Ms. Louisa DeCarlo reports

CANADIAN SPIRIT RESOURCES INC. ANNOUNCES THE REACTIVATION OF NATURAL GAS PRODUCTION AT FARRELL CREEK, NORTHEAST BRITISH COLUMBIA, AND THE FIRST QUARTER SEPTEMBER 30, 2023 FINANCIAL RESULTS

Canadian Spirit Resources Inc. has reactivated natural gas production at Farrell Creek in northeast British Columbia, and has released its unaudited interim financial statements and management's discussion and analysis, each for the three-month period ended Sept. 30, 2023.

Reactivation of joint venture production at Farrell Creek

In June, 2023, the corporation and its joint venture partner opted to shut in its Farrell Creek natural gas processing facility and associated Montney wells as a result of negative netback caused by low natural gas prices at Station 2. The corporation's joint venture Montney wells were returned to production on Nov. 17, 2023. Based on the corporation's net average production over 60 days prior to the suspension of its joint venture operations, a production rate of approximately 2.5 million cubic feet per day is anticipated, with Canadian Spirit's 35-per-cent share being approximately 870,000 cubic feet per day.

First quarter financial results

This news release summarizes information contained in the financial statements and MD&A, and should not be considered a substitute for reading these full disclosure documents, which are available on the corporation's profile on SEDAR+.

In accordance with the corporation's change of year-end from Dec. 31 to June 30 that was approved by the board of directors of the corporation on Aug. 25, 2023, the financial statements and MD&A provide a comparison of the financial performance of the corporation for the three-month period ended Sept. 30, 2023, with the three-month period ended Sept. 30, 2022. The corporation has requested approval of the change of year-end from the Canada Revenue Agency; however, such approval is still pending.

Selected financial data

The attached table summarizes certain selected financial data from the financial statements for the three months ended Sept. 30, 2023.

The corporation's loss and comprehensive loss for the three months ended Sept. 30, 2023, were $422,964 (2022: $389,882) resulting in an increased loss of $33,082 for the three months, partly due to the shut-in of production experienced during the three months ended Sept. 30, 2023.

The corporation had a working capital deficit as at Sept. 30 2023, of $62,628 (June 30, 2023: working capital of $123,980). The corporation's shareholders equity is $36,194,481 at Sept. 30, 2023 (June 30, 2023: $36,429,424).

The corporation will continue to pursue financing alternatives to maintain the corporation as a going concern as it seeks and evaluates strategic alternatives. Additional necessary financing may be secured through either the issue of new equity or debt instruments or entering into new joint venture or farm-in arrangements.

Review of strategic alternatives

The corporation also announces that it has initiated a process to review strategic alternatives with a view to maximizing the value of the corporation's Montney resource base at Farrell Creek and Altares. This may include, among other alternatives, the addition of capital to further develop the potential of the assets, the sale of the corporation or a portion of the corporation's assets, a merger, farm-in or joint venture, or other such options as may be determined by the board to be in the best interests of the corporation and its shareholders. Canadian Spirit has engaged Sayers Energy Advisors to serve as financial adviser in the strategic alternative review process.

The corporation has not set a definitive schedule to complete its strategic alternative review evaluation, and no decision on any particular alternative has been reached at this time. Canadian Spirit does not intend to disclose developments with respect to this process unless and until the board has approved a definitive transaction agreement or other course of action or otherwise deems disclosure of developments is appropriate or otherwise required by applicable securities laws or the requirements of the TSX Venture Exchange. There are no guarantees that the process will result in a transaction of any form or, if a transaction is entered into, as to its terms or timing.

We seek Safe Harbor.