Calima Energy Limited provided preliminary results on the Calima #2 and Calima #3 test program. Flow test results to date: Management has been very pleased with the preliminary test results on the Calima #2 well with condensate yields significantly higher than the original limited test program completed in 2019. The testing program flows the wells at multiple constrained rates and pressurized gas sampling.

This sampling will support laboratory tests required to do the Pressure-Volume-Temperature ("PVT") work to determine the NGL volumes present in the test fluids and in the reservoir. The data collected at multiple rates will also support the well test analysis and interpretation and the development of an accurate Inflow Performance Relationship ("IPR") curve and validation of type curves for the wells. Additionally the testing provides insight into the production parameters to be used on the well to maximise value when the wells are tied in.

The Calima #2 well flowed at a maximum constrained rate of 6.3 mmcf/d and has delivered a peak condensate to gas ratio ("CGR") of 248 bbl/mmcf. This peak rate reflects "flush production" and the likely stabilised rate will be lower with average production to date being 102 bbl/mmcf. This rate reflects wellhead condensate only and excludes anticipated NGL's to be recovered through gas processing which may add an additional 15-25 bbls/mmcf of total liquids recovered.

Condensate and NGL's provide substantially enhanced economics with condensate currently trading at a premium to WTI. Flow tests on the Calima #3 (Upper Montney) well have recovered significantly less load fluid to date versus the Calima #2 well. The Calima #3 well has flowed at a peak of 5.25 mmcf/d with 8.4 bbl/mmcf of condensate.

The Upper Montney productivity potential has been historically an unknown, due to a lack of meaningful test data. The test results to date, whilst not yet reflecting total condensate yield potential as a result of low overall completion fluid recovery, will now allow for an improved development plan with proof of meaningful gas rates. Both wells are equipped with 60.3mm production tubing to enable efficient lifting of fluid over a range of production rates.

This tubing size does constrain the maximum rate capability of the wells. This tubing restriction was not in place when maximum gas flow rates were achieved in Calima #2 in 2019. The key to the testing program, is to establish what the potential CGR of each of the wells, in addition to being able to calculate the maximum gas flow rates.

The goal of the tests is to accurately determine how to maximize the CGR at various gas flow rates. The value molecule from the wells is the condensate, and the long-term plan will be to produce the wells at the rate that maximizes the value via optimal gas and condensate rates. Testing will continue for a further 3-10 days after which time the wells will be shut-in.

The extensive test data obtained will be analysed to aid the Company in refining its type curves for each of the zones and will be incorporated in future reserve reports. The initial construction work related to the pipeline connecting the A-54-C pad containing Calima #2 and #3 to the Tommy Lakes infrastructure is about to commence. To take advantage of the current roads and logistical access to the area around the pad, the Company has decided to start construction work on the pipeline right- of-way in the vicinity of the current testing work.

The Montney work program is funded from cash flow generated from the Brooks and Thorsby producing assets. Current production from Brooks and Thorsby is at historical highs of 4,600-4,700 boe/d. The sale of condensate produced during the Montney testing operations has also offset work program costs. - The Tommy Lakes Infrastructure lies immediately north of the Calima Lands and offers the closest, most cost-effective tie-in to processing facilities and regional pipeline networks.

The horizontal wells on Pad A can be connected to the Tommy Lakes field via a proposed 20 km pipeline.