Mr. Shawn Mehler reports

PROSPERA ENERGY ANNOUNCES Q3 2023 FINANCIALS WITH FIRST CLOSING OF DEBT FINANCING

In third quarter 2023, Prospera Energy Inc. was steadily recovering production rates that had been impacted by adverse weather in earlier quarters. During Q3, Prospera Energy attained gross peak rates of 770-plus barrels of oil equivalent per day, with another 350 boe/d behind the pipe to be optimized. Meanwhile, phase 2 development drilling commenced in Q3, and this horizontal drilling program required the temporary shut-in of the adjacent production of approximately 120 boe/d for smoother drilling operations. This second phase of restructuring development includes the transformation from vertical wells to horizontal wells to reach the significant remaining reserves in Prospera Energy's Saskatchewan heavy oil fields.

Prospera Energy attained higher working interest (net) sales of 519 boe/d (658 boe/d gross) in Q3 2023 with higher corresponding revenue of $4.0-million compared with Q3 2022. Prospera Energy's joint venture partners are in receivables and therefore in default payables until remedied. Consequently, Prospera Energy assumes 100 per cent of production and revenue. In third quarter 2023, highlights are as follows:

• Realized positive operating income of $1,101,827 in Q3 2023 compared with $783,084 in Q3 2022;
• Reported net income of $71,011 in Q3 2023 compared with a net loss of ($779,438) in second quarter 2023;
• Prospera Energy realized average sales prices of $82.15 per boe in Q3 2023, compared with $85.09 per boe in Q3 2022; Prospera Energy expects pricing to remain at similar levels through the rest of 2023;
• Operating expenses in Q3 2023 were $41.45 per boe compared with $36.24 per boe in Q3 2022; increases were driven by higher vegetation control, facility desanding, injection volumes optimization, winterization and preparation for additional volume throughput;
• Restructuring efforts continue to improve Prospera Energy's balance sheet:
  • Increased property and equipment balance to $36.0-million from $29.0-million on Dec. 31, 2022;
  • Positive shareholders equity balance of $2.3-million compared with $6.2-million on Dec. 31, 2022;
• Year to date, Prospera Energy has received $7,435,568 through warrant exercises and $4,329,000 through private placements, whilst extending matured convertible debt of $1.5-million to 2025, allowing for Prospera Energy capital development without affecting working capital;
• Prospera Energy's capital development program originally consisted of 10 heavy oil horizontal wells and eight medium oil vertical wells, and was expected to contribute an additional 1,000 barrels per day; Prospera Energy has since drilled, completed and tied in five horizontal wells and, due to positive drilling results, has extended the heavy oil horizontal development program.

Prospera Energy third quarter financial performance

Selected financial and operational information outlined herein should be read in conjunction with the company's financial statements and related management's discussion and analysis for the quarter ended Sept. 30, 2023.

Prospera Energy has submitted its quarter-end financial information for 2023, within the company's issuer profile on SEDAR+.

First closing of debt financing

Additionally, Prospera Energy announces the first closing of $580,000 private placement financing of debt with an equity bonus. Prospera Energy intends to use the net proceeds for development capital (covering default partner portion) -- drilling, completion and tie-in, well abandonment and reclamation costs, and continuing environmental, social and governance initiatives. The financing is subject to approval by the TSX Venture Exchange.

An aggregate amount of up to $3-million may be raised through this non-brokered private placement, and Prospera Energy is actively in discussion to fill the remaining amount. The company remains focused on minimal dilution financing options moving forward, and if fully subscribed, this debt financing would represent less-than-1-per-cent equity dilution.

The securities will be offered to qualified purchasers in reliance upon exemptions from prospectus and registration requirements of applicable securities legislation. A finder's fee in cash and/or warrants may be paid to eligible finders in relation to this financing. These private placements are offered in jurisdictions where the corporation is legally allowed to do so.

Furthermore, Prospera Energy issues a clarification in respect to the settlement of finders' fees totalling $47,304 pursuant to the finder's fee agreement dated Jan. 15, 2023. This debt was incurred in respect to a private placement announced on Jan. 25, 2023, and referenced in press releases on March 29, 2023, and again on June 14, 2023, both times using a price per share and a warrant exercise price that were deemed unacceptable to the TSX Venture Exchange.

Under this revised agreement, the corporation will convert the debt into common share units of the corporation. The shares-for-debt transaction involves the issuance of 525,600 common share units at a deemed price of nine cents per common share unit, subject to certain conditions, including the final approval of the TSX Venture Exchange. Each common share unit consists of one common share and 0.875 common share purchase warrant. Holders of whole purchase warrants are entitled to purchase one common share at 10.5 cents per share until Feb. 14, 2025. The corporation reserves the right to accelerate the expiry of the warrants should the shares trade at 30 cents for 10 consecutive business trading days following the expiry of the four-month hold period. The common shares issued as part of the shares-for-debt transaction will be subject to a four-month hold period.

About Prospera Energy Inc. and its development objectives

Prospera Energy (TSX Venture Exchange: PEI, OTC: GXRFF and Frankfurt Stock Exchange: OF6B) is a publicly traded energy company based in Western Canada, specializing in the exploration, development and production of crude oil and natural gas. Prospera Energy has announced a mid-August spud of Prospera Energy's phase 2 restructured development program intended to increase production. This phase includes the transformation from vertical wells to horizontal wells to reach the significant remaining reserves (400 million barrels) in Prospera Energy's Saskatchewan heavy oil fields. This transformation will also reduce the Prospera Energy environmental and surface footprint by eliminating the numerous vertical well leases along the lateral path.

The first five horizontal wells drilled have performed higher than the estimated type curve, and the IP60 has exceeded Prospera Energy expectations. Prospera Energy's current production is 1,100 boe/d, with another 450 boe/d behind pipe to accommodate development. The extended horizontal drilling is to resume and in the next few days. The development of light oil slanted wells has received permits and lease construction, which is set to commence in the next few days as well. Prospera Energy will continue the phase 2 development program to increase production, aiming to achieve year-end targets and enhance Prospera Energy's share value.

Phase 3 of Prospera Energy's restructured development program involves full-scale reservoir management with improved oil recovery/enhanced oil recovery applications to provide support to optimize recovery and lower the decline to sustain steady volume delivery. Prospera Energy plans to further its acquisition strategy, expanding within its core area and diversifying its product mix. The goal for Prospera Energy is to attain 50 per cent light oil, 40 per cent heavy oil and 10 per cent gas.

Prospera Energy remains committed to ESG initiatives aimed at minimizing its environmental footprint, reducing and ultimately eliminating emissions, and exploring innovative methods to enhance API quality. This approach not only improves margins but also eliminates the need for diluents.

We seek Safe Harbor.