Saturn Oil & Gas, a light oil-weighted producer focused on unlocking value through the development of assets in Saskatchewan and Alberta, provides their 2025 development capital budget and annual guidance, along with an operational update and Saturn’s outlook for the next three years.

“Our development capital expenditures(2) budget of $300 to $320 million is targeting stable production averaging 38,000-40,000 boe/d in 2025, approximately 85% of which is oil and liquids, with ongoing margin improvements through cost optimization, capitalizing on synergies, and streamlining operational processes to deliver greater value per barrel,” said John Jeffrey, Chief Executive Officer of Saturn. “Our focus on increasing free funds flow supports a systematic reduction in leverage ratios over time, underpins opportunistic tuck-in acquisitions, and enables the Company to continue enhancing per share metrics. Over the next three years, we intend to build on the 2025 Budget and drive free funds flow generation with net debt reduction, reflecting Saturn’s commitment to sustainable value creation.”

2025 BUDGET HIGHLIGHTS

• $300 to $320 million development capital expenditures budget
• 85% of development capex on drilling, completion, equip and tie-in activities; remainder to production optimization, land, seismic and infrastructure
• 38,000 to 40,000 boe/d(1) (85% liquids) average production
• Drill 120 net wells targeting continued capital efficiency improvements and type curve outperformance
• US$70.00 WTI, US$13.00 WCS-WTI differential, US$3.50 MSW-WTI differential, C$2.50/GJ AECO and 0.72x CAD/USD assumptions
• Over 70% of our 2025 Budget is expected to be deployed during the second half of the year (37% in Q3 and 34% in Q4), with 24% weighted to Q1 and the balance in Q2, reflecting the seasonal impacts of spring break-up. Given this cadence, production volumes are anticipated to be highest in Q1 and Q4, while free funds flow is anticipated to be highest in Q2 given the low capital spending in that period.

Through 2025, Saturn intends to direct free funds flow to net debt reduction, maximizing share buybacks under the current normal course issuer bid, and pursuing core-up acquisitions, all of which are intended to improve per share metrics and underpin long-term sustainability. Our 2025 corporate guidance estimates may fluctuate with commodity prices and / or regulatory changes and are designed to provide readers with information relevant to Management’s expectations for financial and operating results during the year.

2025 CAPITAL PROGRAM DETAILS

A summary of Saturn’s 2025 capital plans by area follows, which remains subject to change through the year should operating conditions fluctuate.

Southeast Saskatchewan

• Approximately 62% of our 2025 Budget, with approximately 80 net wells planned for this area.
• Focus on further development of the Bakken, including both fracked and open hole multi-lateral (“OHML”) drilling.
• Build on the OHML Bakken success realized over the past two years, as well as expanding our Bakken OHML development to approximately eight net wells in 2025, a 100% increase over 2024.
• Further delineation of conventional Mississippian and Spearfish plays to deliver highly capital efficient returns, supporting the drilling of approximately 34 net conventional wells in 2025.
• Continue advancing the waterflood at Flat Lake along with the pre-pressurized Bakken program to mitigate production declines and further contribute to free funds flow generation.

West Saskatchewan

• Approximately 17% of the 2025 Budget, with approximately 26 net wells planned for this area focusing on further development of the Viking and Shaunavon formations.
• Increase operated well development in the Plato area to 13 net wells, an increase of more than 50% over the eight net wells drilled in 2024, as Saturn proved a homogenous stratigraphic trend in the Viking in 2024 that connects the Company’s West and East Plato field.
• Continue development of the Lower Shaunavon at Battrum, building on the first four net wells drilled in 2024, with an additional approximately five net wells planned in 2025, providing proof of concept for the future drilling potential of this predominantly unbooked resource play.

Central Alberta

• Approximately 21% of the 2025 Budget, targeting the Cardium and Montney oil window, with an estimated 14 net wells planned.
• Increasing capital efficiencies by drilling longer lateral wells in the Cardium, with approximately 75% of Cardium development in 2025 allocated to extended reach horizontal wells to further grow this program. In Q4 of 2024, Saturn drilled the longest Cardium well on record in Canada, and the 2025 program will build on this success.
• Further delineating the Montney play to the southwest following the outperformance achieved on our ‘7-30’ pad drilled in 2024, with an additional three well pad planned for drilling that includes increased lateral lengths upwards of three miles, which would represent the longest Montney lateral ever drilled in the Kaybob area.

