Cuda Oil and Gas Inc. Announces Second Quarter Financial and Operating Results

Calgary, Alberta--(Newsfile Corp. - August 29, 2019) - Cuda Oil and Gas Inc. (TSXV: CUDA) ("Cuda" or the "Company") is pleased to announce its financial and operating results for the three and six months ended June 30, 2019. The unaudited interim condensed consolidated financial statements and related management's discussion and analysis ("MD&A") are available under the Company's profile on the SEDAR website at www.sedar.com. Selected financial and operating information for the three and six months ended June 30, 2019 appear below and should be read in conjunction with the related financial statements and MD&A.

Financial and Operational Results(1)

Notes:

(1) Results contributed since the asset acquisitions in Wyoming, United States on August 14, 2018, and October 5, 2018.
(2) See "Non-GAAP Measures".

Second Quarter Highlights

• Second quarter crude oil production averaged 306 boe/d, down 17% from 369 boe/d for the first quarter of 2019. Production was affected by natural declines as no new wells were brought on production in the quarter. In the first half of 2019, Cuda continued to invest capital into oil field development and associated infrastructure in the Barron Flats (Deep) Unit in the Powder River Basin of Wyoming, United States, to create liquids production and build out the facilities from a planned miscible flood in the Shannon formation.

• Cuda's average operating netback (see Non-GAAP measures) increased to $24.31/ boe for the second quarter, from $15.01/ boe for the first quarter of 2019.

• During the first half of 2019, interest expense on the Cuda's credit facilities, convertible debentures and lease obligations, and higher net G&A expense, mostly attributable to integration activities and public company compliance, partially offset by higher operating netbacks from additional crude oil production from the asset acquisitions in Wyoming, resulted in adjusted funds flows used in operations (see Non-GAAP measures) of $1,594,930 and $1,974,411 for the three and six months ended June 30, 2019, respectively.

• On June 26, 2019, Cuda amended its $35 million credit facility with an institutional lender to extend the maturity of the facility to June 27, 2020, and a new $8 million credit facility was made available to Cuda by the lender.

• Subsequent to June 30, 2019, Cuda entered into a series of binding Asset Purchase Agreements on July 22, 2019, to sell all of its oil and gas assets and related decommissioning liabilities in Quebec, Canada, for net proceeds of $3,915,003, and the purchaser will also cause Cuda to be released and discharged, at closing, from a claim associated with the obligation to purchase shares from a dissenting shareholder in the amount of $3,116,750.

• As at June 30, 2019, the sale of Cuda's oil and gas assets in Quebec, Canada, was considered highly probable of occurring and the assets were available for immediate sale in their present condition. Assets classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell ("FVLCS"). As the FVLCS was lower than the carrying amount of the assets, an impairment of $20,211,185 was recognized for the three and six months ended June 30, 2019.

• Subsequent to June 30, 2019, Cuda issued 14,282,000 units for gross proceeds of $7,141,000 on July 30, 2019; net proceeds of $6,643,000 after estimated share issuance costs of $498,000. Each unit consists of one common share plus one-half of a common share purchase warrant. Each share purchase warrant is exercisable for one common share at a price of $0.60 per share for a term of 24 months from closing.

About Cuda Oil and Gas Inc.

Cuda Oil and Gas Inc. is engaged in the business of exploring for, developing and producing oil and natural gas, and acquiring oil and natural gas properties across North America. The Cuda management team has worked closely together for over 20 years in both private and public company environments and has an established track record of delivering strong shareholder returns. Cuda will continue to implement its proven strategy of exploring, acquiring, and exploiting with a long-term focus on large, light oil resource- based assets across North America including significant operational experience in the United States. The Cuda management team brings a full spectrum of geotechnical, engineering, negotiating and financial experience to its investment decisions.

For further information please contact:

Glenn Dawson
President and Chief Executive Officer
Cuda Oil and Gas Inc.
(403) 454-0862

Non-GAAP Measures

This news release contains the terms "adjusted funds flow from (used in) operations", and "operating netback", which do not have standardized meanings prescribed by IFRS and therefore may not be comparable with the calculation of similar measures presented by other issuers.

• Adjusted funds flow from (used in) operations denotes cash flow from (used in) operating activities as it appears on the Company's consolidated statement of cash flows before decommissioning expenditures, if any, and changes in non-cash operating working capital.
• Operating netback denotes total revenue less royalty and production tax expenses, and operating and transportation costs calculated on a per boe basis. Management uses operating netback on a per boe basis in operational and capital allocation decisions.
• BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (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. As the value ratio between natural gas and crude oil based on the current prices of natural gas and crude oil is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

Forward-Looking Information

This news release contains forward-looking information. All statements other than statements of historical fact included in this release are forward-looking statements that involve various risks and uncertainties and are based on forecasts of future operational or financial results, estimates of amounts not yet determinable and assumptions of management. In particular, this news release includes forward-looking information relating to the completion of the sale of the Quebec assets, the terms of the transaction and its impact on Cuda and the Company's exploration and development activities in Wyoming. Risk factors that could prevent forward-looking statements from being realized include market conditions, third party and regulatory approvals, ongoing permitting requirements, the actual results of current exploration and development activities, operational risks, risks associated with drilling and completions, uncertainty of geological and technical data, conclusions of economic evaluations and changes in project parameters as plans continue to be refined as well as future oil and gas prices. Although Cuda has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company disclaims any intention and has no obligation or responsibility, except as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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