Mr. Richard McHardy reports

LOGAN ENERGY CORP. ANNOUNCES THIRD QUARTER 2023 RESULTS, OPERATIONS UPDATE AND 2024 GUIDANCE

Logan Energy Corp. has released its unaudited financial and operating results for the third quarter of 2023, and has provided an operations update, increased guidance for the second half of 2023 and preliminary guidance for 2024.

Selected financial and operational information is set out herein and should be read in conjunction with the company's unaudited interim financial statements and related management's discussion and analysis (MD&A) for the three and nine months ended Sept. 30, 2023, and 2022 filed on SEDAR+ and are available on the company's website. The highlights reported in this press release include certain non-GAAP (generally accepted accounting principles) measures and ratios which have been identified using capital letters and are defined herein.

Third quarter financial and operating highlights

• The third quarter of 2023 reflects Logan's first full quarter of operations following the spinout of the early stage Montney assets from Spartan Delta Corp. on June 20, 2023.
• Logan raised net equity proceeds of $102.2-million in the third quarter through completion of the previously announced private placement and exercise of the transaction warrants issued in connection with the spinout.
• Production averaged 5,394 BOE (barrels of oil equivalent) per day (24 per cent liquids) during the third quarter, up from 5,015 BOE per day (22 per cent liquids) in the second quarter of 2023. The first two wells drilled at Simonette were brought on stream in September and did not contribute meaningful volumes to the average reported for the third quarter. The increase in production compared with the previous quarter is primarily due to the installation of additional field compression at Pouce Coupe.
• The company generated $5.2-million of adjusted funds flow for the three months ended Sept. 30, 2023, an increase of 64 per cent compared with $3.1-million in the previous quarter, primarily driven by the increase in oil and gas sales, net of royalties.
• Capital expenditures before A&D were $33.5-million for the three months ended Sept. 30, 2023, of which Logan spent $3.5-million on seismic and land, $27.3-million on drilling and completions, $1.7-million on equipping and facilities, and $900,000 on production optimization projects. Additionally, Logan incurred $5.1-million of acquisition costs during the quarter to expand its undeveloped acreage position at Simonette and to acquire certain equipment inventory to be used in its 2023 and 2024 capital program.
• Logan exited the third quarter with $90.0-million of cash on hand and access to a $15.0-million revolving demand credit facility which is currently undrawn. The company is well positioned to execute on its 2023 and 2024 capital expenditure programs.
• Since commencing operations, Logan has added 62.25 net sections of land around the company's core area of Simonette, consisting of 32.75 net sections of Montney acreage and 29.5 net sections of land in non-Montney plays on and surrounding our existing asset base. Within the Montney acreage added, Logan has acquired a 14 net section contiguous block of land in the Lator area west of Simonette which Logan plans to drill this winter.

The attached table summarizes the company's financial and operating results for the three months ended Sept. 30, 2023.

Operations and well performance update

Logan began drilling operations in July at Simonette with a well in the North Simonette oil play segment (the 5-11 well) which was completed in August and began flowback in September. From there, the rig moved to South Simonette in August to drill a single well within the gas-condensate play segment (the 14-33 well) which was completed and began flowback in September. The rig then moved to Pouce Coupe to drill a three well pad which spud on Sept. 7, 2023. The Pouce Coupe pad has now been completed and has just begun flowback.

North Simonette 5-11 performance

The Logan 5-11 well is offsetting a 2012 vintage well (the 16-12 legacy well) that was completed with a 12-stage oil frac and 885 tonnes of proppant across 1,942 metres of horizontal. The 16-12 legacy well achieved peak monthly production of 120 bbl/d (barrels of oil per day) of oil and is expected to have ultimate recovery of 210 mbbl of oil, 4.7 mbbl of NGLs (natural gas liquids) and 0.62 bcf (billion cubic feet) of sales gas (318 mBOE with 68 per cent liquids).

The Logan 5-11 well was completed with a high-intensity frac consisting of 207 stages and 8,275 tonnes of proppant across 2,914 metres of horizontal. For the month of October, 5-11 averaged 494 bbl/d of oil, eight bbl/d of NGLs and 1.4 mmcf/d (million cubic feet per day) of sales gas (732 BOE/d with 69 per cent liquids). As of Oct. 31, 2023, the well had been on production for 65 days. The water cut continues to decline as the well continues to clean up. Importantly, the drawdown for October was only about 25 per cent (or 5MPa of drawdown) due to downhole pump capacity limits demonstrating that the well has significantly more inflow potential. The company's experience is that wells in the underpressured Montney oil play, like North Simonette, can take up to three to four months to reach peak production.

Initial production results from the 5-11 well exceeded the company's previous H2 2023 guidance (defined herein) assumptions by 35 per cent. While the production results are early, Logan is encouraged by the results to date and believes that North Simonette will be a highly economic and material play segment for the company going forward.

South Simonette 14-33 performance

The Logan 14-33 well is offsetting the top-performing legacy well in South Simonette (the 16-33 legacy well) that was completed in 2017 with a 70-stage frac and 3,150 tonnes of proppant across 2,937 metres of horizontal. The 16-33 legacy well achieved peak monthly production of 318 bbl/d of condensate, 45 bbl/d of NGLs and 5.9 mmcf/d of sales gas (1,352 BOE/d with 27 per cent liquids) and is expected to have an ultimate recovery of 253 mbbl of condensate, 54 mbbl of NGLs and 7.1 bcf of sales gas (1,493 mBOE with 21 per cent liquids) 3.

