CLEO Energy Corp. – Insolvency Sale

CLEO Energy Corp. (“CLEO” or the “Company”) has filed a Notice of Intention to Make a Proposal (the “NOI”) pursuant to section 50.4 (1) of the Bankruptcy and Insolvency Act (the “BIA”) and Alvarez & Marsal Canada Inc. (“A&M”) is acting as Proposal Trustee of CLEO for the NOI process. A sale and solicitation process (the “SSP”) is to be undertaken by the Company in its NOI proceedings. CLEO has engaged Sayer Energy Advisors to assist the Company with the SSP in order to solicit interest in the purchase of or investment in all or part of the business or operations of the Company or its undertaking, property and assets. Potential outcomes include but are not limited to a sale of the shares of the Company, the sale, in whole or in part, of all of the oil and natural gas assets held by CLEO, or a joint venture. A copy of the SSP is found on Sayer’s website at www.sayeradvisors.com.

CLEO’s oil and natural gas interests are located in the Alliance, Atlee, Enchant/Taber, Fabyan, Hayter, Kessler, Neutral Hills, Sedgewick, Shorncliffe and Silver Heights areas of Alberta (the “Properties”).

Average daily sales production net to CLEO from the Properties for the first half of 2024 was approximately 990 boe/d, consisting of approximately 527 bbl/d of oil and natural gas liquids and approximately 2.8 MMcf/d of natural gas. Current production from the Properties is approximately 460 boe/d, consisting of 395 bbl/d of oil and natural gas liquids and 390 Mcf/d of natural gas. The Company is currently reactivating several wells which it believes will add approximately 330 bbl/d of oil. Details of the reactivations will be made available in the virtual data room to parties that execute a confidentiality agreement.

CLEO believes that with limited capital the current reactivation production capability is approximately 750 bbl/d of oil.

CLEO controls the pipeline infrastructure in the area necessary for both oil development and associated natural gas egress, which is of great benefit for the future development of the Upper Mannville. The Properties have significant offsetting potential including the Viking and Upper Mannville Sparky oil reservoirs, which would require use of the Company’s pipeline infrastructure.

Summary information relating to this divestiture is attached to this correspondence. A package of more detailed confidential information will be sent to any party executing a Confidentiality Agreement (copy attached).

Offers as outlined in the SSP relating to this process will be accepted until 12:00 pm on Thursday, February 27, 2025.

For further information please feel free to contact: Ben Rye, Sydney Birkett or Tom Pavic at 403.266.6133.