Prospera Energy Reports Record Q2 2026 Revenue and Higher Operating Netback

TSXV: PEI | OTC : GXRFF

Prospera Energy Inc. announced its financial and operating results for the second quarter of 2026, reporting what the company describes as the strongest quarter in its recent history. According to the company, sales revenue reached $6.2 million ($91.17/boe), the highest quarterly revenue in five years, while operating netback rose to $2.0 million or $29.65/boe, the best in 24 months. The company states these results were delivered through spring break-up, which it describes as historically the highest-risk operating window for Western Canadian heavy oil producers, on disciplined capital spending of only $0.6 million.

According to the company, monthly operating income in June 2026 was approximately four times January 2026 levels, which it attributes to rising production from reactivated wells, stronger realized pricing, and a cost structure held flat. For the six months ended June 30, 2026, the Corporation generated sales revenue of $10.7 million and an operating netback of $2.7 million, the company reported.

Key Highlights

• Sales revenue of $6.2 million ($91.17/boe) in Q2 2026, the highest quarterly sales revenue in five years, up 37% quarter over quarter on a 31% increase in realized prices and a 3% increase in volumes, according to the company.
• Operating netback of $2.0 million, or $29.65/boe, nearly tripling Q1 2026, with monthly operating income in June approximately four times January levels, the company stated.
• Total operating costs of $3.22 million were unchanged from Q1 2026 despite higher volumes; field operating costs per boe fell 5% quarter over quarter, according to the company.
• The company reported increasing field uptime and zero pipeline failures in Q2 2026, compared with five pipeline failures in Q2 2025.
• The 16 wells reactivated in 2025 averaged 133 bbl/d in H1 2026, up 64% from their 2025 average, and reached 141 bbl/d in June, with capital efficiency of approximately $13,300 per flowing barrel per day, according to the company.
• Trade and other payables were cut by $1.8 million (10%) since year-end to $16.3 million, including $170,476 settled in shares during the quarter and a $71,121 gain on debt settlements, the company reported.

Strategic/Operational Context

According to the company, average net sales volumes were 745 boe/d in Q2 2026, compared with 720 boe/d in Q1 2026 and 780 boe/d in Q2 2025. Field operating costs were $47.45/boe in Q2 2026, compared with $49.90/boe in Q1 2026 and $36.86/boe in Q2 2025.

Shubham Garg, Executive Chairman and CEO, stated: "This is the quarter the turnaround stopped being a promise and became a run-rate. We posted our best netbacks in two years and generation more than $2,000,000 operating income through spring break-up, the window that breaks heavy oil producers, while enhancing field operating procedures. This upward trajectory was built well-by-well, with the same team and the same playbook we are about to point at more than 140 remaining reactivation candidates. The strategy and engine are proven and every incremental barrel we add lands on a cost structure we have already shown we can hold flat."

Chris Ludtke, Chief Financial Officer, stated: "The quarter's progress was as much financial as operational. Payables are down 10% since year-end, legacy obligations continue to be retired through a combination of negotiated settlements and shares-for-debt conversions, and funds flow has turned decisively positive. Each dollar of the Offering goes further on the balance sheet we have today than it would have a year ago."

The company reported that Luseland field production remains at an eight-year high, with several high-impact wells continuing to rise in production while numerous wells continue through their sand clean-up phase. According to the company, wells brought online under the 2025 reactivation program have grown production while remaining on-stream without service rig intervention or flush-by activity, supported by the Corporation's sand management program including sand suspension chemistries, recycle pumping configurations, and refined operating practices. More than 140 reactivation candidates remain in inventory, which the company states provides a multi-year, low-risk growth runway across its 379 million barrels of original oil in place.

