Calgary, Alberta--(Newsfile Corp. - March 6, 2026) - Lycos Energy Inc. (TSXV: LCX) ("Lycos" or the "Company") is pleased to announce that it has entered into a definitive agreement (the "Agreement") on March 6, 2026 with Mahikan Oil Corporation ("Mahikan"), a privately-held, arm's length, heavy oil producer, to complete a strategic business combination in an all-share transaction (the "Combination"). Lycos is also pleased to announce a concurrent equity financing to be offered on a non-brokered private placement basis for aggregate gross proceeds of $30.0 million (the "Offering" and, together with the Combination, the "Transaction").

Summary of the Combination

Pursuant to the terms of the Agreement, Lycos will acquire Mahikan for total consideration of approximately $49.7 million, including the assumption of net debt, consisting of 29,781,301 common shares of Lycos ("Lycos Shares") at a deemed price of $1.20 per Lycos Share, representing 0.60 of a Lycos Share for each common share of Mahikan.

Concurrent with the execution of the Agreement, shareholders of Mahikan representing 100% of the outstanding shares, executed letters of transmittal irrevocably accepting Lycos' offer and tendering their shares in connection with the Combination. Following closing of the Transaction, Mahikan will continue to operate as a wholly owned subsidiary of Lycos.

The Combination is expected to close on or before March 31, 2026, subject to certain customary conditions and approvals, including the approval of the TSX Venture Exchange (the "TSXV"). The Agreement provides for, among other things, non-solicitation covenants. All of the Lycos Shares issued to directors, officers and 10% shareholders of Mahikan, representing an aggregate of 21,150,001 Lycos Shares on closing, will be subject to a hold period and released as to 1/3 on each of the dates which is four, eight and twelve months following the closing. Lycos Shares issued to all other shareholders of Mahikan will be subject to a four-month hold period.

The Combination and the Offering will not result in the creation of a new "control person" of Lycos, as such term is defined by the policies of the TSXV. In addition, the Transaction will not result in a "change of control" of Lycos, as such term is defined by the policies of the TSXV. The Transaction is not a related party transaction.

Strategic Rationale

Lycos and Mahikan have each executed on strategies of acquiring land and inventory-rich assets with established total petroleum initially-in-place ("PIIP") and development potential, applying disciplined capital allocation, optimized well design and operational execution to enhance asset performance prior to divestiture. While the merits of the Lycos and Mahikan asset bases stand on their own, their respective elements are highly complementary to one another. Lycos believes the combined teams' experience developing stacked Mannville inventory provides a solid foundation to responsibly advance the newly acquired contiguous land base.

Combination Highlights

• New Core Area - 45 Net Contiguous Sections of Stacked Mannville Rights
  The Combination establishes a new operated core area comprised of approximately 45 net contiguous sections of largely undeveloped land prospective for multiple Mannville horizons. The contiguous land base provides enhanced development flexibility, pad-style drilling opportunities and infrastructure optimization potential.

• Stacked Mannville Pay with Multi-Zone Optionality
  The Mahikan land position is prospective for multiple stacked Mannville targets, including the Waseca, Sparky, General Petroleum (G.P.) and Lloydminster formations, providing repeatable drilling inventory across several oil-bearing horizons and long-term development visibility.

• Large Oil-in-Place Resource Base
  The Mahikan asset base is supported by a significant PIIP estimate of approximately 1.44 billion barrels, underpinning long-life resource potential and future recovery upside through optimized primary and enhanced recovery development strategies.

• Material Development Inventory
  Identified drilling inventory of approximately 698 gross (698 net) locations, with additional upside potential through delineation and step-out development across the broader land base.

• Management and Board of Directors
  Lycos will continue to be led by Dave Burton, President and Chief Executive Officer, and will include Mahikan team members Taylor Law as Vice President, Exploration, Craig Hutton as President of the Mahikan Business Unit and Brennan Kasper as Director, Land. Upon completion of the Transaction, the board of directors of Lycos (the "Board") will include equal representation from both companies with Tom Coolen (Chairperson) and Steve Buytels, two existing directors of Mahikan, and Dave Burton and Bruce Beynon, two incumbent directors of the Board, ensuring continuity of governance and corporate oversight. Two additional independent Board members will be appointed in connection with the Transaction.

Equity Offering

Lycos is also pleased to announce a non-brokered private placement offering of up to 25,000,000 Lycos Shares (the "Offered Shares") at a price of $1.20 per Offered Share for aggregate gross proceeds of up to $30.0 million. It is anticipated that certain directors, officers and employees of the combined entity will subscribe for approximately $5.0 million of the Offering.

