Saturn Oil & Gas Inc. Announces Third Quarter 2025 Results, Highlighted by Production Ahead of Guidance and Continued Execution of Our Blueprint Strategy

2025-11-05

TSX - Toronto Stock Exchange · Oil · Natural Gas · Natural Gas Liquids · Canada

Q3/25 production of 41,142 boe/d exceeded previous guidance, the previous quarter and the same period in 2024 Adjusted funds flow(1) totaled $103 million ($0.54/share(1)) in Q3/25 with free funds flow(1)of $16 million Executed an $87 million capital program in the quarter, with a capital shift to core-up acquisition opportunities that offer better economics relative to drilling in the current oil price environment Net opex(1)was 3% below guidance at $19.24/boe, reflecting continued cost reduction and efficiency capture Quarterly debt repayments totaled US$16.3 million (C$22.6 million) and over the past five quarters have totaled US$98 million (C$133 million) reducing principal outstanding on our senior notes to US$553 million at quarter end

Calgary, Alberta--(Newsfile Corp. - November 5, 2025) - Saturn Oil & Gas Inc. (TSX: SOIL) (OTCQX: OILSF) ("Saturn" or the "Company"), a light oil-weighted producer focused on unlocking value through the development of assets in Saskatchewan and Alberta, is pleased to report our operating and financial results for the three and nine months ended September 30, 2025, highlighted by strong quarterly production that exceeded internal guidance and analyst consensus estimates, and robust adjusted funds flow ("AFF") despite a weakening commodity price environment. Saturn's financial statements ("Financial Statements"), as well as Management's Discussion and Analysis ("MD&A") for the three and nine months ended September 30, 2025, are available on our websiteand filed on SEDAR+ at sedarplus.ca. A conference call and webcast to discuss the results has been scheduled for Thursday, November 6, 2025 at 8:00 am Mountain Time (10:00 am Eastern Time). Access details for the conference call and webcast are provided below.

"Saturn's Q3/25 results demonstrate the continued execution of our Blueprint strategy, as production once again exceeded guidance and analyst consensus estimates, and we highlighted our commitment to allocate capital to opportunities offering the highest returns with the announcement of two separate tuck-in acquisitions that had attractive metrics of under $16,000 per flowing boe," said John Jeffrey, Chief Executive Officer. "Combined with the strength of our existing asset base, these transactions and an incremental land purchase further extend the long-term sustainability of Saturn and contribute to robust AFF. Meanwhile, our focus on increasing free funds flow generation supports ongoing debt repayment and share buybacks, which not only improves our per share metrics, but is also expected to drive equity accretion over time."

Q3 2025 HIGHLIGHTS

Production of 41,142 boe/dwas 10% above the midpoint of our previously guided Q3/25 estimate of 37,000 to 38,000 boe/d(2), reflecting a combination of continued asset outperformance, volumes coming on-stream from our drilling program, including new open hole multi-lateral ("OHML") wells, and production additions from the southeast Saskatchewan ("SE SK") tuck-in acquisition (the "SE SK Tuck-in") that closed during the quarter.

Adjusted EBITDA(1) totaled $124 millionin the quarter, while AFF(1)was $103 million ($0.54/share basic(1)), reflecting strong production volumes amid a softening oil and natural gas price environment.

Capital expenditures(1)(3)of $87 million included the drilling of 29 gross (24.7 net) wells, 23 of which were drilled in SE SK and six in Central Alberta, and reflects a shift of capital from drilling and completions activity to acquisitions that offer higher potential returns given current market conditions.

Positive free funds flow(1)totaled $16 millionand supported Saturn's ongoing return of capital framework and SE SK Tuck-in which helps to improve per share metrics.

Returned $12 million to shareholdersduring the quarter through the repurchase of 3.3 million common shares ("Shares") for a value of $8.5 million under our normal course issuer bid ("NCIB") that was renewed in August, along with 1.6 million Shares taken-up for $3.5 million through our substantial issuer bid that concluded in July.

