Ann: Half Year Accounts, page-3

Dear Fellow Shareholders

I am privileged to address you in my capacity as the Managing Director. As I step into this role, I see tremendous potential
within our Company, with a robust asset base that presents an excellent opportunity to enhance value for our valued
shareholders through prudent and efficient management.
With over three decades of experience both domestically and internationally in managing businesses, I have had the
privilege of working with notable Oil and Gas producers and a major service company. This extensive experience has instilled
in me a crucial lesson: the path to success doesn't always have to mirror past practices or conform to industry norms. There
are myriad opportunities for enhancing cost-effectiveness and efficiency throughout our operations, whether they are
large-scale initiatives or incremental improvements in our day-to-day activities.
Our commitment to capital efficiency guided our decision to divest the Tommy Lakes Money asset. Unfavourable forward
pricing for gas limited our financing and equity options for developing the Montney assets. To achieve acceptable returns,
the minimum work program required a substantial investment ranging from C$50 million to C$100 million. Continuing to
hold the Montney assets would have resulted in an annual burn rate of approximately C$1 million, eroding overall value.
Consequently, we have divested our Montney Assets, allowing us to concentrate on our Thorsby and Brooks production
assets and other initiatives that offer more immediate returns to our Company and shareholders.
As we navigate the volatile yet improving landscape of oil and gas pricing, with the impending commissioning of oil export
capacity through TMX and gas export capacity via Coastal Gas Link and LNG Canada, we are optimistic about the outlook
for our industry in the coming years.
As the third quarter drilling program commences, we observe a stabilization in service and supply costs, signalling a
reduction in the high inflation rates experienced in the previous year. Our capital program is strategically designed to sustain
production at approximately 4,000 boepd, affording the Company the flexibility to allocate resources towards delivering
returns to our shareholders while maintaining a robust balance sheet that allows us to capitalize on evolving opportunities.
Our unwavering commitment to long-term shareholder value creation remains steadfast as we look to build upon our solid
foundation. We are dedicated to unlocking compelling value across our existing assets while placing paramount importance
on safety, sustainability, and sound governance in every facet of our operations. We firmly believe that higher commodity
prices, consistent production levels, and cost-effective drilling programs in our Brooks and Thorsby fields will deliver robust
returns for our shareholders in 2023 and beyond.
I thank you for your continued support. I am confident that, with the dedication of our talented team at Calima and the
continued support of you, our shareholders, we will deliver improved returns.
Warm regards,
Karl DeMong
Managing Director