Mr. Robin Auld reports

CRITERIUM ENERGY ANNOUNCES CLOSING OF EQUITY PUBLIC OFFERING IN CONNECTION WITH ITS TRANSFORMATIVE ACQUISITION OF MONT D'OR PETROLEUM LTD.

Criterium Energy Ltd. has closed its previously announced upsized, underwritten public offering of equity subscription receipts of the company for gross proceeds of approximately $6.7-million. The public offering is being conducted alongside a convertible loan (as defined herein) for aggregate gross proceeds of approximately $18.9-million to the company, led by Research Capital Corp., and is in connection with the acquisition of all the issued and outstanding shares of Mont D'Or Petroleum Ltd. (MOPL) pursuant to a sale and purchase agreement (SPA). The convertible loan is expected to be issued and completed concurrently with the closing of the acquisition.

The financing consists of:

• The underwritten public offering of 60.91 million equity subscription receipts at a price of 11 cents per equity subscription receipt for gross proceeds of approximately $6.7-million, pursuant to an underwriting agreement entered into between the company and Research Capital, as the sole underwriter and sole bookrunner, for the public offering. Each equity subscription receipt entitles the holder thereof to receive, without payment of any additional consideration and with no further action on the part of the holder thereof, one unit of the company upon satisfaction of certain escrow release conditions (as defined herein) prior to the escrow release deadline (being no later than the 90th day following the closing date or such other date as the company and the underwriter may mutually agree upon). Each unit will consist of one common share in the capital of the company and one common share purchase warrant. Each warrant will entitle the holder to purchase one common share at an exercise price of 14 cents per warrant share until the date that is 60 months following the satisfaction or waiver of the escrow release conditions.
• A convertible loan in the principal amount of $12.2-million.

The financing is anchored by a strategic investor participating for an aggregate of $14.7-million, including the entirety of the $12.2-million convertible loan and $2.5-million in the public offering.

Financing details

The company has entered into a letter of intent and the company intends to enter into a loan agreement prior to the closing of the acquisition in connection with the convertible loan pursuant to which the strategic investor will agree to advance $12.2-million in principal amount to the company. In addition, the company will issue to the strategic investor 76.25 million warrants. The convertible loan will be issued on or before the closing of the acquisition and is subject to a number of conditions, including the approval of the TSX Venture Exchange.

The convertible loan shall bear interest at a rate of 14.75 per cent per annum from the date of issue, accrued daily and payable monthly in cash. The principal amount of the convertible loan shall be convertible, for no additional consideration, into common shares at the option of the holder at any time prior to the close of business on the third business day preceding the date that is 60 months from the date following the satisfaction or waiver of the escrow release conditions (the maturity date) at a conversion price equal to 16 cents per common share, subject to customary adjustments.

The convertible loan will be subordinated in right of payment of principal and interest to all senior obligations of the company. The convertible loan will be secured by a general charge over the company's assets. The outstanding principal amount of the convertible loan will be repaid in full on the maturity date in cash. On and following the date that is the second anniversary of the satisfaction of the escrow release conditions, the company shall have the right to partially or fully repay the outstanding principal amount of the convertible loan in cash at a premium of 14.75 per cent to the outstanding principal amount at the time of repayment, plus any unpaid accrued interest, by giving 30-days written notice to the strategic investor.

The company intends to use the net proceeds from the financing to finance the acquisition of all of the issued and outstanding shares of MOPL pursuant the terms of the SPA, including (i) drilling activities in 2023 to ramp up oil production focused on the Tungkal PSC; (ii) execution work associated with the Tungkal PSC gas monetization tie-in project and (iii) partial repayment of certain debts of MOPL outstanding following the acquisition, and development of MOPL's assets and for general corporate and working capital purposes.

