Saturn Oil & Gas Inc. Increases 2026 Guidance Following Continued Operational Outperformance, Successful Tuck-In Acquisition Activity and Senior Notes Refinancing

2026-07-29

TSX - Toronto Stock Exchange · Oil · Natural Gas · Natural Gas Liquids · Canada · Production & Operations

Increased average annual production estimate by ~10% to 43,000 to 44,000 boe/d, with target 2026 exit volumes between 48,000 and 50,000 boe/d

Expanded development capital budget to $355 to $375 million that draws on our deep and growing inventory, focused on maximizing capital efficiencies and targeting opportunities with short full-cycle times and attractive return potential

Grow forecast adjusted funds flow by ~60% to between $535 and $570 million ($2.95 to $3.15/share)

Free funds flow forecast increased over 20% to range between $150 to $200 million ($0.80 to $1.10/share), to be allocated to continued debt repayment, shareholder returns and enhancing per share metrics

Calgary, Alberta--(Newsfile Corp. - July 29, 2026) - 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 announce increased guidance and estimates for full year 2026, including an approximately 60% increase in estimated adjusted funds flow ("AFF") and approximately 20% growth in free funds flow(1)compared to our original 2026 budget, along with an enhanced capital program designed to drive organic production growth and target 2026 exit production ranging between 48,000 and 50,000 boe/d(4).

The revised capital program reflects Saturn's confidence in the economics of our development inventory and the opportunity to deploy incremental capital into projects expected to generate attractive returns in the current commodity price environment. Combined with our recently completed senior note refinancing, our updated guidance reflects a stronger and more flexible platform from which to realize organic growth while maintaining financial discipline. Saturn intends to remain nimble and target opportunities that offer short full-cycle times and strong capital efficiencies, while ensuring optimal infrastructure utilization that aids in controlling operating costs. We anticipate our proforma net debt to adjusted EBITDA(1)ratio will improve relative to our original 2026 guidance while we are increasing average annual production by nearly 10%, which reflects the accretive nature of our recent 'core-up' acquisitions along with our enhanced cash flow generating ability.

"The Saturn team is excited to be expanding our capital program into a constructive oil price environment, with organic production growth from our expanded scale, enhanced inventory depth and quality of development opportunities following a series of accretive tuck-in acquisitions to date in 2026," said John Jeffrey, Saturn's Chief Executive Officer. "We remain committed to growing adjusted funds flow and free funds flow, prudently allocating capital, preserving our financial flexibility following our recent senior note refinancing and converting operational execution into sustainable value creation for shareholders."

UPDATED 2026 GUIDANCE HIGHLIGHTS

$355 to $375 million development capital expenditure(1)budget (the "Revised Budget"), of which 85%, or approximately $310 million at midpoint, is expected to be directed to drilling, completion, equip and tie-in ("DCET") activities, with the balance to production optimization initiatives, waterflood, facilities, land and seismic. Total 2026 capital expenditures (including capitalized G&A) are expected at $365 to $385 million.

43,000 to 44,000 boe/d(2)annual average 2026 production (~82% liquids), targeting 2026 exit production of 48,000 to50,000 boe/d(2)with an ~84% oil and liquids weighting.

$535 to $570 million of AFF(1)($2.95 to $3.15/share basic), anticipated to drive free funds flow(1)of $150 to $200 million($0.80 to $1.10/share basic), which represents a 15% to 20% free funds flow yield(4).

Drill 156 (136.2 net) wellsacross Southeast Saskatchewan ("SE SK"), West Central Saskatchewan ("WC SK"), and Alberta ("AB").

Updated guidance assumesUS$80.00 WTI, US$3.50 MSW-WTI differential, US$15.50 WCS-WTI differential, C$2.25/GJ AECO and 0.71x CAD/USD.

Our updated 2026 guidance estimates are intended to provide readers with information relevant to Saturn's expectations for financial and operating results for the full year, incorporating first half actuals, and could fluctuate with commodity prices, regulatory changes or other factors beyond our control.

| 2026 Updated Forecast(3) | Original 2026 Guidance Ranges | Updated 2026 Guidance Range | | Development Capital Expenditures(1)($millions) | $180 - $190 | $355 - $375 | | Average Annual Production (boe/d)(2) | 39,000 - 41,000 | 43,000-44,000 | | Oil and Liquids Weighting (%) | ~81% | ~82% | | Exit Volumes (boe/d)(2) | N/A | 48,000-50,000 | | | | | | ($millions, except per share) | | | | Adjusted Funds Flow (AFF)(1) | $325 - $375 | $535 - $570 | | AFF per weighted average basic share(4) | $1.75 - $2.00 | $2.95 - $3.15 | | Free Funds Flow(1) | $120 - $170 | $150 - $200 | | Free Funds Flow per weighted average basic share(4) | $0.65 - $0.95 | $0.80 - $1.10 | | Year-end Net Debt(1) | $645 - $695 | $955 - $990 | | Net Debt(1)to proforma Adjusted EBITDA(1)(5) (times) | 1.4x - 1.7x | 1.3x - 1.5x | | | | | | Operating Netback(1)Inputs | | | | Royalties (%) | 12.0% - 12.5% | 12.0% - 12.5% | | Net operating expense(1)($/boe) | $20.00 - $21.00 | $20.00 - $21.00 | | Transportation expense ($/boe) | $1.70 - $1.85 | $1.70 - $1.85 | | General and administrative ("G&A") expense ($/boe) | $1.70 - $1.85 | $1.70 - $1.85 |

