration of the acquisition, Bonterra Energy expands its existing Charlie Lake footprint and secures a meaningful growth asset in this substantially derisked, highly economic play. The Charlie Lake play integrates with Bonterra Energy's established Cardium assets and cash flow profile while complementing its emerging Montney resource play to create a foundation supporting sustained long-term growth and free funds flow generation.

(1) Assumes total per-well drill, complete, equip and tie-in costs of $5.0-million.

(2) Flowing boe is calculated using the estimated average cost per well divided by the initial annual production.

(3) Composed of 2,740 bbl per day of light crude oil and NGL and 19,560 Mcf per day of natural gas.

(4) Non-international financial reporting standard measure.

(5) Forecasts based on: WTI $75 (U.S.) per bbl; differential $3.50 (U.S.) per bbl; foreign exchange: 0.725; AECO: $3 per gigajoule.

About Bonterra Energy Corp.

Bonterra Energy is a conventional oil and gas corporation forging a grounded path forward for Canadian energy. Operations include a large, concentrated land position in Alberta's Pembina Cardium, one of Canada's largest oil plays. Bonterra Energy's liquids-weighted Cardium production provides a foundation for implementing a return of capital strategy over time, which is focused on generating long-term, sustainable growth and value creation for shareholders. An emerging Montney exploration opportunity is expected to provide enhanced optionality and an expanded potential development runway for the future. Its shares are listed on the Toronto Stock Exchange under the symbol BNE.

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