Mr. Shubham Garg reports

PROSPERA ANNOUNCES $12.0 MILLION NON-BROKERED EQUITY FINANCING TO SCALE ITS HEAVY-OIL STRATEGY

Prospera Energy Inc. has arranged a non-brokered private placement of units of the company at four cents per unit for aggregate gross proceeds of up to $12-million, the largest financing in the company's history and a defining inflection point for Prospera. Over the past 20 months, the company executed a deliberate and highly successful shift in strategy, focusing its efforts on reactivating previously shut-in wells across its existing inventory, with remarkable results that have been proven repeatedly in the field. This financing is the catalyst that will take the proven model to full scale. Capital deployed across Prospera's remaining inventory of more than 140 reactivation candidates is expected to rapidly grow production, compounding into field cash flow that funds further development and systematically retires the company's balance sheet obligations, creating a self-reinforcing engine of production growth and balance sheet repair.

A demonstrated, capital-efficient development model

Since the strategic shift, the company has completed 19 reactivations and more than 60 workovers, propelling production at its flagship Luseland property from approximately 54 boe/d (barrels of oil equivalent per day) to 260 boe/d, a remarkable 381-per-cent increase that drove the field to an eight-year production high. These projects have delivered exceptional economics, with per-well payback periods of just six to eight months and production brought on line at a capital efficiency of less than $10,000 per boe/d, a level that ranks among the most compelling in the Canadian heavy-oil sector.

Use of proceeds

The capital is purpose-built for growth. Approximately $10-million of the gross proceeds is earmarked specifically for the company's workover and reactivation program, the engine driving Prospera's next phase of production, cash flow and reserves expansion, with the remaining $2-million directed to working capital. Critically, the program requires no new drilling. Every dollar is deployed against existing, proven wellbores, the lowest-risk and most capital-efficient barrels available to the company. As non-producing and shut-in well bores are returned to production, the company expects to unlock a powerful dual benefit. As production surges and reserves expand, the company builds a larger, more valuable asset base that supports both its cash flow and its balance sheet.

A comprehensive balance sheet transformation

Beyond funding production growth, the offering is structured to fundamentally reset the company's financial position. Management has evaluated, in detail, the precise capital required to restore positive working capital, address the going-concern qualification in the company's financial statements and establish a clear, defined path to retiring every obligation including the senior secured facility within 24 months of closing. The mechanism is self reinforcing. Cash flow generated by the development program is intended to systematically retire the company's senior debt, subordinated debt and gross overriding royalty obligations, together totalling approximately $30-million, with balances amortized to zero over the following 24 months. The company is concurrently advancing long-term extension and refinancing discussions with its senior lender to secure an extended runway as the development program executes, while accounts payable continues to be reduced through a disciplined combination of cash payments, scheduled payment plans and shares-for-debt settlements.

The outcome is a fundamentally derisked enterprise; positive working capital restored, debt and royalty obligations eliminated, and a growing, cash-generating asset base. Net debt is modelled to decline materially over the program horizon, transitioning toward a net cash position as free cash flow accumulates, positioning Prospera within the financial profile of the most successful low-decline heavy-oil producers in Western Canada.

A proven blueprint in Western Canadian heavy oil

Prospera believes its strategy closely mirrors a transformation already demonstrated by Hemisphere Energy, an operator the company regards as a close peer and benchmark for value creation in conventional heavy oil. Several years ago, Hemisphere was a small-capitalization producer developing low-decline heavy-oil pools of a character comparable with Prospera's. Through a deliberate shift toward enhanced recovery on its existing asset base, Hemisphere grew production from approximately 1,400 boe/d to approximately 3,800 boe/d. That growth drove a corresponding expansion in field cash flow, which the company applied to systematically retire its debt, progressively cleaning up its balance sheet and ultimately reaching a net-cash position from which it has since returned substantial capital to shareholders. Prospera is pursuing the same sequence; capital-efficient development of known, low-decline reservoirs that grows production and cash flow, which in turn funds the retirement of its obligations and the restoration of a clean balance sheet.

Reserves, abandonment and tax efficiency

The program delivers benefits that extend across the company's reserves and liability profile. Each reactivated wellbore is anticipated to convert shut-in and non-producing wells into booked proved developed producing reserves while reducing the company's asset retirement obligations and improving its decommissioning outlook as activity increases. The company is further positioned to retain substantially all of the cash flow it generates: Prospera holds approximately $75.8-million of accumulated tax pools, including approximately $38.1-million of non-capital losses and approximately $32.1-million of resource pools, which are expected to fully shelter forecast pretax income and result in no modelled cash income tax over the development horizon.

