Company Announcements

The Company has acquired six sections of mineral rights in the Cold Lake Oil Sands Area with approximately 40 unbooked horizontal drilling locations targeting the Mannville Stack and achieved record production after its two-well Killam drilling program

CALGARY, AB , Oct. 28, 2024 /CNW/ - Westgate Energy Inc. ("Westgate" or the "Company") (TSXV: WGT), a high-growth junior exploration and production company that is targeting untapped Mannville Stack medium and heavy oil resources in East-Central Alberta and West Central Saskatchewan, announces the acquisition of a new core area with approximately 40 unbooked multi-lateral drilling locations identified within the Mannville Stack group of formations. In addition, Westgate confirms the production results of its summer program consisting of two horizontal, multi-lateral oil wells drilled at the Company's core Killam property in Eastern Alberta (the "Summer Program Wells").

New Core Area

Westgate has acquired a 100% working interest in six sections (1,536 hectares) of mineral rights in the Cold Lake Oil Sands Area of Alberta (the "New Core Area") as part of a partnership agreement with Elizabeth Metis Settlement ("EMS") that grants access to the EMS lands for the purposes of developing oil and gas resources. Westgate has identified the potential for up to 40 horizontal drilling locations across multiple horizons within the Mannville Stack group of formations in the New Core Area. The land has year-round road access and is proximal to other successful Mannville Stack developments.

Killam Summer Program Results

At Killam, the 11-21 well ("11-21") was successfully drilled as a six-leg, open-hole horizontal design, targeting the Mannville Sparky Formation drilled from a new pad. A total of 5,438 metres of lateral length was drilled in zone and the cost to drill and complete ("D&C Costs") 11-21 came in under budget at $1.33mm versus a D&C estimate of $1.6mm. After a period of clean-up, its recent production rate is approximately 130 boe/d, with a 90% oil weighting.

The 16-15 well ("16-15") was successfully drilled as a four-leg, open-hole horizontal design, also targeting the Mannville Sparky Formation. A total of 5,197 metres of lateral length drilled and the D&C Costs for 16-15 also came in under budget at $1.4mm versus a D&C estimate of $1.6mm. After a period of clean-up, its recent production rate is approximately 65 boe/d, with an 80% oil weighting.

The below table compares the well results of 11-21 and 16-15 against the Company's base case. Westgate currently budgets drilling and complete ("D&C") costs of $1.6mm per well drilled to a planned 8,000 meters of lateral length and assumes stabilized production rates of 155 boe/d from each such successfully drilled well (the "Type Well"). Based on the nature of Westgate's land holdings at Killam, the Summer Program Wells were drilled to an average total of 5,318m of lateral length, representing 66% of our Type Well length.

Management Commentary

Westgate's Management is excited about the New Core Area and will be prioritizing development of these new lands and the approximately 40 drilling locations across multiple, stacked oil-bearing Mannville horizons. These six sections significantly bolster Westgate's horizontal drilling inventory. We look forward to a long-standing working relationship well into the future with the Elizabeth Metis Settlement.

Regarding our increased production level, we are pleased with the outcome of our two-well summer program, with both wells producing within our range of expectations on a normalized per-meter basis.

Westgate is also pleased with the significant reduction in well costs achieved by our team and service providers on this program.

Guidance Update

With Westgate's entry into the Cold Lake Oilsands Area, the Company will pause its previously budgeted capital expenditures for the fourth quarter of 2024 at Killam and shift its focus to Cold Lake. As a result of the deferral of the Q4 Killam well, the Company's new 2H/24 production is forecasted to be 250 boe/d with a December 2024 exit rate of 270 boe/d, and a 67% crude oil and liquids weighting. Current corporate production is 320 boe/d with a 68% crude oil and liquids weighting.

Q4 will be spent on designing and planning our first drilling program in the New Core Area. The Company anticipates providing an updated 2025 capital budget in the near term.

Westgate's Strategy

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.

For more information, please visit www.westgateenergy.ca.

Abbreviations

bbl                   barrel of oil
boe                  barrel of oil equivalent
boe/d               barrel of oil equivalent per day
Mcf                  thousand cubic feet

Reader Advisories

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

Oil and Gas Advisories

Barrels of Oil Equivalent

Boe may be misleading, particularly if used in isolation. In accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities, a conversion ratio for conventional natural gas of 6 Mcf:1 bbl has been used, which is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In addition, utilizing a conversion on a 6 Mcf:1 bbl basis may be misleading as an indicator of value as the value ratio between conventional natural gas and heavy crude oil, based on the current prices of natural gas and crude oil, differ significantly from the energy equivalency of 6 Mcf:1 bbl.

Oil and Gas Metrics

This press release contains metrics commonly used in the oil and gas industry, including "D&C Costs" and "Capital Efficiency". These metrics have been prepared by management and do not have standardized meanings or standardized methods of calculation, and therefore such measures may not be comparable to similar measures presented by other companies and should not be used to make comparisons. Such measures are not reliable indicators of the future performance of the Company, and future performance may not compare to the performance in prior periods, and therefore such metrics should not be unduly relied upon. The Company uses these oil and gas metrics for its own performance measurements and to provide shareholders with measures to compare the Company's operations over time. "D&C Costs" includes all capital spent to drill and complete a well and "Capital Efficiency" is calculated by dividing D&C Costs by the applicable production expressed in $/boe/d.

Drilling Locations

Unbooked drilling locations are the internal estimates of Westgate based on the acquired assets prospective acreage and an assumption as to the number of wells that can be drilled per section based on industry practice and internal review. Unbooked locations do not have attributed reserves or resources (including contingent and prospective). Unbooked locations have been identified by the Company's management as an estimation of the Company's multi-year drilling activities based on evaluation of applicable geologic, seismic, engineering, production and reserves information. There is no certainty that Westgate will drill all unbooked drilling locations and if drilled there is no certainty that such locations will result in additional oil and natural gas reserves, resources or production. The drilling locations on which the Company will actually drill wells, including the number and timing thereof is ultimately dependent upon the availability of funding, regulatory approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results, additional reservoir information that is obtained and other factors. While a certain number of the unbooked drilling locations have been de-risked by Westgate drilling existing wells in relative close proximity to such unbooked drilling locations, the majority of other unbooked drilling locations are farther away from existing wells where management of Westgate has less information about the characteristics of the reservoir and therefore there is more uncertainty whether wells will be drilled in such locations and if drilled there is more uncertainty that such wells will result in additional oil and gas reserves, resources or production.

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, the drilling locations at Cold Lake, the resumption of the planned 1-well Q4 program at Killam, the drilling and spudding of wells and timing thereof, the expected 2H/24 production, the expected announcement of initial production results and timing thereof, the business and growth prospects of Westgate, 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 the two well program at Cold Lake and production therefrom, the expected time to drill, complete, equip and tie-in each of the two planned wells, 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 the time to drill the two planned wells and bring 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.