Westgate Energy Inc. Closes US$25 million Senior Secured Loan

CALGARY, AB, April 3, 2025 /CNW/ - Westgate Energy Inc. (the "Company" or "Westgate") (TSXV: WGT) is pleased to announce that, further to its press release dated March 10, 2025, it has closed a first lien senior secured loan for up to US$25 million (the "Senior Secured Loan") from Cibolo Energy Partners, LLC and certain of its affiliates (collectively, "Cibolo"), a Houston‐based firm focused on energy investment opportunities. The Senior Secured Loan is a strategic and transformational transaction for Westgate that will allow the Company to fund drilling on its existing lands and on strategic Mannville Stack focused assets to potentially be acquired in East-Central Alberta near Frog Lake (the "Strategic Acquisition").

Westgate entered into a first lien senior secured credit agreement with Cibolo providing for a multi‐draw, non‐revolving term loan facility of a maximum aggregate principal amount of up to US$25.0 million. Westgate has made an initial draw of US$10.0 million. An additional US$10.0 million has been committed and remains available for draw. Additional commitments are subject to further approval by Cibolo. The Senior Secured Loan carries an interest rate due quarterly of SOFR plus 7.75%, with an SOFR floor of 4.25%, and will mature on April 3, 2029. Based on the current SOFR rate, the initial interest rate will be approximately 12.04%. The Company's wholly owned subsidiary, Westgate Energy Operations Ltd., has guaranteed the Senior Secured Loan.

In connection with the Senior Secured Loan, the Company issued Cibolo non-transferable common share purchase warrants (the "Loan Warrants") entitling Cibolo to acquire up to 24,343,659 common shares in the capital of the Company (the "Common Shares"). Each Loan Warrant will entitle Cibolo to acquire one Common Share until April 3, 2030 at an exercise price equal to C$0.21 per Common Share.

Westgate CEO Dan Brown comments:
"We are very pleased to be working with the Cibolo team. The access to capital that this loan provides, will facilitate Westgate's development of its recently acquired lands in the Mannville Stack Fairway of Eastern Alberta. We are excited to get the drill bit in the ground and begin our 2025 capital program right after spring breakup."

Upcoming Capital Program
Westgate is planning to commence a three well program in the second half of May 2025 pending the timing of spring road bans. The drilling program will consist of three horizontal wells, each targeting separate Mannville Stack horizons within the Beaverdam area near Cold Lake, Alberta. These three wells are expected to take 25-30 days in aggregate from spud to rig release and are anticipated to be on production in July.

Westgate Asset Summary
Westgate holds a total of 6 sections of undeveloped land in the Cold Lake area of Eastern Alberta.  These lands are deemed to be prospective for up to four unique geologic horizons within the Mannville Stack group of formations. Westgate has identified up to 40 potential horizontal locations that can be drilled on its land in this area, all targeting various Mannville Stack horizons.

The previously announced Strategic Acquisition will provide Westgate with 14.5 sections of mostly undeveloped land highly prospective for horizontal development within the Mannville Stack Waseca Formation. To date, Westgate has identified over 57 horizontal locations targeting the Waseca and other Mannville Stack zones that are oil prone in the area. The Strategic Acquisition is subject to certain conditions that are expected to be met in the second quarter of 2025. Subject to closing Strategic Acquisition, Westgate expects to commence a drilling program on these lands later in 2025, subject to board and lender approval. 

Oil and Gas Advisories

Drilling Inventory

Unbooked drilling locations in respect of Westgate's current assets and the Acquisition Lands (as defined herein) are the internal estimates of Westgate based on the 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.

Forward-Looking Information

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "should", "believe", "intends", "forecast", "plans", "guidance" and similar expressions are intended to identify forward-looking statements or information.

More particularly and without limitation, this document contains forward-looking statements and information relating to the anticipated use of proceeds from the Senior Secured Loan, statements related to the timing and closing of the Strategic Acquisition; the satisfaction of the conditions of the closing of the Strategic Acquisition, including the receipt, in a timely manner, of regulatory and other required approvals; the strategic rationale for the Strategic Acquisition; the performance characteristics of the Company's oil and natural gas properties; and capital expenditure programs. The forward-looking statements and information are based on certain key expectations and assumptions made by the Company, including expectations and assumptions relating to the ability of the Company to close the Strategic Acquisition, the ability of management to successfully implement and execute its business plan, prevailing commodity prices and exchange rates, applicable royalty rates and tax laws, future well production rates, the performance of existing wells, the timing and success of its future drilling plans and its ability to identify new drilling locations, the anticipated benefits of its relationships with the applicable Metis Settlements, the ability of the Company to integrate its current and proposed assets, drilling and production potential from its current and proposed assets and the Mannville Stack more generally, the availability of capital to undertake planned activities, the Company's ability to generate sufficient cash flow to meet its current and future obligations, assumptions regarding the ability to use multilateral horizontal drilling, including its expected decreased capital expenses and increased production benefits, the availability and cost of labour and services and the receipt of all necessary approvals.

Although the Company believes that the expectations reflected in such forward-looking statements and information are reasonable, it can give no assurance that such expectations will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the possible failure to realize the anticipated benefits of the Strategic Acquisition, the failure of management to successfully implement its business plan and/or the failure of such initiatives to yield the expected benefits and results, the failure of the Company to successfully implement its future drilling plans and identify new drilling locations, the accuracy of analogous information, the failure to realize the anticipated benefits of the Company's relationships with applicable Metis Settlements, the failure of the Company to successfully integrate its current and proposed assets and other risks associated with the oil and gas industry in general such as operational risks in development, exploration and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, the uncertainty of estimates and projections relating to production rates, costs and expenses, commodity price and exchange rate fluctuations, marketing and transportation, environmental risks, competition, the ability to access sufficient capital from internal and external sources and changes in tariff, tax, royalty and environmental legislation. The forward-looking statements and information contained in this document are made as of the date hereof for the purpose of providing the readers with the Company's expectations. The forward-looking statements and information may not be appropriate for other purposes. The Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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

SOURCE Westgate Energy Inc.

For further information, please contact: WESTGATE ENERGY INC., Suite 420, 2020 4th Street SW, Calgary, Alberta T2S 1W3; Mr. Nick Grafton, Chief Financial Officer, Phone: [phone]