The Lycos Shares will be issued on a private placement basis pursuant to applicable prospectus exemptions under Canadian securities laws in all the provinces and territories of Canada. The Offered Shares may also be offered and sold in the United States by way of private placement pursuant to exemptions from the registration requirements of the United States Securities Act of 1933, as amended (the "U.S. Securities Act") and to eligible purchasers resident in jurisdictions other than Canada and the United States in compliance with applicable securities laws. Net proceeds from the Offering will be used to repay indebtedness incurred in connection with the Combination, to fund future development capital and for general corporate purposes. Upon completion of the Transaction and assuming gross proceeds of $30.0 million are raised through the Offering, Lycos is expected to have a net cash position of approximately $13.0 million.

The Offering is anticipated to close on or about March 31, 2026, subject to customary closing conditions, including approval of the TSXV. In connection with the Offering, certain eligible advisors may receive cash finder's fees, in accordance with applicable securities laws and the policies of the TSXV.

Following the completion of the Offering, insiders of the Company are expected to hold in excess of 20% of the issued and outstanding Lycos Shares.

All securities issued under the Offering will be subject to a statutory hold period of four months and one day from the date of issuance in accordance with applicable securities laws.

Board Additions

Tom Coolen, Chairperson (Calgary, Canada)
Mr. Coolen has been a director of Trican Well Services since August 2025, following the acquisition of Iron Horse Energy Services by Trican. Prior to joining Trican, he served as Chairman and CEO of Iron Horse from 2010 to 2025. Mr. Coolen began his career in 2002 with Schlumberger Oilfield Services, where he gained extensive experience in the energy sector. He previously served as a director on the board of Buffalo Mission Energy Corp. ("Buffalo Mission") prior to its acquisition in 2024 by Rubellite Energy. Mr. Coolen holds a Bachelor of Engineering from Dalhousie University.

Steve Buytels, Director (Calgary, Canada)
Mr. Buytels is the President of Tamarack Valley Energy and brings over 20 years of oil and gas, capital markets, and financial advisory experience. Prior to his appointment as President, he served as the Chief Financial Officer of Tamarack Valley Energy from 2020 to 2025. Before joining Tamarack, he served as a Partner and Managing Director at various independent investment banks specializing in the energy sector.

He previously served as a director on the board of Buffalo Mission prior to its acquisition in 2024 by Rubellite Energy. Mr. Buytels holds a Chartered Financial Analyst Designation and a Bachelor of Management from the University of Lethbridge.

Advisors

National Bank Capital Markets is acting as exclusive financial advisor to Lycos in connection with the Combination and as lead financial advisor to Lycos in connection with the Offering.

Peters & Co. Limited is acting as exclusive financial advisor to Mahikan in connection with the Combination and as co-financial advisor to Lycos in connection with the Offering.

Stikeman Elliott LLP is acting as legal counsel to Lycos in connection with the Combination and the Offering.

Torys LLP is acting as legal counsel to Mahikan with respect to the Combination.

About Lycos

Lycos is an oil-focused, exploration, development and production company based in Calgary, Alberta, operating high-quality, heavy-oil, development assets in the East Central, Alberta area.

Additional Information

For further information, please contact:

Reader Advisories

The TSX Venture Exchange Inc. has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this press release.

This press release is not an offer of the securities for sale in the United States. The securities may not be offered or sold in the United States absent registration or an available exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. Lycos will not make any public offering of the securities in the United States. The securities have not been and will not be registered under the U.S. Securities Act.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Forward-Looking and Cautionary Statements

Certain statements contained within this press release constitute forward-looking statements within the meaning of applicable Canadian securities legislation. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "budget", "plan", "endeavor", "continue", "estimate", "evaluate", "expect", "forecast", "monitor", "may", "will", "can", "able", "potential", "target", "intend", "consider", "focus", "identify", "use", "utilize", "manage", "maintain", "remain", "result", "cultivate", "could", "should", "believe" and similar expressions. Lycos believes that the expectations reflected in such forward-looking statements are reasonable as of the date hereof, but no assurance can be given that such expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. Without limitation, this press release contains forward-looking statements pertaining to: Lycos' business strategy, objectives, strength and focus; the completion of the Combination, including anticipated funding and timing thereof; the completion of the Offering and the terms, timing and use of proceeds therefrom; satisfaction or waiver of the closing conditions to the Combination and the Offering; receipt of required legal, court and regulatory approvals for the completion of the Combination and the Offering; the anticipated benefits of the Combination, including the impact of the Combination on Lycos' operations, inventory and opportunities, financial condition, access to capital and overall strategy; anticipated growth, production levels, capital expenditures, drilling plans and locations; expectations regarding commodity prices; the performance characteristics of Lycos' oil and natural gas properties; the ability of Lycos to achieve drilling success consistent with management's expectations, including through the use of proprietary fishbone well designs; and the source of funding for Lycos' activities including development costs. Statements relating to production, recovery, replacement, costs and valuation are also deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the oil exists in the quantities predicted or estimated and that the oil can be profitably produced in the future.

