Mr. Pat Carlson reports

KIWETINOHK ANNOUNCES A CASH SALE FOR $24.75 PER SHARE UNDER ARRANGEMENT AGREEMENT WITH CYGNET ENERGY LTD.

Kiwetinohk Energy Corp. and Cygnet Energy Ltd. have entered into an arrangement agreement, under which Cygnet will acquire all of the issued and outstanding common shares of Kiwetinohk for cash consideration of $24.75 per share by way of a plan of arrangement under the Canada Business Corporations Act.

Pursuant to the terms of the arrangement, 22 per cent or 6,060,606 shares (the rollover shares) owned by ARC Financial will be exchanged for shares of Cygnet.

The arrangement has been unanimously approved by Kiwetinohk's board of directors (with conflicted directors abstaining). A special meeting of holders of shares will be held on or about Dec. 16, 2025, to consider and vote on the arrangement. Closing will occur thereafter upon satisfaction or waiver of all conditions, including required shareholder approvals, court approval and customary closing conditions.

Speaking on behalf of Kiwetinohk's management and the board, Pat Carlson, chief executive officer, said: "Since formation in 2018, Kiwetinohk has grown into a premium unconventional growth company differentiated by peer-leading netbacks, high-quality liquids-rich Duvernay assets, an overlapping Montney resource with significant future potential, owned and operated infrastructure and access to the premium Chicago market for natural gas. In 2025, we initiated a broad business strategy review process in an effort to maximize value for our shareholders and deliver a return on capital aligned with the inherent value that has been built over the past seven years.

"After reviewing all of our available options, with the benefit of input from our financial advisers at National Bank Capital Markets and RBC Capital Markets and our legal advisers at Stikeman Elliott LLP, the board has determined that the arrangement is the best alternative in the current market. This arrangement represents a successful conclusion of the business strategy review and achieves a 63-per-cent premium to our share price prior to announcing the business strategy review, reflective of Kiwetinohk's high-quality asset base and notable operational achievements."

Arrangement highlights

• Attractive value for shareholders from business strategy review -- The arrangement was determined to be the preferred strategic alternative for the Kiwetinohk shareholders following a comprehensive and broad strategic review process. Relevant deal metrics of:
  • Enterprise value (EV) of $1.4-billion;
  • Premium to the total proved NPV 15 (net present value, 15-per-cent discount rate) (BT) reserve value of $1.3-billion outlined in the 2024 year-end reserve report;
  • EV/2025 estimated adjusted funds flow from operations of 3.5 times;
  • EV/2025 estimated production of $41,500/boe/d (barrels of oil per day).
• Significant premium generated through business strategy review -- Compared with the company's March 5, 202,5 closing share price of $15.20 on the Toronto Stock Exchange prior to the initial announcement of the business strategy review, Kiwetinohk shareholders will realize a 63-per-cent premium.
• All cash consideration -- Kiwetinohk shareholders will receive $24.75 per share (excluding the rollover shares) to be settled fully with cash consideration provided primarily by NGP and Carlyle. The arrangement is not subject to any financing conditions.
• Independent review -- A special committee of independent directors of Kiwetinohk was formed to consider various transaction alternatives including Cygnet's proposal to acquire all of the outstanding shares, as well other alternatives available to the company including the status quo. After an extensive review process and after receiving independent legal and financial advice and the Peters & Co. Ltd. fairness opinion and independent formal valuation (each as defined below), the special committee unanimously recommended that the board approve the arrangement.
• Formal valuation and fairness opinions -- The special committee retained Peters & Co. as independent valuator to prepare a formal valuation of the shares other than the rollover shares. Peters & Co. has delivered a verbal opinion that, as of Oct. 27, 2025, and subject to the assumptions, limitations and qualifications to be set out in the written formal valuation, the fair market value of the shares is in the range of $22.00 and $27.00 per share. In addition, Peters & Co. has provided a verbal fairness opinion to the special committee that as of the date thereof, and based upon and subject to the various assumptions, limitations and qualifications set forth therein, the consideration to be received by Kiwetinohk shareholders (other than the rollover shareholders in respect of the rollover shares) pursuant to the arrangement is fair, from a financial point of view, to such shareholders (other than the rollover shareholders). In addition, National Bank Capital Markets has provided a verbal fairness opinion to the board that the consideration to be received by Kiwetinohk shareholders (other than the rollover shareholders in respect of their rollover shares) pursuant to the arrangement is fair, from a financial point of view, to such shareholders.
• Strong support -- The special committee and the board (with representatives of the rollover shareholders abstaining from voting) have unanimously recommended that shareholders vote in favour of the arrangement. Additionally, Kiwetinohk shareholders representing approximately 79 per cent of the outstanding shares, including 38 per cent of the minority shares (see shareholder support below), have agreed to support the arrangement, subject to customary fiduciary protections.

