Saturn Oil & Gas Inc. press release

Saturn Oil & Gas Inc. Announces Record Third Quarter 2026 Results with Production Exceeding Guidance and Analyst Expectations(8) for the Ninth Consecutive Quarter

2026-11-04

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

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Achieved record production of 43,704 boe/d(2), beating Saturn's guidance and analyst expectations(8)for the ninth consecutive quarter

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Generated cash flow from operating activities of $156 million and record quarterly adjusted funds flow(1)of $150 million ($0.84/share)

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Executed Saturn's highest capital expenditure program in our history, deploying $128 million and drilling a total of 60 gross wells, of which 52 were drilled in Saskatchewan

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Continued executing our blueprint strategy with 'core-up' acquisitions both during and after the quarter, building on our 10% forecast organic growth and driving an increased 2026 exit production target of 54,000 to 56,000 boe/d(2)

Calgary, Alberta--(Newsfile Corp. - November 4, 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, Manitoba and Alberta, is pleased to report our operating and financial results for the three and nine months ended September 30, 2026, featuring record quarterly production that exceeded both guidance and analyst expectations, along with record quarterly adjusted funds flow(1)("AFF") of $150 million ($0.84/share). We also executed our largest capital program to date, investing $128 million and increasing Q3/26 average production by 6% (15% per share), AFF(1)by 45% (56% per share) and cash flow from operating activities by 24% to $156 million relative to the third quarter of 2025.

Saturn's financial statements ("Financial Statements") and Management's Discussion and Analysis ("MD&A") for the three and nine months ended September 30, 2026, are available on our website and filed on SEDAR+ at sedarplus.ca. As previously announced, we have scheduled a conference call and webcast on Thursday, November 5, 2026, at 8:00 am Alberta Time (9:00 am Eastern Standard Time) to discuss the results. Access details for the conference call and webcast are provided below.

"Saturn delivered record production and AFF(1)in the quarter while executing the largest capital program in our history," said John Jeffrey, Chief Executive Officer. "Building on approximately 10% forecast organic production growth in 2026, we continued to execute our blueprint strategy through accretive acquisitions that added approximately 3,700 boe/d(2)of light oil-weighted production and expanded our drilling inventory, while strengthening our capital structure through the refinancing of our senior notes. That momentum has carried into the fourth quarter with the Corex acquisition and an increased 2026 exit production target of 54,000 to 56,000 boe/d. We remain focused on disciplined growth, reducing debt and returning capital to shareholders."

Q3 2026 HIGHLIGHTS

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Achieved record quarterly production of 43,704 boe/d(2)(82% oil and liquids), reflecting continued outperformance of Saturn's wells, while volumes averaged 42,758 boe/d(2)during the first nine months of 2026.

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Generated record AFF(1)of $150 million ($0.84/share) in Q3, bringing AFF for the first nine months of the year to $380 million. Adjusted EBITDA(1)in the quarter also set a new record at $171 million, contributing to the $439 million in adjusted EBITDA(1)generated through September 30, 2026. The quarter's net loss of $48 million ($0.27/share) primarily reflects non-cash unrealized hedge losses and one-time costs associated with refinancing our senior notes.

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Executed Saturn's largest capital expenditure(1)(4)program of $128 million during Q3, resulting in the drilling of 60 gross (54.5 net) wells, including 32 (29.6 net) in southeast Saskatchewan ("SE SK"), 20 (16.9 net) in West Central SK, and 8 (8.0 net) in Central Alberta, with approximately $30 million of Q3/26 capital deferred into Q4/26 due to wet weather in SE SK.

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Generated free funds flow(1)of$22 million ($0.12/share) in the quarter, with $167 million ($0.93/share) generated during the first nine months of 2026. Saturn continues to direct our free funds flow to returning capital through our share buyback program, disciplined core-up acquisition strategy and ongoing net debt reduction.

