• Binding agreement to acquire 100% of Blackspur Oil Corp (“Blackspur”), a western Canadian conventional oil-weighted energy producer.
• Consideration of C$17 million; comprised C$12.1 million in Calima shares and a cash payment of up to C$4.9 million; plus contingent consideration tied to net debt adjustments at closing (A$1:C$).
• Focused High Quality Asset Base: Blackspur’s operations include high quality, producing assets in Alberta Canada with an oil weighted reserve base:

Net Reserves:

• 5.4 MMboe Proved Developed Producing (PDP)
• 16.7 MMboe Total Proved (1P)
• 22.5 MMboe Total Proved and Probable (2P)
• 2020 Q4 average production: ~2,600 boe/d
• Average 2021 forecast production: ~3,000 boe/d (65% oil)
• Estimated Dec 2021 production: ~3,400 boe/d (65% oil)
• Low-cost production: US$26/bbl WTI break-even cost

Substantial Growth Upside:

• Planned organic growth to over 5,500 boe/d by drilling 24 low risk proven undeveloped (PUD) wells by year end 20223.
• In Q3 2018, Blackspur averaged production of 4,400 boe/d and peaked over 5,000 boe/d.
• Large drilling inventory with greater than 60 booked PUD locations
• Significant Historical Investment: C$200 million invested in Blackspur assets over the last 7 years.
• Leveraged to Oil & Gas Price Recovery: The Blackspur low-cost oil producing assets will give the larger Company a recurring cash flow stream and exposure to improving oil prices, while the significant resource base of the Calima Lands in the Montney gives upside to both improving oil and gas prices and LNG development in Canada.

Calima Energy has entered into a binding agreement to acquire 100% of the issued share capital of Blackspur Oil Corp., a privately held Canadian company which owns producing oil and natural gas assets in two core areas within Alberta, at Brooks and Thorsby.

Blackspur’s operations include two high quality assets with 2P reserves of 22.5 MMboe, 1P reserves of 16.7 MMboe and PDP reserves of 5.4 MMboe. Q4 2020 production average of 2,600 boe/d (70% oil).

The successful merger with Blackspur will transform Calima to a high margin oil & gas producer leveraged to WTI pricing targeting > 5,500 boe/d by December 2022 plus exposure to rising natural gas prices via its strategic holdings in the Montney Formation.

The deal is valued at C$60,000,000 (inclusive of C$43,000,000 in debt) plus working capital adjustments and includes all assets, reserves, production and the management team of Blackspur.

• High Quality Management Team: Management and operations led by Jordan Kevol, as CEO and Director supported by Blackspur and Calima management.
• Liquidity and Financing: Calima to undertake a capital raising of no less than A$34 million to fund the acquisition, reduce Blackspur indebtedness, provide working capital and cover transaction costs.
• Environmental Technology: Existing investment by Blackspur in regenerative, proprietary H2S removal technology will also position Calima with the ability to lower its CO2 emission rates versus peers and offers a number of positive economic & environmental benefits vs. traditional technology.
• Board & Shareholder support: The respective boards and major shareholders of Calima and Blackspur have approved the transaction with the deal expected to close in April 2021.

Over the past 7 years, Blackspur has invested over C$200 million acquiring and developing its assets while creating inventory and infrastructure to accommodate growth to over 10,000 boe/d. Calima and Blackspur will combine management teams in Canada and Jordan Kevol will become CEO and President of Calima.

Glenn Whiddon, Calima’s Chairman Comments:
“The merger with Blackspur creates an emerging oil and gas producer with production and current operating cashflow of ~C$1.8million/mth in addition to a substantial reserve and resource base for future growth. At US$50 WTI the growth model is self-funding (including debt repayments) on the path to 5,500 boe/d and operating cashflow of ~C$3.5 million/mth. The Montney acreage offers material upside exposure to rising gas prices from the growth of the LNG industry in Canada and North American demand. We look forward to combining with the Blackspur team and growing the Company for all shareholders going forward.”

Jordan Kevol, CEO of the combined Company states:
“Blackspur is excited to be merging with Calima as it provides all shareholders an opportunity to unlock value in the Blackspur assets, as well as future growth within the Western Canadian Sedimentary Basin. The growth opportunity from a cashflow perspective enables Blackspur to leverage its position to grow production organically and through acquisitions within a top tier country. Post-merger, Blackspur’s strong balance sheet and asset base, along with a low environment liability (ARO), will be an ideal combination to take advantage of current market conditions.”

KeyFacts Energy: Calima Energy Canada Onshore country profile