Earnings release
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Journey Generates $ 18.5 Million of Net Income in the Second Quarter of 2026 Calgary , Alberta -- ( Newsfile Corp. - August 6 , 2026 ) - Journey Energy Inc. ( TSX : JOY ) ( OTCQX : JRNGF ) ( " Journey " or the " Company " ) is pleased to announce its financial and operating results for the three and six month periods ending June 30 , 2026. The complete set of financial statements and management discussion and analysis are posted on www.sedarplus.com and on the Company's website www.journeyenergy.ca . Highlights for the second quarter are as follows : • Generated sales volumes of 10,017 boe / d in the second quarter ( 51 % crude oil ; 11 % NGL's ; 38 % natural gas ) • Recorded $ 18.5 million in net income or $ 0.27 per basic share and $ 0.26 per diluted share . • Realized Adjusted Funds Flow of $ 18.4 million or $ 0.27 per basic share and $ 0.26 per diluted share . • Brought on - stream 4 ( 1.2 net ) Duvernay light oil wells late in the quarter from the 06-04-043-03W5 drilling pad . Production results from these wells are averaging IP30 rates of approximately 1,115 BOE / d and 84 % liquids per well ( 855 BBL / d of crude oil , 80 BBL / d of NGLs , and 1.1 MMcf / d of natural gas ) . • Closed on the disposition of 950 boe / d ( 100 % natural gas ) , the Countess power generating facility , and $ 20 million of decommissioning obligations on June 1 for proceeds of $ 7.0 million . • On June 24 , 2026 , Journey's Gilby Power Plant made its first power sales to the distribution grid . Subsequent Events : Completed drilling on the 01-19-43-03W5 pad . 5 ( 1.5 net ) Duvernay wells are awaiting completion . Began completing 3.0 ( 0.3 net ) wells on the 04-20-41-03W5 pad . Began drilling 4 ( 1.2 net ) wells on the 02-22-42-04W5 pad . In total , Journey is participating in the completion of 3 ( 0.3 net ) wells and has 6 ( 1.8 ) net wells drilled , cased , and awaiting completion . Financial & Operating Highlights Three months ended June 30 , Six months ended June 30 , Financial ( $ 000's except per % % share amounts ) 2026 2025 change 2026 2025 change Sales revenue Net income ( loss ) 63,186 18,509 45,196 4,065 Per basic share ( $ ) 0.27 0.06 Per diluted share ( $ ) 0.26 0.06 333 Adjusted Funds Flow 18,388 15,889 Per basic share ( $ ) 0.27 0.24 Per diluted share ( $ ) 0.26 0.24 Cash flow provided by operating activities 19,490 11,112 Per basic share ( $ ) 0.29 0.17 Per diluted share ( $ ) 0.28 0.17 Capital expenditures , including net A & D 17,838 25,469 Net debt 57,755 64,452 មិ ខ្ញុំ ៩៨ ២៨៩៩៥៩៩ 40 355 350 111,175 12,660 0.19 97,228 14 11,793 0.18 476 0.18 16 32,088 0.18 35,508 13 0.48 0.53 8 0.46 0.53 75 33,857 24,774 71 68 0.50 0.49 0.37 0.37 ටටම 588 ( 10 ) ( 13 ) ( 30 ) ( 10 ) 34,871 57,755 35,043 64,452 ( 10 ) Share Capital ( 000's ) Basic , weighted average 67,481 67,107 1 67,481 67,107 1 Basic , end of period 67,481 67,107 1 67,481 67,107 1 Fully diluted¹ 77,870 69,497 12 77,870 69,497 12
