Mr. Dave Burton reports

LYCOS ENERGY INC. ANNOUNCES INITIAL RESULTS FROM MOONSHINE WELL, 2026 CAPITAL BUDGET AND APPOINTMENT TO BOARD OF DIRECTORS

Lycos Energy Inc. has provided an operational update on its recently drilled Moonshine well in east-central Alberta and outlined its 2026 capital budget.

2026 capital budget

Lycos has approved 2026 capital expenditures of $35-million to $40-million, focused on the continued development of its Mannville heavy oil assets in east-central Alberta. The program is expected to support the drilling of approximately 15 to 20 gross (15 to 20 net) wells, primarily targeting the Moonshine area, with additional activity planned across the company's broader east-central Alberta land base.

The 2026 program is designed as a disciplined, proof-of-concept phase, with the company planning to drill initial wells across several pads to delineate the asset base. This approach is expected to provide key reservoir and operational data to optimize future development. As additional pads are developed, Lycos expects to return to these locations with multiwell programs, supporting improved capital efficiencies.

Drilling activity is expected to commence in the second quarter, with the majority of activity concentrated in the latter part of the quarter and into the second half of the year, positioning the company to deliver exit production of approximately 2,500 to 3,000 boe/d.

In addition to drilling, the program includes continued investment in waterflood optimization and facility infrastructure to support base production and improve capital efficiency across the asset base.

Lycos remains focused on executing a disciplined development program while advancing its inventory of high-quality Mannville drilling opportunities. Results from the Moonshine well are expected to support future development planning and capital allocation decisions throughout 2026.

Moonshine well update

In March, 2026, the company drilled one gross (1.0 net) single-leg circulating string well in the Moonshine area targeting the Mannville formation. Since being brought on production, the well has demonstrated increasing production rates with associated sand production consistent with expectations for the reservoir. The well achieved a 30-day initial production (IP30) rate of approximately 140 barrels of oil equivalent per day (boe/d) and is currently exceeding 160 boe/d.

The company continues to monitor well performance and will use these data to support future pad development planning and type curve refinement.

The company believes these initial results support the development potential of the Moonshine area and will assist in delineating additional drilling locations across its Mannville land base.

Board appointment

The company is pleased to announce the appointment of Craig Bryksa to its board of directors effective today. Mr. Bryksa brings more than 23 years of experience in the energy industry. He most recently served as president and chief executive officer of Veren Inc. until its combination with Whitecap Resources Inc. in May, 2025. Prior to this role, he held a number of senior management positions within the organization, including vice-president, engineering west, after joining the company in 2006. His industry experience as a professional engineer also includes roles with Enerplus Resources Fund and McDaniel & Associates Consultants. Mr. Bryksa is a member of both the Association of Professional Engineers and Geoscientists of Alberta, and the Association of Professional Engineers and Geoscientists of Saskatchewan, and holds a bachelor of applied science in petroleum systems engineering from University of Regina.

Stock option grant

The company granted a total of 3.32 million stock options today pursuant to the company's stock option plan, of which approximately 2.82 million were granted to certain directors and officers. The options expire five years from the date of grant and are exercisable at a price of $2.20 per common share. The options vest as to one-third on each of the first, second and third anniversaries of the grant date.

The company also intends to adopt a new share award incentive plan, subject to acceptance by the TSX Venture Exchange and ratification by shareholders at the next annual general meeting. If implemented, the new plan would complement, and operate alongside, the company's existing stock option plan, providing the company with additional flexibility in structuring future long-term incentive awards as restricted share awards and performance share awards.

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.