Closed the strategic SE SK Tuck-inon July 31, 2025, adding production of approximately 4,100 boe/d(2)and expanding our OHML development potential in the Midale and Torquay with an estimated 255 gross Company identified locations (217 net)(4), along with optimization and cost reduction potential, including infrastructure consolidation opportunities.

Net debt(1)of $783 millionat quarter endincludesthe principal balance on our senior notes of $769 million (US$553 million), and reflects ongoing debt repayment, the restart of our drilling program in Q3, along with tuck-in acquisition activity, equating to a net debt to annualized proforma AFF(1)of 1.6x.

Maintained liquidity and financial flexibilitywith $34 million of cash at quarter end, plus an undrawn $150 million credit facility with an uncommitted accordion feature that allows for an expansion up to $100 million to $250 million in total, subject to certain conditions.

EVENTS SUBSEQUENT TO QUARTER END

'Cored-up' in our Greater Pembina Region, closing the previously announcedacquisition of a private company on October 20, 2025 with assets that fit neatly into our Central Alberta core area (the "Central AB Tuck-in"), including production of approximately 1,300 boe/d(2), and more than 83 gross (73 net) internally identified drilling locations(4)prospective for the Cardium, Glauconite and Bluesky formations.

Invested $4.6 million to acquirean additional 1.7 millionShares on the open market via our NCIB subsequent to the end of the quarter.