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Daily Sales Volumes Natural gas (mcf/d): Conventional 18,126 21,919 (17) 18,515 21,981 (16) Shale 2,389 1,273 88 2,463 1,093 125 Coal bed methane 2,407 3,663 (34) 2,973 3,776 (21) Total natural gas volumes 22,922 26,855 (15) 23,951 26,850 (11) Crude oil (bbl/d): Light/medium 2,294 2,578 (11) 2,330 2,654 (12) Tight (shale) 806 646 25 722 544 33 Heavy 1,974 2,103 (6) 1,983 2,131 (7) Total crude oil volumes 5,074 5,327 (5) 5,035 5,329 (6) Natural gas liquids (bbl/d) 1,123 1,147 (2) 1,208 1,169 3 Barrels of oil equivalent (boe/d) 10,017 10,950 (9) 10,235 10,973 (7) Average Realized Prices Natural gas ($/mcf) 2 1.64 1.86 (12) 1.94 2.05 (5) Crude Oil ($/bbl) 117.63 75.32 56 102.33 80.43 27 Natural gas liquids ($/bbl) 53.30 39.64 34 43.49 45.82 (5) Barrels of oil equivalent ($/boe) 1 69.32 45.36 53 60.01 48.95 23 Operating Netback ($/boe) Realized prices 2 69.32 45.36 53 60.01 48.95 23 Royalties (15.14) (7.24) 109 (11.59) (8.24) 41 Operating expenses (21.77) (17.58) 24 (21.36) (18.32) 17 Transportation expenses (1.75) (0.92) 90 (1.68) (0.99) 70 Operating netback 30.66 19.62 56 25.38 21.40 19 Note: 1 . See Non-IFRS measures. Fully diluted shares include 7.6 million shares from the potential conversion of convertible debentures at $5.00/share. Should this conversion occur, which is at the holders' option, net debt will concurrently decrease by $38.0 million. 2 . Realized prices include physical hedging gains. OPERATIONS Sales volumes in the second quarter of 2026 averaged 10,017 boe/d as compared to 10,456 boe/d in the first quarter of 2026. Liquids volumes in the second quarter of 2026 averaged 6,197 bbl/d as compared to 6,291 boe/d in the first quarter of 2026. The larger drop in overall volumes reflects the disposition of Journey's Countess (950 boe/d 100% natural gas) and natural production declines which were only partially offset by the addition of 4.0 (1.2 net) new Duvernay wells during the month of June. The disposition of lower netback natural gas assets and the increase in Duvernay development brings Journey closer to our stated goal of increasing sustainability through the addition of higher netback oil- weighted volumes. Capital expenditures, before dispositions, in the second quarter of 2026 were $24.8 million, which included $20 million primarily for Duvernay development activities including drilling 4 (1.2 net) new Duvernay wells. In addition, the Company spent $5.3 million on the continuing work on its power generation projects in Gilby and Mazeppa, with over 80% of this capital being allocated to the grid connection costs for Journey's Mazeppa project. DUVERNAY UPDATE Journey announced a significant expansion to its 2026 Duvernay capital program on June 16, 2026. This plan included participation in 4.2 net Duvernay wells over the course of 2026 with most of the production coming on-stream later in 2026. 4.0 gross (1.2 net) Duvernay wells drilled in the first quarter were brought on-stream in June, but had limited impact on Journey's second quarter production, due to the timing of the additions. An additional 3 (0.3 net) locations are forecast to be brought on-stream in September. 5 (1.5 net) locations are forecast to be brought on-stream in November with the remaining 4 (1.2 net) wells expected to be brought on in 2027. The phasing of this program to later in the year provides a platform for significant liquids production growth in 2027. The following table updates the
