Greenfields Petroleum Corporation Reports 2019 Year End Reserves and Announces Update on the Filing of 2019 Year-End and 2020 First Quarter Results and Extension of Debt Payment

Greenfields Petroleum Corporation is pleased to announce the Company’s oil, natural gas and natural gas liquids (“NGL”) reserves as at December 31, 2019, as evaluated by an independent qualified reserves evaluator, Wisholm Geosciences Inc. (“WGI”), in an independent report (the “WGI Report”) as well as a progress update on the extension of its senior debt payment. In addition to the summary information disclosed in this announcement, more detailed information is included in Greenfields’ statement of reserves data as at December 31, 2019 which has been filed on the Company’s SEDAR profile at www.sedar.com. All amounts herein are in United States dollars.

WGI REPORT

As at December 31, 2019, the proved reserves net to the Company through its interest in Bahar Energy Limited were evaluated at 34,900 Mboe and the total proved plus probable reserves were evaluated at 52,688 Mboe net to the Company. The net present value of proved reserves discounted at 10% (“PV10”) was $196 million net to the Company while the PV10 of the proved plus probable reserves was $506 million.

Reserves Summary

The WGI Report has evaluated Greenfields’s reserves in accordance with National Instrument 51-101 “Standards of Disclosure for Oil and Gas Activities” and the Canadian Oil and Gas Evaluation Handbook (“COGEH”). The Company’s net reserves at December 31, 2019 as set forth in the WGI Report are summarized below:

1. Total numbers have been adjusted to reflect changes made to COGEH related to the reporting of Company Net Reserves associated with Production Sharing Contracts. Please see the below reconciliation table.

A reconciliation of the Company’s net lease reserves at December 31, 2019 to the previous year-end is as follows:

1. Opening Balance has been adjusted to reflect changes made to COGEH related to the reporting of Company’s net lease reserves associated with Production Sharing Contracts.
2. Opening Balances were separately prepared by GLJ Petroleum Consultants Ltd., an independent qualified reserves evaluator.

Pricing Assumptions – Forecast Prices and Costs

The WGI Report uses the following pricing and inflation rate assumptions as of December 31, 2019 in estimating the Company’s reserves data using forecast prices and costs.

Notes:

1. Per GLJ’s Crude Oil Price Forecast effective January 1, 2020.
2. Net Realized Oil Prices are calculated at approximately 94% of GLJ forecast Brent Crude Price less $3.00/bbl for transportation and marketing costs.
3. Escalation rates are based on the Society of Petroleum Evaluation Engineers annual survey of projected expenses and costs.

LOAN FACILITY

The Company has made positive progress on a payment deferral letter with its senior lender, Vitol Energy (Bermuda) Ltd.(“Vitol”), regarding deferring the loan payment due under the Company’s credit facility from April 30th, 2020. The Company anticipates that the deferral will give the Company sufficient time to comply with its obligations to the Company’s loan agreement with Vitol, as amended.

FINANCIAL STATEMENTS

As previously announced, the Alberta Securities Commission (the “ASC”) has issued a temporary management cease trade order (“MCTO”) against Greenfields on the basis that the Company was unable to file its annual financial statements, management’s discussion and analysis and related certifications for the financial year ended December 31, 2019 (the “Annual Filings”) by the filing deadline, as extended under ASC Blanket Order 51-517. The financial audit process is taking longer than usual due to the continued impact of COVID-19. In particular, delay has resulted from travel restrictions imposed by the Cabinet of Ministers of the Azerbaijan Republic, including the suspension of all flights and other passenger traffic to and from Azerbaijan until August 1, 2020.

The MCTO will remain in effect until the Annual Filings and the Company’s interim financial statements, management’s discussion and analysis and related officer certifications for the three-month period ended March 31, 2020 (the “Interim Filings”) have been filed, provided that such filings are completed on or before July 31, 2020. The Company anticipates that the Annual Filings and Interim Filings will be filed on July 24, 2020.

The MCTO does not affect the ability of shareholders who are not insiders of the Company to trade their securities. The Company is providing this status update in accordance with the provisions of the alternative information guidelines set out in National Policy 12-203 Management Cease Trade Orders. Except as disclosed in this announcement, the Company confirms as of the date of this press release that there has been no material change in the information contained in the announcements issued on June 18, 2020 and July 2, 2020 and there is no other material information concerning the affairs of the Company that has not been generally disclosed.

About Greenfields Petroleum Corporation

Greenfields is an oil and natural gas exploration and development company focused on the development and production of proven oil and gas reserves principally in the Republic of Azerbaijan. More information about the Company may be obtained on the Greenfields website at www.greenfields-petroleum.com.

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