Lotus Creek Exploration Inc. press release

Lotus Creek Exploration Inc. Announces Third Quarter 2026 Operating Results

2026-11-05

TSXV - TSX Venture Exchange · Oil · Natural Gas Liquids · Natural Gas · Canada · Production & Operations

Calgary, Alberta--(Newsfile Corp. - November 4, 2026) - Lotus Creek Exploration Inc. (TSXV: LTC) ("Lotus Creek" or the "Company") is pleased to provide the following third quarter operating results and operational update to shareholders. Lotus Creek's Interim Consolidated Financial Statements and related Management's Discussion and Analysis ("MD&A") for the period ended September 30, 2026 are available for review on Lotus Creek's website at www.lotuscreek.caand on Lotus Creek's SEDAR+ profile at www.sedarplus.ca.

QUARTERLY HIGHLIGHTS

The Company's third quarter adjusted funds from operations ("adjusted FFO") were the highest since inception on February 5, 2025. Adjusted FFO for the third quarter of 2026 was $12.9 million compared to $1.9 million for the third quarter of 2025 and $7.5 million for the second quarter of 2026. See "Non-GAAP and Other Financial Measures" in this press release.

Cash flows from operating activities for the third quarter of 2026 were $15.5 million compared to $6.7 million for the third quarter of 2025 and $5.5 million for the second quarter of 2026.

Table 1

| | | Three months ended | | | | | | | | | (Cdn$ thousands, except per boe amounts) | | Sep 30, 2026 | | | Sep 30, 2025 | | | Jun 30, 2026 | | | Adjusted funds from operations (1) | | 12,890 | | | 1,947 | | | 7,535 | | | Adjusted funds from operations per boe | | 33.70 | | | 14.85 | | | 24.23 | | | Cash flows from operating activities | | 15,527 | | | 6,662 | | | 5,549 | | | Cash flows from operating activities per boe | | 40.60 | | | 50.82 | | | 17.85 | |

(1) Adjusted funds from operations does not have any standardized meanings under Canadian generally accepted accounting principles ("GAAP") and therefore may not be comparable to similar measures presented by other entities. For additional information related to these measures, including a reconciliation to the nearest GAAP measures, where applicable, see "Non-GAAP and Other Financial Measures".

Lotus Creek's third quarter production was its highest quarterly production on record since inception. The Company has organically grown production from 1,425 boe per day in the third quarter of 2025 to 4,157 boe per day in the third quarter of 2026. Production for the third quarter of 2026 was comprised of 2,105 bbl per day of crude oil, 733 bbl per day of NGLs and 7,911 mcf per day of natural gas. Production increased from the previous quarter of 3,417 boe per day mainly due to the increase in production from the new wells drilled during the year.

Table 2

| | | Three months ended | | | | | | | | | (Cdn$ thousands, except per boe amounts) | | Sep 30, 2026 | | | Sep 30, 2025 | | | Jun 30, 2026 | | | Production | | | | | | | | | | | Crude oil (bbl/d) | | 2,105 | | | 874 | | | 1,584 | | | Natural gas liquids (bbl/d) | | 733 | | | 201 | | | 745 | | | Natural gas (mcf/d) | | 7,911 | | | 2,100 | | | 6,528 | | | Total (boe/d) | | 4,157 | | | 1,425 | | | 3,417 | |

As at September 30, 2026, the Company had $8.6 million drawn on its credit facilities, net debt of $12.8 million and net debt to quarterly funds from operations of 0.2 times. During the third quarter of 2026, the Company invested a total of $24.4 million of capital. See "Non-GAAP and Other Financial Measures" in this press release.

Lotus Creek generated net income of $2.0 million for the third quarter of 2026 compared to a net loss of $0.3 million for the third quarter of 2025 and net income of $5.8 million for the second quarter of 2026. Net income in the third quarter of 2026 was inclusive of a $4.0 million unrealized loss on outstanding risk management contracts.

OPERATIONAL UPDATE

Increased 2026 Guidance

As a result of the Company's 2026 drilling program and production performance exceeding expectations, Lotus Creek has increased its 2026 annual average production guidance to 3,900 - 4,300 boe per day and its fourth quarter average production guidance to 5,100 - 5,500 boe per day.

During October 2026, corporate production averaged approximately 5,500 boe per day, consisting of approximately 2,900 bbl per day of oil, 900 bbl per day of NGLs and 10,100 mcf per day of natural gas.

Infrastructure Capacity and Development Outlook

The Company's first 12 gross (11.9 net) development wells have advanced the delineation and de-risking of its 100+ well drilling inventory at Wilson Creek, while bringing existing infrastructure to capacity. Building on these results, Lotus Creek is preparing for infrastructure expansion in 2027 to support continued development and production growth toward the Company's 10,000 boe per day objective.

