Calgary, Alberta--(Newsfile Corp. - August 6, 2026) - Kelt Exploration Ltd. (TSX: KEL) ("Kelt" or the "Company") reports its financial and operating results to shareholders for the second quarter ended June 30, 2026. The Company's financial results are summarized as follows:

Financial Statements

Kelt's unaudited condensed consolidated interim financial statements and related notes for the quarter ended June 30, 2026 will be available to the public on SEDAR+ at www.sedarplus.ca and will also be posted on the Company's website at www.keltexploration.com on August 6, 2026.

Kelt's operating results for the second quarter ended June 30, 2026 are summarized as follows:

Message to Shareholders

Kelt Exploration Ltd. ("Kelt" or the "Company") reports its financial and operating results to shareholders for the second quarter of 2026.

Kelt's average production for the three months ended June 30, 2026 reached a new Company record high quarterly production average of 50,388 BOE per day, up 30% from average production of 38,734 BOE per day during the corresponding period in 2025. Production for the three months ended June 30, 2026 was weighted 39% oil and NGLs and 61% gas.

Kelt's realized average oil price during the second quarter of 2026 was $131.65 per barrel, up 60% from $82.52 per barrel in the second quarter of 2025. Kelt's realized second quarter oil price in 2026 was 102% of the equivalent Canadian dollar WTI daily average index price for the same period. The realized average NGLs price was $57.75 per barrel, up 57% from $36.67 per barrel in the second quarter of 2025. Kelt's realized average gas price for the second quarter of 2026 was $2.14 per Mcf, down 8% from $2.32 per Mcf in the corresponding quarter of the previous year. Kelt's realized second quarter gas price in 2026 was 31% higher than the AECO daily average index price for the same period.

Kelt continues to generate robust returns from its sulphur production. The Company sold an average of 110 long tons per day at an average net price of $919.44 per long ton during the second quarter of 2026, which added $9.2 million to funds from operations. With significant shortages of sulphur supply globally, demand for the product remains resilient. As a result, sulphur prices have continued to trend upwards early in the third quarter of 2026.

For the three months ended June 30, 2026, petroleum and natural gas sales were $222.2 million and adjusted funds from operations was $108.7 million ($0.53 per common share, diluted), significantly higher than $116.4 million and $61.8 million ($0.31 per common share, diluted) respectively, in the second quarter of 2025. At June 30, 2026, the Company had net debt of $242.1 million, equating to 0.6 times forecasted 2026 adjusted funds from operations of $410.0 million.

Net capital expenditures incurred during the three months ended June 30, 2026 were $137.9 million. During the second quarter of 2026, the Company spent $109.1 million (79%) on drill and complete operations; $27.2 million (20%) on facilities, pipelines and equipment; and $1.6 million (1%) of other expenditures.

Operations Update

In its Wembley/Pipestone Division, year-to-date, Kelt has drilled and completed 12 Montney wells from three different pads (6-9, 11-34 and 16-26). These wells were all completed using the plug and perf method optimized with higher proppant and water intensities and are now on production. The Company has also drilled five Montney wells off the 7-8 pad which are currently being completed and are expected to commence production in late August 2026. During the remainder of the year, Kelt plans to drill and complete three additional Montney D3/D4 wells off the 14-26 pad and two Montney D2 wells off the 5-26 pad by La Glace.

The tables below summarize the results of the Wembley wells drilled off the 6-9 and 11-34 pads. These wells have now been on production for longer than 30 days. The Company is targeting both the Montney D3 and D4 zones off these pads that will result in eight Montney wells per section. Kelt has drilled a third lower zone, the Montney D1, off other pads in the Wembley/Pipestone area and expects that certain lands on its 190 section land block could be prospective for all three zones, resulting in the potential for twelve Montney wells per section on those lands.

The Company is encouraged from the results of the Wembley wells drilled to date in 2026 and completed using the optimized fracture design that has resulted in higher IP30 rates and higher liquids ratios compared to those included for the same wells in last year's third-party independent engineering evaluation.

