Tenth Avenue Petroleum Announces Closing of Light Oil Acquisition - Seite 2

The Acquisition strengthens the Company's business model of acquiring high quality, operated, light and medium gravity crude oil reservoirs that contain large original oil in place ("OOIP") with low recovery factors. The Acquisition increases the Company's current production base by 21% to approximately 182 boe/d (88% oil and natural gas liquids) from the Q2/22 average of 143 boe/d and expands the Company's existing core area in Southern Alberta.

THE ACQUISITION

The Acquisition has an effective date of September 1, 2022 and consists of a 100% working interest in 5 wells, a 100% owned multi well oil facility (05-21-015-25W4M) and a 35% ownership in a potential gas well awaiting tie-in. The current conventional production is from the Sunburst zone, located in the Vulcan area of Alberta. This asset generates high operating netbacks and has additional revenue streams from custom treating, water disposal and gas handling. Much like the Murray Lake asset that the Company purchased in Q1/22, the Acquired Assets show potential upside to implement an Enhanced Oil Recovery ("EOR") with waterflood to increase production and recovery factors. The existing Sunburst pool has recovered less than 10% to date and under an EOR waterflood program could achieve upwards of +20% recovery factor with an estimated 3.5MMbbl OOIP per section.

The Acquisition is consistent with the Company's strategy to assemble under capitalized, undervalued opportunities to enhance the quality of the Company's business model and asset base throughout various commodity price cycles. Based on the Company's base production historical decline rate, it is expected that minimal capital will be required to maintain existing production levels on the Acquires, providing the Company with a strong platform for future cash flow and sustainability. The Acquisition is accretive on key valuation metrics and is expected to improve the Company's operating netbacks and exposure to additional drilling inventory, EOR waterflood opportunities and further strengthens the Company's disciplined growth strategy. Closing of the Acquisition is subject to certain customary conditions and regulatory and other approvals, including all necessary approvals of the TSX Venture Exchange.