RUBELLITE ENERGY CORP. REPORTS RECORD PRODUCTION AND ADJUSTED FUNDS FLOW PER SHARE IN SECOND QUARTER 2025 FINANCIAL AND OPERATING RESULTS

CALGARY, AB, Aug. 5, 2025 /CNW/ – (TSX:RBY) – Rubellite Energy Corp. (“Rubellite” or the “Company”), is pleased to report its second quarter 2025 financial and operating results and provide an operations and guidance update.

Select financial and operational information is outlined below and should be read in conjunction with Rubellite’s unaudited condensed consolidated interim financial statements and related Management’s Discussion and Analysis (“MD&A”) for the three and six months ended June 30, 2025, which are available on the Company’s website at www.rubelliteenergy.com and SEDAR+ at www.sedarplus.ca.

This news release contains certain specified financial measures that are not recognized by GAAP and used by management to evaluate the performance of the Company and its business. Since certain specified financial measures may not have a standardized meaning, securities regulations require that specified financial measures are clearly defined, qualified and, where required, reconciled with their nearest GAAP measure. See “Non GAAP and Other Financial Measures” in this news release and in the MD&A for further information on the definition, calculation and reconciliation of these measures. This news release also contains forward-looking information. See “Forward-Looking Information”. Readers are also referred to the other information under the “Advisories” section in this news release for additional information.

SECOND QUARTER 2025 HIGHLIGHTS

• Rubellite delivered record second quarter conventional heavy oil sales production of 8,637 bbl/d that exceeded the high end of guidance and was up 4% relative to the first quarter of 2025 (Q1 2025 – 8,339 bbl/d) and 92% relative to the second quarter of 2024 (Q2 2024 – 4,503 bbl/d). Second quarter total sales production of 12,425 boe/d (72% heavy oil and NGL) also exceeded the high end of guidance. Production growth quarter over quarter was driven by the successful drilling programs at Figure Lake and Frog Lake which brought eleven (10.0 net) new wells on production during the second quarter of 2025. The Figure Lake gas plant that commenced operations on January 23, 2025, added an average of 3.0 MMcf/d of solution gas sales plus associated liquids (17 boe/d) in the second quarter of 2025.
• Exploration and development capital expenditures⁽¹⁾ totaled $23.8 million for the second quarter of 2025, to drill, complete, equip and tie-in five (5.0 net) multi-lateral horizontal development wells at Figure Lake and six (4.0 net) multi-lateral horizontal development wells at Frog Lake. Included in second quarter development capital spending was $0.7 million for the Figure Lake gas conservation project and the expansion of the gas gathering system.
• Land and other spending totaled $7.3 million in the second quarter of 2025 and included $0.5 million of spending on seismic purchases (Q2 2024 – nominal). An additional $0.1 million (Q2 2024 – nominal) was spent on decommissioning, abandonment and reclamation activities.
• Adjusted funds flow⁽¹⁾ in the second quarter of 2025 was $37.3 million ($0.40 per share), up 81% (21% per share) from the second quarter of 2024 (Q2 2024 – $20.7 million or $0.33 per share).
• Cash costs⁽¹⁾ were $20.7 million or $18.26/boe in the second quarter of 2025, down 19% on a per boe basis from the second quarter of 2024 (Q2 2024 – $9.3 million or $22.58/boe).
• Net income was $16.1 million ($0.17 per share) in the second quarter of 2025 (Q2 2024 – $12.4 million net income and $0.20 per share).
• As at June 30, 2025, net debt⁽¹⁾ was $142.4 million, down 8% with the reduction of $11.7 million from $154.0 million as at December 31, 2024 driven by positive free funds flow⁽¹⁾ of $17.1 million in the first half of 2025 which was used to reduce net debt and other balance sheet obligations.
• Rubellite had available liquidity⁽¹⁾ at June 30, 2025 of $32.4 million, comprised of the $140.0 million borrowing limit of Rubellite’s first lien credit facility, less current bank borrowings of $106.2 million and outstanding letters of credit of $1.4 million.

OPERATIONS UPDATE

Greater Figure Lake (Figure Lake and Edwand)

Heavy oil sales production from the Greater Figure Lake area averaged 5,544 bbl/d for the second quarter as compared to 5,326 bbl/d for the first quarter of 2025, an increase of 4%. Solution gas sales contributed 3.0 MMcf/d plus associated natural gas liquids of 17 boe/d which brought total sales production at Figure Lake for the second quarter to 6,064 boe/d (92% oil and liquids). Rubellite is currently expanding the Figure Lake 1-13 Gas Plant to manage additional associated solution gas volumes and increase total throughput capacity to approximately 5.9 to 6.4 MMcf/d. Completion of the expansion is expected in August 2025. 

During the second quarter of 2025, Rubellite drilled and rig released three (3.0 net) development horizontal wells in the Greater Figure Lake area, all targeting the Wabiskaw Member of the Clearwater Formation, with 33 meter inter-leg spacing and typical 15,000m open hole length per the Figure Lake well design adopted in the latter half of 2024. Results from the 2025 development capital program to date across the Greater Figure Lake field have achieved an average⁽¹⁾ IP30 of 271 bbl/d (7 wells) and IP60 of 267 bbl/d (5 wells), as compared to the McDaniel Tier 1 Type Curve⁽²⁾ rates for 33 meter inter-leg spacing of 177 bbl/d (IP30) and 169 bbl/d⁽²⁾ (IP60).

