WESTGATE ENERGY ANNOUNCES UPDATE ON THREE WELL DRILLING PROGRAM AND Q1 2025 FINANCIAL RESULTS

WESTGATE ENERGY ANNOUNCES UPDATE ON THREE WELL DRILLING PROGRAM AND Q1 2025 FINANCIAL RESULTS

CALGARY, AB, May 28, 2025 /CNW/ - Westgate Energy Inc. ("Westgate" or the "Company") (TSXV: WGT), is pleased to announce the filing of its unaudited financial and operating results for the three months ended March 31, 2025. Selected financial and operating information should be read in conjunction with Westgate's unaudited consolidated financial statements and related management's discussion and analysis ("MD&A") for the three months ended March 31, 2025 and 2024, which are available on SEDAR+ at www.sedarplus.ca and on Westgate's website at www.westgateenergy.ca.

Financial & Operating Results Summary

Q1 2025 ("Q1/25") Highlights

• Increased average production volume to 259 boe/d (55% crude oil) in Q1/25 as compared to 178 boe/d (52% crude oil) in Q1/24, representing a 46% increase.
• Achieved an operating netback⁽¹⁾ of $22.30/boe in Q1/25, representing a $5.25/boe increase from $17.05/boe in Q1/24.
• Closed a C$0.7MM private placement offering of convertible debentures with an insider of the Company. 
• Subsequent to the quarter, Westgate closed a US$25MM credit facility with a US private lender and also closed a C$2.5MM best efforts public financing of units of the Company, such units consisting of one common share and one common share purchase warrant. These funds are intended to be used for drilling on Westgate's existing and potential new lands in the Cold Lake area, to fund the strategic acquisition of the previously announced asset in East-Central Alberta  (the "Moonshine Acquisition") and for general corporate purposes.

Operational Update

Westgate is pleased to announce the commencement of a three well horizontal drilling program on the Company's Beaverdam asset in the Cold Lake area. These wells will target three distinct horizons within the Mannville Stack group of formations. Drilling is scheduled to commence on May 29^th and is expected to continue for 28 days, with all three wells anticipated to be on production by early August. Peak production is expected to be reached within two months of the wells coming on production. Pending results of this program, the Company expects to formalize an additional drilling program for the second half of the year.

Updated Corporate Presentation

Investors can find an updated corporate presentation on the Company's website at www.westgateenergy.ca. The presentation includes further information about the Company's current financial and operational outlook. 

Westgate's Differentiated Strategy

Westgate is focused on the emerging Mannville Stack fairway located in East-Central Alberta and West Central Saskatchewan. This fairway is characterized by known accumulations of medium and heavy oil which are being 'unlocked' via the application of innovative drilling techniques that have optimized horizontal drilling in shallow heavy oil reservoirs. Applying these drilling techniques have yielded some of the strongest oil well economics across Western Canada. The management team and board of Westgate have extensive experience building and leading successful energy companies in Canada. The collective successes of the leadership group share common characteristics: a strategy of targeting high-quality oil assets with large quantities of oil-in-place and driving growth through successful drilling as well as strategic merger and acquisition opportunities. This proven blueprint of delivering shareholder value will be foundational to Westgate's strategy, positioning the Company as one of a select few pure-play, high-growth, publicly traded junior oil companies focused on the Mannville Stack fairway.

For more information, please visit www.westgateenergy.ca.

Reader Advisories

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

In this press release, all references to "$" are to Canadian dollars unless otherwise noted. 

ADVISORIES AND OTHER GUIDANCE
Non-GAAP Financial Measures and Ratios
The Financial Statements have been prepared in accordance with IFRS. This press release contains non-GAAP financial measures, non-GAAP ratios and supplementary financial measures, including operating income (loss), operating netback, total revenue, realized price, and royalties as a percentage of revenue which are not recognized measures under GAAP. Management believes these measures are useful for reporting purposes and for evaluating the consolidated financial position of the Company but cautions readers that these measures should not be considered as alternatives to measures calculated in accordance with IFRS. Non-GAAP financial measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers for these non-GAAP financial measures.

Operating Income (Loss)
Operating income (loss) is a non-GAAP financial measure calculated by subtracting the cost of royalties and operating expenses from total revenue. Operating income (loss) is a component of operating netback, a non-GAAP ratio that management believes is a key industry benchmark and a measure of performance of the Company that provides investors/readers with information that is commonly used by other petroleum and natural gas producers. For a reconciliation of operating income (loss) to revenue, the most directly comparable GAAP measure, see the table under the heading "Financial & Operating Results Summary" within this press release.

Operating Netback
Operating Netback is a non-GAAP financial ratio calculated by dividing operating income (loss) by production volumes. Operating Netback allows management and others to evaluate the production results from the Company's assets. Management feels that operating netback is a key industry benchmark and a measure of performance of the Company that provides investors/readers with information that is commonly used by other petroleum and natural gas producers.

