Mr. Joel MacLeod reports

HIGHWOOD ASSET MANAGEMENT LTD. ANNOUNCES WILSON CREEK OPERATIONAL UPDATE

Highwood Asset Management Ltd. has released an operational update regarding its Wilson Creek operations. As previously announced, Highwood drilled two gross (approximately 1.8 net) booked locations in the fourth quarter of 2025. The 102/13-02-043-06W5 well and the 100/11-33-042-05W5 well were completed and brought on stream late in the fourth quarter of 2025. The wells achieved a cycle time of approximately 50 days with associated capital costs being around 10 per cent below budget.

Over the first three weeks of production, the 13-02 and 11-33 combined averaged 1,700 barrels per day light oil and 2,400 barrels of oil equivalent per day (85 per cent liquids), including associated gas and natural gas liquids (1,450 bbl/d and 1,950 boe/d net). Over the past 10 days, production from the 13-02 well has averaged gross production of 900 bbl/d light oil (698 bbl/d net) and 1,500 boe/d, including associated gas and natural gas liquids (1,163 boe/d net). In that same time frame, the 11-33 well has averaged gross production of 900 bbl/d light oil (900 bbl/d net) and 1,110 boe/d, including associated gas and natural gas liquids (1,110 boe/d net). In aggregate, the company expects the wells to pay out in fewer than three months yielding projected recycle ratios of greater than 3.5 at current strip pricing.

Highwood continues to be encouraged by the results from the Basal Belly River play in its portfolio, and the recent successes reinforce the company's confidence in its inventory. The company currently carries 16.5 net booked and 13 net unbooked locations in Wilson Creek.

Corporately, Highwood's current total company production is greater than 6,300 boe/d. Depending on market conditions, the company plans to drill one to three additional wells in the first quarter of 2026 in the Basal Belly River horizon.

We seek Safe Harbor.