The Company expects to provide further details on its infrastructure expansion strategy in conjunction with the release of its 2027 capital budget, anticipated before year-end 2026.

2026 GUIDANCE

The Company has increased its annual production guidance and its Q4 average production guidance. The Company has also adjusted its annual crude oil and NGLs weighting percentage.

Table 3

| | | 2026 Previous Fiscal Guidance(1) | | | 2026 Revised Fiscal Guidance | | | Q3 2026 YTD Actuals | | | Annual production (boe/d) | | 3,800 - 4,200 | | | 3,900 - 4,300 | | | 3,862 | | | Q4 average production (boe/d) | | 4,800 - 5,200 | | | 5,100 - 5,500 | | | NA | | | Capital and abandonment expenditures ($ millions) | | 50.0 | | | 50.0 | | | 46.8 | | | Crude oil and NGLs weighting (%) | | 76 | | | 71 | | | 72 | | | Natural gas weighting (%) | | 24 | | | 29 | | | 28 | |

(1) As previously announced on April 27, 2026.

The following table summarizes selected highlights for the three and nine months ended September 30, 2026:

| | | Three months ended | | | Nine months ended | | | | | | | | | | | | (Cdn$ thousands, except per share, share and per boe amounts) | | Sep 30, 2026 | | | Sep 30, 2025 | | | Jun 30, 2026 | | | Sep 30, 2026 | | | Sep 30, 2025(2) | | | FINANCIAL | | | | | | | | | | | | | | | | | Adjusted funds from operations (1) | | 12,890 | | | 1,947 | | | 7,535 | | | 31,038 | | | 5,615 | | | Per weighted average basic share | | 0.32 | | | 0.05 | | | 0.19 | | | 0.77 | | | 0.16 | | | Cash flows from operating activities | | 15,527 | | | 6,662 | | | 5,549 | | | 31,235 | | | 7,288 | | | Per weighted average basic share | | 0.39 | | | 0.17 | | | 0.14 | | | 0.78 | | | 0.21 | | | Net income (loss) | | 1,993 | | | (281 | ) | | 5,849 | | | 3,490 | | | (885 | ) | | Per weighted average basic share | | 0.05 | | | (0.01 | ) | | 0.15 | | | 0.09 | | | (0.03 | ) | | Net debt (1) | | (12,763 | ) | | (6,519 | ) | | (1,216 | ) | | (12,763 | ) | | (6,519 | ) | | Weighted average shares, basic (thousands) | | 40,263 | | | 40,000 | | | 40,134 | | | 40,142 | | | 34,872 | | | Shares outstanding, end of period (thousands) | | 40,354 | | | 40,000 | | | 40,220 | | | 40,354 | | | 40,000 | | | | | | | | | | | | | | | | | | | | CAPITAL | | | | | | | | | | | | | | | | | Exploration and evaluation expenditures | | 226 | | | 1,662 | | | 1,504 | | | 1,899 | | | 12,274 | | | Property, plant and equipment expenditures | | 23,631 | | | 16,898 | | | 6,355 | | | 44,224 | | | 19,274 | | | Decommissioning liabilities settled | | 517 | | | 261 | | | 163 | | | 699 | | | 331 | | | Total capital and abandonment expenditures | | 24,374 | | | 18,821 | | | 8,022 | | | 46,822 | | | 31,879 | | | Net (dispositions) acquisitions | | - | | | - | | | (13,000 | ) | | (13,000 | ) | | 58,631 | | | | | | | | | | | | | | | | | | | | OPERATING | | | | | | | | | | | | | | | | | Production | | | | | | | | | | | | | | | | | Crude oil (bbl/d) | | 2,105 | | | 874 | | | 1,584 | | | 1,987 | | | 927 | | | Natural gas liquids (bbl/d) | | 733 | | | 201 | | | 745 | | | 791 | | | 229 | | | Natural gas (mcf/d) | | 7,911 | | | 2,100 | | | 6,528 | | | 6,504 | | | 2,363 | | | Total (boe/d) | | 4,157 | | | 1,425 | | | 3,417 | | | 3,862 | | | 1,550 | | | | | | | | | | | | | | | | | | | | Average realized prices | | | | | | | | | | | | | | | | | Crude oil ($/bbl) | | 120.86 | | | 84.65 | | | 131.36 | | | 113.49 | | | 85.04 | | | Natural gas liquids ($/bbl) | | 30.43 | | | 39.18 | | | 32.58 | | | 29.53 | | | 36.85 | | | Natural gas ($/mcf) | | 1.44 | | | 0.54 | | | 1.51 | | | 1.56 | | | 1.41 | | | | | | | | | | | | | | | | | | | | Netback and selected financial results ($/boe) | | | | | | | | | | | | | | | | | Petroleum and natural gas sales | | 69.31 | | | 58.25 | | | 70.89 | | | 67.07 | | | 58.48 | | | Royalties | | (9.94 | ) | | (8.26 | ) | | (12.21 | ) | | (9.59 | ) | | (8.26 | ) | | Operating expenses | | (11.84 | ) | | (23.34 | ) | | (14.47 | ) | | (14.53 | ) | | (23.41 | ) | | Transportation expenses | | (1.24 | ) | | (2.17 | ) | | (1.39 | ) | | (1.14 | ) | | (1.90 | ) | | Operating netback (1) | | 46.29 | | | 24.48 | | | 42.82 | | | 41.81 | | | 24.91 | | | Realized risk management (loss) gain | | (8.35 | ) | | 0.24 | | | (13.43 | ) | | (7.87 | ) | | 0.08 | | | General and administrative | | (3.48 | ) | | (8.82 | ) | | (4.38 | ) | | (3.74 | ) | | (9.18 | ) | | Interest income | | 0.01 | | | 0.40 | | | 0.02 | | | 0.01 | | | 0.55 | | | Interest and financing charges | | (0.77 | ) | | (1.45 | ) | | (0.80 | ) | | (0.77 | ) | | (1.14 | ) | | Adjusted funds from operations(1) | | 33.70 | | | 14.85 | | | 24.23 | | | 29.44 | | | 15.22 | | | Cash flows from operating activities | | 40.60 | | | 50.82 | | | 17.85 | | | 29.63 | | | 19.76 | |