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status of 2026 wells. Journey Duvernay 2026 Wells Category Bottom Hole Surface Pad WI Status Estimated On- Production Date Base 102/13-28-042-04W5/00 02-22-42-04W5 30.0% Q3 2026 2027 Base 103/04-12-042-04W5/00 02-22-42-04W5 30.0% Drilling 2027 Base 104/04-33-042-04W5/00 02-22-42-04W5 30.0% Q3 2026 2027 Base 102/16-02-042-04W5/00 02-22-42-04W5 30.0% Drilled 2027 Base 102/04-25-041-04W5/00 04-20-41-03W5* 4.0% Completing September Base 100/12-25-041-04W5/00 04-20-41-03W5* 9.6% Completing September Base 100/13-25-041-04W5/00 04-20-41-03W5* 15.3% Completing September Base 100/16-12-043-04W5/00 06-04-43-03W5 30.0% Completed On Production Base 100/14-26-042-03W5/00 06-04-43-03W5 30.0% Completed On Production Base 102/04-18-043-03W5/00 06-04-43-03W5 30.0% Completing On Production Base 100/03-18-043-03W5/00 06-04-43-03W5 30.0% Completed On Production Base 100/11-04-043-03W5/00 01-19-43-03W5 30.0% Drilled November Base 100/14-04-043-03W5/00 01-19-43-03W5 30.0% Drilled November Base 103/02-09-043-03W5/02 (DUC) 01-19-43-03W5 30.0% Drilled November Base 100/08-09-043-03W5/00 01-19-43-03W5 30.0% Drilling November Base 100/05-10-043-03W5/00 01-19-43-03W5 30.0% Drilled November Total Net Wells for 2026 4.2 * Partial joint venture well drilled across southern border of the play. In order to accommodate the new scheduling of projects, Journey has deferred the facility expansion project along with the completion capital for the 02-22 pad wells to 2027. If conditions to accelerate the completion of these wells permit, Journey will add additional capital to its 2026 program as required. Journey now forecasts approximately $60 million of net capital expenditures associated with the Duvernay joint venture in 2026. The initial results of the 4 (1.2 net) 06-04 pad wells remain encouraging and support the world class nature of this resource play. 06-04-043-03W5 7 well pad (30% WI): Following the successful results from the initial 3 (0.9 net) wells, Journey brought an additional 4 (1.2 net) wells on-stream. Production results from the 4 (1.2 net) wells are averaging IP30 rates of approximately 1,115 BOE/d and 84% liquids per well (855 BBL/d of crude oil, 80 BBL/d of NGLs, and 1.1 MMcf/d of natural gas). Production results from the 7 (2.1 net) wells averaged IP30 rates of approximately 1,178 BOE/d and 85% liquids per well (935 BBL/d of crude oil, 67 BBL/d of NGLs, and 1.0 MMcf/d of natural gas). The economic viability of the play is further substantiated by Journey's realized revenues from wells brought on-production to date. The original two 2024 wells achieved Payout 1 in approximately thirteen months at average WTI prices of approximately $64 USD/bbl. The original three wells on the 06-04 pad achieved Payout in approximately thirteen months and the original four wells on the 02-22 pad are forecast to pay out in fourteen to fifteen months. Journey previously indicated that 2026 capital expenditures in the Duvernay carried a high facility component. Journey is participating in its 30% working interest for the construction of a 30 MMcf/d compressor station (in-service in the third quarter of 2026), and approximately 17 kilometers of gathering and inter-pad connection pipelines. Journey's net share of these 2026 long-term investments is estimated to be approximately $15 million. The long-term investments in facility projects will benefit the Company for many years to come by improving cycle times, reducing operating costs, and reducing facility costs for future drilling pads. Further information highlighting Journey's expanded Duvernay program for 2026 is available in its August Corporate Presentation at www.journeyenergy.ca . Note: 1 . Payout means the period of time required for a well or project to generate enough net cash flow to recover its initial capital investment.