FINANCIAL AND OPERATING HIGHLIGHTS

| | | | Three months ended | | | Nine months ended | | | | | | | | | | | | ($000s, except per share amounts) | | | September 30, 2025 | | | June 30, 2025 | | | September 30, 2024 | | | September 30, 2025 | | | September 30, 2024 | | | | | | | | | | | | | | | | | | | | | FINANCIAL HIGHLIGHTS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Petroleum and natural gas sales | | | 235,344 | | | 236,712 | | | 262,379 | | | 750,137 | | | 639,451 | | | Cash flow from operating activities | | | 126,097 | | | 89,865 | | | 100,013 | | | 381,334 | | | 220,780 | | | Operating netback, net of derivatives(1) | | | 128,565 | | | 131,833 | | | 118,550 | | | 417,965 | | | 319,620 | | | Adjusted EBITDA(1) | | | 123,571 | | | 131,712 | | | 135,842 | | | 408,468 | | | 330,029 | | | Adjusted funds flow(1) | | | 103,282 | | | 108,854 | | | 94,065 | | | 343,257 | | | 250,886 | | | per share - Basic(1) | | | 0.54 | | | 0.56 | | | 0.46 | | | 1.76 | | | 1.44 | | | - Diluted(1) | | | 0.51 | | | 0.53 | | | 0.45 | | | 1.67 | | | 1.40 | | | Free funds flow(1) | | | 15,943 | | | 93,012 | | | 9,684 | | | 166,781 | | | 109,990 | | | per share - Basic(1) | | | 0.08 | | | 0.48 | | | 0.05 | | | 0.85 | | | 0.63 | | | - Diluted(1) | | | 0.08 | | | 0.45 | | | 0.05 | | | 0.81 | | | 0.61 | | | Net income (loss) | | | 3,466 | | | 95,054 | | | 101,601 | | | 136,339 | | | 80,424 | | | per share - Basic | | | 0.02 | | | 0.49 | | | 0.50 | | | 0.70 | | | 0.46 | | | - Diluted | | | 0.02 | | | 0.46 | | | 0.49 | | | 0.66 | | | 0.45 | | | Acquisitions, net of cash acquired | | | 65,212 | | | 5,132 | | | (4,749 | ) | | 70,344 | | | 538,396 | | | Proceeds from dispositions | | | - | | | - | | | - | | | - | | | (25,708 | ) | | Capital expenditures(1) | | | 87,339 | | | 15,842 | | | 84,381 | | | 176,476 | | | 140,896 | | | Total assets | | | 2,214,611 | | | 2,103,571 | | | 2,155,632 | | | 2,214,611 | | | 2,155,632 | | | Net debt(1), end of period | | | 782,514 | | | 694,835 | | | 779,018 | | | 782,514 | | | 779,018 | | | Shareholders' equity | | | 924,514 | | | 929,573 | | | 837,560 | | | 924,514 | | | 837,560 | | | Common shares outstanding, end of period | | | 190,020 | | | 194,809 | | | 203,103 | | | 190,020 | | | 203,103 | | | Weighted average, basic | | | 192,520 | | | 195,644 | | | 203,916 | | | 195,405 | | | 173,940 | | | Weighted average, diluted | | | 202,785 | | | 206,040 | | | 209,359 | | | 205,668 | | | 179,377 | | | | | | | | | | | | | | | | | | | | | OPERATING HIGHLIGHTS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Average production volumes | | | | | | | | | | | | | | | | | | Crude oil (bbls/d) | | | 29,152 | | | 30,150 | | | 28,994 | | | 30,140 | | | 23,017 | | | NGLs (bbls/d) | | | 4,180 | | | 3,310 | | | 3,407 | | | 3,606 | | | 2,811 | | | Natural gas (mcf/d) | | | 46,860 | | | 41,740 | | | 39,885 | | | 43,986 | | | 36,335 | | | Total boe/d | | | 41,142 | | | 40,417 | | | 39,049 | | | 41,077 | | | 31,884 | | | % Oil and NGLs | | | 81% | | | 83% | | | 83% | | | 82% | | | 81% | | | Average realized prices | | | | | | | | | | | | | | | | | | Crude oil ($/bbl) | | | 81.71 | | | 79.72 | | | 92.51 | | | 84.03 | | | 94.19 | | | NGLs ($/bbl) | | | 37.49 | | | 40.24 | | | 43.94 | | | 43.02 | | | 44.15 | | | Natural gas ($/mcf) | | | 0.67 | | | 1.80 | | | 0.74 | | | 1.61 | | | 1.44 | | | Processing expenses ($/boe) | | | (0.30 | ) | | (0.26 | ) | | (0.25 | ) | | (0.27 | ) | | (0.33 | ) | | Petroleum and natural gas sales ($/boe) | | | 62.18 | | | 64.36 | | | 73.04 | | | 66.89 | | | 73.20 | | | Operating netback ($/boe) | | | | | | | | | | | | | | | | | | Petroleum and natural gas sales | | | 62.18 | | | 64.36 | | | 73.04 | | | 66.89 | | | 73.20 | | | Royalties | | | (7.70 | ) | | (7.68 | ) | | (9.47 | ) | | (8.14 | ) | | (9.29 | ) | | Net operating expenses(1) | | | (19.24 | ) | | (18.28 | ) | | (19.86 | ) | | (19.04 | ) | | (19.30 | ) | | Transportation expenses | | | (1.49 | ) | | (1.65 | ) | | (1.70 | ) | | (1.57 | ) | | (1.52 | ) | | Operating netback(1) | | | 33.75 | | | 36.75 | | | 42.01 | | | 38.14 | | | 43.09 | | | Realized gain (loss) on derivatives | | | 0.22 | | | (0.91 | ) | | (9.01 | ) | | (0.88 | ) | | (6.49 | ) | | Operating netback, net of derivatives(1) | | | 33.97 | | | 35.84 | | | 33.00 | | | 37.26 | | | 36.60 | |

ASSET OUTPERFORMANCE

Third quarter production averaged 41,142 boe/d, which exceeded both previous guidance and analyst consensus estimates. Stronger than expected volumes are due to a combination of production additions from the SE SK Tuck-in along with continued robust production from our new OHML Bakken and conventional Spearfish development, partially offset by natural declines.

Saturn continues to drive consistent success in our development program, efficiently and safely deploying capital. During the third quarter, capital expenditures totaled $87.3 million, including $58.1 million directed to drill and complete 29 gross (24.7 net) wells, with approximately $18.2 million allocated to land expenditures in SE SK that unlock 60 gross (60 net) OHML locations in the Bakken. Despite volatile commodity pricing and a weakening crude oil outlook, Saturn's inventory of OHML locations remains highly economic, as our SE SK assets feature some of the shortest payouts and highest potential returns among the Company's undeveloped locations. Should commodity prices weaken further, we can shift more capital to that area given our strategy to allocate capital to the highest potential return opportunities. Currently, our OHML locations represent approximately 15% of our estimated 2,500 total identified locations(4). Saturn plans to direct up to 35% of our capital expenditures next year to this program, with the weighting potentially increasing as the OHML drilling technique is derisked across other plays.

