Mr. Edwin Tam reports

PETROX RESOURCES CORP. ANNOUNCES COOPERATION AGREEMENT WITH PCC DIGITAL AND BENNU HOLDINGS

Petrox Resources Corp. has entered into an assignment, novation and assumption agreement dated Aug. 27, 2026, with certain arm's-length unrelated parties, PCC Digital ULC and Bennu Holdings LLC, pursuant to which Petrox will acquire all of the assignors' rights, interests and obligations under a power generation development and co-operation agreement made effective July 16, 2026, among the assignors, PCC and Bennu.

Pursuant to the co-operation agreement, each party contributes complementary expertise: Petrox provides oil and gas knowledge and operational support; PCC serves as the lead power generation developer, supplying power generation development, deployment, knowledge and operational support; and Bennu assesses each site for suitability as a future data centre and leverages its industry relationships to identify and introduce prospective data centre tenants.

The company's oil and natural gas operations in Saskatchewan continue to be its principal business, but the co-operation agreement supports one element of Petrox's previously announced broader cash-flow-first strategy: using its existing industry knowledge and assets to evaluate opportunities to monetize stranded and otherwise flared natural gas through on-site power generation. Each project Petrox is looking to acquire or develop can be assessed based on the economics around finding the highest and best use for gas it is able to supply. In addition, through Petrox's extensive experience in oil and gas, new opportunities are opened up for PCC and Bennu.

What Petrox is acquiring

Under the assignment agreement and pursuant to the transactions thereunder, Petrox will acquire from the assignors and will be substituted for the assignors as a party to the co-operation agreement:

• A secured loan receivable from PCC in the principal amount of $250,000 (U.S.), together with the benefit of the related security; and
• The assignors' remaining contractual rights under the co-operation agreement, including the entitlement to a share of the net cash flow of the new sites (as defined below) described under the cash flow sharing section below, and rights of first refusal in respect of certain future power generation projects.

The PCC loan was advanced in full by the assignors prior to the date of the assignment agreement. It bears interest at 12 per cent per annum commencing six months after each advance, matures on July 16, 2027, and is secured by a first-ranking security interest, registered under the Personal Property Security Act (Alberta) over power generation and mining equipment belonging to PCC deployed or otherwise used on or in connection with the new sites.

The new sites are the sites initially comprising the Nipisi and Grande Prairie area projects in Alberta and including any site to which equipment is to be relocated under the co-operation agreement and that are funded in whole or in part with the proceeds of the PCC loan.

Cash flow sharing

Until the PCC loan and all other secured obligations have been repaid in full, PCC's entire corporate net cash flow -- including net cash flow from its existing operations -- is to be applied 70 per cent to Petrox, in reduction of the amounts owing under the PCC loan and 30 per cent to PCC.

Following repayment in full of the PCC loan, Petrox will be entitled to 30 per cent of the net cash flow generated by the new sites only, and PCC will be entitled to the balance. That entitlement continues for the operating life of the new sites for so long as PCC equipment is used on those sites. Petrox's entitlement following repayment does not extend to PCC's central Alberta operations or to any of PCC's other operations.

Consideration

As consideration for the assignment and subject to TSX-V acceptance, Petrox will:

• Issue to the assignors an aggregate of three million common shares of Petrox at a deemed price of 19 cents per share, being an aggregate deemed value of $570,000; and
• Issue to the assignors unsecured promissory notes in the aggregate principal amount of $360,000, bearing interest at 12 per cent per annum accruing from Feb. 16, 2027, and maturing on July 16, 2027.

Each of the assignors deals at arm's length with the company. None of the assignors, PCC or Bennu, are a related party of the company within the meaning of Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions) or a non-arm's-length party of the company within the meaning of the policies of the TSX-V, and no insider of the company has any interest, direct or indirect, in the assignors, PCC or Bennu. Accordingly, the transaction is not a related-party transaction, and no formal valuation or minority approval is required under MI 61-101.

Obligations assumed under the co-operation agreement

On closing, Petrox will assume the obligations of the financing party under the co-operation agreement, including the obligation to issue, subject to TSX-V acceptance:

• One million common shares of Petrox to PCC at a deemed price of 19 cents per share, in consideration of the continuing grant of the net cash flow interest in the new sites described above; and
• One million common share purchase warrants to Bennu, each exercisable to acquire one common share of Petrox at an exercise price of 19 cents for a period of two years from the date of issuance, in consideration of Bennu's site assessment and tenant introduction services.

Petrox has no obligation under the co-operation agreement to advance further funds, the loan described below having been advanced in full by the assignors prior to the date of the assignment agreement.

Finder's fee

In connection with the transaction and subject to TSX-V acceptance, the company intends to issue 100,000 common shares at a deemed price of 19 cents per share, being an aggregate value of $19,000, to an arm's-length finder who introduced the counterparties to the company.

Hold periods and approvals

The assignment shares, the consideration shares, the consideration warrants, the finder shares and any common shares issued on exercise of the consideration warrants will be subject to a statutory hold period of four months and one day from the date of issuance, together with any additional resale restrictions imposed by the TSX-V.

The transaction, including the issuance of the assignment shares, the notes, the consideration shares, the consideration warrants and the finder shares, remains subject to the acceptance of the TSX-V and to compliance with applicable securities laws. Closing is expected to occur on the third business day following TSX-V acceptance, subject to satisfaction of the other conditions in the assignment agreement.

Grant of stock options

The company further announces that its board of directors has approved the grant of an aggregate of 600,000 incentive stock options to certain directors, officers, employees and consultants of the company under the company's stock option plan. Each option is exercisable to acquire one common share at an exercise price of 19 cents per share for a period of two years from the date of grant, subject to the terms of the company's stock option plan, applicable securities laws and the acceptance of the TSX-V.

Shares for debt

The company also announces that, subject to the acceptance of the TSX-V, it intends to settle an aggregate of $80,000 of outstanding indebtedness owing to certain directors and officers of the company in respect of accrued and unpaid director and management fees through the issuance of an aggregate of 533,332 common shares of the company at a deemed price of 15 cents per share.

The company has cash on hand, but that cash is committed to its continuing oil and natural gas operations and general working capital requirements. The company has determined to settle the debt in common shares to preserve its cash resources. No warrants or other securities will be issued in connection with the shares-for-debt transaction.

The debt shares will be subject to a statutory hold period of four months and one day from the date of issuance in accordance with applicable securities laws, together with any additional resale restrictions imposed by the TSX-V. The shares-for-debt transaction will not result in the creation of a new control person of the company. The shares-for-debt transaction is subject to the acceptance of the TSX-V and to compliance with applicable securities laws.

The participation of directors and officers of the company in the shares-for-debt transaction constitutes a related-party transaction as defined in Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions). The company is relying on the exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101, on the basis that neither the fair market value of the debt shares to be issued to related parties, nor the fair market value of the consideration to be received from related parties exceeds 25 per cent of the company's market capitalization.

About Petrox Resources Corp.

Petrox is a Calgary-based junior oil and natural gas company whose common shares are listed and posted for trading on the TSX Venture Exchange under the symbol PTC. The company's principal business is the acquisition, exploration, development and production of petroleum and natural gas in Canada.

Management commentary

"This is a financial interest in projects operated by an experienced counterparty, acquired on terms we think are sensible for a company considering its strategy to make the highest and best use of each oil and gas site," said Edwin Tam, president and chief executive officer of Petrox. "Our oil and gas operations remain our principal business, and our focus and the ability to change the economics of a project with the right expertise is key to future success."

We seek Safe Harbor.