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2026 ASSET DISPOSITIONS On June 1, 2026 Journey closed the disposition of its Countess assets (the " Assets ") for total cash consideration of $7 million, subject to customary closing adjustments. The Assets sold included the Countess gas field as well as Journey's 4 MW Countess power generation facility. The Assets were producing approximately 950 boe/d (100% natural gas) from 425 natural gas wells and carried end-of- life costs of approximately $20 million. The Assets were removed from corporate guidance effective June 1, 2026. In May 2026, Journey began marketing a significant number of assets through TPH & Co. The assets being marketed represent a mixture of both core and non-core properties which, given Journey's opportunity rich conventional assets and its commitments for the Duvernay development, will not attract significant capital over the next five years. Marketing these assets is consistent with Journey's goal to drive higher netbacks while improving the longer-term sustainability of the Company. Similar to Countess, proceeds from any sale of assets would be earmarked for Duvernay development where rates of return in the current commodity price environment are exceptional. Journey has not incorporated any additional asset sales into its guidance and does not intend to comment further on asset sales until binding agreements, if any, are entered into with third parties. POWER UPDATE During 2026, Journey continues to advance its power business. Journey's Gilby power project is operational and has been exporting initial test electricity volumes to the distribution grid since late June. The project is still in the commissioning phase while Journey works through Fortis and AESO testing procedures to receive final commercial approval. Journey's Mazeppa power project has entered Stage 5 of the AESO approvals. Significant grid connection payments in excess of $4 million were made to Fortis in the spring of this year to complete connection of Mazeppa to the distribution grid. The Initial Start Date (" ISD ") of the Mazeppa project had originally been set in conjunction with all stakeholders as November 1, 2026. On May 28, 2026, Fortis published an updated Technical Standard (DER 02). On Friday July 24, 2026, Journey received an email from Fortis Alberta stating the following: "Hi again, all, As previously discussed, the change in engineering requirements necessitates the revision of key engineering studies, including the TOV and Short Circuit studies. Based on the estimated engineering effort and subsequent review requirements, this is the estimate critical path for the new ISD, and Fortis Alberta will be revising the project's ISD from November 1, 2026, to August 11, 2027." The reason for the ISD date change is due to a new requirement to redo studies that were conducted in October of 2025 and submitted in December of 2025. These studies were conducted at Journey's expense as part of Fortis's study scope. This delay in ISD date will impact the project revenue stream and may also impact the project cost, due to additional engineering costs and possibly additional equipment requirements. Journey has no ability to anticipate or control these delays that result from regulatory bodies changing rules or standards mid project without warning. Journey will attempt to provide further guidance in due course as additional information becomes available. Although not included in Journey's 2025 year-end NI 51-101 reserve report, Journey's independent reserve evaluator (GLJ Petroleum Consultants Ltd.) ran an economic model based on the Three Consultants' Average 1 pricing for natural gas and their view of future power prices. The economic value (before tax NPV@10%) of Journey's two power projects is approximately $69 million. The power projects are expected to provide significant upside for Journey's producing net asset value when both projects are on-stream. However, the volatility in power and natural gas prices over the near to
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intermediate term makes the valuation of these projects subject to significant volatility. Note: 1) Forecast pricing used is the average of the published price forecasts for GLJ Petroleum Consultants Ltd., Sproule Associates Ltd. and McDaniel & Associates Ltd. as at December 31, 2025. FINANCIAL Journey achieved Adjusted Funds Flow of $18.4 million during the second quarter of 2026. While average daily sales volumes were 9% lower than the second quarter of 2025, average realized commodity prices were 53% higher than the comparable quarter of 2025 due primarily to a 56% increase in realized oil prices. Realized crude oil prices rose to $117.63/bbl in the second quarter as the continuation of the US-Iran war had the most significant impact on oil prices and in turn Journey's Adjusted Funds Flow (" AFF "). Conversely, the spike in WTI oil prices had a negative impact of $6.7 million on AFF as the realized oil related hedges went out of the money. Journey's overall liquids (crude oil and NGL's) volume weighting continued to strengthen with its Duvernay drilling results and the disposition of natural gas assets in June. Liquids volumes increased to 62% of total volumes in the second quarter. Crude oil sales volumes for the second quarter of 2026 represented 51%, an increase from 48% in the first quarter, and represented 86% of total revenues. Natural gas sales volumes contributed 38% of total boe volumes in the first quarter of 2026 while contributing only 5% of total revenues. Journey's operating netbacks were $30.66/boe in the second quarter of 2026 as compared to $19.62 in the second quarter of 2025. 