Red Cloud Announces Fall Mining Showcase 2024 Agenda

Coelacanth has commenced drilling on the 5-19 Pad at Two Rivers East with the first well spud on September 1st. The complete program consists of drilling and completing 3 Lower Montney wells, completing 1 previously drilled Upper Montney well, and drilling a Bluesky disposal well for a total cost of approximately $36 million. The 4 pad wells are scheduled to be completed starting late October 2024.

As previously released, the three 5-19 Lower Montney wells drilled in 2023 had tested at a per well average of 1,338 boe/d for a combined rate of 4,014 boe/d (54% light oil). The program above will be additive to this once the Two Rivers East facility is constructed and on-stream in April 2025. The Upper Montney has not produced in the immediate area but has been very prolific in the greater region. Management is looking forward to proving up the commerciality of this zone in the area as well as establishing expected oil/gas production mix.

Strategic benefits of this program are as follows:

• Accelerating the growth profile of the overall company
• Adding material drilling inventory through proving commerciality of Upper Montney
• Reducing risk in processing and transportation commitments
• Minimizing disruptions on start-up of new facility by having wells completed in advance
• Increasing financial and operational flexibility in 2025 capital program
• Creating additional production certainty for future decisions on third-party processing and build-out of additional facilities

Also as previously released, Coelacanth obtained all regulatory approvals to construct a new battery facility (“Facility”) at Two Rivers East designed for gas compression/dehydration, oil treating and water handling, plus gathering and transport lines to connect from the 5-19 Pad through the Facility to a mid-stream gathering line. Construction of the pipelines and the facility site have already commenced and estimated to be operational in April 2025.

BANK CREDIT FACILITY AND FINANCIAL UPDATE

Coelacanth secured 2 revolving bank credit facilities for a total of $52 million from its primary lender. The facilities are backed by reserves at Two Rivers West plus a $45 million Letter of Credit from a third party. The commitment from the third party is for a 2-year term. During the term, Coelacanth expects that the lending value of producing reserves at Two Rivers East will allow for the credit facility to be renegotiated and the Letter of Credit to be returned.

Coelacanth had also previously secured a commitment for approximately $22 million from a Mid-Stream company to finance a pipeline connecting Coelacanth facilities to the Mid-Stream Company’s gathering system.

With over $60 million cash and no debt at the end of Q2 2024, Coelacanth estimates it will have approximately $40 million net debt plus the mid-stream commitment once the drilling program is completed and the facility is operational. Once operational and pending drilling success on the above program, Coelacanth’s production should stabilize at…