Lycos Energy Inc. Announces the Completion of Previously Announced $60.0 Million Asset Sale

Calgary, Alberta–(Newsfile Corp. – October 15, 2025) – Lycos Energy Inc. (TSXV: LCX) (“Lycos” or the “Company“) is pleased to announce that it has successfully closed the previously announced sale of certain assets (the “Asset Sale“) in the Lindbergh, Moose Lake and Fishing Lake areas of Alberta (the “Assets“) to an arm’s length purchaser for cash consideration of $60.0 million, subject to customary closing adjustments as provided for in the purchase and sale agreement dated October 7, 2025.

The Company intends to direct approximately $9.0 million of the net proceeds of the Asset Sale towards debt repayment to strengthen the Company’s balance sheet. The Company’s lender has confirmed that the current $50.0 million credit facility will remain in place on the same terms following closing of the Asset Sale. In addition, the Company intends to return a total of approximately $47.9 million of the net proceeds of the Asset Sale to shareholders of Lycos (the “Lycos Shareholders“) as a return of capital. Lycos Shareholders will receive a cash distribution of $0.90 per Common Share (the “Cash Distribution“). Any remaining proceeds from the Asset Sale will be used towards general corporate purposes, including funding ongoing operations and/or working capital requirements.

At the upcoming special meeting of Lycos Shareholders to be held on November 13, 2025 (the “Meeting“), Lycos Shareholders will be asked to consider a special resolution authorizing the Company to reduce the stated capital account maintained in respect of the Company’s Common Shares by $47.9 million. The Cash Distribution, for Canadian income tax purposes, will be treated as a return of capital by way of a reduction in the stated capital of the Common Shares if the special resolution is approved at the Meeting. If such approval is not obtained, the Cash Distribution will be paid as a special dividend, which, for Canadian income tax purposes, may be designated as an eligible dividend. For more details in respect of the Meeting, please refer to the Company’s management information circular dated October 8, 2025, a copy of which is available on the Company’s SEDAR+ profile at www.sedarplus.ca.

The Company is currently reviewing its development plans for the remainder of 2025 and into 2026 and expects to provide a further update on or before November 18, 2025.

About Lycos

Lycos is an oil-focused, exploration, development and production company based in Calgary, Alberta, operating high-quality, heavy-oil, development assets in Central Alberta.

Advisors

NBF acted as exclusive financial advisor to Lycos in connection with the Asset Sale.

Stikeman Elliott LLP is acting as legal counsel to Lycos in connection with the Asset Sale.

Additional Information

Reader Advisories

Forward-Looking and Cautionary Statements

Certain statements contained within this press release constitute forward-looking statements within the meaning of applicable Canadian securities legislation. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “anticipate”, “outlook”, “plan”, “endeavor”, “continue”, “estimate”, “evaluate”, “expect”, “forecast”, “monitor”, “may”, “will”, “can”, “able”, “potential”, “target”, “intend”, “consider”, “focus”, “identify”, “use”, “utilize”, “manage”, “maintain”, “remain”, “result”, “cultivate”, “could”, “should”, “believe” and similar expressions (including negatives and variations thereof). Lycos believes that the expectations reflected in such forward-looking statements are reasonable as of the date hereof, but no assurance can be given that such expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. Without limitation, this press release contains forward-looking statements pertaining to: Lycos’ business strategy, objectives, strength and focus; the Company’s intended use of proceeds of the Asset Sale; the anticipated timing of the Meeting; the Company’s drilling plans; expectations regarding commodity prices and heavy oil differentials; the performance characteristics of the Company’s oil and natural gas properties; the ability of the Company to achieve drilling success consistent with management’s expectations; expectations in respect of the Company’s wells, including anticipated benefits and results; and the source of funding for the Company’s activities. The forward-looking statements and information are based on certain key expectations and assumptions made by Lycos, including, but not limited to: expectations and assumptions concerning the business plan of Lycos; approval by Lycos Shareholders at the Meeting of the stated capital reduction in respect of the Common Shares, resulting in the treatment of the Cash Distribution by Lycos as a return of capital for Canadian income tax purposes; the timing of and success of future drilling, development and completion activities; the geological characteristics of Lycos’ properties; prevailing and future commodity prices, price volatility, price differentials and the actual prices received for the Company’s products; the availability and performance of drilling rigs, facilities, pipelines and other oilfield services; the timing of past operations and activities in the planned areas of focus; the drilling, completion and tie-in of wells being completed as planned; the performance of new and existing wells; the application of existing drilling and fracturing techniques; prevailing weather and break-up conditions; general economic conditions; royalty regimes and exchange rates; the application of regulatory and licensing requirements; the continued availability of capital and skilled personnel; the ability to maintain or grow its credit facility; the accuracy of Lycos’ geological interpretation of its drilling and land opportunities, including the ability of seismic activity to enhance such interpretation; and Lycos’ ability to execute its plans and strategies.

Although Lycos believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because Lycos can give no assurance that they will prove to be correct. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed. These risks and uncertainties include, but are not limited to: the risk that the Company will utilize the net proceeds from the Asset Sale other than in the manner described in this press release; the risk that Lycos Shareholders do not authorize a reduction in the Company’s stated capital to facilitate the Cash Distribution by way of return of capital; incorrect assessments of the value of benefits to be obtained from acquisitions and exploration and development programs; fluctuations in commodity prices (including pursuant to determinations by the Organization of Petroleum Exporting Countries and other countries (collectively referred to as OPEC+) regarding production levels) and the risk of an extended period of low oil and natural gas prices; changes in industry regulations and political landscape both domestically and abroad; the impact of tariffs and other restrictive trade measures imposed or threatened by the U.S. administration, the Canadian administration and foreign governments, including retaliatory or countermeasures, on global economic markets, market volatility and the demand and/or market price for the Company’s products; wars (including Russia’s military actions in Ukraine and the Israel-Hamas conflict in Gaza); hostilities; civil insurrections; foreign exchange or interest rates; increased operating and capital costs due to inflationary pressures (actual and anticipated); volatility in the stock market and financial system; impacts of pandemics; the retention of key management and employees; and risks with respect to unplanned third-party pipeline outages, including in respect of safety, asset integrity and shutting in production. Ongoing military actions between Russia and Ukraine have the potential to threaten the supply of oil and gas from the region. The long-term impacts of the actions between these nations remains uncertain. Please refer to the Company’s annual information form for the year ended December 31, 2024, and the Company’s latest management discussion and analysis (“MD&A”) for additional risk factors relating to Lycos, which can be accessed either on the Company’s website at www.lycosenergy.com or under the Company’s SEDAR+ profile at www.sedarplus.ca. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date hereof, and to not use such forward-looking information for anything other than its intended purpose. Lycos undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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