(1) Adjusted funds from operations, net debt and operating netback do not have any standardized meanings under Canadian generally accepted accounting principles ("GAAP") and therefore may not be comparable to similar measures presented by other entities. For additional information related to these measures, including a reconciliation to the nearest GAAP measures, where applicable, see "Non-GAAP and Other Financial Measures". (2) The commercial operations of Lotus Creek for the nine months ended September 30, 2025 are between February 5, 2025 and September 30, 2025.

ABOUT LOTUS CREEK

A Business Designed to Compound Shareholder Value

Lotus Creek Exploration Inc. is a Canadian oil and gas exploration and production company focused on the development of its high-quality, light-oil assets in Central Alberta. The Company's core Wilson Creek asset features multiple stacked oil-bearing reservoirs and a significant inventory of repeatable, high-return drilling opportunities.

Lotus Creek is building a scalable, low-cost business designed to compound shareholder value through disciplined reinvestment in high-netback, rapid-payout development opportunities. Supported by owned and operated infrastructure, attractive full-cycle economics and financial discipline, the Company's strategy is focused on delivering sustainable growth in cash flow, production and reserves on a debt-adjusted per-share basis while maintaining resilience through commodity price cycles.

Key Attributes

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High-Netback Production:Light-oil production generating strong operating margins and cash flow.

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Rapid-Payout Development:Capital-efficient drilling opportunities delivering attractive full-cycle returns.

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Large Development Inventory:More than 100 drilling opportunities across multiple stacked oil-bearing reservoirs.

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Resilient Business Model: Disciplined capital allocation and risk management that protects and compounds shareholder value.

Forward-looking Information and Statements This press release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "strategy" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, this press release contains forward-looking information and statements pertaining to the following: the Company's assessment of capacity constraints its ability to optimize existing facilities and expand capacity; the Company's future plans and the anticipated timing of release of the 2027 capital budget; the Company's expected drilling inventory at Wilson Creek; the intent to prepare for infrastructure expansion in 2027 and to prioritize profitability, long-term reliability and operational certainty; the objective of supporting sustainable production growth to 10,000 boe/d; the Company's further revised 2026 production guidance including average annual production and average fourth quarter production; the Company's intention to direct capital to our highest-value projects at Wilson Creek, ensuring a solid foundation to drive shareholder value; the Company's expectation of having a significant inventory of repeatable, high-return drilling opportunities; Lotus Creek intent to build a scalable, low-cost business designed to compound shareholder value through disciplined reinvestment in high-netback, rapid-payout development opportunities; the intent to deliver sustainable growth in cash flow, production and reserves on a debt-adjusted per-share basis while maintaining resilience through commodity price cycles; and the expectation that the Company's low-cost operations and disciplined capital allocation is designed to protect shareholder value through commodity price cycles and compound returns over time.