53% higher average commodity prices between the two comparable quarters in 2026 and 2025 was the primary driver of the increase. Journey generated net income of $18.5 million in the second quarter of 2026 or $0.27 per basic share and $0.26 per diluted share as compared to $4.1 million of net income in the second quarter of 2025 or $0.06 per basic and diluted share. Included in the net income was $11.2 million for a mark-to-market gain on commodity hedges as at June 30, 2026 while there was an $6.7 million realized hedging loss in the quarter. The realized hedging losses were primarily attributable to the significant spike in WTI oil prices. Adjusted Funds Flow of $18.4 million in the second quarter of 2026 was 16% higher than the $15.9 million realized in the second quarter of 2025. Adjusted Funds Flow per share was $0.27 per basic share and $0.26 per diluted share for the second quarter of 2026 as compared to $0.24 per basic and diluted share in the second quarter of 2025. Capital expenditures, before dispositions, in the second quarter of 2026 were $24.8 million, which included $20 million primarily for Duvernay development activities including drilling 4 (1.2 net) new Duvernay wells. In addition, the Company spent $5.3 million on the continuing work on its power generation projects in Gilby and Mazeppa. Journey also realized $7.0 million in proceeds from the sale of its Countess assets which included approximately 950 boe/d (100% natural gas) of sales volumes and the power generation plant in the area. Journey exited the second quarter of 2026 with net debt of $57.8 million, which was 3% higher than the $56.0 million at the end of the previous quarter and 14% higher than the $50.6 million of net debt at the beginning of the year. OUTLOOK & GUIDANCE On June 2, 2026, the Alberta Investment and Management Corporation (" AIMCo ") filed form 62-105F3 declaring a reduction in their shareholdings of Journey. After this reduction and effective May 31, 2026, AIMCo owned 6,256,421 common shares of Journey or 9.27% of the outstanding common shares. Since AIMCo is now below the 10% threshold, they have no further obligation to disclose their holdings and therefore Journey will no longer report their holdings along with Management and Directors. Prior to the securities filing, AIMCo held 13,980,070 shares of Journey.
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Journey has updated its 2026 capital spending and production guidance as per below. The Company reduced its capital spending plans to from the previous guidance, delayed the on-stream date for 01-19 wells, and moved the on-stream date for the 02-22 pad wells to 2027. Sales volumes have been reduced to reflect the loss of Countess volumes effective June 1, 2026. Although these items affect 2026 exit rates, the shortfall is temporary and the robust economic impact of volume additions from the Duvernay continues to be re-enforced with every new pad brought on-stream. Journey is in the strongest position in its history to capitalize on the opportunity created by significant near-term tailwinds for commodity prices. The duration of this supply driven event is uncertain but the outlook for commodity pricing and funds flow has improved since the start of the year. Under current pricing assumptions, Journey has sufficient capital and liquidity available to fully fund its capital program. Journey management looks forward to providing further updates to this guidance at regular intervals throughout the year and as circumstances change. This guidance incorporates many material underlying assumptions including but not limited to: Forecasted commodity prices by month; Forecasted operating costs, including forecasted prices for power; Forecasted costs for the capital program and the timing of the spending; and Forecasted results and phasing of production additions from the capital program; 2026 Updated Guidance June 17, 2026 Previous Guidance Annual average daily sales volumes 10,300-10,700 boe/d (65% crude oil & NGL's) 10,300-10,700 boe/d (65% crude oil & NGL's) Exit average daily sales volumes 11,000-11,500 boe/d (70% crude oil & NGL's) 11,400-11,800 boe/d (70% crude oil & NGL's) Capital spending (excluding A&D) $94 million $100 million Asset retirement spending $7 million $7 million Notes: 1 . The weighting of the corporate sales volumes guidance is as follows: a . Heavy crude oil: 19% b . Light/medium crude oil: 23% c . Tight oil: 9% d . NGL's: 14% e . Coal-bed methane natural gas: 3% f . Conventional natural gas: 27% g . Shale gas: 5% About the Company Journey is a Canadian exploration and production company focused on oil-weighted operations in Alberta, Canada. Journey's strategy is to grow its production base by drilling on its existing core lands, implementing secondary and tertiary flood projects on its existing lands, and by executing on accretive acquisitions. The Company continues to shift its focus to the development of its unconventional Duvernay light oil resource play. In addition, Journey is continuing with its plans to grow its power generation business through its projects at Gilby and Mazeppa. For further information contact: Alex G. Verge President and Chief Executive Officer 403-303-3232 alex.verge@journeyenergy.ca