In the Pouce Coupe/Progress Division, Kelt has an active program in 2026 with 13 (11.5) drills and 14 (12.5) completions. Targets are predominantly the Montney and oily Charlie Lake formations. During the second half of 2026, the Company has four drills and six completions remaining in the capital program.

In its Oak/Flatrock Division, Kelt is less active where a four well pad located at 5-32 was drilled and these wells plus two DUCs on the same pad were completed.

2026 Outlook

The outlook for Kelt for the remainder of 2026 looks positive. Newly drilled wells are performing better than anticipated and forecasted adjusted funds from operations for the year has been revised upwards several times since the Company prepared its initial forecast in January 2026.

Production during 2026 is forecasted to average between 50,000 and 52,000 BOE per day, unchanged from the Company's previous guidance. Despite the following third-party facility downtime, production continues to be within its guidance range (primarily due to better than expected well performance to date from Kelt's 2026 drilling program):

• Progress Gas Plant - expected to be down for planned turnaround operations in September for approximately 17 days;

• MacMahon Gas Plant - expected to be down for planned turnaround operations in September/October for approximately 30 days; and

• Albright Gas Plant - has been down since July 25, 2026, for unplanned maintenance. Kelt has been diverting certain volumes previously dedicated to Albright to other gas plants in the area. The Company's gas production at Wembley/Pipestone is connected to five different gas processing plants.

Adjusted funds from operations for 2026 is forecasted to be $410.0 million or 3% higher than the Company's previous forecast of $400.0 million. The Company increased its forecasted 2026 estimated average WTI oil price by 3% from US$77.50 per barrel to US$79.50 per barrel. Kelt reduced its forecasted 2026 estimated average AECO gas price by 3% from CA$1.81 per GJ to CA$1.75 per GJ.

Kelt's 2026 capital expenditure budget remains unchanged at $375.0 million. However, if strong performance in production and commodity prices continue to boost cash flow, the Company may increase capital expenditures during the remainder of the year to get an earlier start to accelerate production growth in 2027.

On December 31, 2026, the Company expects to have net debt of $153.0 million, approximately 0.4 times forecasted 2026 adjusted funds from operations of $410.0 million.

Forecasted average commodity price assumptions for the remainder of 2026 are shown in the following table:

Financial and operating highlights for the Company's 2026 forecast compared to its 2025 results are highlighted in the table below:

With continued success in its drilling program and strong oil prices, Kelt expects to show significant production and cash flow growth in the second half of 2026. Management looks forward to updating shareholders with 2026 third quarter results on or about November 13, 2026.

Changes in forecasted commodity prices and variances in production estimates can have a significant impact on estimated funds from operations and profit. Please refer to the advisories regarding forward-looking statements and to the cautionary statement below.

Management Update

Mr. Patrick Miles, the Company's Vice President, Exploration, will retire effective August 12, 2026. Mr. Miles has served as Vice President, Exploration since Kelt commenced operations in 2013 and has played a central role in building the Company's vast resource. We wish him well in this new chapter of his life. The Company has appointed Mr. David White, currently Kelt's Manager, Exploration, to succeed Mr. Miles as Vice President, Exploration. Mr. White joined Kelt in 2014 and has held progressively senior roles with the Company. David has been the lead geologist for the Company's Wembley/Pipestone Division and has extensive knowledge in various plays in both Alberta and British Columbia. Prior to joining Kelt, Mr. White was a geologist for a senior oil and gas exploration and production company based in Calgary, Alberta.

Advisory Regarding Forward-Looking Statements

The information set out herein is "financial outlook" within the meaning of applicable securities laws. The purpose of this financial outlook is to provide readers with disclosure regarding Kelt's reasonable expectations as to the anticipated results of its proposed business activities for the calendar year 2026. Readers are cautioned that this financial outlook may not be appropriate for other purposes.

