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Undue reliance should not be placed on these forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By its nature, forward-looking information involves numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur and may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Forward-looking statements may include, but are not limited to, statements with respect to:

• the Company's expectations with respect to future operational results, including, but not limited to, estimated or anticipated production levels, exit production rates, decline rates, recycle ratios, netbacks, capital expenditures and sources of funding thereof, drilling plans and other information discussed in this news release;

• the quantity of the Company's oil and natural gas reserves and anticipated future cash flows from such reserves;

• anticipated financial results of the Company, including but not limited to, 2024 Exit EBITDA, Adjusted EBITDA, Free Cash Flow, and Net Debt / ‎‎2024 Exit EBITDA;

• the Company's expectations regarding capacity of infrastructure associated with its business;

• the Company's expectations regarding commodity prices and costs;

• the Company's expectations regarding supply and demand for oil and natural gas;

• expectations regarding the Company's ability to raise capital and to continually add to reserves through acquisitions and development;

• treatment under governmental regulatory regimes and tax laws;

• fluctuations in depletion, depreciation, and accretion rates;

• expected changes in regulatory regimes in respect of royalty curves and regulatory improvements and the effects of such changes; and

• Highwood's business and acquisition strategy, the criteria to be considered in connection therewith and the benefits to be derived therefrom.

These forward-looking statements are not guarantees of future performance and are subject to a number of known and unknown risks and uncertainties that could cause actual events or results to differ materially, including, but not limited to:

• operational risks and liabilities inherent in oil and natural gas operations;

• the accuracy of oil and gas reserves estimates and estimated production levels as they are affected by exploration and development drilling and estimated decline rates;

• the uncertainties in regard to the timing of Highwood's exploration and development program;

• failure to realize the anticipated benefits of acquisitions, including corresponding results and/or synergies;

• unexpected costs or liabilities related to acquisitions;

• volatility in market prices for oil and natural gas;

• adverse general economic, political and market conditions;

• incorrect assessments of the value of benefits to be obtained from acquisitions and exploration and development programs;

• unforeseen difficulties in integrating assets acquired through acquisitions into the Company's operations;

• changes in royalty regimes;

• competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel;

• that the Company's ability to maintain strong business relationships with its suppliers, service providers and other third parties will be maintained;

• geological, technical, drilling and processing problems;

• fluctuations in foreign exchange or interest rates and stock market volatility;

• liquidity;

• fluctuations in the costs of borrowing;

• political or economic developments;

• uncertainty related to geopolitical conflict;

• ability to obtain regulatory approvals; and

• the results of litigation or regulatory proceedings that may be brought against the Company; and

• changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry.

In addition, statements relating to "reserves" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future.

There are numerous uncertainties inherent in estimating quantities of oil and natural gas and the future cash flows attributed to such reserves. The reserves and associated cash flow information set forth herein are estimates only. In general, estimates of economically recoverable oil and natural gas and the future net cash flows therefrom are based upon a number of variable factors and assumptions, such as historical production from the properties, production rates, ultimate reserves and resources recovery, timing and amount of capital investments, marketability of oil and natural gas, royalty rates, the assumed effects of regulation by governmental agencies and future operating costs, all of which may vary materially. For these reasons, estimates of the economically recoverable oil and natural gas attributable to any particular group of properties, classification of such reserves based on risk of recovery and estimates of future net revenues associated with reserves prepared by different evaluators, or by the same evaluators at different times, may vary. The actual production, revenues, taxes and development and operating expenditures of the Company with respect to its reserves will vary from estimates thereof and such variations could be material. This news release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about the Company's prospective Adjusted EBITDA, Free Cash Flow, Net Debt, 2024 Exit EBITDA, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs. FOFI contained in this news release was made as of the date of this news release and was provided for the purpose of describing the anticipated effects of the Company's anticipated operational results on the Company's business operations. Highwood's actual results, performance or achievement could differ materially from those expressed in, or implied by, such FOFI. The Company disclaims any intention or obligation to update or revise any FOFI contained in this news release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this news release should not be used for purposes other than for which it is disclosed herein.

