FIDDLEHEAD RESOURCES ANNOUNCES AMENDED CREDIT AGREEMENT, FERRIER ADJUSTED PURCHASE PRICE REDUCTION AND CYNTHIA ACQUISITION UPDATE

FIDDLEHEAD RESOURCES ANNOUNCES AMENDED CREDIT AGREEMENT, FERRIER ADJUSTED PURCHASE PRICE REDUCTION AND CYNTHIA ACQUISITION UPDATE

CALGARY, AB, June 26, 2025 /CNW/ - Fiddlehead Resources Corp. ("Fiddlehead" or the "Company") (TSXV: FHR), is pleased to announce the amendment and extension of its existing credit agreement with its current lender. The credit agreement has been amended, effective June 24, 2025, to refinance the current outstanding debt of C$12.6 million, previously set to mature November 30, 2025 for a term of eighteen months, with monthly interest payments and no fixed required amortization or principal repayment. In conjunction with the refinancing, Fiddlehead has paid a refinancing fee to its lender totalling C$200,000 from the issuance of one million shares to the lender valued at C$0.20 per share.

Fiddlehead has also reached an agreement with the vendor of the Ferrier/South Strachan Asset, resulting in the elimination of the deferred consideration to the vendor of C$1.25 million and contingent consideration totalling C$2.25 million previously announced, due on December 31, 2025 and January 31, 2026, respectively. The elimination of the deferred and contingent consideration represent a significant reduction in current liabilities for the Company.

On April 10^th, 2025 Fiddlehead announced a strategic acquisisiton of a private central Alberta producer ("PrivateCo") in the Cynthia area of Alberta ("Cynthia Transaction"). Recognizing the material improvements to the Company's financial position as a result of this debt refinancing and elimination of current liabilities, Fiddlehead is now focused on closing the previously announced acquisition of the PrivateCo (See press release dated April 10, 2025). The Company continues to work closley with Research Capital Corp. ("RCC") as its financial advisor to complete the previously announced Cynthia Transaction.

Acquisition Highlights – Producing Assets near Cynthia, Alberta ("Cynthia Assets")

• The Cynthia Assets are located near Fiddlehead's existing assets, comprising 100% working interest in 42 wells with strong liability management rating (LMR) of approximately 6.0x.
• Production from the Cynthia Assets is expected to be approximately 2,238 boe/d at closing, with an expected decline rate of 15% per year.
• Incremental proved developed producing (PDP) reserves of 5.4 million boe, valued at an NPV10% of $56.0 million.ⁱ
• Identified development opportunities on Cynthia Assets of 9 recompletion candidates and 7 identified unbooked drilling locations providing additional upside optionality.

Attractive Acquisition Metrics

The following table summarizes the expected operating and financial performance of the Cynthia Assets anticipated to be acquired by the Company for the Next Twelve Months ("NTM").

Strategic Rationale and Benefits to Fiddlehead Shareholders

• Transformative Growth with Fully Funded, Non-Dilutive Financing, Executing on Acquisition Strategy: Accelerating Fiddlehead's disciplined growth strategy by securing a high-margin, low-decline asset base with low-risk, high-impact development opportunities and exploration upside. Structured to optimize value, the debt financing reinforces Fiddlehead's commitment to sustainable, long-term value creation while continuing to pursue a pipeline of accretive acquisition opportunities in the Western Canadian Sedimentary Basin.
• Significantly Increases Production and Reserves^v: The Transaction is expected to result in a greater than two times increase in production and increasing PDP NPV10% reserves by $56.0 million for a pro forma aggregate of $80.2 million at closing.
• Incremental Development Upside^vi: 50+ identified development well drilling locations from existing acreage, many on existing well pads in defined Cardium fairway and incremental opportunities from the inventory of PrivateCo. The development plan targets a multi-well drilling campaign for 2 Cardium horizontal wells per year.
• Strong Cash Flow and Leverage Profile^vii: Increasing oil and liquids weighting to 44%, before drilling additions, drives cash flow from low decline production (15% pro forma corporate decline rate). Upon closing of the Transaction, net debt to EBITDA of 1.90x strengthens to 1.66x by exit 2026.
• Accretive Acquisition^viii: Attractive acquisition metrics of 2.1x NTM net operating income (NOI) and 0.37x PDP NPV10% before tax reserve value, providing accretion to Fiddlehead shareholders on a per-share basis, and increasing projected NTM NOI per share by 54%

Details on Amendment and Extension of its Existing Credit Agreement

The Company can repay all or part of the refinanced facility at any time without penalty. The annual interest rate for the period July 1, 2025 to November 30, 2025 is 12%. For the period December 1, 2025 to April 30, 2026, the annual interest rate will be 15%. For the period May 1, 2026 to maturity (December 31, 2026), the annual interest rate will be 18%.

2025 Guidance

Following closing of the Transaction, Fiddlehead anticipates providing guidance for full year 2025. The guidance will include a full update incorporating the PrivateCo's Cynthia Assets acquired, as well as an update on Fiddlehead's current asset base.

READER ADVISORIES

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.

Non-GAAP and Other Financial Measures

Throughout this document and other materials disclosed by the Company, Fiddlehead uses certain measures to analyze financial performance, financial position, and cash flow. These non-GAAP and other financial measures do not have any standardized meaning prescribed under GAAP and therefore may not be comparable to similar measures presented by other entities. The non-GAAP and other financial measures should not be considered alternatives to, or more meaningful than, financial measures that are determined in accordance with GAAP as indicators of the Company performance. Management believes that the presentation of these non-GAAP and other financial measures provides useful information to shareholders and investors in understanding and evaluating the Company's ongoing operating performance, and the measures provide increased transparency and the ability to better analyze Fiddlehead's business performance against prior periods on a comparable basis.

