Calima Energy : Montney Resource Update 2022

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28 March 2022

Montney Resource Update 2022

Highlights:

• • Montney activity has ramped up materially in the vicinity of Calima's land with very encouraging results.

• • The Company's Contingent Resources remain in the Development Pending category which would be categorised as 2P Reserves upon securing funding. Additionally, these Resources lie within the acreage which was secured in 2019 under a 10-year Continuation Lease.

• • The best estimate gross un-risked Contingent Resources (2C) Development on Hold and Development Pending is 748 MMcfg and 35.8 MMbbl (net of royalties).

• • The total best estimate of gross un-risked Prospective Resources (2U) is 588 MMcfg and 28.2 MMbbl (net of royalties).

• • Estimated Ultimate Recovery (EUR) per type curve well increased to 9BCFG and 131 MMbbls of condensate on average between the upper and middle Montney (2020: 8.4 BCFG 168 MMbbls) due to positive results on gas from offsetting operators.

(Net of Royalties)	Prospective Resource (2U)	Contingent Resource (2C)
Dev on hold	Dev Pending	Total Contingent
Natural Gas (mmcf)	588,109	535,193	213,295	748,488
Total Liquids (mbbl)	28,240	25,644	10,137	35,780
Total BOE (Mboe)	126,258	114,842	45,686	160,528

Calima Energy Limited (ASX:CE1 / OTCQB: RLTOF) (Calima or Company) currently operates more than 34,000 acres of drilling rights (Calima Lands) in British Columbia, Canada. McDaniel & Associates (McDaniel) have completed their resource reports for the period ending 31 December 2021.

The Company is pleased to confirm that a slightly higher 213.3 MMCFG & 10.1 million barrels of light oil and natural gas liquids (2020: 212.8 MMCFG & 10.8 MMBO) of Contingent Resources is continuing to be defined as Development Pending, reconfirming a significant portion its Montney acreage as being development ready subject only to securing the necessary funding to construct a tie-in pipeline.

Once the Company secures funding then according to the reporting standards these Development Pending resources could be classified as 2P reserves. Note the prospective resources were down approximately 58% due to land expiries resulting in 68 locations removed from each of the Upper and Middle Montney benches. This was somewhat offset by positive gas technical revisions based on recent successful area operator activity. The following maps highlight the material activity from offsetting operators in 2021.

The estimated quantities of hydrocarbons that may potentially be recovered by the application of a future development project relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration appraisal is required to determine the existence of a significant quantity of potentially moveable hydrocarbons.

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Figure 1 - Offsetting Activity

McDaniel & Associates (McDaniel) have evaluated crude oil, natural gas and natural gas products prospective resources of the Calima Lands according to PRMS standards. McDaniel's Best Estimates of total un-risked contingent and prospective resources within the Calima Lands are summarised in Tables 1A/1B and Figure 2.

Figure 2 - Map of Calima Lands defining the areas of Prospective (purple) and

Contingent Development on hold (light pink) and Contingent Development pending (dark pink) Resources.

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1A Gross Unrisked Contingent Resources 4 (2C) based upon 122 wells	Development on hold	Development Pending	Total 2C
Natural Gas (mmcf)	Gross	681,034	267,876	948,910
Net after Royalties	535,193	213,295	748,488
Condensate (mbbl)	Gross	13,597	5,355	18,951
Net after Royalties	11,399	4,506	15,906
Natural Gas Liquids1 (mbbl)	Gross	16,990	6,691	23,682
Net after Royalties	14,245	5,631	19,875
TOTAL LIQUIDS2 (mbbl)	Gross	30,587	12,046	42,633
Net after Royalties	25,644	10,137	35,780
TOTAL mboe3	Gross	144,093	56,692	200,785
Net after Royalties	114,842	45,686	160,528