Changes in forecast commodity prices, differences in the timing of capital expenditures and variances in average production estimates can have a significant impact on the key performance metrics included in the Company's guidance for 2024 contained in this news release. The Company's actual results may differ materially from such estimates.

With respect to forward-looking statements contained in this news release, the Company has made assumptions regarding, among other things: the Company's future operational results, including, but not limited to, estimated or anticipated production levels, exit production rates, decline rates, recycle ratios, netbacks, capital expenditures and sources of funding thereof, drilling plans and other information discussed in this news release; that commodity prices will be consistent with the current forecasts of its engineers; field netbacks; the accuracy of reserves estimates; costs to drill, complete and tie-in wells; ultimate recovery of reserves; that royalty regimes will not be subject to material modification; that the Company will be able to obtain skilled labour and other industry services at reasonable rates; the performance of assets and equipment; that the timing and amount of capital expenditures and the benefits therefrom will be consistent with the Company's expectations; the impact of increasing competition; that the conditions in general economic and financial markets will not vary materially; that the Company will be able to access capital, including debt, on acceptable terms; that drilling, completion and other equipment will be available on acceptable terms; that government regulations and laws will not change materially; that royalty rates will not change in any material respect; and that future operating costs will be consistent with the Company's expectations.

Although Highwood believes the expectations and material factors and assumptions reflected in these forward-looking statements are reasonable as of the date hereof, there can be no assurance that these expectations, factors and assumptions will prove to be correct.

Readers are cautioned not to place undue reliance on such forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur and the predictions, forecasts, projections and other forward-looking statements may not occur, which may cause Highwood's actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by this news release.

A more complete discussion of the risks and uncertainties facing Highwood is disclosed in Highwood's continuous disclosure filings with Canadian securities regulatory authorities available on SEDAR+ at www.sedarplus.ca. All forward-looking information herein is qualified in its entirety by this cautionary statement, and Highwood disclaims any obligation to revise or update any such forward-looking information or to publicly announce the result of any revisions to any of the forward-looking information contained herein to reflect future results, events, or developments, except as required by law.

Caution Respecting Reserves Information

This news release contains oil and gas metrics commonly used in the oil and gas industry. These oil and gas metrics do not have any standardized meaning and therefore they should not be used to make comparisons and readers should not place undue reliance on such metrics. Further, these metrics have not been independently evaluated, audited or reviewed and are based on historical data, extrapolations therefrom and management's professional judgement, which involves a high degree of subjectivity. For these reasons, actual metrics attributable to any particular group of properties may differ from our estimates herein and the differences could be significant.

Basis of Barrels of Oil Equivalent — This news release discloses certain production information on a barrels of oil equivalent ("boe") basis with natural gas converted to barrels of oil equivalent using a conversion factor of six thousand cubic feet of gas (Mcf) to one barrel (bbl) of oil (6 Mcf:1 bbl). Condensate and other NGLs are converted to boe at a ratio of 1 bbl:1 bbl. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf:1 bbl is based roughly on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at sales point. Although the 6:1 conversion ratio is an industry-accepted norm, it is not reflective of price or market value differentials between product types. Based on current commodity prices, the value ratio between crude oil, NGLs and natural gas is significantly different from the 6:1 energy equivalency ratio. Accordingly, using a conversion ratio of 6 Mcf:1 bbl may be misleading as an indication of value.

Mcfe Conversions: Thousands of cubic feet of gas equivalent ("Mcfe") amounts have been calculated by using the conversion ratio of one barrel of oil (1 bbl) to six thousand cubic feet (6 Mcf) of natural gas. Mcfe amounts may be misleading, particularly if used in isolation. A conversion ratio of 1 bbl to 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 based on the current price of natural gas as compared to oil is significantly different from the energy equivalent of 1:6, utilizing a conversion on a 1:6 basis may be misleading as an indication of value.

