Mr. Edwin Tam reports

PETROX RESOURCES CORP. ANNOUNCES NON-BINDING TERM SHEET FOR THE SUPPLY OF NATURAL GAS TO ON-SITE POWER GENERATION IN ALBERTA AND SASKATCHEWAN

Petrox Resources Corp. has entered into a non-binding term sheet dated Aug. 28, 2026, with International Energy (HK) Group Ltd. (IEHK), a company incorporated in Hong Kong, in respect of the supply of natural gas from oil and natural gas properties in Alberta and Saskatchewan to gas-fired power generation equipment to be supplied, owned and operated by IEHK at those sites. Electricity generated by that equipment is intended to be used by IEHK on site to power computing and digital asset mining equipment owned and operated by IEHK.

Role of the company

The company's role under the arrangements contemplated by the term sheet is that of the oil and natural gas party. The company would originate, evaluate and negotiate sites; own or operate the oil and natural gas properties at which the equipment is located; hold or arrange the well, facility and pipeline licences required for its own wells, facilities and pipelines; obtain the site-level regulatory and government approvals and licensing for those wells, facilities and pipelines; supply natural gas at a single delivery point at each site; and conduct the landowner, community and indigenous consultation associated with its own licensed operations.

Role of the IEHK

IEHK will supply, finance, own, install and operate any power generation equipment, computing equipment or digital asset mining equipment. Any power plant approval would be applied for, obtained and held by IEHK as owner and operator of the equipment, with the company providing reasonable cooperation at no cost. All equipment, certification, testing, installation, downstream piping, conditioning, operating, maintenance and insurance costs in respect of the equipment would be for the account of IEHK.

Company's corporate strategy

The principal business of the company would continue to be the acquisition, exploration, development, and production of petroleum and natural gas in Canada. The arrangements contemplated by the term sheet are intended to monetize stranded, shut-in, trapped and otherwise underutilized natural gas from that business, and form one element of the company's previously announced cash-flow-first strategy. The company would receive revenue in two forms, being the sale of natural gas from properties the company owns or operates and a fee calculated by reference to electricity generated, each as described below. Where natural gas is sourced from a third party, IEHK would purchase that gas from and pay that third party directly, and the company would receive the generation fee only in respect of that site. Any definitive agreement will be subject to the acceptance of the TSX Venture Exchange.

Principal commercial terms

The principal commercial terms contemplated by the term sheet are as follows.

• Natural gas. IEHK would purchase and pay for natural gas separately from, and in addition to, the fee described below. For gas from properties the company owns or operates that are connected to a pipeline, the price would be the AECO/NIT monthly index price for the applicable month. Where the gas is stranded, trapped, shut-in or otherwise underutilized, the price would be agreed for that site and may be less than the index price. Gas sourced from a third party would be purchased by IEHK at a price negotiated with that third party, which may range from nil to the AECO/NIT index price. IEHK may accept or reject any site for its use in its sole discretion, and no minimum volume of gas sales by the company is guaranteed.
• Generation fee. For each site, the company would be paid the qualified power generation at that site multiplied by one U.S. cent per kilowatt-hour (kWh). Qualified power generation means gross kWh measured at the generator output terminals, including station service and excluding kWh generated during commissioning.
• Sites, term and reporting. Sites would be identified in a schedule to the definitive agreements, and neither party would be obliged to proceed in respect of a site before signing the applicable site-specific definitive agreement.
• Initial phase. The initial phase contemplated by the term sheet consists of testing and deployment of one megawatt (MW), three MW and seven MW of generation capacity. Following a successful initial phase, the parties will work together to expand capacity.
• Costs and liability. Each party bears its own negotiation and diligence costs. The company would bear the costs of obtaining and maintaining its gas, sites, upstream assets, and related approvals, and IEHK would bear all costs within the equipment scope.

Binding provisions

The term sheet is not legally binding except for customary binding provisions regarding exclusivity, confidentiality, announcements, costs, governing law and disputes, and language, together with a non-circumvention covenant in favour of the company, described below.

