Highlights

• Average production for the third quarter of 2025 was 4,254 BOEPD, an increase of 40% from the third quarter of 2024 average production of 3,032 BOEPD. The increase was due to production from the wells that were drilled and completed in the first nine months of 2025
• Revenue, net of royalties was $15.0 million in the third quarter of 2025 compared to $13.0 million for the third quarter of 2024, which was an increase of 15% due to a 40% increase in production partially offset by a decrease in average prices of 18%
• Net income in the third quarter of 2025 was $3.6 million and Basic EPS was $0.10/share, compared to net income of $5.1 million and Basic EPS of $0.14/share, in the same period of 2024. Net income in the third quarter of 2025 included a $0.5 million unrealized loss on commodity contracts compared to a $1.3 million unrealized gain on commodity contracts in the third quarter of 2024. The decrease was also due to higher depreciation expense and higher operating expenses from increased production in the third quarter of 2025 which offset the increase in revenues
• Adjusted EBITDA(1) was $11.1 million in the third quarter of 2025 compared to $10.1 million in the third quarter of 2024, an increase of 9%. The increase was primarily due to an increase in revenues, partially offset by an increase in operating expenses due to the increase in production
• Production and operating expense per barrel averaged $7.37 per BOE in the third quarter of 2025 compared to $6.63 per BOE in the third quarter of 2024, an increase of 11%. The increase was due to reassessed production tax adjustments related to prior periods that were recorded in September 2025 totaling $0.3 million, or $0.80 per BOE. Excluding those costs, production and operating costs would have been $6.57 per BOE, a 1% decrease from the prior year
• Average netback from operations(2) for the third quarter of 2025 was $30.84/boe, a decrease of 23% from the prior year third quarter due to lower prices in 2025. Average netback including commodity contracts(2) for the third quarter of 2025 was $30.89 per boe, a decrease of 23% from the prior year third quarter
• In October 2025, the credit facility was redetermined with the same $65 million borrowing base. At September 30, 2025, the Company had $18.5 million of available borrowing capacity on its credit agreement.

(1) Adjusted EBITDA is considered a non-GAAP measure.
(2) Netback from operations and netback including commodity contracts are considered non-GAAP ratios. 

KEI’s President and Chief Executive Officer, Wolf Regener commented:
“We are pleased that the Company continues to increase production, revenue and adjusted EBITDA as we execute our 2025 drilling program. Our production increased by 40% during the quarter and our adjusted EBITDA increased by 9% as compared to the third quarter of 2024. Our product mix was 66% oil during the third quarter and it increased to 71% in September due to the contribution of the higher percentage oil production from the Lovina wells. We are currently in completion operations on our last four wells for 2025 which we expect will start production in December. As we shifted the completion operations of our last four wells closer to the end of the year, we expect to exit the year with production at an all-time high. These latest wells will have the biggest impact in the first quarter of 2026 by increasing production and generating continued growth for the Company.

“The Forguson 17-20-3H well (46% working interest), which was completed in the 3rd quarter of 2025 on its east side acreage, has still only recovered 4.5% of the frack fluid, with the well producing about 192 BOEPD, about 94 BOPD for the last week in October.”

Third Quarter 2025 versus Third Quarter 2024

Oil and gas gross revenues totaled $18.9 million in the third quarter of 2025 versus $16.5 million in the third quarter of 2024. Oil gross revenues totaled $16.5 million in the third quarter of 2025 versus $15.4 million in the third quarter of 2024. Oil revenues increased 7% as oil production increases of 25% were offset by average oil price decreases of 14%. Natural gas revenues increased by $0.7 million or 345% as natural gas prices increased 124% and production increased 98%. Natural gas liquids (NGLs) revenues increased by $0.6 million or 67% as NGL production increased 74% partially offset by price decreases of 4%.

Average third quarter 2025 production per day increased 1,222 BOEPD or 40% from the third quarter of 2024. The increase is due to production from the wells that were drilled and completed in the first nine months of 2025.

Production and operating expenses increased to $2.5 million in the third quarter of 2025, an increase of 64% due to higher production during the quarter. Operating expense per barrel averaged $7.37 per BOE in the third quarter of 2025 compared to $6.63 per BOE in the third quarter of 2024, an increase of 11%. The increase was due to reassessed production tax adjustments related to prior periods that were recorded in September 2025 totaling $0.3 million, or $0.80 per BOE.

General and administrative expenses increased by $0.1 million or 6% in the third quarter of 2025 due to costs related to the special shareholder meeting.

Finance income decreased by $1.3 million in the third quarter of 2025 compared to the prior year third quarter due to realized gains on commodity contracts in the third quarter of the prior year.

Finance expense increased by $0.5 million in the third quarter of 2025 due to unrealized losses on commodity contracts of $0.5 million in the third quarter of 2025.

FIRST NINE MONTHS 2025 HIGHLIGHTS

• Average production for the nine months ended September 30, 2025 was 3,851 BOEPD, an increase of 22% from the average production of 3,154 BOEPD in the same period of 2024. The increase is due to production from the wells that were drilled and completed in the first nine months of 2025
• Revenue, net of royalties was $42.1 million in the first nine months of 2025 compared to $41.2 million for the first nine months of 2023, which was an increase of 2%, as production increased by 22% partially offset by a decrease in average prices of 16%
• Net income for the first nine months of 2025 was $12.2 million and Basic EPS was $0.34/share compared to net income of $12.5 million and Basic EPS of $0.38/share for the first nine months of 2024 primarily due to an increase in depreciation expense and operating expense from the increase in production, partially offset by higher revenues
• Adjusted EBITDA(1) was $31.6 million for the nine months ended September 30, 2025 compared to $30.5 million for the comparable prior year period, an increase of 3%. The increase was due to an increase in revenue partially offset by higher operating expenses due to the increase in production
• Production and operating expense per barrel averaged $7.20 per BOE in the first nine months of 2025 compared to $7.84 per BOE for the same period of 2024, a decrease of 8%
• Average netback from operations(2) for the first nine months of 2025 was $32.86/boe, a decrease of 17% from the prior year period due to lower prices. Netback including commodity contracts(2) for the first nine months of 2025 was $32.91/boe which was 16% lower than the comparable prior year period

(1) Adjusted EBITDA is considered a non-GAAP measure. 
(2) Netback from operations and netback including commodity contracts are considered non-GAAP ratios.