Special committee and recommendation of the Kiwetinohk board

As part of the business strategy review process, the board formed the special committee to consider various transaction alternatives, including Cygnet's proposal to acquire all of the outstanding shares, as well other alternatives available to the company including the status quo. Following a comprehensive review of the Cygnet proposal, potential alternatives and negotiations overseen by the special committee between Kiwetinohk and Cygnet as to the purchase price per common share and other terms of the arrangement, and following the receipt of the independent formal valuation and the Peters & Co. fairness opinion in respect of the fairness, from a financial point of view, of the consideration to be received by Kiwetinohk shareholders (other than the rollover shareholders) under the arrangement and advice from its financial and legal advisers, the special committee unanimously determined that the arrangement is in the best interests of Kiwetinohk shareholders and recommended that the board approve the execution and delivery of the arrangement agreement.

After considering, among other things, the unanimous recommendation of the special committee, the receipt of advice from its financial and legal advisers, and the receipt of a fairness opinion from National Bank Capital Markets, the board (with director representatives of ARC Financial abstaining) unanimously determined that the arrangement is in the best interests of Kiwetinohk and is fair to Kiwetinohk shareholders (other than the rollover shareholders), approved the execution and delivery of the arrangement agreement, and recommends that the Kiwetinohk shareholders (other than the rollover shareholders) vote in favour of the arrangement resolution at the special meeting.

Shareholder support

The arrangement requires approval by:

• At least 66.67 per cent of the votes cast by Kiwetinohk shareholders present in person or represented by proxy at the special meeting;
• A majority of the votes cast by Kiwetinohk shareholders, excluding the votes cast by the rollover shareholders and other Kiwetinohk shareholders required to be excluded under Multilateral Instrument -- Protection of Minority Security Holders in Special Transactions. For the purposes of this majority of the minority approval requirement under MI 61-101, 28.6 million shares controlled, directly or indirectly, by the rollover shareholders and shares held by Patrick Carlson will be excluded from voting.

All of the directors and officers of Kiwetinohk, as well as the company's two largest institutional shareholders ARC Financial and Luminus Energy IE Designated Activity company, have entered into voting support agreements pursuant to which they have agreed, subject to the terms thereof, to vote their shares, representing in aggregate 79 per cent of the issued and outstanding shares, including 38 per cent of the minority shares, in favour of the arrangement.

Power business update

Kiwetinohk's process to exit the power business has advanced and the company has sold or cancelled six out of seven of its power projects with aggregate sales proceeds of approximately $26.7-million to date. The power assets will be fully exited prior to the close of the arrangement.

Management information circular

Further details with respect to the arrangement, including the formal valuation and fairness opinions, will be included in the management information circular to be mailed to the Kiwetinohk shareholders in connection with the special meeting to be held on or about Dec. 16, 2025, with closing of the arrangement to occur thereafter upon satisfaction or waiver of all conditions. Closing is currently anticipated to occur in mid to late December, 2025. Once available, a copy of the arrangement agreement and the information circular will be filed on Kiwetinohk's SEDAR+ profile.

Advisers

National Bank Capital Markets and RBC Capital Markets are acting as financial advisers to Kiwetinohk in connection with the business strategy review and the arrangement.

Peters & Co. provided an independent formal valuation and fairness opinion to the special committee.

Stikeman Elliott is acting as legal adviser to KEC and its special committee.

Conference call information

Kiwetinohk management will host a conference call on Oct. 28, 2025, at 2:30 p.m. MT (4:30 p.m. ET) to discuss the arrangement and answer questions. Participants can listen to the conference call by dialling 1-800-715-9871 (North America toll-free) or 647-932-3411 (Toronto and area). A replay of the call will be available until Nov. 4, 2025, at 1-800-770-2030 (North America toll-free) or 647-362-9199 (Toronto and area) by using the code 9866204.

About Kiwetinohk Energy Corp.

Kiwetinohk produces natural gas, natural gas liquids, oil and condensate.

Kiwetinohk's common shares trade on the Toronto Stock Exchange under the symbol KEC. Additional details are available within the year-end documents available on Kiwetinohk's website.

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