1B Gross Unrisked Prospective Resources5 (2U) based upon 98 wells
Natural Gas (mmcf)	Gross	749,854
Net after Royalties	588,109
Condensate (mbbl)	Gross	14,977
Net after Royalties	12,553
Natural Gas Liquids1 (mbbl)	Gross	18,714
Net after Royalties	15,687
TOTAL LIQUIDS2 (mbbl)	Gross	33,691
Net after Royalties	28,240
TOTAL mboe3	Gross	158,667
Net after Royalties	126,258

Table 1A - Best estimate Unrisked Contingent (2C) Resources and Table 1B - Prospective (2U) Resources of the Calima

Lands as estimated by McDaniel & Associates effective March 31, 2022

Notes to accompany Tables 1A & 1B

(1) Natural Gas Liquids refers to the product recovered after processing. Approximately 10 bbl/MMcf of the product recovered after processing is also condensate (C5) see also Note 2.

(2) Sum of Condensate and Natural Gas Liquids. Based on Company drilling results public domain data and the results of wells drilled on adjacent land McDaniel estimate that the average condensate to gas ratio for wells in the Calima Lands would be 16 bbl/MMcf (wellhead condensate/gas ratio) for the Middle Montney and 13 bbl/MMcf for the Upper Montney. Additional liquids 25bbl/MMCF would be stripped from the gas upon processing comprising 6 bbl/MMcf of C3, 9 bbl/MMcf of C4, and 10 bbl/MMcf of C5+ (Condensate). Plant yields of six bbl/MMcf of C3, nine bbl/MMcf of C4, and 10 bbl/MMcf of C5+ have been assigned based off Saguaro's/Tourmaline's presentation material and are in line with typical recoveries in the area. An average shrinkage of 10 percent was applied to raw gas to obtain sales gas estimates.

(3) Barrels of Oil Equivalent based on 6:1 for Natural Gas, 1:1 for Condensate and C5+, 1:1 for Ethane,1:1 for Propane, 1:1 for Butanes. BOE's may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

(4) Contingent Resources (2C) - Those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations by application of development projects, but which are not currently considered to be commercially recoverable owing to one or more

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contingencies. Contingencies may include factors such as economic, legal, environmental, political, and regulatory matters, or a lack of markets. Contingent resources are further categorized in accordance with the level of certainty associated with the estimates and may be sub-classified based on project maturity and/or characterized by the economic status. The Contingent Resources (2C) in Tommy Lakes have been sub-classified as a "Development on Hold" and "Development Pending" as the accumulation is well defined and does represent a viable drilling target. The Contingent Resources have been classified using a deterministic method of estimation having an effective date of 31 December 2022

(5) Prospective resources (2U) are the estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) related to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration appraisal and evaluation is required to determine the existence of a significant quantity of potentially moveable hydrocarbon. The Prospective Resources (2U) in Tommy Lakes have been sub-classified as a "Prospect" as the accumulation is well defined and does represent a viable drilling target. The prospective resources have also been classified using a deterministic method having an evaluation date of 31 December 2021.

(6) Pre-Development - A pre-development study is an intermediate step in the development of a project scenario. The amount of information that is available for the reservoir of interest is greater than for a conceptual study. In particular, the petroleum initially in place has been reasonably well defined and the remaining uncertainty lies largely in the recovery factor and the economic viability.

(7) The resources have been calculated on a reduced land position of ~34,000 acres in which Calima Energy holds a 100% working interest. This includes 33,643 acres (49 sections) held under a 10-year Continuation Lease (valid to 2029).

The below tables shows the comparison between the year-end 2020 and the 2021 resources (Tables 2A, 2B).

