Mr. Brian Bagnell reports

ADVANTAGE ANNOUNCES WEMBLEY DISPOSITION AND ACCELERATED RETURN OF CAPITAL

Advantage Energy Ltd. has entered into a definitive agreement to sell its assets in the Wembley area of Alberta for gross proceeds of $316-million in cash, prior to closing adjustments.

The Wembley assets include 32 net sections of Montney lands, 11.8 million barrels of oil equivalent (mmboe) of proved developed producing reserves, 27.9 mmboe of proved reserves and 46.1 mmboe of total proved plus probable reserves. First-half 2026 sales volumes were approximately 5,730 barrels of oil equivalent per day (boe/d), including 45 per cent liquids (19.0 million cubic feet per day (mmcf/d) natural gas, 1,358 barrels per day (bbl/d) crude oil and 1,206 bbl/d natural gas liquids (NGLs)).

The purchase price will be subject to adjustments based on an effective date of July 1, 2026. Closing of the transaction is expected to occur early in the fourth quarter of 2026, subject to regulatory approvals and other closing conditions.

Transaction rationale

The transaction delivers sale metrics that are accretive to Advantage while generating cash proceeds that unlock significant financial and strategic flexibility. The sale crystallizes a before-tax cash return on invested capital of 92 per cent since significant development began in 2019, reflecting the value created through Advantage's disciplined investment and execution with respect to the Wembley assets.

Wembley was developed organically by Advantage, becoming a highly valued asset in Advantage's portfolio with optionality for future liquids-weighted production growth. However, Wembley sits outside of Advantage's core owned and operated infrastructure at its Glacier/Valhalla/Progress complex, and is therefore reliant on third party processing capacity, which comes with higher unit costs and less control over development. As a result, future growth at Wembley does not compete for capital in comparison with Advantage's deep inventory of development opportunities.

Proceeds from the transaction will be used to reduce Advantage's net debt, providing the corporation with the ability to accelerate shareholder returns. After closing the transaction, Advantage expects to enter the fourth quarter with net debt of approximately $245-million, including bank indebtedness of $101-million and convertible debentures of $144-million, both with June, 2029, maturity dates. Having achieved a net debt level substantially below its target range of $400-million to $500-million, Advantage will continue to prioritize balance sheet strength, with debt to adjusted funds flow expected to remain below 1.0 time even at bottom-decile commodity prices.

Peters & Co. Ltd. and Scotia Capital Inc. acted as financial advisers to Advantage on the transaction.

Guidance update

Advantage's cash costs are expected to fall following the closing of the transaction as the company further concentrates its operations and reduces its net debt. Fourth quarter 2026 operating costs per barrel of oil equivalent (boe) are now expected to be approximately $4.70, general and administrative (G&A) costs per boe approximately 70 cents, and finance costs per boe approximately 85 cents. Fourth quarter 2026 production is expected to average between 83,000 boe/d and 84,000 boe/d.

Advantage's full-year 2026 guidance has been updated, as detailed in an attached table.

Looking forward

Following the completion of the Progress gas plant in the second quarter, all major infrastructure projects contemplated in Advantage's current three-year plan are now complete. Pro forma the transaction, Advantage plans to sustain production levels from the fourth quarter of 2026 through the end of 2027, supported by owned and operated infrastructure and an efficient capital program designed to maximize free cash flow.

Advantage is focused on maximizing shareholder returns. Subsequent to closing the transaction, Advantage expects to immediately begin significant share repurchases, including up to 5 per cent of its common shares outstanding in the remainder of 2026 and up to an additional 10 per cent in 2027. Share buybacks remain Advantage's main vehicle for direct shareholder returns while the company's shares are trading below intrinsic value.

Based on current commodity pricing, Advantage expects to retain substantial financial flexibility even after executing on its planned share buybacks. Advantage maintains a strong inventory of liquids-weighted development opportunities within both the Charlie Lake and the Montney at Valhalla and Progress, providing significant future liquids growth potential that will continue to be evaluated through the company's returns-based framework. Advantage plans to release its formal 2027 budget, along with an updated three-year plan, in early December, 2026.

Advantage wishes to thank its employees, board of directors and shareholders for their continuing support.

We seek Safe Harbor.