In addition to the above forecasts, Saturn anticipates approximately $15 million in capitalized administrative expenses; $19 million of asset retirement obligations and $16 million primarily related to lease payments associated with a gas processing contract. The Company does not anticipate paying cash taxes in 2026.

Sensitivities

Saturn's forecasted AFF(1)is most sensitive to changes in crude oil prices. Sensitivity analysis on AFF(1)for the second half of 2026 is as follows:

UPDATED CAPITAL PROGRAM HIGHLIGHTS

The Revised Budget is focused on development projects within Saturn's portfolio that can deliver short half-cycle payback periods and enhanced capital efficiencies, while supporting growth in our free funds flow generation.

Saturn's Revised Budget anticipates activity across all three of our core areas where returns can be amplified in a higher oil price environment:

58% allocated to SE SK DCETcapital: approximately $177 million, targeting 100 (87.2 net wells.

18% allocated to WC SK DCETcapital: approximately $57 million, targeting 37 (32.0 net) wells.

24% allocated to AB DCETcapital: approximately $75 million, targeting 19 (17.0 net) wells.

Over 20% of the Revised Budget is allocated to open hole multi-lateral ("OHML") drilling, with more than 37 (28.2 net) OHML locations targeted, including two planned drills that represent 'firsts' for the Company:

First P2 Spearfish sands OHML pool expansion well in SE SK, building on our success in the P1 Spearfish sands and potentially adding several follow-up locations that expand the pool to the west.

First Lower Shaunavon OHML well in WC SK in Q4/26, which has the potential to unlock a significant resource play.

Saturn has continued to improve our OHML efficiencies with a 20% increase in Bakken OHML drilling meters per day and an estimated 10% reduction in costs per meter drilled from 2025 to the first half of 2026.

We are building on Saturn's first organic waterflood at Creelman that was started in 2025 with the conversion of 14 producers to injectors in 2026 which will set up for re-pressurized development in 2027 within an area that was previously unexploitable due to a lack of reservoir pressure.

The third of seven extended reach horizontal wells is currently being drilled on our Cardium pad in the West Pembina area, expanding on our Cardium success over the past 15 months, which will feature the longest ever Cardium wells to be drilled in the West Pembina area at up to 3-miles.

CONFERENCE CALL AND WEBCAST

Saturn plans to host a conference call on Thursday, July 30 2026, at 8:00 am Mountain Time (10:00 am Eastern Time), which will include a discussion with Saturn's leadership team regarding our Q2 2026 results, along with our updated 2026 guidance, followed by a question-and-answer session with attendees.

Date: Thursday, July 30 2026

Time: 8:00 am MT (10:00 am ET)

Live Webcast Link: https://www.gowebcasting.com/14721

North America (Toll Free) Dial In: 1-800-715-9871

International Dial In: 1-647-932-3411

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)2026 updated pricing assumptions: WTI crude oil of US$80.00 WTI, US$3.50 MSW-WTI differential, US$15.50 WCS-WTI differential, C$2.25/GJ AECO and 0.71x CAD/USD. (4)Free funds flow yield calculated as Saturn's current market cap of ~$1.0 billion at an assumed $5.60 share price divided by forecast free funds flow. (5)Assuming net debt to annualized proforma Adjusted EBITDA.

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 and safety-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 under IFRS Accounting Standards, as issued by the International Accounting Standards Board ("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 for the year ended December 31, 2025 and three and six months ended June 30, 2026, 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 to Annualized Proforma Adjusted EBITDA" and "Free Funds Flow", which are capital management financial measures. See the disclosure under "Capital Management" in our Financial Statements for the three and six months ended June 30, 2026, for an explanation and composition of these measures, how these measures provide useful information to an investor, and 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 GAAP for the applicable period then ended.

Capital Expenditures

Saturn uses development 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 activities as well as the accounting impact of any accrual changes or payments under certain lease arrangements. Development capital expenditures in this news release are calculated as expenditures on exploration and evaluation assets, property plant and equipment and excludes the impact of capitalized administrative costs.

Adjusted EBITDA

The Company considers Adjusted EBITDA to be a key capital management measure as it was used within certain financial covenants prescribed under the Company's previous senior note indenture and demonstrates Saturn's standalone profitability, operating and financial performance in terms of cash flow generation, adjusting for interest related to its capital structure. Adjusted EBITDA is defined by the Company as earnings before interest, taxes, depreciation, amortization and other non-cash or extraordinary items. Adjusted EBITDA is presented both before and after derivatives to identify the impact of WTI commodity contracts hedges in place.

