Lycos Energy sells Alberta assets for $60 MM – Disposition Summary

Transaction Overview

• Seller: Lycos Energy Inc.

• Purchaser: Arm’s length third party (unnamed)

• Transaction Type: Sale of certain assets located in the Lindbergh, Moose Lake, and Fishing Lake areas of Alberta

• Consideration: $60.0 million cash, subject to customary closing adjustments

• Agreement Date: October 7, 2025

• Effective Date: September 1, 2025

• Expected Closing: On or about October 15, 2025

• Regulatory Approval: Subject to TSX Venture Exchange (TSX-V) approval as a Reviewable Transaction

• Press Release: Lycos Energy Inc. Announces $60.0 Million Asset Sale, Distribution of Proceeds to Shareholders and Normal Course Issuer Bid

Assets Sold

• Production: ~940 barrels of oil per day (bbl/d)

• Reserves:

  • Proved Developed Producing (PDP): 395 Mbbl (per Sproule Associates Ltd., Dec 31, 2024)

  • Total Proved (1P): 2,326 Mbbl

  • Proved + Probable (2P): 3,070 Mbbl

• Drilling Locations: 21.0 net booked drilling locations

Valuation Metrics

• 3.4× annualized net operating income

• $63,830 per flowing boe

• $25.80 per boe (Proved reserves)

• $19.54 per boe (Proved + Probable reserves)

Use of Proceeds

• Debt Reduction: ~$9.0 million applied to reduce net debt to < $1.0 million.

• Shareholder Distribution: ~$47.9 million returned to shareholders as a $0.90 per share Sale Dividend (treated as a return of capital).

• Remainder: General corporate purposes and working capital.

Post-Sale Pro Forma

• Production: ~1,700 boe/d (97% crude oil) in Central Alberta (Swimming, Wildmere, Viking Kinsella areas).

• Net Debt: < $1.0 million

• Credit Facility: $50.0 million (unchanged terms)

Advisors

• Financial Advisor: National Bank Financial Inc. (NBF)

• Legal Counsel: Stikeman Elliott LLP

• Fairness Opinion: Provided by NBF, confirming transaction is fair from a financial standpoint.