Bonterra Balances Growth and Debt with Strong Q1 Operations

CALGARY, AB – May 15, 2026 – Bonterra Energy Corp. demonstrated a firm commitment to its growth strategy in the first quarter of 2026, posting strong operational results from its key Alberta assets that counterbalanced a net loss driven by hedging positions in a rising oil market. The Calgary-based producer announced stable funds flow of $23.5 million and reaffirmed its full-year guidance, signaling confidence that its heavy investment in the Charlie Lake and Montney plays will drive performance through the rest of the year.

The company’s Q1 results paint a picture of a producer executing a dual mandate: aggressively developing its high-potential unconventional assets while maintaining a disciplined focus on debt reduction. Despite reporting a net loss of $14.6 million for the quarter, the underlying operational metrics highlight significant progress, particularly in the Bonanza Charlie Lake asset, which is rapidly becoming the company's primary growth engine.

Alberta's Unconventional Plays Power Growth

Bonterra's strategic pivot towards its unconventional light oil plays yielded impressive results in the first three months of 2026. The Bonanza Charlie Lake asset was the standout performer, with net production surging 108% year-over-year to approximately 3,632 barrels of oil equivalent (BOE) per day. This now accounts for 23% of the company's total output, a significant increase that underscores the success of its recent drilling campaigns.

The company brought four new Charlie Lake wells online late in the quarter, with three wells in its core Bonanza development delivering a combined 30-day peak rate of 3,100 BOE per day. One of these wells achieved a standout 30-day peak rate of approximately 1,400 BOE per day, confirming the high-quality nature of the reservoir and the team's technical approach. This success builds on a strong Q4 2025 drilling program and validates the company's growing expertise in the play, which is known for its highly economic horizontal drilling potential.

"I'm encouraged by our first quarter 2026 results, which reflect stable production and funds flow from our core assets, supported by front-loaded capital activity in Q1 that positions the Company well for the balance of 2026," said Patrick Oliver, President and CEO of Bonterra, in the company's press release.

Beyond its core development, Bonterra also used a fourth new well to test a portion of the assets it acquired in late 2025. While currently shut-in for facility upgrades, the well showed encouraging early results, bolstering the value of the $15.3 million acquisition. Bonterra's focus on the Charlie Lake mirrors a broader industry trend, with competitors like Tamarack Valley Energy also achieving significant success in the play, confirming its status as one of Western Canada's premier light oil opportunities.

Simultaneously, Bonterra is laying the groundwork for its next growth frontier in the Wembley Montney. The company has expanded its land holdings to a contiguous block of nearly 72 net sections (approximately 46,000 net acres) and secured additional processing capacity to support future development. During the quarter, Bonterra completed its third Montney well, a technically ambitious project with a three-mile lateral and around 300 fracture stages. Although the well faced operational challenges that have prolonged its cleanup phase, its early results are described as encouraging.

Navigating Financial Headwinds and Capital Discipline

While operations fired on all cylinders, Bonterra's bottom line was impacted by its commodity hedging program. The reported net loss was primarily due to a $20.3 million unrealized loss and a $4.1 million realized loss on risk management contracts. These losses are a direct consequence of a rapid increase in crude oil prices during March, which surpassed the price ceilings set in the company's hedge contracts. While such losses can pressure quarterly earnings, they are a common feature of risk management programs designed to provide cash flow certainty, especially in volatile markets.

Despite these hedging impacts, Bonterra's financial discipline remains a key focus. The company ended the quarter with adjusted net debt of $196.2 million, translating to an adjusted net debt to trailing twelve-month EBITDA ratio of 1.9:1. Management emphasized that debt reduction remains a priority for the remainder of 2026, with free funds flow earmarked for strengthening the balance sheet.

The company's capital spending was heavily front-loaded, with $38.0 million invested in Q1, representing nearly half of its full-year budget of $75 to $80 million. Approximately 92% of this capital was directed at drilling and completion activities in the Charlie Lake and Montney plays, a clear signal of where the company is placing its bets for future growth. This aggressive upfront spending is intended to bring new production online early, allowing the company to capitalize on what it anticipates will be a constructive oil price environment for the rest of the year.

Charting the Course for 2026

Looking ahead, Bonterra expressed confidence by reaffirming its 2026 annual guidance. The company continues to target average production of 16,200 to 16,400 BOE per day, with capital expenditures holding firm at $75 million to $80 million. While its Q1 average production of 15,463 BOE per day was slightly below the low end of this annual range, the figure was impacted by approximately 400 BOE per day of unplanned downtime. With new, high-rate wells now online and contributing, the company appears well-positioned to ramp up production and meet its annual target.

The remainder of the 2026 capital program includes drilling an additional three wells in the Bonanza Charlie Lake asset and a targeted program in its foundational Pembina Cardium asset. This demonstrates a balanced approach, continuing to exploit its stable, low-decline legacy asset while fueling growth with its unconventional plays.

In response to market dynamics, Bonterra is also adjusting its risk management strategy, strategically adding new hedges for the second half of 2026 and into 2027 at progressively higher oil prices. This proactive approach aims to protect cash flows while retaining greater exposure to potential price upside. Ultimately, the company's Q1 performance underscores a clear strategy: leveraging operational excellence in high-growth plays to generate the free cash flow needed to fortify its financial position through the commodity cycle.