Mr. Dave Burton reports

LYCOS ENERGY INC. ANNOUNCES STRATEGIC BUSINESS COMBINATION WITH MAHIKAN OIL CORPORATION AND $30.0 MILLION EQUITY OFFERING

Lycos Energy Inc. entered into a definitive agreement on March 6, 2026, with Mahikan Oil Corp., a privately held, arm's-length, heavy oil producer, to complete a strategic business combination in an all-share transaction. Lycos has arranged a concurrent equity financing to be offered on a non-brokered private placement basis for aggregate gross proceeds of $30.0-million.

Summary of the combination

Pursuant to the terms of the agreement, Lycos will acquire Mahikan for total consideration of approximately $49.7-million, including the assumption of net debt, consisting of 29,781,301 common shares of Lycos at a deemed price of $1.20 per Lycos share, representing 0.60 of a Lycos share for each common share of Mahikan.

Concurrent with the execution of the agreement, shareholders of Mahikan representing 100 per cent of the outstanding shares, executed letters of transmittal irrevocably accepting Lycos's offer and tendering their shares in connection with the combination. Following closing of the transaction, Mahikan will continue to operate as a wholly owned subsidiary of Lycos.

The combination is expected to close on or before March 31, 2026, subject to certain customary conditions and approvals, including the approval of the TSX Venture Exchange. The agreement provides for, among other things, non-solicitation covenants. All of the Lycos shares issued to directors, officers and 10-per-cent shareholders of Mahikan, representing an aggregate of 21,150,001 Lycos shares on closing, will be subject to a hold period and released as to one-third on each of the dates that is four, eight and 112 months following the closing. Lycos shares issued to all other shareholders of Mahikan will be subject to a four-month hold period.

The combination and the offering will not result in the creation of a new control person of Lycos, as such term is defined by the policies of the TSX-V. In addition, the transaction will not result in a change of control of Lycos, as such term is defined by the policies of the TSX-V. The transaction is not a related party transaction.

Strategic rationale

Lycos and Mahikan have each executed on strategies of acquiring land and inventory-rich assets with established total petroleum initially-in-place (PIIP) and development potential, applying disciplined capital allocation, optimized well design and operational execution to enhance asset performance prior to divestiture. While the merits of the Lycos and Mahikan asset bases stand on their own, their respective elements are highly complementary to one another. Lycos believes the combined teams' experience developing stacked Mannville inventory provides a solid foundation to responsibly advance the newly acquired contiguous land base.

Combination highlights:

• New core area -- 45 net contiguous sections of stacked Mannville rights: The combination establishes a new operated core area comprising approximately 45 net contiguous sections of largely undeveloped land prospective for multiple Mannville horizons. The contiguous land base provides enhanced development flexibility, pad-style drilling opportunities and infrastructure optimization potential.
• Stacked Mannville pay with multizone optionality: The Mahikan land position is prospective for multiple stacked Mannville targets, including the Waseca, Sparky, General Petroleum (GP) and Lloydminster formations, providing repeatable drilling inventory across several oil-bearing horizons and long-term development visibility.
• Large oil-in-place resource base: The Mahikan asset base is supported by a significant PIIP estimate of approximately 1.44 billion barrels, underpinning long-life resource potential and future recovery upside through optimized primary and enhanced recovery development strategies.
• Material development inventory: Identified drilling inventory of approximately 698 gross (698 net) locations, with additional upside potential through delineation and stepout development across the broader land base.
• Management and board of directors: Lycos will continue to be led by Dave Burton, president and chief executive officer, and will include Mahikan team members Taylor Law as vice-president, exploration, Craig Hutton as president of the Mahikan business unit and Brennan Kasper as director, land. Upon completion of the transaction, the board of directors of Lycos will include equal representation from both companies with Tom Coolen (chairperson) and Steve Buytels, two existing directors of Mahikan, and Mr. Burton and Bruce Beynon, two incumbent directors of the board, ensuring continuity of governance and corporate oversight. Two additional independent board members will be appointed in connection with the transaction.

Equity offering

Lycos is also pleased to announce a non-brokered private placement offering of up to 25 million Lycos shares at a price of $1.20 per offered share for aggregate gross proceeds of up to $30.0-million. It is anticipated that certain directors, officers and employees of the combined entity will subscribe for approximately $5.0-million of the offering.

The Lycos shares will be issued on a private placement basis pursuant to applicable prospectus exemptions under Canadian securities laws in all the provinces and territories of Canada. The offered shares may also be offered and sold in the United States by way of private placement pursuant to exemptions from the registration requirements of the United States Securities Act of 1933, as amended, and to eligible purchasers resident in jurisdictions other than Canada and the United States in compliance with applicable securities laws. Net proceeds from the offering will be used to repay indebtedness incurred in connection with the combination, to finance future development capital and for general corporate purposes. Upon completion of the transaction and assuming gross proceeds of $30.0-million are raised through the offering, Lycos is expected to have a net cash position of approximately $13.0-million.

The offering is anticipated to close on or about March 31, 2026, subject to customary closing conditions, including approval of the TSX-V. In connection with the offering, certain eligible advisers may receive cash finders' fees, in accordance with applicable securities laws and the policies of the TSX-V.

Following the completion of the offering, insiders of the company are expected to hold in excess of 20 per cent of the issued and outstanding Lycos shares.

All securities issued under the offering will be subject to a statutory hold period of four months and one day from the date of issuance in accordance with applicable securities laws.

Board additions

Tom Coolen, chairperson (Calgary, Canada)

Mr. Coolen has been a director of Trican Well Services since August, 2025, following the acquisition of Iron Horse Energy Services by Trican. Prior to joining Trican, he served as chairman and CEO of Iron Horse from 2010 to 2025. Mr. Coolen began his career in 2002 with Schlumberger Oilfield Services, where he gained extensive experience in the energy sector. He previously served as a director on the board of Buffalo Mission Energy Corp. prior to its acquisition in 2024 by Rubellite Energy. Mr. Coolen holds a bachelor of engineering from Dalhousie University.

Steve Buytels, director (Calgary, Canada)

Mr. Buytels is the president of Tamarack Valley Energy, and brings over 20 years of oil and gas, capital markets, and financial advisory experience. Prior to his appointment as president, he served as the chief financial officer of Tamarack Valley Energy from 2020 to 2025. Before joining Tamarack, he served as a partner and managing director at various independent investment banks specializing in the energy sector.

He previously served as a director on the board of Buffalo Mission prior to its acquisition in 2024 by Rubellite Energy. Mr. Buytels holds a chartered financial analyst designation and a bachelor of management from the University of Lethbridge.

Advisers

National Bank Capital Markets is acting as exclusive financial adviser to Lycos in connection with the combination and as lead financial adviser to Lycos in connection with the offering.

Peters & Co. Ltd. is acting as exclusive financial adviser to Mahikan in connection with the combination and as co-financial adviser to Lycos in connection with the offering.

Stikeman Elliott LLP is acting as legal counsel to Lycos in connection with the combination and the offering.

Torys LLP is acting as legal counsel to Mahikan with respect to the combination.

About Lycos Energy Inc.

Lycos is an oil-focused, exploration, development and production company based in Calgary, Alta., operating high-quality, heavy oil development assets in the east-central Alberta area.

We seek Safe Harbor.