Mr. Shawn Mehler reports

TRANSFORMED & RESTRUCTURED PROSPERA TRANSITIONING TO PROFITABILITY IN 2024

Since Q1 2021, restructured Prospera Energy Inc. has methodically executed the planned development phases and attained drilling results exceeding expectations and substantiating the technical and economical applications. The nine heavy-oil horizontal drills and one medium-light-oil deviated well delivered initial production exceeding the expected initial production rates. The medium-light-oil well was flowing at 500 barrels per day and has stabilized to 300 barrels per day, substantially exceeding the anticipated 75 barrels per day. The heavy-oil horizontal wells yielded on average 100 barrels per day of initial production (higher than expected). These results enabled Prospera to attain 2023 year-end peak rates of 1,800 barrels per day, with the capability to 2,200 barrels per day. Further, Prospera executed the drilling program technically efficiently and economically under budget. This resulted in a favourable capital payout in less than six months for medium-light oil and an average payout of nine months for the heavy-oil horizontal wells. These results are expected to increase the reserve valuation substantially from the 2022 year-end 2P valuation of $72 million. The third party 2023 year-end reserve valuation is expected in the coming weeks.

Based on the 2023 successful drilling results, Prospera is positioned to increase production primarily in medium-light oil and continue the horizontal transformation to capture the substantial remaining heavy-oil reserves. The horizontals enable Prospera to reduce environmental footprint, operating expense and asset retirement liability while appreciating production. Prospera is proposing a robust 2024 capital development and acquisition plan to achieve a 2024 year-end exit target rate of 5,000 barrels of oil equivalent per day. The proposed capital program entails five geologically and seismically delineated medium-light-oil wells and 15 low-risk infill heavy-oil horizontal wells. Also, includes light-oil acquisitions to diversify the heavy-light product mix to optimize margins (letter of intent to complete in Q2 of this year). The 2024 development, ARO (asset retirement obligation) reduction and acquisitions are financed through existing cash flow and non-dilutive credit facilities that are expected to be in place in the second quarter.

Prospera has bolstered the operations and production engineering team with experienced professionals to attain and sustain a monthly average of 2,000 barrels of oil equivalent per day by end of the first quarter. The 2,000 barrels of oil equivalent per day per month are expected to equate to gross revenue of $4.2-million per month ($70 per barrel) and field netback of $2.1-million ($35 per barrel). The heavy-oil horizontal wells are currently being optimized gradually, while the medium-light-oil infrastructure is being constructed to accommodate the current and planned 2024 drills. Meanwhile, the development teams are preparing for the coming 2024 capital program to commence after breakup (in the latter part of Q2 2024).

In addition, significant ARO reduction projects are planned for the summer of 2024, including abandonment of more than 40 wells as well as lease reclamations. Also, a facility/pipeline turnaround is planned, which includes maintenance and calibration to accommodate the proposed development.

About Prospera Energy Inc.

Prospera is a publicly traded energy company based in Western Canada, specializing in the exploration, development and production of crude oil and natural gas. Prospera is primarily focused on optimizing hydrocarbon recovery from legacy fields through environmentally safe and efficient reservoir development methods and production practices. Prospera was restructured in the first quarter of 2021 to become profitable and in compliance with regulatory, environmental, municipal, landowner and service stakeholders.

The company is in the midst of a three-stage restructuring process aimed at prioritizing cost-effective operations while appreciating production capacity and reducing liabilities. Prospera has completed the first phase by optimizing low-hanging opportunities and attaining free cash flow while bringing operations to safe operating conditions, all while remaining compliant. Currently, Prospera is executing phase II of the restructuring process, the horizontal transformation intended to accelerate growth and capture the significant remaining reserves (400 million barrels). These horizontal wells allow Prospera to reduce its environmental and surface footprint by eliminating the numerous vertical well leases along the lateral path. Phase III of Prospera's corporate redevelopment strategy is to optimize recovery through EOR (enhanced oil recovery) applications. Furthermore, Prospera will pursue its acquisition strategy to diversify its product mix and expand its core area. Its goal is to attain 50 per cent light oil, 40 per cent heavy oil and 10 per cent gas.

Prospera continues to apply efforts to minimize its environmental footprint. Also, efforts to reduce and eventually eliminate emissions, alongside pursuing innovative ESG (environmental, social and governance) methods to enhance API quality, thereby achieving higher margins and eliminating the need for diluents.

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