WESTGATE ENERGY INC. ANNOUNCES FINAL EXCHANGE BULLETIN, RESUMPTION OF TRADING, ANNUAL GENERAL MEETING, MARKET MAKING AND INVESTOR RELATIONS AGREEMENTS, OPERATIONAL UPDATE AND SECOND HALF 2024 GUIDANCE

CALGARY, AB, June 10, 2024 /CNW/ - Westgate Energy Inc. ("Westgate" or the "Company") is pleased to provide this initial update to shareholders following closing of the previously announced business combination transaction (the "Transaction"), including an operational update and overview of Westgate's guidance for the second half of 2024 ("2H 2024"). The TSX Venture Exchange (the "TSXV") has published its final exchange bulletin in connection with the closing of the Transaction. Trading in the common shares of Westgate ("Westgate Shares") is expected to resume at market open on June 11, 2024 under the symbol "WGT".

Impact of the Transaction

Under the terms of the amalgamation agreement dated March 14, 2024, the Company (formerly 763997 Alberta Ltd.) and Grafton Ventures Energy Holdings Corp. ("Grafton") completed the Transaction by way of a three-cornered amalgamation through which:

• a wholly-owned subsidiary of the Company and Grafton amalgamated;
  
  
• the Company completed the consolidation of its common shares on a 40-for-1 basis (the "Consolidation") and changed its name from "763997 Alberta Ltd." to "Westgate Energy Inc.";
  
  
• each common share of Grafton was exchanged for 0.34433507 Westgate Shares, on a post-Consolidation basis at a deemed price of $0.44 per Westgate Share;
  
  
• each convertible, exchangeable or exercisable security of Grafton was exchanged for a convertible, exchangeable or exercisable security of Westgate on substantially the same economic terms and conditions as the original convertible, exchangeable or exercisable security of Grafton (or adjusted in accordance with the terms of such securities to reflect the completion of the Transaction);
  
  
• the Transaction resulted in the issuance of 47,660,238 Westgate Shares at a deemed price per share of $0.44; and
  
  
• the Company will continue the business of Grafton.

As detailed in the Company's press release issued May 23, 2024, Grafton completed its brokered and non-brokered private placements raising aggregate gross proceeds of $7.0 million prior to the closing of the Transaction.

The Company has issued and filed an amended notice of meeting and record date for an annual general meeting of shareholders (the "Meeting") to be held on July 17, 2024.

Westgate has engaged the services of Independent Trading Group (ITG), Inc. ("ITG") to provide market-making services in accordance with TSXV policies, subject to TSXV review and acceptance. ITG will trade shares of the Company on the TSXV with the objective of maintaining a reasonable market and improving the liquidity of the Westgate Shares.

Under the agreement, ITG will receive compensation of $6,500 per month, payable monthly in advance. The agreement is for an initial term of one month and will renew for additional one-month terms unless terminated. The agreement may be terminated by either party with 30 days' notice. There are no performance factors contained in the agreement and ITG will not receive shares or options as compensation. ITG and Westgate are unrelated and unaffiliated entities and at the time of the agreement, neither ITG nor its principals have an interest, directly or indirectly, in the securities of Westgate.

ITG is a Toronto based CIRO dealer-member that specializes in market making, liquidity provision, agency execution, ultra-low latency connectivity, and bespoke algorithmic trading solutions. Established in 1992, with a focus on market structure, execution and trading, ITG has leveraged its own proprietary technology to deliver high quality liquidity provision and execution services to a broad array of public issuers and institutional investors.

Subject to TSXV review and acceptance, effective June 11, 2024, Westgate has engaged Calgary-based Meadowbank Strategic Partners Inc. ("Meadowbank") to primarily provide investor relations services in accordance with TSX Venture Exchange policies. Meadowbank has provided scalable investor relations services to over 20 clients since early 2020. Under the agreement, Meadowbank will receive compensation of $5,500 per month. The agreement is for an initial term of six months, with a renewal term of six months. The agreement may be terminated by Westgate with 30 days' notice upon completion of the initial term. There are no performance factors contained in the agreement and Meadowbank will not receive shares or options as compensation. Meadowbank and Westgate are unrelated and unaffiliated entities and, at the time of the agreement, Meadowbank owns securities of Westgate from a prior transaction unrelated to the agreement.

The Company successfully drilled and completed its inaugural multilateral horizontal oil well at Westgate's Killam property in December 2023. Post clean-up, the well achieved a peak production rate of 115 boe/d over 30 consecutive days with capital expenditures for drilling and completion of this well totaling approximately $1.9 million. The Company anticipates achieving cost savings on its next multi-well drilling program at the Killam property as economies of scale are realized, along with the added benefit of drilling during the summer which is typically a less active period for services than during the winter season.