Learnings from our successful Bakken OHML program have been applied to our Spearfish development, with Saturn being the first and only operator in Canada to have drilled an OHML Spearfish well. The Company's third Spearfish OHML well at 16-05 came on-line during the quarter with initial results exceeding expectations. Our internal type curve(5)was 110 boe/d and the 16-05 well came on production at approximately 330 boe/d (IP30), three times the type curve estimate(5). Further, Saturn again had an OHML Bakken well rank among Saskatchewan's top ten best performing wells through the quarter, and we have added two planned OHML re-entries into the Midale in Q4/25 on land purchased through the SE SK Tuck-in.

Saturn's focus on efficiencies resulted in the Company drilling the fastest 2.0-mile Cardium well on record during the quarter, drilling to 5,090 metres measured depth in a single run, with well completion from surface casing to total depth (TD) in only 4.8 days. Not only does this achieve meaningful cost reductions from well completion times, with the higher than anticipated volumes from our recent Cardium wells, Saturn is applying these learnings to enhance capital efficiencies across other fields.

Our net operating expenses per boe(1)in Q3/25 remained below our revised guidance range of $19.50 to $20.00 per boe, averaging $19.24 per boe. The restart of our drilling program in July resulted in higher service and maintenance costs, along with increased workover activity as part of ongoing optimization work. The elimination of the carbon tax in Saskatchewan partially offset these costs, and Saturn continues to seek opportunities to enhance our netbacks as part of our Blueprint strategy.

OUTLOOK

In Q4/25, the Company's capital expenditures(1)(3) are anticipated to range between $60 and $70 million, assuming WTI prices align with current strip prices, and we anticipate the capital program will be focused on conventional Mississippian development, along with further OHML drilling.

Production for the quarter is expected to average between 42,000 to 43,000 boe/d(2)with our exit 2025 (defined as December month average volumes) ranging between 43,000 and 44,000 boe/d(2), driven by our high-impact fourth quarter drilling program, production from the SE SK Tuck-in, and the addition of low-decline volumes from the Central Alberta Tuck-in from the time of its closing on October 20ththrough year-end 2025. Saturn anticipates releasing our full year 2026 guidance mid-December.

CONFERENCE CALL AND WEBCAST

The Company plans to host a conference call on Thursday, November 6, 2025, at 8:00 am Mountain Time (10:00 am Eastern Time), which will include a discussion with Saturn's leadership team, who will provide an overview of our Q3 2025 results, followed by a question-and-answer session with attendees.

Date: Thursday, November 6, 2025 Time: 8:00 am MT (10:00 am ET) Live Webcast Link: https://www.gowebcasting.com/14153 North America (Toll Free) Dial In: 1-833-752-3741 International Dial In: 1-647-846-8678

An audio replay of the webcast will be available one hour after the end of the call at the link above and will remain accessible for 12 months. The replay link will also be posted on Saturn's website.

NOTES

(1)See reader advisory: Non-GAAP and Other Financial Measures. (2)See reader advisory: Supplemental Information Regarding Product Types. (3)Includes capitalized G&A. (4)See reader advisory: Drilling Locations. (5)See reader advisory: Type Curves and Initial Production.

ABOUT SATURN

Saturn is a returns-driven Canadian energy company focused on the efficient, responsible and innovative development of high-quality, light oil weighted assets, supported by an acquisition strategy targeting accretive and complementary opportunities. The Company's portfolio of free-cash flowing, low-decline operated assets in Saskatchewan and Alberta provide a deep inventory of long-term economic drilling opportunities across multiple zones. With an unwavering commitment to building an entrepreneurial focused culture, Saturn's goal is to increase per Share reserves, production and cash flow at an attractive return on invested capital. The Company's Shares are listed for trading on the TSX under ticker 'SOIL' and on the OTCQX under the ticker 'OILSF'. Further information and our corporate presentation are available on Saturn's website at www.saturnoil.com.