Management commentary

"The work of the last twenty months has changed what Prospera is," said Shubham Garg, chief executive officer of Prospera. "We have proven the new business model works by demonstrating low-risk growth from existing wellbores rather than high-risk exploration supported by a resource base of 380 million barrels in place at single-digit recovery factors. This financing allows us to execute efficiently against that inventory at full scale while rebuilding the balance sheet at the same time by restoring positive working capital, addressing the going-concern qualification and establishing a clear path to retiring all debt within two years. I believe this is the single most important milestone in Prospera's history and we are ready to execute."

Offering details

Each unit consists of one common share of the company and one common share purchase warrant. Each warrant entitles the holder to acquire one additional common share at an exercise price of six cents for a period of two years following closing. Full exercise of the warrants would provide the company with up to an additional $18-million of growth capital, structured to align investors with the company's value-creation plan and to finance the subsequent phases of the development program as it unfolds.

The securities will be offered to qualified purchasers in reliance upon exemptions from prospectus and registration requirements of applicable securities legislation. The private placement is offered in jurisdictions where the Corporation is legally allowed to do so. All securities issued under the offering will be subject to a statutory hold period of four months and one day from the date of closing in accordance with applicable Canadian securities laws. The offering remains subject to the approval of the TSX Venture Exchange.

June, 2026, corporate update conference call June 30 -- virtual

Prospera will host its June, 2026, corporate update conference call on June 30, 2026, at 10 a.m. MT. Investors can register to attend via Zoom. During the call, management will provide updates on operational progress, production optimization initiatives and near-term strategic priorities. Investors may also view the company's May, 2026, corporate update on YouTube and the June, 2026, key wells report.

Shares for debt

Prospera has entered into settlement agreements with a total of three arm's-length vendors, representing an aggregate of $42,800.24 in outstanding trade payables, to be satisfied through the issuance of 996,005 common shares. Two vendors have collectively settled a total of $14,800.24 through the issuance of 296,005 common shares at a deemed price of five cents per share. One vendor has settled $28,000.00 through the issuance of 700,000 common shares at a deemed price of four cents per share. The shares will be subject to a trading restriction of four months and a day from the date of issuance and are subject to TSX-V acceptance.

Shares for debt update

Prospera announces an update to its previously announced shares-for-debt settlements originally disclosed on April 20, 2026. The company has entered into settlement agreements with a total of five arm's-length vendors, representing an aggregate of $170,476.02 to be satisfied through the issuance of 4,100,306 common shares.

The settlements are structured as follows:

• Two vendors have agreed to settle a total of $30,188.54 of trades payable through the issuance of 603,771 common shares at a deemed price of five cents per share.
• One vendor has agreed to settle a total of $3,834.76 of trades payable through the issuance of 85,217 common shares at a deemed price of 4.5 cents per share.
• One vendor has agreed to settle a total of $113,389.92 of interest payable through the issuance of 2,834,748 common shares at a deemed price of four cents per share.
• One vendor has agreed to settle a total of $23,062.80 of trades payable through the issuance of 576,570 common shares at a deemed price of four cents per share.

The shares will be subject to a statutory hold period of four months and one day from the date of issuance. The transactions have been accepted by the TSX Venture Exchange.

About Prospera Energy Inc.

Prospera Energy is a publicly traded Canadian energy company specializing in the exploration, development, and production of crude oil and natural gas. Headquartered in Calgary, Alta., Prospera is dedicated to optimizing recovery from legacy fields using environmentally safe and efficient reservoir development methods and production practices. The company's core properties are strategically located in Saskatchewan and Alberta, including Cuthbert, Luseland, Hearts Hill and Brooks. Prospera Energy is listed on the TSX Venture Exchange under the symbol PEI and the United States OTC Market under GXRFF.

Prospera reports gross production at the first point of sale, excluding gas used in operations and volumes from partners in arrears, even if cash proceeds are received. Gross production represents Prospera's working interest before royalties, while net production reflects its working interest after royalty deductions. These definitions align with ASC 51-324 to ensure consistency and transparency in reporting.

We seek Safe Harbor.