Mr. Chris Ludtke reports

PROSPERA ANNOUNCES MONTHLY OPERATIONS UPDATE

In December, Prospera Energy Inc. field production was estimated to be 661 boe/d (barrels of oil equivalent per day) (91 per cent oil). From Jan. 1 to Jan. 19, field production estimated sales at 682 boe/d (92 per cent oil), with production peaking on Jan. 16 at 751 boe/d (92 per cent oil) as the company continues to bring production on line. The average production weighted working interest for Prospera Energy throughout this period was 91 per cent.

As 2024 concluded, the company successfully completed its nine-well workover program, yielding strong results across all wells while achieving exceptional capital efficiency at less than $3,500 per boe/d. A standout performer in the program is well 13-13-36-26W3, a horizontal Waseca well distinguished by higher API oil grades, lower oil viscosity and greater reservoir exposure compared with other wells in the Luseland pool. This well is currently producing 59 boe/d (18 per cent oil), with daily monitoring of water cuts and fluid levels to ensure optimal performance.

The average cost of the first seven workovers was under $35,000 per job, reflecting operational efficiencies achieved through preplanning, streamlined decision making and strong collaboration among field operations teams. The 2025 service rig program commenced in early January with the successful repair of the 03-02 injector well in Cuthbert. The rig is currently working on the fourth well of a four-well program in Cuthbert and is scheduled to then move to Hearts Hill for an extensive 11-well initiative. In parallel, the company is finalizing plans for Luseland's program, which targets higher-potential wells. These wells require additional surface equipment and advanced planning to effectively address sand production challenges.

Winterization activities have been successfully implemented and now stress-tested across all pools, enhancing the corporation's ability to maintain production during severe weather conditions. These measures have resulted in improved runtime, more efficient field operations and reduced operating costs

MER non-compliances continue to be addressed with crucial and timely progress, including the completion of signage issues, surface casing vent repairs, packer leak fixes, housekeeping improvements, and most importantly the removal and disposal of two spill piles.

Additionally, pipeline cutouts from both Hearts Hill pipeline failures have been excavated and removed. The failure analysis report is now complete, and a third party engineering firm is conducting engineering assessments. The conclusions of these evaluations will be presented and taken into account as Prospera develops and adjusts its field-wide go-forward plan.

In Brooks, the company has accelerated well production with increased drawdown of fluid levels and implementing casing gas compression to alleviate pressure on the reservoir. These efforts have led to increased production, with additional optimization capacity available on both fronts. Preparatory work in Brooks includes evaluations of acid fracs versus cross-linked gel fracs and optimal matrix stimulation techniques for the Pekisko wells. Additionally, Prospera's joint venture partner in the Brooks field is in arrears of approximately $4.2-million, and investigations into this matter are continuing.

The company is conducting extensive reviews on the nine Horizontal wells drilled in 2023 in the Cuthbert pool as only three of the wells are preforming to expectations. Four of the lower producing wells have been analyzed through reservoir engineering, geological analysis and drilling postmortem analysis, with plans to complete workovers on all four wells. One of the wells will undergo a packer install to block off the one-third of well closest to the heel, and one well will require a blank installed where the well dipped too far down the reservoir into a water zone. Two of the wells require the closest injector to the well being completely shut-off. Analysis on the remaining two low producing wells will be completed over the next two weeks.

As previously mentioned, the company has begun replacing worn out field equipment with a total of five new or rebuilt engine installations completed in the Cuthbert field thus far in January. Lease operating cost reviews are now conducted on a more frequent basis with a current focus on optimizing electricity costs, flushby costs and the transportation of oil from the company's batteries to sales points. Additionally, the company has successfully implemented defoam and enhanced demulsifier chemicals, achieving less than 20 ppm (parts per million) oil in the water injection system, further improving operational efficiency.

Escalating WTI (West Texas Intermediate) prices, Canadian heavy oil differentials at tight levels, and increasing production have allowed the company to generate significant and rising field operating cash flows to cover general and administrative expenses, interest, accounts payable arrears, and continuing rig activities aimed at further boosting production.

In line with the company's commitment to greater transparency, the company is pleased to announce the launch of an updated website and a refreshed corporate presentation. The corporate presentation will be updated monthly going forward.

About Prospera Energy Inc.

Prospera Energy 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 Energy is listed on the TSX Venture Exchange under the symbol PEI and the U.S. OTC Market under GXRFF.

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