INVESTOR & MEDIA CONTACTS

John Jeffrey, MBA - Chief Executive Officer Tel: +1 (587) 392-7900 www.saturnoil.com

Cindy Gray, MBA - VP Investor Relations Tel: +1 (587) 392-7900 info@saturnoil.com

READER ADVISORIES

Non-GAAP and Other Financial Measures

Throughout this news release and in other materials disclosed by the Company, Saturn employs certain measures to analyze financial performance, financial position and cash flow. These non-GAAP and other financial measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other entities. The non-GAAP and other financial measures should not be considered to be more meaningful than GAAP measures which are determined in accordance with IFRS, such as net income (loss), cash flow from operating activities, and cash flow used in investing activities, as indicators of Saturn's performance.

The disclosure under the section "Non-GAAP and Other Financial Measures" in our MD&A, including non-GAAP financial measures and ratios, capital management measures and supplementary financial measures in the Company's Financial Statements and MD&A are incorporated by reference into this news release.

This news release may use the terms "Adjusted EBITDA", "Adjusted Funds Flow", "Net Debt", "Free Funds Flow", "Net Debt to Annualized Proforma AFF", "Net Debt to Annualized Adjusted EBITDA" and "Net Debt to Annualized AFF" which are capital management financial measures. See the disclosure under "Capital Management" in our Financial Statements for the three and nine months ended September 30, 2025, for an explanation and composition of these measures, how these measures provide useful information to an investor, the additional purposes, if any, for which management uses these measures, and, where applicable, a reconciliation of the Company's historical non-GAAP financial measures to the most directly comparable measure calculated in accordance with IFRS for the applicable period then ended.

Capital Expenditures

Saturn uses capital expenditures to monitor its capital investments relative to those budgeted by the Company on an annual basis. Saturn's capital budget excludes acquisition and disposition ("A&D") activities as well as the accounting impact of any accrual changes or payments under certain lease arrangements. The most directly comparable GAAP measure for capital expenditures is cash flow used in investing activities. The following table reconciles capital expenditures and capital expenditures, net A&D to the nearest GAAP measure, cash flow used in investing activities.

| | | Three months ended | | | Nine months ended | | | | | | | | | | | | ($000s) | | September 30, 2025 | | | June 30, 2025 | | | September 30, 2024 | | | September 30, 2025 | | | September 30, 2024 | | | Cash flow used in investing activities | | 102,027 | | | 67,934 | | | 32,951 | | | 269,481 | | | 635,000 | | | Change in non-cash working capital | | 50,524 | | | (46,960 | ) | | 46,681 | | | (22,661 | ) | | 18,584 | | | Capital expenditures(1)(3), net A&D | | 152,551 | | | 20,974 | | | 79,632 | | | 246,820 | | | 653,584 | | | Acquisitions, net of cash acquired | | (65,212 | ) | | (5,132 | ) | | 4,749 | | | (70,344 | ) | | (538,396 | ) | | Proceeds from disposition | | - | | | - | | | - | | | - | | | 25,708 | | | Capital expenditures(1)(3) | | 87,339 | | | 15,842 | | | 84,381 | | | 176,476 | | | 140,896 | |

Free Funds Flow and Free Funds Flow per Share

Saturn uses free funds flow as an indicator of the efficiency and liquidity of its business, measuring its funds after capital investment available to manage debt levels, pursue acquisitions and gauge optionality to pay dividends and/or and return capital to shareholders through activities such as share repurchases. Saturn calculates free funds flow as adjusted funds flow in the period less capital expenditures. By removing the impact of current period capital expenditures from adjusted funds flow, management monitors its free funds flow to inform its capital allocation decisions. Free funds flow is also presented on a per share basis as a non-GAAP financial ratio. The following table reconciles adjusted funds flow to free funds flow.