OPERATIONS UPDATE

Southeast Saskatchewan

Saturn currently have three drilling rigs active in this area which will continue into 2025, two of which are drilling Bakken wells at Viewfield. Since 2023, Saturn has extended the lengths of our Viewfield OHML Bakken wells. Initially drilled at 1-mile laterals, these wells were increased to 1.5-miles, and in 2024 the Company drilled two, 2-mile open hole eight-leg Bakken wells. Consistent with their Blueprint described below, Saturn successfully expanded the use of multilateral technology to the Company’s legacy Spearfish land base, where we drilled Canada’s first six-leg by 1-mile multilateral Spearfish well.

Saturn’s third rig has been steadily drilling in Flat Lake and is now on the seventh and final 2-mile well to conclude the 2024 program. The Company also successfully drilled the first ever mono-bore Torquay well at Flat Lake, saving capital costs while materially increasing capital efficiencies. Saturn continues to advance our waterflood at Flat Lake with the conversion of ten legacy Torquay producer wells to waterflood injection wells, adding pressure support to the formation and building up five pre-pressurized Bakken inventory locations we plan to drill in 2026.

West Saskatchewan

The Company has finalized our 2024 drilling program in this area. Saturn drilled 15 net operated Viking wells that are on production (plus seven additional non-operated drills); one disposal well; and our first four net Lower Shaunavon wells at Battrum/Butte, which are currently being completed. In addition, the Company commissioned a stripping station facility in the Battrum Units, which increases fluid processing capacity, optimizing pumping conditions and enhancing production from numerous wells in the Battrum field.

Saturn's drilling success in the Viking Plato field through the latter half of 2024 drove the Company to construct a new battery and gathering system for the area, which are expected to reduce current and future field operating expenses as well as lower emissions.

Central Alberta

Saturn recently concluded drilling the final well of a four-well pad at Lochend, which includes the longest Cardium well drilled on record in Canada, at 7,570m of total well length. Not only is this accomplishment a testament to our team’s technical capabilities, it also demonstrates Saturn’s culture of innovation and commitment to improving economics. While longer lateral lengths are technically more challenging, drilling extended reach horizontals meaningfully improves capital efficiencies in the Cardium, and can be utilized across other plays and assets within our portfolio. The pad at Lochend is expected to undergo completions through the end of 2024 and into early 2025, with initial production anticipated to come online in mid-Q1/25.

The drilling rig from Lochend was relocated up to West Pembina to drill one final well that concludes our Central Alberta 2024 program, culminating in a total of 16 net wells being drilled in 2024, including 12 in the Cardium and four in the Montney oil window.

THREE-YEAR OUTLOOK

Aligned with our 2025 Budget, presents a three-year outlook spanning 2025 to 2027. This Outlook highlights their commitment to long-term resilience, financial strength, and focus on deploying their Saturn Blueprint to maximize free funds flow while continuing to mitigate risks and enhance financial flexibility.

Strategic pillars of Saturn's Outlook include the following, assuming a constant US$70.00/bbl WTI price:

• Maintain production of 38,000 to 40,000 boe/d through the period, and reinvest approximately 70% of AFF annually, with development capital expenditures over the three years totaling between $950 million to $1 billion.
• Generate $450 to $475 million of free funds flow over the three-year period, and forecast growth in free funds flow per share of up to 12% from 2025 to 2027, with torque to higher per share growth under an $80/bbl WTI scenario and above.
• Reduce net debt by over 40% from year end 2024 to year end 2027, and steadily drive down leverage metrics to approximately 1.0 times net debt to trailing 12 months’ Adjusted EBITDA exiting 2026 and to 0.7 times exiting 2027.
• Deploying the Saturn Blueprint

KeyFacts Energy Industry Directory: Saturn Oil & Gas