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Added 3,700 boe/d(2)of 96% light oil and liquids through strategic tuck-in acquisitionsduring the quarter, investing $176.6 million to bring privately-held Burgess Creek Exploration Inc. and Triland Energy Inc. (the "SE SK Acquisitions") into Saturn's SE SK operations at attractive metrics of 1.7 times run-rate net operating income(1)and further enhancing our netbacks.

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Closed the dual-tranche offering of senior unsecured notes due 2031, issuing US$575 million at 8.5% and C$185 million at 7.5% (together, the "New Notes"), with proceeds used to early retire Saturn's outstanding senior secured second lien notes ("2L Notes") due 2029, which had a balance of $706.7 million (US$503.8 million). The New Notes reduce effective interest costs by approximately 2%, extend the tenor by two years, eliminate the mandatory 10% amortization feature, are unsecured and relax certain covenants that were required under the 2L Notes.

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Increased 2026 guidanceto reflect continued operational outperformance, the SE SK Acquisitions, and impact of the New Notes, with an expansion of our full-year capital to $355 to $375 million and the first increase to our exit production guidance to 48,000 to 50,000 boe/d(2), which was subsequently increased to 54,000 to 56,000 boe/d(2)with the Corex Acquisition.

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Ended the quarter with net debt to annualized adjusted EBITDA(1)of 1.5 timeson net debt of $1,001 million and approximately $500 million of liquidity on an undrawn credit facility. At current commodity prices, we anticipate the Company will be positioned to exit 2027 with net debt to adjusted EBITDA(5)of less than one times.

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Renewed our Normal Course Issuer Bid ("NCIB"), having repurchased a total of 12.1 million shares in the open market from August 27, 2025, to July 22, 2026, at a weighted average price of $3.29 per share, bringing total capital returned to Saturn shareholders to $66 million through the repurchase and cancellation of 24.2 million shares since August 2024. The renewed NCIB authorizes the repurchase and cancellation of up to 12.2 million common shares until September 7, 2027, with a daily maximum purchase of 200,855 shares subject to certain exceptions for block repurchases.

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Returned $10.3 million to shareholders during the quarter through the repurchase and cancellation of 1.5 million shares via our NCIB at a weighted average price of $6.69 per share, continuing our steady return of capital to Saturn shareholders.

EVENTS SUBSEQUENT TO QUARTER END

Announced the accretive acquisition of Corex Resources Ltd. (the "Corex Acquisition") on October 19, 2026, adding approximately 7,000 bbl/d of 100% light oil, high-netback production, expanding our SE SK core area into Manitoba and supporting an increase to our forecast 2026 exit production to 54,000 to 56,000 boe/d(2). The $302 million purchase price represents 1.6 times run-rate net operating income(1)and 82% of PDP NPV10 value(7), reflecting Saturn's continued execution of our blueprint strategy.