Annualized Proforma Adjusted EBITDA

Annualized proforma adjusted EBITDA is calculated by annualizing the five months of proforma adjusted EBITDA following Saturn's acquisition activities to date in 2026. This metric is used by management to quantify and analyze its leverage ratios in the current period, with the added context of the proforma adjusted EBITDA from the acquired assets.

Adjusted Funds Flow

The Company considers adjusted funds flow to be a key capital management measure as it demonstrates Saturn's ability to generate the necessary funds to manage production levels and fund future growth through capital investment. Adjusted funds flow is calculated as cash flow from operating activities before changes in non-cash working capital, decommissioning expenditures and transaction costs. Management believes that this measure provides an insightful assessment of Saturn's operations on a continuing basis by eliminating certain non-cash charges, actual settlements of decommissioning obligations, of which the nature and timing of expenditures may vary based on the stage of the Company's assets and operating areas, and transaction costs which vary based on the Company's acquisition and disposition activity

Adjusted Funds Flow per Share

Adjusted funds flow per share is a non-GAAP ratio by management to better analyze the Company's performance against prior periods on a more comparable basis. Adjusted funds flow per share is calculated as adjusted funds flow from operations divided by weighted average shares outstanding during the applicable period on a basic or diluted basis.

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.

Net Operating Expenses and Net Operating Expenses per BOE

Net operating expense is calculated by deducting processing income primarily generated by processing third party production at processing facilities where the Company has an ownership interest, from operating expenses presented on the Statement of income (loss). Where the Company has excess capacity at one of its facilities, it will process third-party volumes to reduce the cost of ownership in the facility. The Company's primary business activities are not that of a midstream entity whose activities are focused on earning processing and other infrastructure-based revenues, and as such third-party processing revenue is netted against operating expenses in the MD&A. This metric is used by management to evaluate the Company's net operating expenses on a unit of production basis. Net operating expense per boe is a non-GAAP financial ratio and is calculated as net operating expense divided by total barrels of oil equivalent produced over a specific period of time. The calculation of the Company's net operating expenses is shown within the net operating expenses section of the MD&A

Operating Netback and Operating Netback, Net of Derivatives

The Company's operating netback is determined by deducting royalties, net operating expenses and transportation expenses from petroleum and natural gas sales. The Company's operating netback, net of derivatives is calculated by adding or deducting realized financial derivative commodity contract gains or losses from the operating netback. Derivative contract termination payments are included in realized derivative commodity contract gains or losses for the purposes of calculating the operating netback. The Company's operating netback and operating netback, net of derivatives are used in operational and capital allocation decisions. Presenting operating netback and operating netback, net of derivatives on a per boe basis is a non-GAAP financial ratio and allows management to better analyze performance against prior periods on a per unit of production basis.

Capital Management Measures

National Instrument 52-112 _Non-GAAP and Other Financial Measures Disclosure _("NI 52-112") defines a capital management measure as a financial measure that: (i) is intended to enable an individual to evaluate an entity's objectives, policies and processes for managing the entity's capital; (ii) is not a component of a line item disclosed in the primary financial statements of the entity; (iii) is disclosed in the notes to the financial statements of the entity; and (iv) is not disclosed in the primary financial statements of the entity. Please refer to note 13 "Capital Management" in Saturn's financial statements as at and for the year ended December 31, 2025 and the three and six months ended June 30, 2026, for additional disclosure on: net debt, adjusted EBITDA, adjusted funds flow, free funds flow, and net debt to annualized proforma AFF, each of which are capital management measures used by the Company in this news release.

Supplementary Financial Measures

NI 52‐112 defines a supplementary financial measure as a financial measure that: (i) is, or is intended to be, disclosed on a periodic basis to depict the historical or expected future financial performance, financial position or cash flow of an entity; (ii) is not disclosed in the financial statements of the entity; (iii) is not a non‐GAAP financial measure; and (iv) is not a non‐GAAP ratio. The supplementary financial measures used in this news release are either a per unit disclosure of a corresponding GAAP measure, or a component of a corresponding GAAP measure, presented in the financial statements. Supplementary financial measures that are disclosed on a per unit basis are calculated by dividing the aggregate GAAP measure (or component thereof) by the applicable unit for the period. Supplementary financial measures that are disclosed on a component basis of a corresponding GAAP measure are a granular representation of a financial statement line item and are determined in accordance with GAAP.

Earlier from Saturn Oil & Gas Inc.

More production & operations releases

Guanajuato Silver Provides Q3 2026 Production Results Guanajuato Silver Company Ltd. (GSVR.V), 2026-10-16
NG ENERGY ANNOUNCES ARUCHARA-6 WELL RESULTS AT MARIA CONCHITA AND SPUDDING OF ENCANTADO-1X AT SINÚ-9 (GASX.TO), 2026-10-16
Bengal Crude Realizations Run US$25 a Barrel Above Brent in Fiscal 2027 to Date Bengal Energy Ltd. (BNG.TO), 2026-10-16