Mr. Shubham Garg reports

PROSPERA ENERGY INC. PROVIDES OPERATIONS UPDATE

Prospera Energy Inc. has provided an operations update.

Prospera continues to demonstrate strong operational performance, averaging gross production of 859 barrels of oil equivalent per day (97 per cent oil) from July 1 to July 23, 2025. This sustained growth follows the successful completion of numerous projects across the company's properties, including well reactivations, rod repairs, sand control upgrades, engine maintenance and tune-ups, lease upgrades, mineral rights acquisitions, coil-tubing cleanouts, and waterflood optimizations. Nine additional wells have come on line in the last 10 days and are currently in stages of load fluid recovery or initial optimization.

Notably, these figures exclude production from the recently acquired White Tundra petroleum assets, which remain subject to TSX Venture Exchange acceptance. Comprehensive well-by-well analysis is now being conducted weekly, with production enhancement changes implemented on a daily basis through communication with field operations personnel. Concurrently, Prospera's service rig continues to systematically work through a robust inventory of over 150 remaining workover and reactivation candidates across its heavy oil properties, further enhancing operational efficiency.

Prospera's predominantly heavy oil production base continues to operate in favourable pricing conditions with WCS (Western Canadian Select) differentials in an optimal range, contributing to enhanced revenue and cash flow. The corporation's high netbacks support Prospera's strategy to reallocate capital efficiently into high-impact and reliable projects, with more than 50 projects now completed and plans finalized for its Q3 and Q4 service rig programs, including nine Luseland reactivations that have completed engineering and planning stages.

Cuthbert

Production at the Cuthbert pool has been rising steadily, averaging 356 boe/d (100 per cent oil) from July 1 to July 23, 2025. This sustained growth is supported by continuing waterflood optimization, increased pump speeds, and the completion of critical maintenance across well-site and battery infrastructure.

A high-impact remediation project on the 16-28 HZ well has been successfully completed, involving the installation of a downhole bridge plug to isolate a section of the well previously drilled into a coal- and water-bearing part of the formation. Additionally, a high-impact remediation project on the 08-02 HZ well has been fully financed and is awaiting mobilization after lease conditions dry up. This project includes a casing cut and cementing to block water production from the heel of the well.

Hearts Hill

Production at the Hearts Hill pool remains stable, averaging 230 boe/d (91 per cent oil) from July 1 to 23, 2025. The corporation is actively advancing waterflood pattern optimization and fluid level drawdown initiatives to enhance reservoir performance. A comprehensive line-by-line review of all pipelines in the area has been completed to confirm injection volumes, validate pipeline integrity, and support the development of a final field reactivation and workover plan. Earlier Sparky zone recompletions continue to deliver consistent oil production, with future Sparky waterflood development held in inventory. Prospera is also actively evaluating uphole recompletion opportunities in the Waseca and Rex zones to further unlock production potential.

Luseland

The corporation continues to advance its growth trajectory at the Luseland pool, averaging production of 193 boe/d (100 per cent oil) from July 1 to July 23, 2025. This performance is supported by continuing workovers, well reactivations and field optimizations. In the past 10 days, five reactivated wells have been brought on line, with two additional wells recently completed under single-well-battery set-ups and awaiting start-up.

Numerous other wells are currently undergoing optimization, including the installation of recycle pumps, application of sand suspension chemical treatments, increased pump speeds to accelerate fluid drawdown, flushby operations and well loads to bring sand up the wellbore. These efforts are complemented by various initiatives aimed at reducing operating costs. Prospera's engineering team is focused on well-by-well monitoring of all new reactivations to maximize production rates and enhance reservoir understanding while minimizing well failures and decline rates.

Several high-performing Luseland wells are featured in the accompanying Key Wells report, demonstrating the success of Prospera's strategic focus on revitalizing legacy wells with significant original oil in place (OOIP). By reactivating these assets, the company is effectively converting wells previously classified as no reserves associated (NRA) and burdened solely with asset retirement obligations (ARO) into actively producing wells with meaningful proved developed producing (PDP) reserves -- resulting in sustainable revenue generation and positive cash flow.