FINANCIAL AND OPERATING HIGHLIGHTS

| | | Three months ended | Nine months ended | | | | | | | | | | | | | | ($000s, except per share amounts) | September 30, 2026 | | June 30, 2026 | | September 30, 2025 | | September 30, 2026 | | September 30, 2025 | | | | | | | | FINANCIAL HIGHLIGHTS | | | | | | | | | | | | | | | | | Petroleum and natural gas sales | | 349,724 | | | 358,714 | | | 235,344 | | | 978,675 | | | 750,137 | | | Cash flow from operating activities | | 155,970 | | | 126,955 | | | 126,097 | | | 396,171 | | | 381,334 | | | Operating netback, net of derivatives(1) | | 173,157 | | | 147,272 | | | 128,565 | | | 453,169 | | | 417,965 | | | Adjusted EBITDA(1) | | 170,739 | | | 142,055 | | | 123,571 | | | 439,322 | | | 408,468 | | | Adjusted funds flow(1) | | 149,887 | | | 122,609 | | | 103,282 | | | 379,724 | | | 343,257 | | | per share - Basic(1) | | 0.84 | | | 0.68 | | | 0.54 | | | 2.11 | | | 1.76 | | | - Diluted(1) | | 0.84 | | | 0.64 | | | 0.51 | | | 2.11 | | | 1.67 | | | Free funds flow(1) | | 21,930 | | | 82,528 | | | 15,943 | | | 166,936 | | | 166,781 | | | per share - Basic(1) | | 0.12 | | | 0.46 | | | 0.08 | | | 0.93 | | | 0.85 | | | - Diluted(1) | | 0.12 | | | 0.43 | | | 0.08 | | | 0.93 | | | 0.81 | | | Net income (loss) | | (48,296 | ) | | 108,116 | | | 3,466 | | | (37,504 | ) | | 136,339 | | | per share - Basic | | (0.27 | ) | | 0.60 | | | 0.02 | | | (0.21 | ) | | 0.70 | | | - Diluted | | (0.27 | ) | | 0.57 | | | 0.02 | | | (0.21 | ) | | 0.66 | | | Acquisitions, net of cash acquired | | 176,594 | | | 45,665 | | | 65,212 | | | 220,546 | | | 70,344 | | | Proceeds from dispositions | | - | | | - | | | - | | | (3,503 | ) | | - | | | Capital expenditures(1)(4) | | 127,957 | | | 40,081 | | | 87,339 | | | 212,788 | | | 176,476 | | | Total assets | | 2,581,111 | | | 2,192,572 | | | 2,214,611 | | | 2,581,111 | | | 2,214,611 | | | Net debt(1), end of period | | 1,000,842 | | | 761,553 | | | 782,514 | | | 1,000,842 | | | 782,514 | | | Shareholders' equity | | 853,336 | | | 909,286 | | | 924,514 | | | 853,336 | | | 924,514 | | | Common shares outstanding, end of period | | 178,023 | | | 178,300 | | | 190,020 | | | 178,023 | | | 190,020 | | | Weighted average, basic | | 178,494 | | | 179,788 | | | 192,520 | | | 180,077 | | | 195,405 | | | Weighted average, diluted | | 178,494 | | | 191,025 | | | 202,785 | | | 180,077 | | | 205,668 | | | | | | | | | | | | | | | | | | | | OPERATING HIGHLIGHTS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Average production volumes | | | | | | | | | | | | | | | | | Light and medium crude oil (bbls/d) | | 28,757 | | | 26,614 | | | 25,825 | | | 27,684 | | | 26,737 | | | Heavy crude oil (bbls/d) | | 3,137 | | | 3,244 | | | 3,327 | | | 3,186 | | | 3,403 | | | NGLs (bbls/d) | | 4,110 | | | 3,858 | | | 4,180 | | | 3,969 | | | 3,606 | | | Natural gas (mcf/d) | | 46,197 | | | 46,385 | | | 46,860 | | | 47,514 | | | 43,986 | | | Total boe/d | | 43,704 | | | 41,447 | | | 41,142 | | | 42,758 | | | 41,077 | | | % Oil and NGLs | | 82% | | | 81% | | | 81% | | | 81% | | | 82% | | | Average realized prices | | | | | | | | | | | | | | | | | Crude oil ($/bbl) | | 110.48 | | | 122.14 | | | 81.71 | | | 107.14 | | | 84.03 | | | NGLs ($/bbl) | | 50.92 | | | 58.35 | | | 37.49 | | | 50.76 | | | 43.02 | | | Natural gas ($/mcf) | | 1.79 | | | 1.81 | | | 0.67 | | | 1.93 | | | 1.61 | | | Processing expenses ($/boe) | | (0.32 | ) | | (0.34 | ) | | (0.30 | ) | | (0.37 | ) | | (0.27 | ) | | Petroleum and natural gas sales ($/boe) | | 86.98 | | | 95.11 | | | 62.18 | | | 83.84 | | | 66.89 | | | Operating netback ($/boe) | | | | | | | | | | | | | | | | | Petroleum and natural gas sales | | 86.98 | | | 95.11 | | | 62.18 | | | 83.84 | | | 66.89 | | | Royalties | | (11.08 | ) | | (12.25 | ) | | (7.70 | ) | | (10.35 | ) | | (8.14 | ) | | Net operating expenses(1) | | (20.85 | ) | | (20.98 | ) | | (19.24 | ) | | (20.77 | ) | | (19.04 | ) | | Transportation expenses | | (0.85 | ) | | (1.75 | ) | | (1.49 | ) | | (1.43 | ) | | (1.57 | ) | | Operating netback(1) | | 54.20 | | | 60.13 | | | 33.75 | | | 51.29 | | | 38.14 | | | Realized gain (loss) on derivatives | | (11.13 | ) | | (21.09 | ) | | 0.22 | | | (12.46 | ) | | (0.88 | ) | | Operating netback, net of derivatives(1) | | 43.07 | | | 39.04 | | | 33.97 | | | 38.83 | | | 37.26 | |

