Mr. Pramod Jain reports

CMG ANNOUNCES THE ACQUISITION OF SHARP REFLECTIONS GMBH

Computer Modelling Group Ltd.'s wholly owned subsidiary has acquired all of the shares of Sharp Reflections GmbH, a seismic processing and interpretation platform for geophysicists and quantitative interpreters.

Sharp has been a pioneer in leveraging high performance computing in the cloud, setting a new standard on how to effectively handle massive prestack seismic data sets with advanced visualization, interactivity and scientific analysis. The platform provides capabilities and workflows that help geophysicists and quantitative seismic interpreters work efficiently and improve the quality of decision making in subsurface interpretation, reservoir characterization and exploration.

"Sharp is a compelling opportunity to acquire a growing, founder-led business and expand our seismic solutions offering with a proven technology innovator," stated Pramod Jain, chief executive officer of Computer Modelling. "We consider Sharp the intellectual, technological and product leader in the niche specialty of multidimensional, prestack seismic interpretation. The company's expertise and leadership in real-time seismic processing, prestack analysis and 4-D seismic analysis meets the growing demand for high-fidelity interpretation and faster, more accurate decision making in exploration and production."

Sharp is headquartered in Germany, with operations in the United States, Norway and the United Kingdom. Sharp's customer base is global, and consists of major oil and gas companies. Bill Shea, co-founder and chief executive officer of Sharp, has agreed to remain with the organization to lead the integration.

Commenting on the transaction, Mr. Shea stated: "I am pleased to have found a great home for Sharp as it embarks on the next phase of its evolution. CMG's vision of acquiring and nurturing leading solutions in upstream oil and gas resonates deeply with me as a founder. I am confident that Sharp will achieve great things for our customers in the years to come, and I extend my thanks to all the talented employees of Sharp without whom we could not have achieved this success."

In the 12 months ended July 31, 2024, Sharp had unaudited revenue of approximately 10.0 million euros (1) (approximately $14.7-million (1)), composed of approximately 6.9 million euros (1) (approximately $10.1-million (1)) in software revenue (over 95 per cent considered recurring software revenue) and 3.1 million euros (1) (approximately $4.6-million (1)) in service revenue. The company generated low-double-digit adjusted earnings before interest, taxes, depreciation and amortization margin (1, 2).

Total consideration paid by Computer Modelling for Sharp was 25.0 million euros (approximately $37.0-million), cash consideration, subject to postclosing adjustments, plus an amount equivalent to Sharp's cash on hand immediately prior to closing. Computer Modelling financed the consideration from its existing cash-on-hand resources.

For more information on the transaction, please refer to the chief executive officer letter to shareholders on the Sharp acquisition, which can be found on the company's website.

(1) Revenue and adjusted EBITDA margin are unaudited for the period from Aug. 1, 2023, to July 31, 2024, and are not reported in accordance with international financial reporting standards. These figures are subject to adjustment upon conversion to international financial reporting standards. The average Canadian-dollar/euro exchange rate used was 1.4695.

(2) Adjusted EBITDA margin is a non-IFRS measure.

About Computer Modelling Group Ltd.

Computer Modelling is a global software and consulting company that combines science and technology with deep industry expertise to solve complex subsurface and surface challenges for the new energy industry around the world. Computer Modelling is headquartered in Calgary, Alta., with offices in Houston, Oxford, Dubai, Bogota, Rio de Janeiro, Bengaluru, Kuala Lumpur, Oslo, Stavanger and Kaiserslautern.

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