2A - 2021 Contingent Resource Dev on Hold (2C)

681,034

Natural Gas Liquids (mbbl)

13,597

16,990

30,587

TOTAL3 mboe

144,093

2A - 2021 Contingent Resource Dev Pending (2C)

6,691

56,692

TOTAL 2A - 2021 Contingent Resource (2C)

23,682

200,785

2A - 2020 Contingent Resource Dev on Hold (2C)

17,718

138,267

2A - 2020 Contingent Resource Dev Pending (2C)

248,401

5,530

6,912

12,442

53,842

TOTAL 2A - 2021 Contingent Resource (2C)

24,630

192,109

Natural Gas Liquids (mbbl)

TOTAL3 mboe

1,677,610

18,714

37,294

46,602

83,896

158,667

363,498

Table 2A - McDaniel 2020 and 2021 Best Estimate Gross Unrisked Contingent Resource and 2B Gross Unrisked

Prospective Resource (refer Table 1 footnotes and see Figure 1 for areal distribution)

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Method of Preparation

The resource estimates have been prepared and presented in accordance with the Canadian standards set out in the Canadian Oil and Gas Evaluation Handbook (COGEH) and National Instrument 51-101 (NI 51-101), and have been classified in accordance with the Society of Petroleum Engineers' Petroleum Resources Management System (SPE-PRMS) and reported in the most specific resource class in which the prospective resource can be classified under SPE-PRMS.

In accordance with the applicable guidelines the volumes presented in the McDaniel's report were risked for the chance of commerciality. The chance of commerciality is the product of the chance of discovery and the chance of development. The chance of discovery in an unconventional resource such as the Montney is associated with the likelihood that commercially viable concentrations of hydrocarbon within a given region exist (i.e. sufficient thickness and porosity), and not necessarily whether hydrocarbons of any concentration will be found. The presence of hydrocarbons within the Montney resource is considered broadly mappable; however, area specific thicknesses and differences in reservoir quality will ultimately determine commercial viability.

Resource Classification

The Contingent Resources (2C) in Tommy Lakes have been sub-classified as a "Development on Hold" as the accumulation is well defined and does represent a viable drilling target and "Development Pending" on the basis that the Company acquired the Tommy Lakes facilities which provides Calima with processing capacity and access to the NorthRiver Jedney pipelines and facilities to get product to market. The drilling target is further confirmed by the level of Montney development in the area by offsetting producers. For the Montney Upper and Middle zones, a chance of development of 70% have been assigned to the Development on Hold Resources and 90% to the Development Pending Resources as the Company is in relatively early stages of development at this point. A technology status of "established" (meaning existing well drilling and completion practices) and a project evaluation scenario of Pre-Development6 also apply as the amount of petroleum initially in place has been reasonably well defined but there is uncertainty around actual performance of the wells and future processing capacity4.

The Prospective Resources (2U) in Tommy Lakes have been sub-classified as a "Prospect" as the accumulation is well defined and does represent a viable drilling target. This project maturity status sub-classification is further confirmed by the Montney development in the area by offsetting producers. For the Montney Upper, Middle and Lower zones, a chance of discovery factor of 90% (previously 90%) and a chance of development of 70% have been assigned as the Company is in relatively early stages of development at this point.

Qualified petroleum reserves and resources evaluator statement

The petroleum resources information in this announcement is based on, and fairly represents, information and supporting documentation in a report compiled by technical employees of McDaniel and Associates Ltd, a leading independent Canadian petroleum consulting firm registered with the Association of Professional Engineers and Geoscientists of Alberta (APEGA) and was subsequently reviewed by Graham Veale who is the VP Engineering with Blackspur Oil Corp. Mr. Veale holds a BSc. in Mechanical Engineering from the University of Calgary (1995) and is a registered member of the Alberta Association of Professional Engineers and Geoscientists of Alberta (APEGA). He has over 26 years of experience in petroleum and reservoir engineering, reserve evaluation, exploitation, corporate and business strategy, and drilling and completions. McDaniel and Mr. Veale have consented to the inclusion of the petroleum reserves and resources information in this announcement in the form and context in which it appears.

This release has been approved by the Board.

For further information visitwww.calimaenergy.com or contact:

Calima Energy Ltd ACN 117 227 086

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Suite 4, 246-250 Railway Parade, West Leederville WA 6007: [phone] Fax: + 61 8 6500 3275 Email:[e-mail]