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of and of the words "will", "expects", "believe", "plans", potential", "forecasts" and similar expressions are intended to identify forward-looking statements. In particular, this press release contains forward-looking statements pertaining to the following: Kelt's expected price realizations and future commodity prices; its expected oil and NGLs weighting; the cost and timing of future capital expenditures and expected results; the expected timing of wells being brought on-production; the number of wells expected to be drilled in 2026; the expectation to show significant production and cash flow growth in 2026; the continued higher IP30 rates from using an optimized facture design; the ability to outperform AECO prices due to the Company's gas diversification portfolio; the continued global demand for sulphur; the continued robust returns from sulphur production and sales; the continued upward trend of sulphur prices; the improvement of the longer-term fundamentals for natural gas; the ability of new wells to generated much higher operating income amounts; the continued performance of wells previously drilled; the expected timing of production additions from capital expenditures; the expected timing around plant turnarounds; the Company's capital expenditure program for the remainder of the year; the ability to show significant production growth; the acceleration of production growth in 2027; and the Company's expected future financial position and operating results.

Certain information with respect to Kelt contained herein, including management's assessment of future plans and operations, contains forward-looking statements. These forward-looking statements are based on assumptions and are subject to numerous risks and uncertainties, many of which are beyond Kelt's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency exchange rate fluctuations, imprecision of reserve estimates, environmental risks, competition from other explorers, stock market volatility, inter-connected challenges which may include slower growth, uncertain trade policies, persistent inflation, high interest rates, and geopolitical instability, and ability to access sufficient capital.

As a result, Kelt's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any events anticipated by the forward-looking statements will transpire or occur.

In addition, the reader is cautioned that historical results are not necessarily indicative of future performance. The forward-looking statements contained herein are made as of the date hereof and the Company does not intend, and does not assume any obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise unless expressly required by applicable securities laws.

Certain information set out herein may be considered as "financial outlook" within the meaning of applicable securities laws. The purpose of this financial outlook is to provide readers with disclosure regarding Kelt's reasonable expectations as to the anticipated results of its proposed business activities for the periods indicated. Readers are cautioned that the financial outlook may not be appropriate for other purposes.

References herein to the IP30 production rates are useful in confirming the presence of hydrocarbons, however the production rates are over a short period of time and, therefore, are not necessarily indicative of average daily production, long-term performance or of ultimate recovery from the wells. Readers are cautioned not to place reliance on such rates in calculating aggregate production for the assets for which such rates are provided.

Non-GAAP and Other Key Financial Measures

This press release contains certain non-GAAP financial measures and other specified financial measures, as described below, which do not have standardized meanings prescribed by GAAP and do not have standardized meanings under the applicable securities legislation. As these non-GAAP, and other specified financial measures are commonly used in the oil and gas industry, the Company believes that their inclusion is useful to investors. The reader is cautioned that these amounts may not be directly comparable to measures for other companies where similar terminology is used.

Non-GAAP Financial Measures

Net realized price

Net realized price is a non-GAAP measure and is calculated by dividing the Company's P&NG sales after cost of purchases by the Company's production and reflects Kelt's realized selling prices plus the net benefit of oil blending and third-party natural gas sales. In addition to using its own production, the Company may purchase butane and crude oil from third parties for use in its blending operations, with the objective of selling the blended oil product at a premium. Marketing revenue from the sale of third-party volumes is included in P&NG sales as reported in the Consolidated Statement of Net Income and Comprehensive Income in accordance with GAAP. Given the Company's per unit operating statistics disclosed throughout this press release are calculated based on Kelt's production volumes, and excludes the sale of third-party marketing volumes, management believes that disclosing its net realized prices based on P&NG sales after cost of purchases is more appropriate and useful, because the cost of third-party volumes purchased to generate the incremental marketing revenue has been deducted.

Combined net realized prices referenced throughout this press release are before derivative financial instruments, except as otherwise indicated as being after derivative financial instruments.