In addition to development drilling, two (2.0 net) step-out delineation wells were drilled in the Greater Figure Lake area with 50m inter-leg spacing and ~10,000m open hole length, to test and confirm productivity from two new pools in the Wabiskaw Member. The first well, 00/01-14-062-18W4 (“1-14 Well”), encountered the down dip limit of the first pool, yielding lower oil saturations and higher water cuts than averaged elsewhere in the field. The second well, 00/04-32-060-17W4 (“4-32 Well”) has fully recovered load oil, and with early Initial Production (IP15) of 58 bbl/d is within the range of expected outcomes supporting further development of the pool in accordance with the geological model established for the field.

Rubellite is actively advancing several opportunities to increase the economic recovery factor for heavy oil at Figure Lake beyond the average anticipated primary recovery factor of approximately 4.0 to 5.5 percent of the original oil in place.

A waterflood pilot is currently planned for the fourth quarter of 2025 from a surface location at 9-35-63-18W4 (the “9-35 Pad”). The waterflood pilot pattern will consist of a single horizontal multi-lat well with two sets of four legs each (8 legs in total), with ~150 meters between the four-leg sets. Each 4-leg set will be drilled with 33 meter inter-leg spacing, and the waterflood producer well will have a planned total open hole length for the 8 legs of approximately 10,000 meters. A separate single leg water injection well will be drilled along the center line between the two 4-leg sets, and water injection is expected to commence in early 2026.

The Company is also advancing a novel natural gas-based re-injection pilot at Figure Lake for enhanced oil recovery, with an experimental well now configured at the 01-13-063-18W4 pad (the “1-13 Pad”), on the same site as the Figure Lake 1-13 Gas Plant. Results from the waterflood pilot and gas re-injection experiment will inform future development patterns and enhanced oil recovery techniques to be implemented across the Greater Figure Lake area.

Rubellite will also test larger diameter (200mm) boreholes at the 9-35 Pad in the third quarter of 2025 to determine if incremental economic returns associated with improved inflow and productivity can be realized relative to the robust economics established for the existing 159mm boreholes drilled to date at Figure Lake.

3D seismic acquired in the first quarter of 2025, imaging the northern end of Figure Lake, has now been interpreted and a Sparky exploration well is planned to be drilled in the first quarter of 2026. Separate detailed mapping work has identified an Upper Clearwater prospect in the southern part of the greater Figure Lake area. If associated exploration wells are successful, there are approximately 15.0 net follow-up Sparky locations and up to 10.0 net follow-up Upper Clearwater locations, all of which would be incremental to the existing Clearwater development inventory and secondary targets inventory at Figure Lake.

Consistent production results continue to support the geologic model at Figure Lake and affirm the 243.0 net development drilling inventory locations⁽³⁾ in the Wabiskaw, including 96.2 net proven and probable undeveloped⁽²⁾⁽³⁾ booked locations. Under a one-rig program, which would provide for the drilling of 18 wells per year at Figure Lake, the Clearwater location count at Figure Lake represents over 13 years of low-risk development drilling inventory. 

Frog Lake

Production at the Frog Lake property grew 5% to average 2,539 bbl/d (100% heavy oil) for the second quarter, as compared to 2,423 bbl/d (100% heavy oil) for the first quarter of 2025.

Results from the 2025 capital drilling program to date at Frog Lake (all wells drilled using an oil-based mud (“OBM”) drilling system and targeting the north Waseca sand) achieved an average⁽¹⁾ IP30 and IP60 of 140 bbl/d (9 wells) and 128 bbl/d (7 wells) respectively, as compared to the McDaniel Waseca North Type Curve⁽²⁾ IP30 and IP60 of 107 bbl/d and 104 bbl/d established by McDaniel at year-end 2024 using historical data obtained from wells drilled with water-based mud systems.

Rubellite switched its drilling operations at Frog Lake in December 2024 to utilize OBM. The OBM trial at Frog Lake has confirmed the benefits of using OBM fluid consistent with Rubellite’s operations at Figure Lake, where the use of OBM has improved hole cleaning and stability, accelerated the time to stabilized reservoir production, and reduced drill pipe wear, water handling and disposal costs as compared to conventional water-based mud systems. The Company is continuing to utilize OBM in its ongoing drilling operations at Frog Lake as it evaluates the effects on long term production performance in different parts of the Waseca reservoir across the Frog Lake field.

In addition to continued drilling of the Waseca sand as the primary development zone at Frog Lake, the Company is planning two exploration wells in the third quarter of 2025, targeting the General Petroleum (“GP”) sand.  The first well will be drilled using a single leg lined horizontal lateral design and the second well will be drilled using an alternative lined “fish bone” well design. Learnings from these two wells will confirm type curve assumptions, and inform mapping parameters, appropriate geological cutoffs, and the future well design for optimum economic development of both the GP and Sparky sands in the Mannville Stack at Frog Lake.