Resources and Financials

• Sales revenue (Q2 2026): $6,184,396, or $91.17/boe
• Sales revenue (Q1 2026): $4,522,137, or $69.75/boe
• Sales revenue (Q2 2025): $4,902,540, or $69.03/boe
• Operating netback (Q2 2026): $2,011,303, or $29.65/boe
• Operating netback (Q1 2026): $713,053, or $10.99/boe
• Operating netback (Q2 2025): $1,613,923, or $22.73/boe
• Six-month (H1 2026) sales revenue: $10.7 million; six-month operating netback: $2.7 million

According to the company, Q2 2026 pricing was materially affected by the global oil supply disruption that emerged in late February 2026, including the curtailment of shipping through the Strait of Hormuz. Western Canada Select averaged Cdn$107.97 per barrel in the quarter, up from Cdn$79.20 in Q1 2026, and the Corporation's realized revenue rose to $91.17 per boe from $69.75. Subsequent to quarter end, WTI futures for the balance of 2026 have traded at approximately US$80 per barrel, according to the company, well above the US$63.71 Q2 2025 average. The company maintains hedge protection on a WCS differential swap on 300 bbl/d at WTI less US$12.40 through September 30, 2026.

The company stated that if recent price levels hold and the WCS differential remains consistent with recent quarters, it would expect operating netbacks to remain and grow meaningfully above the Q2 average of $29.65/boe. The company cautioned that commodity prices are inherently volatile, the duration and resolution of the underlying geopolitical situation remains uncertain, and no assurance can be provided as to future realized prices.

Offering Update

On June 29, 2026, the Corporation announced a private placement of up to 300,000,000 units at $0.04 per unit for aggregate gross proceeds of up to $12.0 million. Each unit comprises one common share and one common share purchase warrant, with each warrant exercisable at $0.06 per share for two years from closing; exercise in full of the warrants would provide up to an additional $18.0 million of proceeds, according to the company.

The expected closing of the Offering has been extended from July 31, 2026 to August 31, 2026 to accommodate continued investor engagement and completion of subscription documentation, the company stated. Net proceeds are intended to fund the Luseland well reactivation program, the Luseland well optimization program, and the Cuthbert workover program. The Offering remains subject to TSX Venture Exchange approval, and all securities issued under the Offering will be subject to a statutory hold period of four months and one day from issuance in accordance with applicable securities laws.

Board of Directors Update

Prospera announced that Christopher Moore has resigned from the Company's Board of Directors for medical reasons, effective immediately. Mr. Moore will continue to support Prospera in an advisory capacity, according to the company. The Company has commenced a process to identify a qualified candidate and anticipates that the vacant Board position will be filled on or before August 31, 2026.

What to Watch Next

• Expected closing of the up to $12.0 million Offering on or before August 31, 2026, subject to TSX Venture Exchange approval.
• Anticipated filling of the vacant Board position on or before August 31, 2026.
• Investor webinar hosted by management on August 4, 2026 at 11:00 a.m. MT to review Q2 2026 results and the Offering.

Capital Markets Advisory Engagement

Prospera announced its formal engagement with ArcStone Canada Inc. for capital markets advisory services, including capital markets planning, investor engagement, and strategic positioning across North American markets. According to the company, the engagement covers advisory services only and excludes broker-dealer activity, securities solicitation, and investment advice.

ArcStone Canada Inc. is part of the ArcStone group of companies, which comprises ArcStone Securities LLC (CRD# 306029, member FINRA/SIPC), ArcStone Canada Inc., ArcStone Financial Pulse Inc., and ArcStone Kingswood, a division of Kingswood Capital Partners, LLC. ArcStone Securities and Investments Corp. is the parent entity and is not itself a registered broker-dealer.

About Prospera

Prospera Energy Inc. is a publicly traded Canadian energy company specializing in the exploration, development, and production of crude oil and natural gas. Headquartered in Calgary, Alberta, Prospera is dedicated to optimizing recovery from legacy fields using environmentally safe and efficient reservoir development methods and production practices. The company's core properties are strategically located in Saskatchewan and Alberta, including Cuthbert, Luseland, Hearts Hill, and Brooks. Prospera Energy Inc. is listed on the TSX Venture Exchange under the symbol PEI and the U.S. OTC Market under GXRFF.

Prospera reports gross production at the first point of sale, excluding gas used in operations and volumes from partners in arrears, even if cash proceeds are received. Gross production represents Prospera's working interest before royalties, while net production reflects its working interest after royalty deductions. These definitions align with ASC 51-324 to ensure consistency and transparency in reporting.

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