Production, workover tracker and key wells report

Prospera is enhancing its transparency measures with the publishing of its updated production, workover tracker and key wells report. Production volumes on each field will continue to be reported on a monthly basis, along with corporate revenue information. A detailed workover tracker will share production rates from all workovers and reactivations completed, with information on capital spend and cumulative production since start-up to be added to the August iteration of this report. Additionally, numerous key wells and their production graphs are explained in detail as the company further proves out its highly capital-efficient workover and reactivation business model.

Price hedging

The corporation is pleased to announce that it has entered into a contract to hedge a portion of its oil production. From September, 2025, through February, 2026, Prospera has hedged 100 barrels of oil per day at an average price of approximately $67 (U.S.) per barrel of WTI (West Texas Intermediate). This strategic initiative is aimed at providing improved cash flow stability, strengthening corporate governance through pro-active risk management and capitalizing on current favourable market pricing. It represents a disciplined approach to managing commodity price exposure while preserving upside potential across the remainder of Prospera's production.

Shares for debt

Prospera has entered into agreements with two vendors to settle outstanding trade payables through the issuance of common shares. The first vendor has agreed to settle a total of $28,900.45 through the issuance of 125,000 common shares at a deemed price of 23.1 cents per share. The second vendor has agreed to settle $7,392.55 through the issuance of 40,000 common shares at a deemed price of 18.5 cents per share. The shares will be subject to a trading restriction of four months and one day from the date of issuance and are subject to TSX-V acceptance.

Loan amendment

The corporation announces a further amendment to its $11-million promissory note, originally dated June 7, 2024, in collaboration with its principal lender. Following previous increases, an additional $2-million has been added, bringing the total principal amount to $18.7-million. The note retains its original terms, including a 12-per-cent interest rate and a two-year maturity, with no other changes. The proceeds are earmarked specifically toward production-increasing capital projects. This amendment remains subject to acceptance by the TSX-V.

Promissory note update

The corporation provides an update regarding the previously disclosed one-year secured promissory note on Jan. 9, 2025. The promissory note component of the offering will now be unsecured. The placement closed with four subscribers, raising aggregate gross proceeds of $900,000. Each unit, priced at $1,000, consists of: (i) a one-year unsecured promissory note with a principal amount of $1,000, carrying a 12-per-cent annual interest rate; and (ii) 5,000 common share purchase warrants of the corporation, exercisable at five cents for a period of one year, for a total of 4.5 million warrants. Subscribers are entitled to a 5-per-cent gross overriding royalty (GORR) for every $1-million of principal investment on revenue from all Prospera properties on incremental production above 1,363 barrels per day, calculated on a monthly average until the principal debt is fully repaid. Interest on the notes will accrue and be paid quarterly, accompanied by a 2-per-cent facility fee. This offering has been accepted by the TSX-V.

Insiders have participated in this offering for a principal amount of $800,000, which results in this being a related party transaction pursuant to TSX-V Policy 5.9 and Multilateral Instrument 61-101. The corporation is relying upon numerous exemptions under these policies with respect to minority approval and valuation requirements, including those found in sections 5.5 (a), (b) and (c) and 5.7 (a) and (b). The following reporting insiders have participated in this offering:

• Summerhill Investments Corp. subscribed for $500,000 and was issued an aggregate of 2.5-million warrants, each exercisable at five cents per share for a period of one year from the date of issuance.
• Mantl Canada Inc. subscribed for $200,000 and was issued an aggregate of one million warrants, each exercisable at five cents per share for a period of one year from the date of issuance.
• Countryman Investments Ltd. subscribed for $100,000 and was issued an aggregate of 500,000 warrants, each exercisable at five cents per share for a period of one year from the date of issuance.

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-V under the symbol PEI and the U.S. OTC (over-the-counter) market under GXRFF.

Prospera reports gross production at the first point of sale, excluding gas used in operations and volumes from partners in arrears, even if cash proceeds are received. Gross production represents Prospera's working interest before royalties, while net production reflects its working interest after royalty deductions. These definitions align with ASC 51-324 to ensure consistency and transparency in reporting.

We seek Safe Harbor.