The forward-looking information and statements contained in this press release reflect several material factors and expectations and assumptions of Lotus Creek including, without limitation: that Lotus Creek will continue to conduct its operations in a manner consistent with past operations; the duration and impact of tariffs (or other retaliatory trade measures) imposed by Canada or the U.S. (or other countries) on exports and/or imports into and out of such countries; that there are no future amendments to 2026 United States - Mexico - Canada Agreement ("USMCA") (and no countries withdraw from USMCA) that significantly impact the ability or costs of Canadian oil and gas companies to export their products into the United States or have other negative to the Canadian economy and/or the Company's business; the ability of the Company to receive all necessary regulatory approvals without significant adverse conditions; the general continuance of current industry conditions; the continuance of existing (and in certain circumstances, the implementation of proposed) tax, royalty and regulatory regimes; that well results will meet expectations; the accuracy of the estimates of Lotus Creek's reserves and resource volumes; certain commodity price and other cost assumptions; and the continued availability of adequate debt and equity financing and funds from operations to fund its planned expenditures. Lotus Creek believes the material factors, expectations and assumptions reflected in the forward-looking information and statements are reasonable, but no assurance can be given that these factors, expectations and assumptions will prove to be correct.

To the extent that any forward-looking information contained herein may be considered a financial outlook, such information has been included to provide readers with an understanding of management's assumptions used for budgeting and developing future plans and readers are cautioned that the information may not be appropriate for other purposes. The forward-looking information and statements included in this press release are not guarantees of future performance and should not be unduly relied upon. Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information or statements including, without limitation: the risks and impacts of tariffs (or other retaliatory trade measures) imposed by Canada or the U.S. (or other countries) on exports and/or imports into and out of such countries; the failure to receive any regulatory approvals required for the Company's operations; the impacts of the ongoing United States, Israel and Iran war (and other Middle-East conflicts (including the recent attacks by the U.S. and Israel on Iran and Iranian retaliation), Russia-Ukraine war (and any associated sanctions) and United States interventions in Venezuela on the global economy and on the oil and gas industry in Canada and elsewhere; the impacts of any potential amendments to or withdrawals from USMCA on the ability of Canadian oil and gas companies to export their products into the United States, the Canadian economy and/or the Company's business; the impacts of inflation and supply chain issues; pandemics, political events, natural disasters and terrorism; changes in commodity prices; changes in interest rates and currency exchange rates; changes in the demand for or supply of Lotus Creek's products; unanticipated operating results or production declines; changes in tax or environmental laws, royalty rates or other regulatory matters; changes in development plans of Lotus Creek or by third party operators of Lotus Creek's properties, increased debt levels or debt service requirements; inability to obtain debt or equity financing as necessary to fund operations, capital expenditures and any potential acquisitions; any ability for Lotus Creek to repay any of its indebtedness when due; inaccurate estimation of Lotus Creek's oil and gas reserve and resource volumes; limited, unfavorable or a lack of access to capital markets; increased costs; a lack of adequate insurance coverage; the impact of competitors; and certain other risks detailed from time to time in Lotus Creek's public documents including risk factors set out in the Company's annual information form for the year ended December 31, 2025, which is available on SEDAR+ at www.sedarplus.ca.

This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about Lotus Creek's prospective results of operations including, without limitation, forecast annual and fourth quarter average production and capital and abandonment expenditures, which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth above. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on FOFI. Lotus Creek's actual results, performance or achievement could differ materially from those expressed in, or implied by, these FOFI, or if any of them do so, what benefits Lotus Creek will derive therefrom. Lotus Creek has included the FOFI in order to provide readers with a more complete perspective on Lotus Creek's future operations and such information may not be appropriate for other purposes.

The forward-looking information and statements and FOFI contained in this press release speak only as of the date of this press release, and Lotus Creek does not assume any obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable laws.

Non-GAAP and Other Financial Measures This press release includes references to non-GAAP and other financial measures that Lotus Creek uses to analyze financial performance. These specified financial measures include non-GAAP financial measures, non-GAAP ratios, capital management measures and supplementary financial measures, and are not defined by International Financial Reporting Standards ("IFRS") Accounting Standards and are therefore referred to as non-GAAP and other financial measures. Management believes that the non-GAAP and other financial measures used by the Company are key performance measures for Lotus Creek and provide investors with information that is commonly used by other oil and gas companies. These key performance indicators and benchmarks as presented do not have any standardized meaning prescribed by IFRS Accounting Standards and therefore may not be comparable with the calculation of similar measures for other entities. These non-GAAP and other financial measures should not be considered an alternative to or more meaningful than their most directly comparable financial measure presented in the financial statements, as an indication of the Company's performance. Descriptions of the non-GAAP and other financial measures used by the Company as well as reconciliations to the most directly comparable GAAP measure for the three and nine months ended September 30, 2026 and year ended December 31, 2025, where applicable, are provided below.