• Saturn has tied-in nine horizontal wells drilled since spring break up increasing production to 12,000 boe/d[1]
• $8 million of environmental remediation expenditures have been deployed of total 2022 budget of $14 million[2]
• Dr. Thomas Gutschlag and Mr. Grant MacKenzie are new nominees for election to the board of directors
Saturn Oil & Gas Inc. is committed to leading environment, social and governance ("ESG") policies and procedures in its operations and is pleased to announce that the Company has reached the midpoint of its 2022 Land Reclamation Program (the "LRP") and successful progress in our 2022 drilling program.
Operations Update
Saturn is pleased to announce that since spring breakup concluded, the Company has drilled and rig released 20 horizontal wells, of which nine have been recently placed onto production, seven are imminent to be put into production and four are currently being completed.
"Saturn is now well into its H2 2022 capital expenditure program, which is budgeted for the drilling of 50 horizontal wells, which comparatively is a greater number of wells than Saturn has drilled in its previous history as an oil and gas producer," stated Jordan Meyer, Saturn's Vice President Engineering. "We are pleased with the operational results to date and our continued production growth and we look forward to executing on a very active drilling program for the remainder of the year."
Saturn expects to release a more detailed operational update in mid September when sufficient data is available for IP30 results on the new drilled wells. The successful drilling results to date and the increased production to approximately 12,000 boe/d, based on field estimates, are encouraging and the Company remains on track to reach stated guidance of 12,500 boe/d average production for Q4 2022.
Land Reclamation Program Update
The LRP was initiated in December 2021 with the goal of returning land previously leased for oil and gas production to landowners in pristine condition. Saturn is currently operating three service rigs full time to the remediation of uneconomic wells, and to date:
• 63 wells have been fully abandoned, cut and capped;
• 11 additional wells have been abandoned downhole, awaiting to be cut and capped;
• 32 flow lines have been abandoned;
• 41 additional flow lines are now discontinued; and
• Over 30 local service providers have been contracted under the LRP.
The Company is conducting ongoing activities for surface remediation including Electro-Magnetic Surveys, Gas Migration Testing, Surface Casing Vent Flow Assessment, and civil works towards full land reclamation and return to landowners.
Saturn expects up to 90 additional wells to be fully abandoned, cut and capped for the remainder of the year along with 50 additional flow lines to be abandoned.
The LRP is an important program towards the environmental remediation of legacy operational areas and offers economic support to local business and indigenous communities. Remediation activities also provide valuable salvaged wellheads, downhole equipment, steel tubing and other materials for reuse which lowers Saturn's ongoing operating and drilling costs. The progress of the LRP contributes to the elimination of certain abandonment and reclamation obligations ("ARO"), improving balance sheet strength, reducing Company liabilities. Reducing ARO further contributes to increasing the net present value of future net revenue as determined by independent reserves evaluation of the Company's crude oil and natural gas assets.
First Nations Partners and Funding of the Land Reclamation Program
The majority of Saturn's LRP activities are funded through $12.6 million awarded under the Accelerated Site Closure Program ("ASCP") from the Saskatchewan provincial and the Canadian federal governments. Saturn has engaged the Onion Lake and Whitebear First Nations and through the employment of eligible indigenous service companies and has been approved for $1.5 million through the Indigenous Business Credit Pool ("IBCP") and the First Nations Stewardship Fund ("FNSF").
Board Nominations
Saturn is pleased to announce the following individuals have been nominated for election to the Company's board of directors at the upcoming AGM of the Company scheduled for September 15, 2022:
• Dr. Thomas Gutschlag - currently the Chairman of Deutsche Rohstoff AG ("DRAG"), a public company listed on the Frankfurt Stock Exchange which identifies, and develops resource projects globally, with a focus on oil and gas development in the United States. Dr. Gutschlag cofounded DRAG in 2006, was its Chief Financial Officer from 2007 to 2015 and was its Chief Executive Officer from 2015 to 2022. Dr. Gutschlag is a qualified economist with a degree in economics from the University of Heidelberg and a doctorate from the University of Mannheim.
• Mr. Grant MacKenzie - a partner at Dentons Canada LLP, the worlds largest law firm, and is the corporate co-lead of Dentons' Calgary office. He has over 20 years experience advising private and public companies in capital markets, mergers and acquisitions, start-ups, public offerings and stock exchange compliance advice. Mr. MacKenzie has extensive experience advising boards and management teams on matters concerning shareholder activism, corporate governance and TSX and TSX Venture Exchange listing matters. Mr. MacKenzie has been corporate secretary for Saturn since February, 2022.
Mr. Calvin Payne will not be standing for renomination to the Company's board of directors at the upcoming AGM. Mr. Payne has been a valuable advisor to the Company since his election to the board of directors in August 2017. The Company wishes Mr. Payne an active and enjoyable retirement and thanks him for his important leadership through Saturn's development.
Current directors Messrs. John Jeffrey, Ivan Bergerman, Jim Payne and Christopher Ryan are also being renominated for election to the Company's board of directors at the upcoming AGM.
"I want to congratulate and thank the entire Saturn team for managing the tremendous growth the Company has undergone in the past 18 months. Reaching the important milestone of 12,000 boe/d and over 5,000% production growth was only possible with the commitment and hard work of our talented team of industry professionals," acknowledged John Jeffrey, Saturn's Chief Executive Officer. "I especially want to thank Calvin Payne for his five years of dedication and guidance to the Company as a director of the board, and for his valued mentorship for myself personally and for Saturn's executives."
