Pan Orient Energy Corp. on behalf of its 71.8% owned subsidiary Andora Energy Corporation (‘Andora'), is pleased to release the March 31, 2022 Contingent Bitumen Resources Report (‘Resources Report') which is a National Instrument 51-101 compliant resources evaluation for Andora's oil sands interests at Sawn Lake Alberta, Canada, as evaluated by independent qualified reserves evaluator Sproule Associates Limited (‘Sproule'). The evaluation included all of Andora's Oil Sands Leases at Sawn Lake based on exploitation using Steam Assisted Gravity Drainage (‘SAGD').

The Resources Report reflects the development plan for Sawn Lake Central and Sawn Lake South of staged development with five standardized ‘battery scale' SAGD facilities where growth is primarily funded by cash flow generated by the project. The SAGD batteries are 5,000 to 6,000 barrels of bitumen per day (BOPD) each and utilize Andora's proprietary Produced Water Boiler (‘PWB') technology which uses water from SAGD production to generate steam and meet water recycle requirements in Alberta. This strategy significantly reduces financial, reservoir and operating risk.

Contingent resources have been assigned to the Sawn Lake Central and Sawn Lake South blocks of Sawn Lake. The unrisked ‘Best Estimate' contingent resources for Andora are 292.0 million barrels of bitumen recoverable (209.6 million barrels net to Pan Orient's 71.8% interest in Andora). Andora is the operator of both these blocks and holds a 75% working interest in the 11 sections of the Central Block, which have been assigned 214.3 million barrels of unrisked recoverable bitumen (net to Andora's interests) and holds a 100% working interest in the 16 sections of the South Block, which have been assigned 77.7 million barrels of unrisked recoverable bitumen.

The unrisked ‘Best Estimate' net present value, discounted at 15%, for Andora's interests is $192 million on an after-tax basis ($138 million net to Pan Orient's 71.8% interest in Andora). The Resources Report assigned an 85% chance of development for Sawn Lake, and the risked ‘Best Estimate' contingent resources for Andora are 248.2 million barrels of bitumen recoverable (178.2 million barrels net to Pan Orient's 71.8% interest in Andora). The risked ‘Best Estimate' net present value, discounted at 15%, for Andora's interests is $165 million on an after-tax basis ($118 million net to Pan Orient's 71.8% interest in Andora).

The Resources Report forecasts bitumen production from 2023 to 2084, with maximum unrisked ‘Best Estimate' production net to Andora of 20,378 BOPD in 2036. The unrisked ‘Best Estimate' evaluation indicates that the maximum cumulative year-end financing requirement, being cumulative cash flow of operating income less capital expenditures and income tax, is $18.2 million in Year 4. The first stage of commercial development is at Sawn Lake Central (where Andora is operator with a 75% working interest) to reactivate the existing SAGD facility and wellpair and drill of an additional wellpair. On a 100% working interest basis, the estimated cost is $10 million and forecast production is 1,237 BOPD.

A further expansion is forecast in year three with the drilling of three more wellpairs plus facilities work, which are estimated on a 100% working interest basis, at a capital cost of $31 million to increase production to 2,990 BOPD. Regulatory approval for the Sawn Lake commercial operation to 3200 BOPD was received in December 2017.