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Gerry Gilewicz Chief Financial Officer 403-303-3238 gerry.gilewicz@journeyenergy.ca Journey Energy Inc. 700, 517 - 10th Avenue SW Calgary, AB T2R 0A8 403-294-1635 www.journeyenergy.ca ADVISORIES This press release contains forward-looking statements and forward-looking information (collectively "forward looking information") within the meaning of applicable securities laws relating to the Company's plans and other aspects of the anticipated future operations, management focus, strategies, financial, operating and production results, industry conditions, commodity prices and business opportunities. In addition, and without limiting the generality of the foregoing, this press release contains forward-looking information regarding decline rates, anticipated netbacks, drilling inventory, estimated average drill, complete and equip and tie-in costs, anticipated potential of the Assets including, but not limited to, EOR performance and opportunities, capacity of infrastructure, potential reduction in operating costs, production guidance, total payout ratio, capital program and allocation thereof, future production, decline rates, funds flow, net debt, net debt to funds flow, exchange rates, reserve life, development and drilling plans, well economics, future cost reductions, potential growth, and the source of funding Journey's capital spending. Forward-looking information typically uses words such as "anticipate", "believe", "project", "expect", "goal", "plan", "intend" or similar words suggesting future outcomes, statements that actions, events or conditions "may", "would", "could" or "will" be taken or occur in the future. The forward-looking information is based on certain key expectations and assumptions made by management, including expectations and assumptions concerning prevailing commodity prices and differentials, exchange rates, interest rates, applicable royalty rates and tax laws; future production rates and estimates of operating costs; performance of existing and future wells; reserve and resource volumes; anticipated timing and results of capital expenditures; the success obtained in drilling new wells; the sufficiency of budgeted capital expenditures in carrying out planned activities; the timing, location and extent of future drilling operations; the state of the economy and the exploration and production business; results of operations; performance; business prospects and opportunities; the availability and cost of financing, labor and services; the impact of increasing competition; the ability to efficiently integrate assets and employees acquired through acquisitions, including the Acquisition, the ability to market oil and natural gas successfully and the ability to access capital. Although we believe that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Journey can give no assurance that they will prove to be correct. Since forward-looking information addresses future events and conditions, by its very nature they involve inherent risks and uncertainties. The actual results, performance or achievement could differ materially from those expressed in, or implied by, the forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits that we will derive therefrom. Management has included the above summary of assumptions and risks related to forward-looking information provided in this press release in order to provide security holders with a more complete perspective on future operations and such information may not be appropriate for other purposes.
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Readers are cautioned that the foregoing lists of factors are not exhaustive. Additional information on these and other factors that could affect the operations or financial results are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website ( www.sedar.com ).These forward looking statements are made as of the date of this press release and we disclaim any intent or obligation to update publicly any forward-looking information, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws. This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about Journeys prospective results of operations, funds flow, netbacks, debt, payout ratio well economics and components thereof, all of which are subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraphs. FOFI contained in this press release was made as of the date of this press release and was provided for providing further information about Journey's anticipated future business operations. Journey disclaims any intention or obligation to update or revise any FOFI contained in this press release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this press release should not be used for purposes other than for which it is disclosed herein. Information in this press release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws, which involves substantial known and unknown risks and uncertainties, most of which are beyond the control of Journey, including, without limitation, those listed under "Risk Factors" and "Forward Looking Statements" in the Annual Information Form filed on www.SEDARPLUS.com on March 24, 2026. Forward-looking information may relate to the future outlook and anticipated events or results and may include statements regarding the business strategy and plans and objectives. Particularly, forward-looking information in this press release includes, but is not limited to, information concerning Journey's drilling and other operational plans, production rates, and long-term objectives. Journey cautions investors in Journey's securities about important factors that could cause Journey's actual results to differ materially from those projected in any forward-looking statements included in this press release. Information in this press release about Journey's prospective funds flows and financial position is based on assumptions about future events, including economic conditions and courses of action, based on management's assessment of the relevant information currently available. Readers are cautioned that information regarding Journey's financial outlook should not be used for purposes other than those disclosed herein. Forward-looking information contained in this press release is based on current estimates, expectations and projections, which we believe are reasonable as of the current date. No assurance can be given that the expectations set out in the Prospectus or herein will prove to be correct and accordingly, you should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While we may elect to, we are under no obligation and do not undertake to update this information at any particular time except as required by applicable securities law. Non-IFRS Measures The Company uses the following non-IFRS measures in evaluating corporate performance. These terms do not have a standardized meaning prescribed by International Financial Reporting Standards and therefore may not be comparable with the calculation of similar measures by other companies. (1) "Adjusted Funds Flow" is calculated by taking "cash flow provided by operating activities" from the financial statements and adding or deducting: changes in non-cash working capital; non- recurring "other" income; transaction costs; and decommissioning costs. Adjusted Funds Flow per share is calculated as Adjusted Funds Flow divided by the weighted-average number of shares outstanding in the period. Because Adjusted Funds Flow and Adjusted Funds Flow per share are not impacted by fluctuations in non-cash working capital balances, Management believes these
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measures are more indicative of performance than the GAAP measured "cash flow generated from operating activities". In addition, Journey excludes transaction costs from the definition of Adjusted Funds Flow, as these expenses are generally in respect of capital acquisition transactions. The Company considers Adjusted Funds Flow a key performance measure as it demonstrates the Company's ability to generate funds necessary to repay debt and to fund future growth through capital investment. Journey's determination of Adjusted Funds Flow may not be comparable to that reported by other companies. Journey also presents " Adjusted Funds Flow per basic share " where per share amounts are calculated using the weighted average shares outstanding consistent with the calculation of net income (loss) per share, which per share amount is calculated under IFRS and is more fully described in the notes to the audited, year-end consolidated financial statements. Three months ended June 30, Six months ended June 30, 2026 2025 % Change 2026 2025 % Change Cash flow provided by operating activities 19,490 11,112 75 33,857 24,774 37 Add (deduct): Changes in non-cash working capital (2,082 ) 3,515 (159 ) (4,489 ) 8,489 (153 ) Transaction costs 200 - - 200 81 147 Decommissioning costs incurred 780 1,262 (38 ) 2,520 2,164 16 Adjusted Funds Flow 18,388 15,889 16 32,088 35,508 (10 ) Adjusted Funds Flow per basic/diluted weighted average share $0.27/ $0.26 $0.24/ $0.24 $0.48/ $0.46 $0.53/ $0.53 (2) " Netback(s) ". The Company uses netbacks to help evaluate its performance, leverage, and liquidity; comparisons with peers; as well as to assess potential acquisitions. Management considers netbacks as a key performance measure as it demonstrates the Company's profitability relative to current commodity prices. Management also uses them in operational and capital allocation decisions. Journey uses netbacks to assess its own performance and performance in relation to its peers. These netbacks are operating, Funds Flow and net income (loss). " Operating netback " is calculated as the average sales price of the commodities sold (excluding financial hedging gains and losses), less royalties, transportation costs and operating expenses. There is no GAAP measure that is reasonably comparable to netbacks. Three months ended June 30, Six months ended June 30, 2026 2025 % 2026 2025 % Realized price 69.32 45.36 53 60.01 48.95 23 Royalties (15.14 ) (7.24 ) 109 (11.59 ) (8.24 ) 41 Operating expenses (21.77 ) (17.58 ) 24 (21.36 ) (18.32 ) 17 Transportation expenses (1.75 ) (0.92 ) 90 (1.68 ) (0.99 ) 70 Netback 30.66 19.62 56 25.38 21.40 19 (3) " Net debt " is calculated by taking current assets and then subtracting accounts payable and accrued liabilities; the principal amount of term debt; and the carrying value of the other liability. Net debt is used to assess the capital efficiency, liquidity and general financial strength of the Company. In addition, it is used as a comparison tool to assess financial strength in relation to Journey's peers. The reconciliation of Journey's net debt is as follows: ($000's) June 30, 2026 June 30, 2025 Bank debt 1 8,664 3,160 Convertible debentures 1 38,000 38,000 Accounts payable and accrued liabilities 43,731 39,083 Other loans 1 375 375 Deduct:
