Mr. Ingram Gillmore reports

GEAR ENERGY LTD. ANNOUNCES INITIATION OF A STRATEGIC REPOSITIONING PROCESS AND AN OPERATIONAL UPDATE

Gear Energy Ltd. has initiated a strategic repositioning process and an operational update.

Strategic repositioning process

Gear Energy's board of directors has commenced a formal process to explore, review and evaluate strategic repositioning alternatives with a view to enhancing shareholder value. With Gear Energy's top-tier cash flow generation ability, strong balance sheet, deep inventory of both drilling and enhanced oil recovery opportunities, and a material tax coverage position, the board and management believe that the company is ideally placed to undertake this process. Although there have been no formal proposals received, Gear Energy has been approached by a number of parties interested in potential transactions.

Through the strategic process, the board intends to undertake a comprehensive review to identify and consider a broad range of alternatives to enhance shareholder value, including, but not limited to, a merger, corporate sale, corporate restructuring, the sale of select assets, the purchase of assets, a potential spinout of select assets, optimization of future capital allocation and return of capital strategies, or any combination of these alternatives. The strategic process may result in no specific transaction being pursued, with the company looking to continue to optimize and improve its operations as they currently exist with a focus on providing long-term sustainable growth and competitive returns to shareholders.

Gear Energy has engaged Peters & Co. Ltd. as financial adviser in connection with the strategic process. Gear Energy and Peters & Co. have created a virtual data room, which will be available for review by parties upon execution of a confidentiality agreement in connection with the strategic process.

Gear Energy has not set a definitive schedule for the conclusion of the strategic process or made a decision to pursue any particular alternative. Given the nature of the process and the need for confidentiality during this process, the company does not intend to provide updates until such time as the board approves a definitive transaction or strategic repositioning alternative, or otherwise determines that further disclosure is necessary or appropriate.

Operational update

With continuing positive results from Gear Energy's summer drilling program, production has grown steadily through September. In total, seven Mannville heavy oil wells have been drilled since breakup with five of them on production as of last week and the remaining two expected to be pumping by early October. Three of the wells were unlined multilateral horizontal wells, and the other four were single lateral lined horizontal wells. Production for September is currently estimated to average approximately 5,600 barrels of oil equivalent per day with exit rates above 5,800 boe per day. Four of these seven new wells not only will add new production but have also derisked and expanded future drilling inventory. Additionally, Gear Energy recently mobilized a rig in Tableland, Sask., to drill the first of two light oil wells.

In addition to the drilling program, Gear Energy has also initiated water injection into the new enhanced oil recovery project in the Wildmere Cummings pool, as well as completed the planned water flood expansions in Wilson Creek. Across the entire enhanced oil recovery portfolio, there have been many encouraging results to date in 2023 with oil production increases being seen in Wilson Creek, Maidstone and Wildmere.

Gear Energy is Canadian energy company focused on the exploration and development of heavy-oil-weighted production primarily in east-central Alberta and west-central Saskatchewan.

We seek Safe Harbor.