Boe means barrel of oil equivalent. All boe conversions in this news release are derived by converting gas to oil at the ratio of six thousand cubic feet ("Mcf") of natural gas to one barrel ("Bbl") of oil. Boe may be misleading, particularly if used in isolation. A Boe conversion rate of 1 Bbl : 6 Mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio of oil compared to natural gas based on currently prevailing prices is significantly different than the energy equivalency ratio of 1 Bbl : 6 Mcf, utilizing a conversion ratio of 1 Bbl : 6 Mcf may be misleading as an indication of value.

Reserves Disclosure

All reserves information pertaining to the Ridgeback Acquisition in this news release were prepared for the Company in a report provided by Ryder Scott Company, independent reserves evaluators, effective October 1, 2022, (the "Ryder Scott Report") calculated using the average forecast price and cost assumptions using the average of three consultants price forecasts including: GLJ Ltd., McDaniel & Associates Consultants Ltd. and Sproule Associates Ltd. effective October 1, 2022, in accordance with National Instrument 51-101 -- Standards of Disclosure of Oil and Gas Activities and the Canadian Oil and Gas Evaluation Handbook. All reserves information pertaining to Saturn in this news release were prepared for the Company in separate reports provided by Ryder Scott Company effective January 1, 2022 (the "Ryder Scott Saturn Reports") calculated using the average forecast price and cost assumptions using the average of three consultants price forecasts including: GLJ Ltd., McDaniel & Associates Consultants Ltd. and Sproule Associates Ltd. effective January 1, 2022, in accordance with National Instrument 51-101 -- Standards of Disclosure of Oil and Gas Activities and the Canadian Oil and Gas Evaluation Handbook. All reserve references regarding the Ridgeback Assets and from the Ryder Scott Saturn Reports in this news release are "Asset gross reserves". Asset Gross reserves are the Ridgeback Assets and Saturn's total working interest reserves before the deduction of any royalties payable and before the consideration of royalty interests. It should not be assumed that the present worth of estimated future cash flow of net revenue presented herein represents the fair market value of the reserves. There is no assurance that the forecast prices and costs assumptions will be attained, and variances could be material. The recovery and reserve estimates of the Ridgeback Assets and Saturn's crude oil, NGLs and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, natural gas and NGLs reserves may be greater than or less than the estimates provided herein.

Drilling Locations

This news release discloses "booked" drilling locations with respect to the Ridgeback Assets derived from the Ryder Scott Report and account for drilling locations that have associated proved and/or probable reserves, as applicable. Un-booked locations are internal estimates based on the Company's assumptions as to the number of wells that can be drilled per section based on industry practice and internal review. Un-booked locations do not have attributed reserves or resources. The drilling locations considered for future development will ultimately depend upon the availability of capital, regulatory approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results, additional reservoir information that is obtained and other factors.

Non-GAAP and other Financial Measures

Throughout this news release and in other materials disclosed by the Company, we employ certain measures to analyze financial performance, financial position and cash flow. These non-GAAP and other financial measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures provided by other issuers. Non-GAAP and other financial measures should not be considered to be more meaningful than GAAP measures which are determined in accordance with IFRS, such as net income (loss) and cash flow from operating activities as indicators of our performance. The Company's unaudited condensed consolidated interim financial statements and MD&A as at and for the three and nine months ended September 30, 2022 are available on the Company's website at www.saturnoil.com and under our SEDAR profile at www.sedar.com. The disclosure under the section "Non-GAAP and Other Financial Measures" including non-GAAP financial measures and ratios, capital management measures and supplementary financial measures in the MD&A is incorporated by reference into this news release.

The following are non-GAAP financial measures: capital expenditures, free funds flow, net operating expenses and operating netback and operating netback net of derivatives. Where applicable, these non-GAAP financial measures are presented on a multiple, per boe or a per share basis resulting in non-GAAP financial ratios. These non-GAAP financial measures and ratios are not standardized financial measures under IFRS and might not be comparable to similar financial measures disclosed by other issuers. See the disclosure under the section "Non-GAAP Financial Measures and Ratios" in our MD&A for the three and nine months ended September 30, 2022, for an explanation of the composition of these measures and ratios, how these measures and ratios provide useful information to an investor, and the additional purposes, if any, for which management uses these measures and ratios.

The following are capital management measures used by the Company: net debt, adjusted EBITDA and adjusted funds flow. See the disclosure under the "Capital Management" note in our unaudited condensed consolidated interim financial statements for the three and nine months ended September 30, 2022, for an explanation of the composition of these measures, how these measures provide useful information to an investor, and the additional purposes, if any, for which management uses these measures.

Where applicable, the supplementary financial measures used in this news release are either a per unit disclosure of a corresponding GAAP measure, or a component of a corresponding GAAP measure, presented in the unaudited condensed consolidated interim financial statements. Supplementary financial measures that are disclosed on a per unit basis are calculated by dividing the aggregate GAAP measure (or component thereof) by the applicable unit for the period. Supplementary financial measures that are disclosed on a component basis of a corresponding GAAP measure are a granular representation of a financial statement line item and are determined in accordance with GAAP.

"Net Operating Income" for the Ridgeback Assets is based on the expected cash flow from operations of the Ridgeback Acquisition for 12 months from the Closing Date, with the production assumption of 17,500 boe/d.

"Recycle Ratio" is calculated as the expected Operating Netback of the Ridgeback Acquisition of $48.55/boe, assuming US$ 80 WTI oil price, divided by the acquisition cost of reserves of $13.01/boe for proved developed producing reserves, $7.73 for total proved reserves and $5.21 per total proved plus probable reserves.

"Enterprise Value" is calculated as market capitalization plus net debt. Management uses enterprise value to assess the valuation of the Company.

Future Oriented Financial Information

Any financial outlook or future oriented financial information in this news release, as defined by applicable securities legislation, including future (but not limited to) operating and fixed costs (and reductions thereto), debt levels, net operating income, funds flow, cash flow and production targets has been approved by management of Saturn. Readers are cautioned that any such future-oriented financial information contained herein should not be used for purposes other than those for which it is disclosed herein. The Company and its management believe that the prospective financial information has been prepared on a reasonable basis, reflecting management's best estimates and judgments, and represent, to the best of management's knowledge and opinion, the Company's expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future activities or results.

Forward-Looking Information and Statements

Certain information included in this news release constitutes forward-looking information under applicable securities legislation. Forward-looking information typically contains statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project", "will" or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information in this news release may include, but is not limited to, statements concerning: timing of the Ridgeback Acquisition; Reserves information; satisfaction or waiver of the closing conditions in the Agreement; receipt of required legal and regulatory approvals for the completion of the Ridgeback Acquisition (including court approval, approval of the TSXV and Competition Act (Canada) approval); funding and payment of the purchase price in respect of the Ridgeback Acquisition; estimated assumed liabilities associated with the Ridgeback Assets; expected production and cash flow related to the Ridgeback Assets; expectations regarding future capex and funds flow; expected number of future drilling locations related to the Ridgeback Assets; the anticipated closing date of the Offering and the Senior Secured Term Loan and the terms thereof; the use of proceeds from the Offering and the Senior Secured Term Loan; reserve estimates; future production levels; decline rates; drilling locations; future operational and technical synergies resulting from the Ridgeback Acquisition; management's ability to replicate past

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January 20, 2023 17:57 ET (22:57 GMT)