Marten Hills

The Company commenced a “bottoms up” waterflood at Marten Hills during the second quarter of 2025, with water injection initiated at its first injection well in April. Value is expected to be realized through reduced water handling costs, reduced production declines and enhanced reserve recoveries.

East Edson

Non-operated drilling planned at East Edson for late in the second quarter was delayed due to wet weather, shifting $3.0 million of capital from Q2 to Q3.  Subsequent to the end of the second quarter, the first of four gross (2.0 net) wells was spud in early July, and drilling of the second well is now underway.

A turnaround lasting 5.5 days was completed in June 2025 at the Company’s primary gas processing facility at East Edson, reducing average sales by 77 boe/d during the second quarter.

Other Exploration

In addition to exploration activities in the General Petroleum and Sparky zones at Frog Lake and the Sparky prospect at Figure Lake, the Company is continuing to advance multiple additional new venture exploration prospects, pursuing both land capture and play concept de-risking activities while minimizing its risked capital exposure. A total of $3.4 million was invested in the second quarter of 2025 to acquire mineral rights and seismic for exploratory prospects that are expected to be evaluated in 2026.

OUTLOOK AND GUIDANCE

For the second half of 2025, Rubellite has budgeted to spend a total of $54.0 to $64.0 million on its exploration and development drilling program, excluding expenditures on land and abandonment and reclamation activities, bringing the total for the year to a range of $100 to $110 million which compares to previous guidance of $95 to $110 million.

The increase in the low end of the guidance range reflects the following drilling program changes:

At Figure Lake:

• One (1.0 net) Clearwater waterflood injection well  is now planned;
• Offset somewhat by lower per well costs forecast on the eleven (11.0 net) wells scheduled for H2/25.

At Frog Lake:

• Four Waseca wells are now forecast to be at 100% working interest as Frog Lake Energy Resources Corp. (“FLERC”) has elected to be in a gross overriding royalty position on these wells;
• A second 100% working interest exploratory GP well is now planned;
• Offset by one (0.5 net) fewer Waseca development well now planned for H2/25.

Planned capital activity in the second half of 2025 includes:

At Figure Lake:

• Drilling ten (10.0 net) multi-lateral development wells;
• Drilling and equipping one (1.0 net) waterflood injection well;
• Spending to cut a core and conduct several lab experiments to progress enhanced oil recovery technology ideas; and
• Capital to expand the Figure Lake gas conservation project, including additional plant optimization and pipeline tie-ins.

At Frog Lake:

• Drilling eleven (7.0 net) Waseca multi-lateral development wells; and
• Drilling one single leg lined lateral well and one lined fish bone well (1.5 net wells) to evaluate the exploratory General Petroleum zone in the Mannville Stack.

At East Edson, participation in the drilling of four (2.0 net) Wilrich development wells.

Additional spending is planned to continue to advance the evaluation of several heavy oil exploration prospects, to increase gas conservation and usage at Ukalta, and to advance enhanced oil recovery in other areas.

With the ongoing volatility in oil prices, the Company is currently planning to maintain its one rig drilling program at each of Figure Lake and Frog Lake for the second half of 2025. The Company will continue to strive for meaningful per well capital cost reductions to maintain attractive rates of return and payout periods, and will manage its capital spending to prioritize free funds flow generation over production growth in this current weaker oil price environment.

Heavy oil sales volumes based on the current budget are expected to grow 44% to 48% year-over-year to average between 8,200 – 8,400 bbl/d in 2025, unchanged from previous guidance. Total production sales volumes, including natural gas and NGL volumes at East Edson and solution gas sales at Figure Lake, are forecast to average 12,200 – 12,400 boe/d in 2025, unchanged from previous guidance.

Capital spending activity will be funded from adjusted funds flow⁽¹⁾, with excess free funds flow⁽¹⁾ applied to reduce net debt⁽¹⁾ and other balance sheet obligations. Aided by Rubellite’s extensive commodity price risk management positions, the Company continues to forecast strong adjusted funds flow and free funds flow through the third quarter of 2025 based on the forward market for commodity prices as at August 5, 2025.

Rubellite’s Clearwater production continues to realize an attractive offset to WCS benchmark pricing, resulting in an improvement in our heavy oil wellhead differential guidance to a range of $4.00 to $4.50 per barrel vs $5.00 to $5.50 per barrel previously.  Additionally, initiatives to improve field operating costs have improved our operating cost guidance to a range of $6.50 to $7.25 per boe versus $7.00 to $7.75 per boe previously.

Rubellite will continue to address end of life ARO, with total abandonment and reclamation expenditures of approximately $0.8 million planned for the second half of 2025. In combination with the $0.9 million of asset retirement obligation spending in the first half of the year, the Company is on track to exceed its area-based mandatory spending requirement for 2025 of $1.7 million, as calculated by the Alberta Energy Regulator (“AER”).

Capital spending and drilling activity for 2025 is summarized in the table below:

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