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Cash in bank (4 ) (8 ) Accounts receivable (23,162 ) (28,427 ) Prepaid expenses and deposits (9,849 ) (9,182 ) Net debt 57,755 55,985 1. Principal amount of the debt. (4) Journey uses " Capital Expenditures" to measure its capital investment level compared to the Company's annual budgeted capital expenditures for its organic capital program, excluding acquisitions or dispositions. The directly comparable GAAP measure to capital expenditures is cash used in investing activities. Journey then adjusts its capital expenditures for A&D activity to give a more complete analysis for its capital spending used for FD&A purposes. The following table details the composition of capital expenditures and its reconciliation to cash flow used in investing activities: Three months ended June 30, Six months ended June 30, 2026 2025 % Change 2026 2025 % Change Cash expenditures: Land and lease rentals 93 470 (80 ) 135 669 (80 ) Geological and geophysical 85 - - 170 (11 ) (1645 ) Drilling and completions 13,750 19,253 (29 ) 19,158 27,681 (31 ) Well equipment and facilities 5,652 3,600 57 7,054 4,637 52 Power generation 5,258 2,129 147 15,685 5,482 186 Total capital expenditures 24,838 25,452 (2 ) 42,202 38,458 10 PP&E acquisitions (dispositions) (7,000 ) 21 (33433 ) (7,225 ) (3,342 ) 116 Other dispositions - (4 ) (100 ) (106 ) (73 ) 45 Net capital expenditures 17,838 25,469 (30 ) 34,871 35,043 - Other expenditures: Administrative - 66 (100 ) - 66 (100 ) Decommissioning 780 1,262 (38 ) 2,520 2,164 16 Total capital expenditures 18,618 26,797 (31 ) 37,391 37,273 - Measurements All dollar figures included herein are presented in Canadian dollars, unless otherwise noted. Where amounts are expressed in a barrel of oil equivalent ("boe"), or barrel of oil equivalent per day ("boe/d"), natural gas volumes have been converted to barrels of oil equivalent at nine (6) thousand cubic feet ("Mcf") to one (1) barrel. Use of the term boe may be misleading particularly if used in isolation. The boe conversion ratio of 6 Mcf to 1 barrel ("Bbl") of oil or natural gas liquids is based on an energy equivalency conversion methodology primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. This conversion conforms to the Canadian Securities Regulators' National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities. Oil and Gas Disclosure IP30 most commonly means initial production at 30 days. It is the average daily production rate of a well during its first 30 days of operation and is used as an early indicator of well performance. Share Capital Journey's common shares are listed on the Toronto Stock Exchange and trades under the symbol "JOY". The table below summarizes the number of common shares outstanding: Three months ended June 30, Six months ended June 30, (000s) 2026 2025 2026 2025
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Weighted average shares outstanding, basic 67,481 67,107 67,481 67,107 Dilutive effect of outstanding securities 2,785 177 1,896 - Weighted average shares outstanding, diluted 70,266 67,284 69,377 67,107 Dilutive instruments excluded from diluted calculations 7,604 2,213 8,493 2,390 Fully diluted shares 77,870 69,497 77,870 69,497 For purposes of calculating the fully diluted shares the dilution impact from the convertible debentures (7,600 thousand) shares have been excluded as the conversion price of $5.00 is out-of-the-money. Abbreviations The following abbreviations are used throughout these MD&A and have the ascribed meanings: API American Petroleum Institute bbl Barrel bbls Barrels bbl/d Barrels of oil per day boe barrels of oil equivalent (see conversion statement) boe/d barrels of oil equivalent per day gj Gigajoules GAAP Generally Accepted Accounting Principles IFRS International Financial Reporting Standards mbbls thousand barrels mboe thousand boe mcf thousand cubic feet mmcf million cubic feet mmcf/d million cubic feet per day MSW Mixed sweet Alberta benchmark oil price at Edmonton Alberta MW One million watts of power NGL's natural gas liquids (ethane, propane, butane and condensate) WCS Western Canada Select benchmark oil price. This crude oil is heavy/sour with API gravity of 19-22 degrees and sulphur content of 1.8-3.2%. WTI West Texas Intermediate benchmark oil price. This crude oil is light/sweet with API gravity of 39.6 degrees and sulfur content of 0.24%. Unless otherwise noted, all volumes in this press release refer to the sales volumes of crude oil, natural gas and associated by-products measured at the point of sale to third-party purchasers. For natural gas, this occurs after the removal of natural gas liquids. No securities regulatory authority has either approved or disapproved of the contents of this press release.
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