Mr. Shawn Mehler reports

PROSPERA ENERGY INC. 2024 CORPORATE UPDATE

The filing of Prospera Energy Inc.'s audited annual financial statements, management's discussion and analysis, and related chief executive officer and chief financial officer certifications for the financial year ended Dec. 31, 2023 (the required filings), will be delayed beyond the filing deadline of April 29, 2024, and, as a result, is in default of its obligations under Part 4 of National Instrument 51-102 -- Continuous Disclosure Obligations. The delay in the completion of the required filings is because of Prospera's auditor requesting additional time to complete the audit which contain complex business transactions, including GORR (gross overriding royalty) financing and improved policies for its decommissioning liability estimates.

The corporation has made an application to the Alberta Securities Commission (ASC) for a management cease trade order (MCTO), which would restrict all trading in securities of the corporation, whether direct or indirect, by management of the corporation. The MCTO does not generally affect the ability of shareholders who are not insiders of the corporation to trade their securities. There is no certainty that the MCTO will be granted.

The corporation is working expeditiously with its auditor, Crowe MacKay LLP, to complete the audit as soon as possible. Prospera plans to remedy the default and file the required filings as soon as it is able to do so, and expects such filing to occur on or prior to May 31, 2024. The corporation also intends to satisfy the provisions of the alternate information guidelines of Section 10 of National Policy 12-203 -- Management Cease Trade Orders as long as it is in default of the filing requirements.

The corporation confirms that there are no insolvency proceedings against it as of the date of this press release. The corporation also confirms that there is no other material information concerning the affairs of the corporation that has not been generally disclosed as of the date of this press release.

GORR financing

The company is the in process of completing a $10-million-plus GORR financing, which will be used for a combination of working capital and 2024 infill development to add approximately 1,500-plus barrels of oil equivalent per day (boepd). Prospera is also in the process of finalizing farm-in financing which will also contribute to the production increase. Additional information to be provided later. GORR financing terms are as shown in the associated table.

Interested investors should contact the company directly for additional information. Prospera is targeting to consolidate the long-term debt on its balance sheet at the end of 2024 with a senior secured debt facility.

Production update

Prospera production has been steadily increasing from the cold weather conditions and maintaining 1,250 plus boepd. Reservoir management measures are being implemented to redirect randomly disposed water and the magnitude of injection to attain the production capability of approximately 1,800 boepd to 2,000 boepd. These steps involve measurement/monitoring equipment maintenance and pipeline repairs that are awaiting warm weather conditions. Moderate management of injection is resulting in a positive response in oil cuts, especially in the newly drilled horizontal wells. Management is encouraged by the results that could appreciate production substantially.

Development update

Prospera intends to continue with the 2024 infill development plan, which is an extension of 2023 drilling results that exceeded expectations in both Alberta medium-light and Saskatchewan heavy oil. Drilling capital is being dedicated specifically to drilling and development. Exceptional performing medium-light oil drills are a priority with six to 10 wells. The company is anticipating multilateral wells in Saskatchewan heavy oil fields with 10 plus wells. These developments are expected to increase production by 1,500 plus boepd and add significant cash flow that can transition Prospera to increased profitability by year-end 2024.

Arrears/settlements

Prospera optimization and development has been steadily appreciating production and improving infrastructure to safe operating conditions. However, $15-million of historical accounts payable arrears (prior to restructuring), cold weather conditions, lower prices and aged infrastructure have attributed to higher accounts payable balances not being addressed in a timely manner. However, March and April, 2024, average production rates were substantially higher than the previous year and are expected to increase further. With Prospera's expectation of continued strong production and a robust commodity price outlook, the company expects to resolve most of the outstanding AP arrears over the next four to six months. This reduction will take place with existing production and optimization. The 2024 development plan is expected to accelerate AP arrears reduction and propel Prospera to increased net income and improved liquidity metrics.

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, it continues its 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.

We seek Safe Harbor.