Operating income and operating netback

Operating income is a non-GAAP measure calculated by deducting royalties, production expenses and transportation expenses from petroleum and natural gas sales, net of the cost of purchases and after realized gains or losses on derivative financial instruments. The Company also presents operating income on a per BOE basis, referred to as "operating netback" or "operating income per BOE", which allows management to better analyze performance against prior periods, on a comparable basis, and is a key industry performance measure of operational efficiency.

See the "Adjusted Funds from Operations" section of Kelt's Management's Discussion and Analysis as at and for the three months ended June 30, 2026, which provides a reconciliation of the operating netback from P&NG sales, which is a GAAP measure.

Capital expenditures

"Capital expenditures, before A&D" and "Capital expenditures, net of A&D" are measures the Company uses to monitor its investment in exploration and evaluation, investment in property plant and equipment, and net investment in acquisition and disposition activities. The most directly comparable GAAP measure is Cash used in investing activities, and is calculated as follows:

Capital Management Measures:

Funds from operations and adjusted funds from operations

Management considers funds from operations and adjusted funds from operations as a key capital management measure as it demonstrates the Company's ability to meet its financial obligations and cash flow available to fund its capital program. Funds from operations and adjusted funds from operations are not standardized measures and therefore may not be comparable with the calculation of similar measures by other entities. The most comparable GAAP measure is "Cash provided by operating activities". Funds from operations and adjusted funds from operations are calculated as follows:

Net debt and net debt to adjusted funds from operations ratio

Management considers net debt and net debt to adjusted funds from operations ratio as key capital management measures to assess the Company's liquidity at a point in time and to monitor its capital structure and short-term financing requirements. The "net debt to adjusted funds from operations ratio" is also indicative of the "net debt to cash flow ratio" calculation used to determine the applicable margin for a quarter under the Company's Credit Facility agreement (though the calculation may not always be a precise match, it is representative).

"Net debt" is equal to bank debt, accounts payable and accrued liabilities, net of cash and cash equivalents, accounts receivables and accrued sales and prepaid expenses and deposits. The Company believes that using a "Net debt" non-GAAP measure, which excludes non-cash derivative financial instruments, non-cash lease liabilities, and non-cash decommissioning obligations, provides investors with more useful information to understand the Company's cash liquidity risk.

Net debt is calculated as follows:

Supplementary Financial Measures

"Production per common share" is calculated by dividing total production by the basic weighted average number of common shares outstanding, as determined in accordance with GAAP.

P&NG sales, cost of purchases, gain (loss) on derivative financial instruments, royalties, revenue after royalties and derivative financial instruments, production expenses, transportation expenses, financing expenses, gross and net G&A expenses, realized gain (loss) on foreign exchange, other income (expense), share based compensation expense and depletion and depreciation on a $/BOE basis is calculated by dividing the amounts by the Company's total production over the period.

Adjusted funds from operations per share (basic and diluted), and net income and comprehensive income per share (basic and diluted) is calculated by dividing the amounts by the basic weighted average common shares outstanding.

Measurements

All dollar amounts are referenced in thousands of Canadian dollars, except when noted otherwise. This press release contains various references to the abbreviation BOE which means barrels of oil equivalent. Where amounts are expressed on a BOE basis, natural gas volumes have been converted to oil equivalence at six thousand cubic feet per barrel and sulphur volumes have been converted to oil equivalence at 0.6 long tons per barrel. The term BOE may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet per barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead and is significantly different than the value ratio based on the current price of crude oil and natural gas. This conversion factor is an industry accepted norm and is not based on either energy content or current prices. Such abbreviation may be misleading, particularly if used in isolation. References to "oil" in this press release include crude oil and field condensate. References to "natural gas liquids" or "NGLs" include pentane, butane, propane, ethane, and sulphur. References to "liquids" include field condensate and NGLs. References to "gas" in this discussion include natural gas.

Abbreviations

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