Mr. John Jeffrey reports

SATURN OIL & GAS INC. REPORTS Q2 2023 FINANCIAL AND OPERATIONAL RESULTS HIGHLIGHTED BY RECORD QUARTERLY PRODUCTION AND ADJUSTED FUNDS FLOW

Saturn Oil & Gas Inc. has released its financial and operating results for the three and six months ended June 30, 2023.

"The three months ended June 30, 2023, represent the first full quarter of positive contribution from the recently completed acquisition of Ridgeback, which has driven record quarterly production and cash flow (1)," commented John Jeffrey, chief executive officer of Saturn. "Saturn is focused on delivering robust free funds flow (1), while sustaining high-netback production with a very active drilling program for the second half of 2023. Saturn's drilling program is now under way in both Alberta and Saskatchewan, developing light oil production in some of the most economic plays in North America."

Second quarter 2023 highlights:

• Record quarterly average production of 25,988 barrels of oil equivalent per day (boe/d), compared with 7,324 boe/d in the second quarter of 2022;
• Record quarterly petroleum and natural gas sales of $176.0-million, up from $82.2-million in the second quarter of 2022 and $131.4-million in the first quarter of 2023;
• Operating netback, net of derivatives (1), of $41.87 per barrel of oil equivalent (boe), while the benchmark WTI (West Texas Intermediate) oil price averaged $73.75 (U.S.) during the period, compared with $29.91 per boe in the second quarter of 2022, when WTI averaged $108.41 (U.S.);
• Record quarterly adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) (1) of $92.9-million, compared with $18.0-million in the second quarter of 2022;
• Record quarterly adjusted funds flow (1) of $67.0-million (48 cents per basic share), compared with $14.5-million (45 cents per basic share) in the comparable 2022 period;
• Invested $13.8-million of development capital expenditures, drilling seven (net 3.4) wells, including two in southeast Saskatchewan and five in west-central Saskatchewan, with a 100-per-cent success rate;
• Record quarterly free funds flow (1) of $53.1-million (38 cents per basic share), compared with $8.5-million (26 cents per basic share) in the comparable 2022 period;
• Net debt (1) of $510.2-million realizing a net debt to annualized quarterly adjusted funds flow(1) ratio of 1.9 times.

(1) Non-GAAP (generally accepted accounting principles) measures.

Message to shareholders

Saturn has made great progress on the integration of Ridgeback Resources Inc. and has emerged as a substantial energy producer in Western Canada. As a reflection of the increased scale of the company's operations, Saturn graduated to the Toronto Stock Exchange in June, 2023. The company is currently exploiting its deep inventory of light oil development projects in both Alberta and Saskatchewan, with one rig drilling full time in each province. The company's Alberta production was temporarily impacted by wildfires and corresponding third party infrastructure downtime, resulting in the curtailment of approximately 2,300 boe/d (56 per cent oil and NGLs (natural gas liquids)) of production during the quarter. Currently, 100 per cent of the curtailed production is back on line and there has been no material damage from the wildfires to Saturn's infrastructure or facilities. The company is diligently reducing its debt load with principal repayments of $51.5-million being made in the quarter.

Oxbow update

The company's assets located in southeast Saskatchewan (the Oxbow asset) produced 11,388 (2) boe/d for the three months ended June 30, 2023, a 62-per-cent increase from Q2 2022, and was not impacted by wildfires. The company drilled and completed seven gross horizontal wells (net 3.4) in the second quarter of 2023, with a 100-per-cent success rate. Two operated wells were drilled targeting light oil in the Spearfish formation of the Midale area. This is Saturn's first development program of the Spearfish formations in what is expected to include the drilling of up to a total of six Spearfish wells. The drilling of the Spearfish wells is supported with extensive seismic coverage and Saturn has an existing pipeline network and facilities in this area to tie in new production quickly.

Viking update

The company's assets located in west-central Saskatchewan (the Viking asset) produced 4,860 boe/d (2) for the three months ended June 30, 2023, a 1,488-per-cent increase from Q2 2022, and was not impacted by wildfires. The company did not drill any new wells in the Viking area in Q2 2023. The production levels of the eight gross wells (8.0 net) drilled in the first quarter of 2023 continue to perform well above the type curves of the company's expected reserve production profile and industry averages for Viking wells. Development drilling for light oil at the Viking asset is expected to recommence in Q1 2024.

Alberta update

Saturn's assets located in central Alberta (the Cardium asset) produced 7,358 boe/d (2) for the three months ended June 30, 2023. The company's assets in the Kaybob and Deer Mountain areas (the North Alberta assets) produced 2,382 boe/d (2) for the three months ended June 30, 2023. Between the Cardium asset and the North Alberta assets, the company estimates that the wildfires in Alberta curtailed approximately 2,300 boe/d (56 per cent oil and NGLs) in the quarter.

Saturn is currently drilling its second extended-reach horizontal (ERH) well (in the Lochend area of Alberta and is presently completing the first of what is expected to be a three-well program. Lateral lengths of the Lochend ERH wells are targeting between 1.5 and three miles. The new Lochend Cardium wells are in close proximity to Saturn's extensive infrastructure in this area, including a working interest in a natural gas processing plant, enabling the new production to be put on stream with short cycle times and high netbacks.

Outlook

Saturn's H2 (second half) 2023 drilling program is now well under way with one drilling rig expected to run to the end of 2023 in both Alberta and Saskatchewan. The company is budgeting up to 25 wells in the Oxbow area for the second half of 2023. The Oxbow development is expected to include the drilling of light oil Bakken formations, utilizing industry-leading hydraulic stimulation completions technology and certain locations to be drilled as open-hole multilateral (OHML) wells. OHML is a newly developed drilling technique that is producing strong industry success in Bakken formations in southeast Saskatchewan in 2023. OHML is showing the potential to increase estimated ultimate recoveries of light oil and enhancing development economics. The Bakken formation is a well-delineated resource play in which Saturn has over 350 identified locations in close proximity to company infrastructure and an operated gas processing facility, including over 263 gross (200 net) booked unconventional Bakken wells and 100 gross (91 net) unbooked OHML targets.

In addition to the Lochend drilling program now under way, Saturn expects to drill up to two additional ERH wells targeting Cardium light oil in the west Pembina and up to four ERH wells targeting Montney light oil in the Kaybob area of the North Alberta asset in 2023.

Investor webcast

Saturn will host a webcast at 10 a.m. MT (12 p.m. ET) on Aug. 15, 2022, to discuss the second quarter financial report and provide investors an update. Participants can access the live webcast through the company's website. A recorded archive of the webcast will be available afterward on the company's website.

About Saturn Oil & Gas Inc.

Saturn is a growing Canadian energy company focused on generating positive shareholder returns through the continued responsible development of high-quality, light-oil-weighted assets, supported by an acquisition strategy that targets highly accretive, complementary opportunities. Saturn has assembled an attractive portfolio of free-cash-flowing, low-decline operated assets in southeastern Saskatchewan, west-central Saskatchewan and central/Northern Alberta that provide a deep inventory of long-term economic drilling opportunities across multiple zones. With an unwavering commitment to building an ESG-focused (environmental, social and governance) culture, Saturn's goal is to increase reserves, production and cash flows at an attractive return on invested capital. Saturn's shares are listed for trading on the Toronto Stock Exchange under ticker SOIL, on the Frankfurt Stock Exchange under symbol SMKA and on the OTCQX under the ticker OILSF.

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