Westgate is pleased to provide initial guidance for 2H 2024. The Company is planning a $6.2 million capital program for the remainder of the year, including two wells expected to spud at Killam during Q3 2024 and a third well in Q4 2024. This program is anticipated to drive 2H 2024 average corporate production between 350 to 400 boe/d with an exit production range of 450 to 500 boe/d (70% liquids¹), representing an increase of over 135% from the current production level of 200 boe/d. The Company anticipates realizing positive impacts to its operating netback, which is forecast to improve to over $30.00 per boe, compared to the current $17.05 per boe, due to increased production volumes from new drills, recent infrastructure investment at the Killam asset in the first half of 2024, and ongoing efficiencies being captured. Operating netback is a non-GAAP financial ratio. See "Non-GAAP Financial Measures" below for more information on operating netback.

Interested investors and other market participants can learn more about the Westgate opportunity by visiting its corporate website and reviewing the Company's June 2024 corporate presentation, available at www.westgateenergy.ca.

Westgate is focused on the emerging Mannville Stack fairway located in East-Central Alberta and West Central Saskatchewan. This fairway is characterized by known accumulations of medium and heavy oil which are being "unlocked" via the application of innovative drilling techniques that utilize multi-lateral horizontal drilling. Applying these multi-lateral drilling techniques has yielded some of the strongest oil well economics across Western Canada.

The management team and board of Westgate have extensive experience building and leading successful energy companies in Canada. The collective successes of the leadership group share common characteristics: a strategy of targeting high-quality oil assets with large quantities of oil in place, and driving growth through successful drilling as well as strategic merger and acquisition opportunities. This proven blueprint of delivering shareholder value will be foundational to Westgate's strategy, positioning the Company as one of a select few pure-play, high-growth, publicly-traded junior oil companies focused on the Mannville Stack fairway.

This press release refers to operating netback which is not a recognized measure under International Financial Reporting Standards ("IFRS"), referred to as Generally Accepted Accounting Principles ("GAAP"). Management believes operating netback is useful for reporting purposes and for evaluating the financial position of the Company but cautions readers that operating netback should not be considered as an alternative in accordance with GAAP. Non-GAAP financial measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers for these non-GAAP measures.

Operating netback is a non-GAAP financial ratio calculated by dividing operating income by production volumes. Operating income is a non-GAAP financial measure. Operating income is calculated by subtracting the cost of royalties and operating expenses from processing revenue plus petroleum, natural gas and midstream sales which is the most directly comparable GAAP measure. Operating income and operating netback allow management and others to evaluate the production results from the Company's assets. Management feels that operating netback is a key industry benchmark and a measure of performance of the Company that provides investors/readers with information that is commonly used by other petroleum and natural gas producers.

In this press release, all references to "$" are to Canadian dollars.

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This press release contains metrics commonly used in the oil and gas industry. These oil and gas metrics do not have any standardized meaning or standard methods of calculation and therefore may not be comparable to similar measures presented by other companies where similar terminology is used and should therefore not be used to make comparisons. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Notice regarding forward-looking statements:

This press release includes forward-looking statements regarding Westgate and its business, which may include, but are not limited to, resumption of trading of the Westgate Shares and the expected timing thereof, the timing of the Meeting, market making services, including payment for, TSXV review and approval of and timing thereof, investor relations services, including payment for, TSXV review and approval of and timing thereof, the business of Westgate, anticipated cost savings on the next multi-well drilling program at the Killam property, the planned capital and drilling programs, planned wells and timing of drilling, anticipated production, forecasted operating netback, and the characteristics of the Mannville Stack fairway and the unique position of Westgate in respect thereof. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "is expected", "expects", "scheduled", "intends", "contemplates", "anticipates", "believes", "proposes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. The forward-looking statements included in this press release are based on management's current expectations and assumptions, including, but not limited to, the successful drilling of planned wells and production therefrom, the Company's ability to execute its business strategy and market conditions. Although the Company believes that the expectations and assumptions reflected in such forward-looking information are reasonable, they may prove to be incorrect. Forward-looking statements involve significant known and unknown risks and uncertainties. A number of factors could cause actual results to differ materially from those anticipated by the Company, including but not limited to, an increase in actual costs to drilling wells and bringing on to production, production from wells being less than anticipated, decreases in the price of oil and natural gas and changes in market conditions. Moreover, exploration, appraisal, and development of oil and natural gas reserves are speculative activities and involve a degree of risk. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, other than as required by law.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Westgate Energy Inc.