Total Revenue
Total revenue is a non-GAAP financial measure calculated by adding processing revenue to petroleum, natural gas and NGL sales. Management uses total revenue to evaluate the cash flow generated from the Company's assets and believes it is useful to investors as a key industry benchmark and a measure of performance of the Company that provides investors/readers with information that is commonly used by other petroleum and natural gas producers. For a reconciliation of petroleum, natural gas and NGL sales, the most directly comparable GAAP measure, see the table under the heading "Financial & Operating Results Summary" within this press release.

Supplementary Financial Measures
Realized Price
Realized price is a supplementary financial measure calculated as the revenue by product divided by the production by product and is a key industry benchmark and a measure of performance of the Company that provides investors/readers with information that is commonly used by other petroleum and natural gas producers.

Other Supplementary Measures
Per boe, per mcf or per bbl disclosures for royalties, operating expenses, and depletion are supplementary financial measures that are calculated by dividing the respective GAAP measure by its respective sales volumes. Royalties as a percentage of revenue is a supplementary financial measure that is calculated by dividing royalties by revenue, expressed as a percentage.

Oil and Gas Advisories

Caution Respecting Boe

This press release discloses certain estimated production information on a boe basis with natural gas converted to barrels of oil equivalent using a conversion factor of six mcf to bbl of oil (6 mcf:1 bbl). Condensate and other NGLs are converted to boe at a ratio of 1 bbl:1 bbl. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 bbl is based roughly on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at sales point. This conversion conforms with NI 51–101 disclosure standards. Although the 6:1 conversion ratio is an industry-accepted norm, it is not reflective of price or market value differentials between product types. Based on current commodity prices, the value ratio between crude oil, NGLs and natural gas is significantly different from the 6:1 energy equivalency ratio. Accordingly, using a conversion ratio of 6 mcf:1 bbl may be misleading as an indication of value.

Forward-Looking Statements

Certain statements and information contained in this press release constitute forward-looking statements or forward-looking information (collectively "forward-looking statements") within the meaning of applicable securities legislation. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words or phrases such as "will", "may", "is expected to", "anticipates", "estimates", "intends", "plans", "projects", "could", "vision", "goals", "objective", "outlook" or similar words suggesting future outcomes or language suggesting an outlook. In particular, this press release contains forward-looking statements with respect to, among other things, the following: the expected use of proceeds from the US$25MM credit facility entered into with a US private lender and the best efforts public financing of units of the Company; the Company's planned drilling program, including with respect to the timing of commencement and conclusion of such drilling program; the Company's expectations regarding an additional drilling program for the second half of the year; and statement related to the closing of the Moonshine Acquisition.

By their nature, forward-looking statements involve numerous assumptions, and while management of the Company believes the assumptions reflected in its forward-looking statements to be reasonable, there can be no guarantee that actual results will be consistent with these forward-looking statements. In particular, with respect to forward-looking statements contained in this press release and the documents incorporated by reference herein and therein the Company has made assumptions regarding, among other things: the timing of drilling oil and natural gas wells; the general stability of the economic and political environment in which the Company operates; the ability of the operator of the projects in which the Company has an interest to operate the field in a safe, efficient and effective manner; the Company's ability to obtain financing on acceptable terms; field production rates and decline rates; future oil and natural gas prices; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which the Company operates; the Company's ability to successfully market its oil and natural gas products; and the ability to closing the Moonshine Acquisition.

Readers are cautioned not to place undue reliance on the forward-looking statements contained in this press release and the documents incorporated by reference herein and therein. Forward-looking statements are subject to various known and unknown risks, both general to the industry as a whole and specific to the Company, that contribute to the possibility that the forward-looking statements contained in this press release may not occur. Although management of the Company believes that the expectations reflected in its forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of known and unknown risks, uncertainties and other factors, many of which are outside the Company's control, including, but not limited to, the following risk factors: risks associated with oil and natural gas development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risk, competition from other producers, inability to retain drilling rigs and other services, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions, the inability to fully realize the benefits of the acquisitions, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources.

The above summary of assumptions and risks related to forward-looking statements are provided in this press release to provide readers with a more complete perspective on the Company's current and future operations and such information may not be appropriate for other purposes. Readers are cautioned that the foregoing lists of factors are not exhaustive. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement. Except as required by applicable securities laws, the Company does not undertake any obligation or is under any duty to publicly update or revise any forward-looking statements. Readers should also carefully consider the matters discussed under the heading "Risk Factors" in the Company's annual information form, a copy of which is available on the Company's SEDAR+ profile at www.sedarplus.ca.

Abbreviations

SOURCE Westgate Energy Inc.