SOURCE ROCK ROYALTIES ACQUIRES ALBERTA HEAVY OIL GROSS OVERRIDING ROYALTY IN 126,000 ACRES OF OIL SANDS LEASES

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CALGARY, AB, Oct. 13, 2026 /CNW/ -- Source Rock Royalties Ltd. ("Source Rock") (TSXV: SRR), a pure-play oil and gas royalty company with an established portfolio of oil royalties and Crown mineral leases, announces that it has acquired a 0.75% non-convertible no deductions gross overriding royalty ("GORR") in approximately 126,000 acres (197 sections) of 100% working interest and largely contiguous oil sands leases in Alberta (the "GORR Lands") for a purchase price of $4,000,000 (the "Acquisition"), which was funded from Source Rock's existing cash balance. The GORR Lands represent greater than a 60% increase to Source Rock's total gross royalty acreage. The GORR Lands are operated by a team that has successfully developed the lands for 6 years (the "Operator").

Production from the GORR Lands averaged approximately 3,300 bbl/d of heavy oil for January to September 2026 from one formation. Portions of the GORR Lands have potential for heavy oil production from various secondary zones, including the Clearwater, the Bluesky and/or the Pekisko platform formations. The GORR Lands are in an area that is actively being explored and developed by several intermediate operators, and recent Crown land sale activity adjacent to the GORR Lands has accelerated materially. In addition to the ongoing development of the primary producing zone, and potentially evaluating secondary zones on the GORR Lands, the Operator is also actively advancing enhanced recovery initiatives with the goal of increasing oil production from older active wells and improving total volumes of oil recovered.

In connection with the Acquisition, the Operator has committed to drill 10 horizontal wells (each a "Commitment Well") on the GORR Lands prior to September 30, 2028 (the "Drilling Commitment Deadline"), with an initial three-well drilling program underway. Source Rock is entitled to non-performance damages for each Commitment Well not drilled before the Drilling Commitment Deadline, however the Drilling Commitment Deadline is subject to extension provisions if the Cushing, OK West Texas Intermediate light oil Spot Price declines materially for extended periods of time. In addition, if production from the GORR Lands increases to specified levels between 4,000 bbl/d and 5,000 bbl/d for specified periods of time on or before June 30, 2029, Source Rock may be required to pay up to an additional $1,200,000 to the Operator.

President's Message

We are very excited to significantly expand our heavy oil royalty lands in Alberta with an experienced operator. The GORR Lands provide exposure to base production, primary zone drilling growth, secondary zone upside potential and an opportunity for the implementation of enhanced recovery technologies. Completing the Acquisition with a portion of our cash balance provides non-dilutive production and revenue growth, as well as added future value optionality in our royalty portfolio.

Since completing our initial public offering in March 2022 for net proceeds of approximately $12.4 million, we have now deployed $22 million on royalty and Crown mineral lease acquisitions in Alberta and Saskatchewan while also paying $15 million ($0.34 per share) in dividends. We have achieved approximately 350% growth in our gross royalty and mineral lease acreage without any additional equity dilution by prudently and strategically recycling the cash flow generated from our high margin business model. We will continue to pursue additional oil royalty acquisitions with the goal of further increasing our base royalty production and expanding our undeveloped royalty lands.

Brad Docherty, President & CEO

Cassels Brock & Blackwell LLP acted as legal counsel to Source Rock with respect to the Acquisition.

About Source Rock Royalties Ltd.

Source Rock is a pure-play oil and gas royalty company with an existing, oil focused portfolio of royalty interests concentrated in southeast Saskatchewan, central Alberta and west-central Saskatchewan, as well as ownership in oil sands and petroleum and natural gas leases in Alberta. Source Rock targets a balanced growth and yield business model, using funds from operations to pursue accretive royalty acquisitions and to pay dividends. By leveraging its niche industry relationships, Source Rock identifies and acquires both existing royalty interests and newly created royalties through collaboration with industry partners. Source Rock's strategy is premised on maintaining a low-cost corporate structure and achieving a sustainable and scalable business, measured by growing funds from operations per share and maintaining a strong netback on its royalty production.

Forward-Looking Statements

This news release includes forward-looking statements and forward-looking information within the meaning of Canadian securities laws. Often, but not always, forward-looking information can be identified by the use of words such as "plans", "expects", "scheduled", "intends", "contemplates", "anticipates", "believes", "proposes" or variations (including negative and grammatical variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements in this news release include statements regarding the expected future production from the GORR Lands, the number of wells to be drilled on the GORR Lands and the timing thereof, the operational activities on the GORR Lands, including primary zone drilling growth, secondary zone upside potential and the implementation of enhanced recovery technologies, the results and resulting production from the wells drilled on the GORR Lands, the possibility of payments received by Source Rock on account of non-performance damages for each Commitment Well not drilled before the Drilling Commitment Deadline, the possibility of payments made by Source Rock on account of increased production from the GORR Lands, Source Rock's dividend strategy and the amount and timing of future dividends (and the sustainability thereof), expectations regarding commodity prices, and Source Rock's growth strategy and expectations with respect to future royalty acquisition opportunities. Such statements and information are based on the current expectations of Source Rock's management and are based on assumptions and subject to risks and uncertainties. Although Source Rock's management believes that the assumptions underlying these statements and information are reasonable, they may prove to be incorrect. The forward-looking events and circumstances discussed in this news release may not occur by certain dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting Source Rock. Although Source Rock has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements and information, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No forward-looking statement or information can be guaranteed. Except as required by applicable securities laws, forward-looking statements and information speak only as of the date on which they are made and Source Rock undertakes no obligation to publicly update or revise any forward-looking statement or information, whether as a result of new information, future events or otherwise.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy of this release.

SOURCE Source Rock Royalties Ltd.

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