The forward-looking statements and information are based on certain key expectations and assumptions made by Lycos, including expectations and assumptions concerning the business plan of Lycos; the receipt of all approvals and satisfaction of all conditions to the completion of the Combination and the Offering; the timing of and success of future drilling, development and completion activities; the geological characteristics of Lycos' properties; prevailing commodity prices, price volatility, price differentials and the actual prices received for Lycos' products; the availability and performance of drilling rigs, facilities, pipelines and other oilfield services; the timing of past operations and activities in the planned areas of focus; the drilling, completion and tie-in of wells being completed as planned; the performance of new and existing wells; the application of existing drilling and fracturing techniques; prevailing weather and break-up conditions; royalty regimes and exchange rates; the application of regulatory and licensing requirements; the continued availability of capital and skilled personnel; the ability to maintain or grow its credit facility; the accuracy of Lycos' geological interpretation of its drilling and land opportunities, including the ability of seismic activity to enhance such interpretation; and Lycos' ability to execute its plans and strategies.

Although Lycos believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because Lycos can give no assurance that they will prove to be correct. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed. These risks and uncertainties include, but are not limited to, counterparty risk to closing the Combination and the Offering; unforeseen difficulties in integrating the assets to be acquired pursuant to the Combination into Lycos' operations; incorrect assessments of the value of benefits to be obtained from business combinations and exploration and development programs (including the Combination); fluctuations in commodity prices, changes in industry regulations and political landscape both domestically and abroad, wars (including Russia's military actions in Ukraine), hostilities, civil insurrections, foreign exchange or interest rates, increased operating and capital costs due to inflationary pressures (actual and anticipated), volatility in the stock market and financial system, impacts of pandemics, the retention of key management and employees, risks with respect to unplanned third-party pipeline outages and risks relating to the Alberta wildfires, including in respect of safety, asset integrity and shutting in production. Ongoing military actions between Russia and Ukraine have the potential to threaten the supply of oil and gas from the region. The long-term impacts of the actions between these nations remains uncertain. Please refer to the annual information form for the year ended December 31, 2024, and management's discussion and analysis for the period ended September 30, 2025 (the "MD&A") for additional risk factors relating to Lycos, which can be accessed either on Lycos' website at www.lycosenergy.com or under Lycos' SEDAR+ profile at www.sedarplus.ca. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date hereof, and to not use such forward-looking information for anything other than its intended purpose. Lycos undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law. Any financial outlook or future-oriented financial information contained in this press release has been approved by management as of the date hereof, is provided for the purpose of conveying the anticipated effects of the Company's planned activities and strategies and may not be appropriate for other purposes.

Disclosure of Oil and Gas Information

Unit Cost Calculation. The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet per barrel (6 Mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions in the report are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.

Product Types. Throughout this press release, "crude oil" or "oil" refers to heavy crude oil product types as defined in National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities.

Drilling Locations. The drilling locations disclosed in this press release are unbooked locations. Unbooked locations are internal estimates based on Lycos' assumptions as to the number of wells that can be drilled per section based on industry practice and internal review. Unbooked locations do not have attributed reserves or resources. Unbooked locations have been identified by management as an estimation of Company's multi-year drilling activities based on evaluation of applicable geologic, seismic, engineering, production and reserves information. There is no certainty that Lycos will drill all unbooked drilling locations and if drilled there is no certainty that such locations will result in additional oil and gas reserves, resources or production. The drilling locations considered for future development will ultimately depend upon the availability of capital, regulatory approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results, additional reservoir information that is obtained and other factors. While certain of the unbooked drilling locations have been derisked by the drilling of existing wells in relative close proximity to such unbooked drilling locations, other unbooked drilling locations are farther away from existing wells where management has less information about the characteristics of the reservoir and therefore there is more uncertainty whether wells will be drilled in such locations and if drilled there is more uncertainty that such wells will result in additional oil and gas reserves, resources or production.

PIIP Disclosure: The term total petroleum initially-in-place ("PIIP") is equivalent to the legacy term original oil-in-place and is that quantity of petroleum that is estimated to originally exist in naturally occurring accumulations. It includes that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations, prior to production, plus those estimated quantities in accumulations yet to be discovered. A portion of the PIIP is considered undiscovered and there is no certainty that any portion of such undiscovered resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of such undiscovered resources. With respect to the portion of the PIIP that is considered discovered resources, there is no certainty that it will be commercially viable to produce any portion of such discovered resources. A significant portion of the estimated volumes of PIIP will never be recovered. PIIP disclosed herein in respect of the Mahikan assets was internally estimated by Lycos' management. There is no certainty management's PIIP estimates were prepared in accordance with the most recent publication of the Canadian Oil and Gas Evaluations Handbook. The estimates may not be comparable to similar measures presented by other companies and therefore should not be used to make such comparisons.

Abbreviations

All dollar figures included herein are presented in Canadian dollars, unless otherwise noted.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/286518

Source: Lycos Energy Inc.