OPERATIONAL UPDATE

The third quarter of 2026 marked another strong period of operational execution, with production averaging 43,704 boe/d, a new quarterly volume record that exceeded both our previous guidance and analyst expectations for the ninth consecutive quarter. Saturn executed a record $128 million capital expenditure program during Q3/26, with six rigs running, and recorded zero lost-time injuries despite a 42% increase in person-hours worked over Q3/25. During this period of elevated capital spending and activity, we also successfully integrated the assets and operations from our SE SK Acquisitions ahead of schedule, realizing cost savings and synergies that exceed our initial forecasts. This reflects the nimble nature of our asset base, the flexibility of our drilling inventory, and strong operations team. Saturn kept rigs active and deployed capital with minimal disruption while navigating both the integration and challenging field conditions.

Approximately 83% of our Q3/26 capital was directed to drilling, completion, equip and tie-in activities, which led to the drilling of 60 gross (54.5 net) wells, including 32 (29.6 net) in SE SK, 20 (16.9 net) in West Central Saskatchewan and 8 (8.0 net) wells drilled in Central Alberta. Included in the SE SK well counts are 8 (6.4 net) open hole multi-lateral ("OHML") wells. We have added a seventh rig into Q4/26, and in light of our capital program to date, we anticipate full-year 2026 capital spending will be at the upper end of our guidance range of $355 to $375 million.

Saturn's OHML program continued to deliver exciting results, as shown by our second OHML into the Torquay (the "8-22 well"), the most successful OHML well we have drilled to date. After an initial clean-up period, the 8-22 well achieved initial production rates(3)of 410 bbl/d(2)after the first 30 days on production ("IP30"), and 360 bbl/d(2)after 90 days ("IP90"), significantly higher than Saturn's internal type curve expectations, and building on the performance of our first 7-16 Torquay OHML well. These two new Torquay wells further demonstrate our ability to efficiently increase production and reserves by applying our growing OHML expertise across multiple formations in the asset base. Saturn's technical team continues to evaluate future potential zones to identify prospective OHML development locations, including opportunities within the Manitoba assets we expect to acquire through the Corex Acquisition.

At Flat Lake, Saturn's innovative and entrepreneurial team recognized that surface groundwater accumulations in the area could be utilized for completions, instead of trucking water to the site. During the quarter, we contracted with local landowners to bring in specialized crews to overland-pump the standing surface water, allowing the Company to remove trucks from the road and lowering expected completion costs by approximately $1 million. This is just one example of how Saturn continuously looks beyond conventional solutions to identify opportunities that can improve our execution and enhance capital efficiencies.

We continued to advance our Cardium development program at West Pembina through the period, and drilled a seven-well pad with three three-mile wells and four two-mile wells, representing our largest multi-well Cardium pad to date. We expect to complete the wells on this pad shortly, with new volumes anticipated later in Q4/26. We are seeing improved efficiencies in our Cardium program, particularly because we can allocate costs across more wells while optimizing area infrastructure.

SETTING UP FOR A STRONG 2027

Combined with robust Q3/26 volumes that averaged 43,704 boe/d(2), elevated oil prices contributed to revenue of $350 million, totaling $979 million year-to-date. With record AFF of $150 million in Q3/26 and $380 million year-to-date, Saturn is well positioned to meet or exceed our 2026 target AFF of approximately $550 million at midpoint. We also maintain significant liquidity and an active commodity hedging program designed to provide downside protection and greater cash flow certainty.