EBITDA

EBITDA is calculated by the Company as adjusted funds flow before interest expense. When this measure is presented quarterly, EBITDA is annualized by multiplying by four. When this measure is presented on a trailing twelve-month basis, EBITDA for the twelve months preceding the net debt date is used in the calculation. This measure is consistent with the EBITDA formula prescribed under the Company's Senior Credit Facility.

Net Operating Income

Fiddlehead uses "net operating income" as one key performance indicator. Operating income is calculated by the Company as oil and natural gas sales less royalties, operating expenses and transportation expenses and is a measure of the profitability of operations before administrative, share-based compensation, financing and other non-cash items. Management considers operating income an important measure to evaluate its operational performance as it demonstrates its field level profitability. Operating income should not be considered as an alternative to or more meaningful than net income as determined in accordance with GAAP as an indicator of the Company's performance.

Net Debt

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

Net Debt to EBITDA

Management considers Net Debt to EBITDA an important measure as it is a key metric to identify the Company's ability to fund financing expenses, net debt reductions, and other obligations. Net Debt to EBITDA is calculated as Net Debt divided by EBITDA.

Risk Factors to Forward Looking Information ("FLI")

Risk factors that could materially impact successful execution and actual results of the Company's 2025 and 2026 capital program and associated estimates include, but not limited to:

• the risk that the U.S. government imposes tariffs on Canadian goods, including crude oil and natural gas, and that such tariffs (and/or the Canadian government's response to such tariffs) adversely affect the demand and/or market price for the Company's products and/or otherwise adversely affects the Company.
• volatility of petroleum and natural gas prices and inherent difficulty in the accuracy of predictions related thereto.
• the extent of any unfavourable impacts of wildfires in the province of Alberta.
• that the completion of the Cynthia Transaction and debt arrangements is subject to a number of conditions which are typical for transactions of this nature however that failure to satisfy any of these conditions may result in the termination of the Cynthia Transaction.
• AER deposit requirements and transfers, as applicable.
• changes in Federal and Provincial regulations.
• the Company's ability to secure financing for the Company to execute a capital program and longer-term capital plans sourced from Adjusted Funds Flow, bank or other debt instruments, asset sales, equity issuance, infrastructure financing or some combination thereof.

The Company has relied upon certain third-party reports, including reserves evaluations and technical assessments prepared by independent experts, in connection with the evaluation and disclosure of the transaction. While the Company believes such sources to be reliable, there is no assurance that the estimates or assumptions contained in such reports will prove to be accurate. Actual results may differ materially from those anticipated due to various risks and uncertainties.

Please refer to the Company's MD&A for the first quarter 2025 and the 2024 Annual Information Form ("AIF") for discussion of additional risk factors relating to the Company, which can be accessed under the Company's SEDAR+ profile on www.sedarplus.ca. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date hereof, and to not use such forward-looking information for anything other than its intended purpose. The Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.

Future-Oriented Financial Information

This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about the Company's and the counterparties prospective results of operations and production, budgets, expenditures and guidance and components thereof, 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 document was approved by management as of the date of this document and was provided for the purpose of providing further information about the Company's future business operations. The Company and its management believe that FOFI has been prepared on a reasonable basis, reflecting management's best estimates and judgments, and represent, to the best of management's knowledge and opinion, the Company's expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results. The Company disclaims any intention or obligation to update or revise any FOFI contained in this document, 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 document 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 measures included in the Company's guidance. The Company's actual results may differ materially from these estimates.

Oil and Gas Measures and Metrics

The Company uses the following metrics in assessing its performance and comparing itself to other companies in the oil and gas industry. These terms do not have a standardized meaning and therefore may not be comparable with the calculation of similar measures by other companies:

Corporate decline ("Decline") is the rate at which production from a grouping of assets falls from the beginning of a fiscal year to the end of that year.

Analogous Information

Certain information in this press release may constitute "analogous information" as defined in NI 51-101, including but not limited to, information relating to the areas in geographical proximity to lands that are or may be held by Fiddlehead. Such information has been obtained from government sources, regulatory agencies, or other industry participants. Fiddlehead believes the information is relevant as it helps to define the reservoir characteristics in which Fiddlehead may hold an interest; however, Fiddlehead is unable to confirm that the analogous information was prepared by a qualified reserves evaluator or auditor. Such information is not an estimate of the reserves or resources attributable to lands held or potentially to be held by Fiddlehead and there is no certainty that the reservoir data and economics information for the lands held or potentially to be held by Fiddlehead will be similar to the information presented herein. The reader is cautioned that the data relied upon by Fiddlehead may be in error and/or may not be analogous to such lands to be held by Fiddlehead.

Net Present Value (NPV) Estimates

It should not be assumed that the net present value of the estimated future net revenues of the reserves of Fiddlehead and/or the acquired assets of PrivateCo included in this press release represent the fair market value of the reserves. There is no assurance that the forecast prices and cost assumptions will be attained, and variances could be material. NPV10 BT represents NPV10 before tax where NPV10 represents the anticipated net present value of the future net revenue discounted at an annual rate of 10%. PDP NPV10 represents the anticipated net present value of the proved developed producing reserves discounted at an annual rate of 10%.

BOE Equivalent

Barrel of oil equivalents or BOEs 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. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different than the energy equivalency of 6:1, utilizing a 6:1 conversion basis may be misleading as an indication of value.

Abbreviations

SOURCE Fiddlehead Resources Corp.