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Leucrotta Exploration First Quarter 2021 Results

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Leucrotta Exploration Inc. reported its Q1 2021 results.

Highlights:

• Closed a bought-deal public financing issuing 45.2 million units of the Company (“Units”) at a price of $0.73 per Unit for gross proceeds of $33.0 million. Each Unit is comprised of one common share of the Company and 0.5 common share purchase warrant of the Company. Each whole common share purchase warrant entitles the holder to purchase one common share at an exercise price of $1.00 per common share expiring on March 31, 2023.

• Subsequent to March 31, 2021, the Company disposed of certain natural gas assets located in Doe, BC for gross proceeds of $30.0 million. The disposed assets were comprised of non-strategic lands and four wells and have been transferred to assets held for sale at March 31, 2021. The disposition closed April 1, 2021.

• Increased adjusted funds flow ⁽¹⁾ by 399% to $3.8 million in Q1 2021 from $0.8 million in Q1 2020.

• March 31, 2021 adjusted working capital ⁽²⁾ balance of $58.0 million.

Q1 Update

Operations

With the property sale and financing recently closed (noted below), Leucrotta will now be focused on executing the Mica Project.⁽¹⁾ Planning for the 2021 test pad and the 2022 facility expansion has been underway for some time and field operations will commence shortly. The drilling and completion of the 3-well test pad at Mica, that will utilize longer laterals and materially greater frac intensity, will commence in mid-July. Leucrotta is excited to start the initial phase of the Mica Project.

Financial

As a result of the financing and property disposition noted below, Leucrotta has $58 million of working capital and no debt.29dk2902l

On March 31, 2021, the Company closed a bought-deal public financing through a syndicate of underwriters. The Company issued 45.2 million Units at a price of $0.73 per Unit for gross proceeds of $33.0 million. A Unit is comprised of one common share of the Company and 0.5 common share purchase warrant of the Company. Each whole common share purchase warrant entitles the holder to purchase one common share at an exercise price of $1.00 per common share expiring on March 31, 2023. The non-brokered private placement offering of 2.0 million flow-through units at $0.75 per unit previously announced by the Company was not taken up and the Company’s conditional approval with the TSX Venture Exchange will expire on May 29, 2021. The Company intends to consider the private placement at a future date.

New credit facility

Subsequent to March 31, 2021, the Company entered into a credit agreement with a new lender comprised of a $10.0 million revolving operating demand loan credit facility. The new credit agreement fully replaced the previous $6.0 million credit facility.

Property Sale

On April 1, 2021, the Company disposed of natural gas assets located in Doe, BC for gross proceeds of $30.0 million as previously released. The disposed assets were comprised of 10.25 sections of non-strategic land with three wells producing approximately 375 boe/d and one shut-in well. The disposed assets have been transferred to assets held for sale at March 31, 2021.