Subsequent to Q3/26, we announced the Corex Acquisition, which is expected to add approximately 7,000 bbl/d of 100% light oil, high-netback production and owned infrastructure, while extending our SE SK operating expertise and scale into adjacent Southwest Manitoba ("SW MB"). The high quality of the barrels being acquired translates to operating netbacks of approximately $82/bbl(1), contributing to estimated run-rate net operating income(1)of $192 million(5). Consideration for the Corex Acquisition will be comprised of $252 million of cash and the issuance of $50 million of common shares, valued at the 20-day volume-weighted average share price preceding the announcement. The transaction is expected to close prior to Christmas.

Integrating the Corex Acquisition is expected to be immediately accretive to Saturn's netback, AFF(1)per share and free funds flow(1)per share. We expect to gain an attractive drilling inventory of 323 gross (279 net) identified drilling locations, of which 206 gross (189.0 net) are booked locations(7). Included in the identified inventory are nearly 30 net unbooked OHML opportunities in the Lodgepole at Virden and an estimated 25 net OHML locations identified in the Spearfish formation, which Saturn believes represents potential value beyond what is reflected in the most recent Corex reserves report. We also see significant opportunity in SW MB to apply our operating expertise and capture approximately $6 million in estimated annual efficiencies through facility consolidation, streamlined field operations, lower operating costs and enhanced marketing arrangements, along with expanding existing waterflood schemes to underpin our long-term sustainability.

BOARD AND LEADERSHIP APPOINTMENTS

Saturn is pleased to announce that Mr. Lynn Peterson, an independent member of the Company's Board of Directors, has been appointed Lead Independent Director.

In addition, the Company is pleased to announce that Mr. Wyatt Hamilton has joined the Company as Vice President, Marketing. As an accomplished energy marketing professional, he brings experience in commercial commodity marketing, trading and transportation, with extensive knowledge of North American energy markets. Mr. Hamilton will oversee the Company's marketing activities and support the continued optimization of our commercial strategy. Prior to Saturn, he held progressively senior roles at Whitecap Resources Inc., most recently as Director, Marketing, and holds a Bachelor of Commerce from the University of British Columbia's Sauder School of Business.

OUTLOOK

The momentum we established in Q3 has carried into Q4, and we expect to operate seven rigs through the balance of 2026 and into Q1/27. In the final quarter of 2026, capital spending is expected to range from $155 to $165 million, with production expected to average between 46,000 and 47,000 boe/d(2). With the closing of the Corex Acquisition expected prior to Christmas 2026, Saturn targets exiting the year between 54,000 and 56,000 boe/d(2). Full-year 2026 capital expenditures are expected to come in at the upper end of our previous guidance of $355 to $375 million, while average annual production is expected to be 43,000 to 44,000 boe/d(2). Saturn anticipates releasing our full-year 2027 budget and guidance in mid to late December.

CONFERENCE CALL AND WEBCAST

The Company plans to host a conference call on Thursday, November 5, 2026, at 8:00 am Alberta Time (9:00 am Eastern Standard Time), which will include a discussion with Saturn's leadership team, who will provide an overview of our Q3 2026 results, followed by a question-and-answer session with attendees.

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Date: Thursday, November 5, 2026

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Time: 8:00 am ABT (9:00 am EST)

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Live Webcast Link: https://www.gowebcasting.com/15016

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

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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)See reader advisory '_Type Curve and Initial Production'_. (4)Includes capitalized G&A. (5)On a forward 12-month basis from effective date (November 2026 to November 2027), assuming October 13, 2026, strip pricing. (6)See reader advisory: Drilling Locations. (7)See reader advisory: Reserves and Future Net Revenue Disclosures (8)Based on Q3/26 estimates submitted by each analyst in October 2026 and aggregated by the Company. Saturn does not endorse third-party estimates.