The net proceeds were deposited and are being held in escrow with the equity subscription receipt agent and will be released to the company (together with the interest thereon) upon satisfaction of certain escrow release conditions and the underwriter receiving a certificate from the company prior to the termination time (as defined herein) to the effect that:

1. The completion, satisfaction or waiver of all conditions precedent to the acquisition in accordance with the SPA (save and except for those conditions precedent which are contingent upon and/or will be completed, satisfied or waived concurrent with or as part of the closing of the acquisition), provided that the chief executive officer of the company (or such other officers as may be acceptable to the underwriter, acting reasonably) has certified to the underwriter that, to the best of his information, knowledge or belief, no event, circumstance or condition exists which could reasonably be expected to result in any of the concurrent conditions precedent not being completed, satisfied or waived concurrent with or as part of the closing of the acquisition; it being understood and agreed that certain of the concurrent conditions precedent may be completed or satisfied pursuant to the giving and acceptance of solicitors' undertakings, as applicable, to the satisfaction of the underwriter, acting reasonably.
2. The receipt of all required shareholder and regulatory approvals, including, without limitation, the conditional approval of the TSX-V for the acquisition.
3. The strategic investor having completed due diligence on the company, in its sole discretion, and is satisfactory.
4. The company obtaining shareholder approval for the strategic investor to become a "control person" of the company.
5. The issuance of the convertible loan and the loan warrants on before the closing of the acquisition.
6. The strategic investor, or such other substitute purchaser at the sole discretion of the underwriter, delivering payment to the underwriter in respect of the $2.5-million participation by the strategic investor of the equity subscription receipts.
7. The representations and warranties of the company contained in the underwriting agreement to be entered into in connection with the public offering being true and accurate in all material respects, as if made on and as of the escrow release date.
8. The company and the underwriter having delivered a joint notice and direction to the escrow agent, confirming that the conditions set forth in (1) to (7) above have been met or waived.

If (i) the escrow release conditions are not satisfied or waived on or prior to 5 p.m. (Calgary time) on the date that is 90 days following the closing of the public offering (or such later date as the underwriter may consent in writing); (ii) the acquisition is terminated in accordance with its terms; or (iii) the company has advised the underwriter or the public that it does not intend to proceed with the acquisition (in each case, the earliest of such times being the "termination time"), the company will be responsible to refund the gross proceeds of the public offering (including the amount of the underwriter's commission and the underwriter's expenses) without penalty or deduction to the subscribers of the public offering, such that it would be the company's responsibility to return the full amount of the gross proceeds of the public offering to the holders of equity subscription receipts, together with such holders' pro rata portion of the interest earned thereon, if any.

The equity subscription receipts were offered by way of a short form prospectus filed in each of the provinces of Canada (other than Quebec) and in the United States on a private placement basis pursuant to an appropriate exemption from the registration requirements under applicable U.S. law, and outside of Canada and the United States on a private placement or equivalent basis. The final short form prospectus is available on SEDAR+. The company will make commercially reasonable efforts to list the warrants issuable underlying the equity subscription receipts. The convertible loan and warrants issuable pursuant to the convertible loan will be subject to a statutory hold period lasting four months and one day following the closing of the convertible loan pursuant to Canadian securities laws.

Certain directors and officers of the company participated in the public offering under applicable securities laws. Insider participation in the public offering constituted a related party transaction within the meaning of Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions, for which the company was exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to sections 5.5(a) and 5.7(1)(a) thereof, as neither the fair market value (as determined under MI 61-101) of the securities issued to insiders under the public offering nor the consideration paid by insiders exceeded 25 per cent of the company's market capitalization, all as determined under MI 61-101. The company did not file a material change report 21 days before closing of the public offering as the details of the insider participation were not known at that time.

The acquisition is subject to Criterium receiving TSX-V approval for the acquisition. The financing and acquisition constitute a reverse takeover (RTO) under TSX Venture Exchange Policy 5.2 and the company is providing the necessary documentation to receive the required TSX-V approval. The company will obtain shareholder approval for the RTO through shareholder written consent.

As part of this development, the definitive agreement setting out the terms of the acquisition was amended by way of an amended sale and purchase agreement dated Oct. 6, 2023 (the amended purchase and sale agreement). The amended purchase and sale agreement extended the timeline for certain conditions of the acquisition and included a non-refundable deposit of $200,000 (U.S.), which was paid as consideration for signing the amended purchase and sale agreement.

About Criterium Energy Ltd.

Criterium Energy is an upstream energy company focused on the acquisition and sustainable development of assets in Southeast Asia that can deliver scalable growth and cash generation. The company focuses on maximizing total shareholder return by executing on three strategic pillars, namely (1) successful and sustainable reputation; (2) innovation and technology arbitrage; and (3) operational and safety excellence.

We seek Safe Harbor.