The parties have agreed to deal exclusively for ninety days in respect of certain specifically identified sites, with that period running from the date the company delivers a complete data room in respect of those sites. Exclusivity ends immediately if the company fails to provide complete data on time, if the company ceases good faith negotiations, or if a site fails IEHK's due diligence.

Under the non-circumvention covenant, for two years from the date on which each well, facility, site, licensee, operator, landowner or gas supplier is first disclosed to it by the company, IEHK may not directly or indirectly approach, negotiate with or transact in respect of that party or site except through the company.

Conditions and expiry

Advancement of the transactions contemplated by the term sheet is subject to mutual conditions precedent, including entity and sanctions checks and satisfactory technical, legal, financial, tax, and environmental diligence by each party.

If definitive agreements are not executed within ninety days after the date of the term sheet, the term sheet automatically expires except for the binding provisions and accrued rights (including the non-circumvention covenant described above), unless extended in writing.

The commencement of activity at any site is subject to the negotiation and execution of definitive agreements, the satisfaction of the conditions described above and the acceptance of the TSX-V. There is no assurance that definitive agreements will be entered into, that any site will be developed, or that any electricity will be generated or any revenue received by the company.

Subscription right for shares of the company

The term sheet contemplates that, following completion of the initial pilot phase and the execution of definitive agreements, IEHK would have a standing right, exercisable from time to time on 10 business days of notice, to subscribe for common shares of the company. The subscription right is limited such that no subscription may result in IEHK becoming a control person of the company (within the meaning of the policies of the TSX-V), and IEHK will not at any time hold more than 19.99 per cent of the issued and outstanding common shares. Any such issuance will be conducted in compliance with the policies of the TSX-V and applicable securities laws, including without limitation that the price per share for each placement will be the market price (as defined in the policies of the TSX-V) at the date the subscription is announced by press release.

The subscription right does not oblige the company to complete any financing, does not restrict the company from issuing securities and does not fetter the discretion of the board of directors. No securities have been issued and none are issuable under the term sheet. The right would be superseded by the definitive agreements, and would terminate on a merger, arrangement, takeover bid or sale of all or substantially all of the assets of the company.

Arm's-length status

IEHK deals at arm's length with the company and is not a non-arm's-length party of the company within the meaning of the policies of the TSX-V or a related party of the company within the meaning of Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions. No insider of the company has any interest, direct or indirect, in IEHK. No finder's fee is payable in connection with the term sheet, although a finder's fee may be payable on the closing of the transaction.

About International Energy (HK) Group Ltd.

International Energy (HK) Group is a Hong Kong company engaged in modular gas-fired power generation and on-site computing infrastructure, with a focus on the utilization of associated, remote and otherwise stranded natural gas.

IEHK supplies, owns and operates all generation, computing, and digital asset mining equipment deployed under the arrangements contemplated by the term sheet, and funds all associated capital and operating costs.

About Petrox Resources Corp.

Petrox Resources is a Calgary-based junior oil and natural gas company whose common shares are listed and posted for trading on the TSX Venture Exchange under the symbol PTC. The principal business of the company is the acquisition, exploration, development, and production of petroleum and natural gas in Canada.

Management commentary

"We are excited to work with IEHK. Our oil and gas experience and access to oil and gas projects, together with the equipment and operating capability of IEHK and its desire to work with Petrox in Alberta and Saskatchewan on the rollout of its business plan, make this a win-win for both parties," said Edwin Tam, president and chief executive officer of Petrox. "Petrox is the oil and gas party. We may supply gas or choose to joint venture with other parties, and our counterparty pays for and owns everything on the power and computing side. Through this arrangement, Petrox is able to monetize gas that would otherwise be stranded or shut in, at no capital cost to us. This goes hand in hand with our previously announced co-operation agreement with PCC Digital UCL and Bennu Holdings LLC."

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