Mr. Ingram Gillmore reports

GEAR ENERGY LTD. ANNOUNCES COMPLETION OF THE STRATEGIC REPOSITIONING PROCESS AND INTENTION TO COMMENCE NORMAL COURSE ISSUER BID

Gear Energy Ltd. has completed the strategic repositioning process, with the board of directors unanimously concluding that the various alternatives presented were not reflective of the company's underlying value nor compelling relative to the company's stand-alone prospects for growing shareholder value.

Strategic repositioning process

Gear's board of directors commenced a formal process on Sept. 27, 2023, to explore, review and evaluate strategic repositioning alternatives with a view to enhancing shareholder value. With Gear's top-tier cash flow generation ability, strong balance sheet, deep inventory of both drilling and enhanced oil recovery opportunities, and material tax coverage position, the board and management believed that the company was ideally placed to undertake this process.

At the beginning of the process, WTI (West Texas Intermediate) oil prices were over $90 (U.S.) per barrel and the WCS (Western Canadian Select) heavy oil differential was close to $15 (U.S.) per barrel. During the subsequent months, WTI prices declined by over $20 (U.S.) per barrel and the WCS differential widened by an incremental $10 (U.S.) per barrel to the end of 2023. As the company moves into 2024, the sentiment for WTI has stabilized and the outlook for WCS differentials has materially improved due to the imminent start-up of the Trans-Mountain pipeline, offering Canadian producers long-awaited access to international markets and a far more competitive outlook for heavy oil prices.

Through the strategic process, the board undertook a comprehensive review to identify and consider a broad range of alternatives, 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 has now concluded with no specific transactions being pursued. The company will continue to optimize and advance its current operations with a focus on providing long-term sustainable growth, competitive returns to shareholders and a strong balance sheet.

Normal course issuer bid

Gear believes that the current market price of its common shares does not reflect their underlying value. As such, subject to regulatory approval, Gear intends to implement a normal course issuer bid (NCIB) allowing the company to purchase up to 10 per cent of the public float of the company's outstanding common shares for cancellation. Following acceptance of the NCIB by the Toronto Stock Exchange, the company expects to provide additional details of the NCIB in its press release announcing the fourth quarter of 2023 operating results and year-end reserves summary, which is expected to be issued on or about Feb. 21, 2024.

Gear Energy is a Canadian energy company focused on the exploration and development of oil in Alberta and Saskatchewan.

We seek Safe Harbor.