The Logan 14-33 well was completed with 125 stages and 7,378 tonnes of proppant across 2,974 metres of horizontal. Importantly, the 14-33 well was landed 35 metres deeper in the Montney section than a typical legacy well in South Simonette, as Logan believes this will lead to materially better liquids capture.

For the month of October, 14-33 averaged 528 bbl/d of condensate, 47 bbl/d of NGLs and 6.1 mmcf/d of sales gas (1,598 BOE/d with 36 per cent liquids). As of Oct. 31, 2023, the well had been on production for 38 days.

For context, the initial gas rate of 14-33 is equivalent to that of the best legacy well in the field, but 14-33's liquids ratio of 87 bbl/mmcf is about 60 per cent higher than the offsetting legacy well's initial liquids ratio and substantially higher than the average legacy well.

Initial production results from the 14-33 well exceeded the company's previous H2 2023 guidance assumptions by 81 per cent, with the condensate rate exceeding the company's guidance assumptions by over 145 per cent. Logan is also very encouraged by these early results in South Simonette. To date, the new deeper landing depth and more intense completion is yielding increased condensate production consistent with the company's hypothesis.

On the back of these well results, Logan took advantage of a rig coming available in the area and has commenced drilling again with a three well pad spud at South Simonette on Oct. 28, 2023 (4-10 pad). The company's total budget for capital expenditures before A&D of $75-million for 2023 remains unchanged. The landholding well initially planned for Flatrock in the fourth quarter of 2023 has been deferred to 2024 and replaced by this accelerated drilling at Simonette.

Updated H2 2023 guidance and 2024 budget

Logan is pleased to provide increased guidance for the second half of 2023 (updated H2 2023 guidance) as well as the company's preliminary budget for 2024 (2024 guidance).

On the strength of its initial well results in Simonette, the company has raised its H2 2023 guidance to 6,000 BOE/d (previously 5,000 BOE/d). For 2024, the company's board of directors has approved an initial capital budget of $120-million. The budget is designed to deliver growth in Simonette, maintain production in Pouce Coupe and advance long-term growth projects like Flatrock. The 2024 capital budget is allocated as follows: $64-million for drilling, completion, equipment and tie-in projects at Simonette and Pouce Coupe, $13-million for drilling and completion at Flatrock, $28-million for infrastructure, and $15-million for land and contingency.

At Simonette, Logan plans to drill, complete and bring onstream four 100-per-cent working interest Montney wells. The 4-10 three well pad currently drilling is budgeted to come on stream in August, 2024, allowing for contingency of an extended spring breakup. In addition, Logan plans to drill and test one well on the recently acquired lands in the Lator area.

At Pouce Coupe, Logan plans to drill and bring on stream a two-well pad which will fill Logan's available third party processing capacity. During the third quarter, Logan advanced its long-term infrastructure plans for Pouce Coupe. Logan was successful in procuring strategic long-term egress for its Pouce Coupe development project by adding 40 mmcf/d of firm transport commencing in 2027. This is a critical part of the development plan for Pouce Coupe and ensures that Logan will be able to execute on its long-term growth plans for the asset. Logan is also advancing a company built and operated processing solution that is optimized for Logan's development plan. Additionally, Logan is advancing procurement of secondary market gas egress that, together with the processing solution, will target a production growth ramp between 2025 to 2027.

At Flatrock, Logan plans to drill its first two wells in 2024 and complete and test one of the two wells.

The attached table summarizes Logan's 2024 guidance, along with updated H2 2023 guidance as compared with previous guidance provided as part of the company's press release dated July 13, 2023 (previous H2 2023 guidance), which is reproduced in the attached table.

The increase in average production forecast for H2 2023 to 6,000 BOE per day is reflective of new wells drilled both exceeding initial production type curves, as well as these wells coming on production earlier than originally estimated. The forecasted working capital surplus for year-end 2023 decreased as a result of 19.4 million transaction warrants that expired unexercised (which resulted in less dilution to the share count than originally anticipated), as well as unbudgeted land acquisitions completed by the company, offset by the forecasted increase in adjusted funds flow. The 2024 budget of 8,700 BOE per day assumes all new pads come on stream in mid 2024; Logan expects to exit 2024 above 10,000 BOE per day (Q4 average production).

Grant of stock options

On Nov. 22, 2023, the company's board of directors approved the grant of 22.7 million stock options with an exercise price of 89 cents per common share and a five-year term. The options vest as to one-third on each of the first, second and third anniversary of the grant date. Of the total number of options granted, an aggregate of 9.7 million options were granted to officers and directors of the company.

About Logan Energy Corp.

Logan is a growth-oriented exploration, development and production company formed through the spinout of Spartan's early stage Montney assets. Logan is founded with a strong initial capitalization and three high-quality and opportunity-rich Montney assets located in the Simonette and Pouce Coupe areas of northwest Alberta and the Flatrock area of northeastern British Columbia. The management team brings proven leadership and a record of generating excess returns in various business cycles.

We seek Safe Harbor.