"Proved Developed Producing" or "PDP" reserves are those reserves that are expected to be recovered from completion intervals open at the time of the estimate. These reserves may be currently producing or, if shut in, they must have previously been on production, and the date of resumption of production must be known with reasonable certainty.

References to "liquids" in this news release refer to, collectively, heavy crude oil, light crude oil and medium crude oil combined, and natural gas liquids.

"bbls/d" means barrels per day.

"boe/d" means barrels of oil equivalent per day.

Non-GAAP and other Specified Financial Measures

This news release may contain financial measures commonly used in the oil and natural gas industry, including "Adjusted EBITDA", "Free Cash Flow" and "Net Debt". These financial measures do not have any standardized meaning under IFRS ‎‎and therefore may not be comparable to similar measures presented by other companies. Readers are cautioned that these ‎‎non-IFRS measure should not be construed as an alternative to other measures of financial performance calculated in ‎‎accordance with IFRS. These non-IFRS measures provides additional information that Management believes is meaningful ‎‎in describing the Company's operational performance, liquidity and capacity to fund capital expenditures and other ‎‎activities. Management believes that the presentation of these non-IFRS measures provide useful information to investors ‎‎and shareholders as the measures provide increased transparency and the ability to better analyze performance against ‎‎prior periods on a comparable basis.‎

‎"Adjusted EBITDA" is calculated as cash flow ‎from (used in) operating activities, adding back changes in non-cash ‎working capital, decommissioning obligation ‎expenditures, transaction costs and interest expense. The Company considers ‎Adjusted EBITDA ‎to be a key capital management measure as it is both used within certain financial covenants anticipated ‎to be prescribed ‎under the credit facilities and demonstrates Highwood's standalone profitability, operating and ‎financial ‎performance in terms of cash flow generation, adjusting for interest related to its capital structure. The most ‎directly ‎comparable GAAP measure is cash flow from (used in) operating activities. ‎

"EBITDA" is a non-GAAP financial measure and may not be comparable with similar measures presented by other companies. EBITDA is used as an alternative measure of profitability and attempts to represent the cash profit generated by the Company's operations. The most directly comparable GAAP measure is cash flow from (used in) operating activities. EBITDA is calculated as cash flow from (used in) operating activities, adding back changes in non-cash working capital, decommissioning obligation expenditures and interest expense.

‎"2024 Exit EBITDA" is calculated as ‎Adjusted EBITDA for the month of December annualized. The Company believes that 2024 Exit EBITDA is useful information to investors ‎and ‎shareholders in understanding the EBITDA generated in the final month of 2024 which is indicative of future EBITDA.

"Free Cash Flow" or "FCF" is used as an indicator of the efficiency and liquidity of the Company's business, measuring ‎its ‎funds after capital expenditures available to manage debt levels, pursue acquisitions and assess the optionality to ‎pay ‎dividends and/or return capital to shareholders though activities such as share repurchases. The most directly ‎comparable ‎GAAP measure is cash flow from (used in) operating activities. Free Cash Flow is calculated as cash flow ‎from (used in) ‎operating activities, less interest, office lease expenses, cash taxes and capital expenditures.‎‎

‎"Net Debt" represents the carrying value of the Company's debt instruments, including outstanding deferred acquisition ‎payments, net of Adjusted working capital. The ‎Company uses Net Debt as an alternative to total outstanding debt as ‎Management believes it provides a more accurate ‎measure in assessing the liquidity of the Company. The Company believes ‎that Net Debt can provide useful information ‎to investors and shareholders in understanding the overall liquidity of the ‎Company.‎

"Net Debt / 2024 Exit EBITDA" is calculated as net debt at the end of the fiscal period of 2024 divided by the 2024 Exit ‎Adjusted EBITDA. The Company believes that Net Debt / 2024 Exit Adjusted EBITDA is useful information to investors ‎and ‎shareholders in understanding the time frame, in years, it would take to eliminate Net Debt based on 2024 Exit Adjusted ‎EBITDA.‎

All dollar figures included herein are presented in Canadian dollars, unless otherwise noted.

SOURCE HIGHWOOD ASSET MANAGEMENT LTD.

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