Mr. Shawn Mehler reports

PROSPERA ANNOUNCES MONTHLY OPERATIONS UPDATE AND INCREASE TO TERM LOAN

Prospera Energy Inc. has amended its $11-million promissory note, originally dated July 7, 2024, in collaboration with its principal lender. The principal balance, which was previously increased by $500,000 to $11.5-million, has now been further increased by an additional $700,000, bringing the total principal amount to $12.2-million as of Dec. 16, 2024. The note retains its original terms, including a 12-per-cent interest rate and a two-year maturity, with no other changes. This amendment is subject to acceptance by the TSX Venture Exchange.

Monthly operational update

This update marks the beginning of monthly production reports, designed to provide stakeholders with consistent, timely insights into operational performance and key field developments. November field production was estimated at 686 barrels of oil equivalent per day (83 per cent oil), while December production (Dec. 1 to Dec. 10) averaged 803 barrels of oil equivalent per day (83 per cent oil). Prospera's sales have outpaced production as the company capitalized on selling excess inventory from the Cuthbert and Brooks fields, with plans to exit the year drawing down inventory to normalized operating levels.

The company continues with its service rig workover program, currently working on well No. 8 (13-13-36-26W3) out of a 10-well workover program, which is a horizontal Waseca well with a higher API oil grade, much lower oil viscosity and significantly greater reservoir exposure than other Luseland pool wells. The average cost of the first seven workovers has been under $35,000 per job, with efficiencies achieved through preplanning, streamlined decision making and strong field operations collaboration.

The program aims to complete two additional wells prior to the holiday break, after which the company will monitor and optimize well production until the new year. The rig is expected to resume operations in the first week of January, starting with work in Luseland and continuing to Cuthbert for both production well workovers and packer repairs on injection wells.

Winterization activities have been successfully completed, improving reliability and reducing future field operating costs across all pools. Prospera is actively building an inventory of critical operational parts and supplies to minimize downtime caused by equipment failures and severe weather conditions. Older and worn-out equipment, such as well-site engines and fan belts, are being serviced or replaced pro-actively to avoid inefficiencies from running equipment to failure. This has resulted in improved runtime and smoother field operations. In addition, overdue preventive maintenance tasks have been addressed, with further work planned in preparation for a comprehensive maintenance program in 2025.

With Canadian heavy oil differentials currently at record tight levels, the company has prioritized optimizing and bringing on line predictable, low-decline heavy oil barrels from its Saskatchewan pools. With average oil sales pricing of more than $80 per barrel and an operating netback of $30 per barrel, coupled with rising production levels, Prospera is generating sufficient field operating cash flows to cover G&A (general and administrative expenses), interest, AP (accounts payable) arrears and continuing rig activities to further boost production. While significant optimization upside remains in Brooks, activity has been deferred to Q1 2025 to safeguard Prospera's cash flow and strengthen its balance sheet. Recent corporate changes have significantly enhanced operational efficiency with renewed strategic focus on improving cash flow and financial health.

About Prospera Energy Inc.

Prospera is a publicly traded Canadian energy company specializing in the exploration, development and production of crude oil and natural gas. Headquartered in Calgary, Alta., Prospera is dedicated to optimizing recovery from legacy fields using environmentally safe and efficient reservoir development methods and production practices. The company's core properties are strategically located in Saskatchewan and Alberta, including Cuthbert, Luseland, Hearts Hill and Brooks. Prospera is listed on the TSX-V under the symbol PEI and the U.S. OTC (over-the-counter) market under GXRFF.

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