Rubellite Energy Inc. First Quarter 2023 Results

Rubellite Energy Inc., a pure play Clearwater oil exploration and development company, is pleased to report first quarter 2023 financial and operating results and provide an operations update and the Company’s full year 2023 guidance.

At Figure Lake, a total of six (6.0 net) multi-lateral wells were rig released during the first quarter. Development drilling operations were focused on two existing pads, adding two (2.0 net) horizontal multi-lateral wells to the pad at 9-23-63-18W4 (the “9-23 Pad”) and two (2.0 net) horizontal multi-lateral wells on the pad to the west at 3-26-63-18W4 (the “3-26 Pad”). The two wells on the 9-23 Pad rig released in January continued to perform significantly above the IP30 of 116 bbl/d for the Figure Lake type curve⁽¹⁾, averaging 231 bbl/d and 259 bbl/d respectively during their IP30 periods and 233 and 234 for their IP60 periods. Positive results continued from the offsetting 3-26 Pad, with the two wells rig released during the first quarter recording IP30 period average rates of 117 bbl/d (20% shorter multi-lateral open hole than the Figure Lake type curve⁽¹⁾) and 147 bbl/d respectively and these wells are also continuing to track above the Figure Lake type curve⁽¹⁾. Performance from these recent Figure Lake development wells continues to be positive and will be monitored to inform future production forecasts as field operations are optimized.

The drilling rig was moved in mid-February to a new Figure Lake pad at 9-31-62-18W4 (the “9-31 Pad”) and a step-out multi-lateral horizontal well was rig released in early March, completed its OBM recovery operations and recorded an IP30 rate of 102 bbl/d. Finally at Figure Lake, one well was rig released in late March and a second well was drilled in early April on a new pad (the “10-19 Pad”) on the Buffalo Lake Metis Settlement acreage acquired in the first quarter of 2023. Both wells on the 10-19 Pad have recovered their OBM load fluid and are within their 30 day initial production period.

The development / infill drilling program at Figure Lake resumed in early May as break-up conditions subsided, allowing for access. The drilling rig returned to the 3-26 Pad to complete the additional three well development program planned for that site. An additional 17 (17.0 net) multi-lateral horizontal wells are expected to be drilled in the vicinity of the development ‘sweet spot’ at Figure Lake over the remainder of 2023.

During the first quarter, Rubellite rig released three (2.5 net) multi-lateral wells in its Northern Exploration Program. The one (0.5 net before payout) exploratory horizontal multi-lateral well at Dawson (5-16-81-16W5) had approximately 7,500 meters of horizontal length as compared to a Figure Lake type curve⁽¹⁾ well with approximately 9,000 meters of horizontal length and recorded an average rate of 81 bbl/d for its 48 days of production before it was shut-in in late March due to winter only access conditions. In April, Rubellite, along with its 50% partner, made its election to drill a second earning well at Dawson prior to April 1, 2024. The Company will continue to review data as information is released and monitor performance from the multiple competitor wells in the Dawson / Seal area to inform its follow-on exploration activity.

At Peavine, the Company shut-in its two exploratory wells as spring break-up approached and will continue to monitor competitor wells in the area to inform further drilling elections on lands under its Farmout and Option Agreement in the Peavine area.

OUTLOOK AND GUIDANCE

Rubellite’s board of directors has approved capital spending⁽¹⁾ for the remainder of 2023 of $30 to $32 million to drill, complete, equip and tie-in an additional 17 (17.0 net) multi-lateral development / step-out wells at Figure Lake and $4 to $6 million to drill up to 3 (2.0 net) multi-lateral Northern exploratory wells. Forecast drilling activities are expected to be funded from adjusted funds flow and the Company’s credit facility.

Factoring in type curve performance from the recent and future drilling program at Figure Lake, production sales volumes are expected to average between 2,900 to 3,100 bbl/d for 2023. Forecast production incorporates the future sales volume impact of the reduced working interest at Marten Hills effective May 1, 2023 related to reaching full payout during the first quarter, and assumes no contribution from the Northern Exploration Program wells that were shut-in due to access for the remainder of 2023.