Cuda Oil and Gas Inc. Announces a Material Improvement to its Liquidity Position with the Successful Amendments to its Indebtedness and the Establishment of a New Senior Credit Facility

• $48 million Existing Demand Facilities Amended and Maturity Dates Extended;

• $ 9 million New Demand Facility Established;

• $ 1.5 million Convertible Debentures Amended and Maturity Date Extended.

Calgary, Alberta--(Newsfile Corp. - January 26, 2021) -  Cuda Oil and Gas Inc. (TSXV: CUDA) ("Cuda" or the "Company") is pleased to announce a major restructuring of its indebtedness including the establishment of a new senior $ 9 million credit facility ("New Facility"). Proceeds will be used for the continued development of its assets in the Powder River Basin, Wyoming.

Glenn Dawson, President and Chief Execuitve Officer of Cuda, stated: "In spite of unprecedented volatility in commodity prices over the last year, the refinancing and extension of our existing credit facilities and the establishment of a new $9 million demand facility speaks to our lenders' confidence in our asset in the Powder River Basin and our progress to advance the miscible gas-flood program at Shannon Secondary Recovery Unit ("SSRU"). We are grateful for their ongoing support. By eliminating the indebtedness to the Operator, Cuda is now in good standing and able to optimize field-wide gas injection which is expected to result in a material increase in production and cash flow at current commodity prices. Progress on the development of the asset continues to exceed expectations and we look forward to updating our stakeholders on field-level results of the program shortly."

An extension and amendment of the existing demand facilities of $48.0 million (the "Existing Credit Facilities") has been reached with the Company's Canadian institutional lender ("Existing Lender"). The Existing Credit Facilities have been extended to November 30, 2021 and will be subordinate to the New Facility until the New Facility is repaid. Interest on the Existing Credit Facilities is 13% per annum on the first $20 million outstanding and 18% per annum on the remaining outstanding balance. Outstanding financing fees owing to the Existing Lender have been added to the outstanding principal of the Existing Credit Facilities. Pursuant to the terms of the amendment of the Existing Credit Facilities, the Company will issue up to 9.1 million common shares to the Existing Lender for no cash consideration and the Existing Lender will surrender 1.5 million warrants for cancellation, subject to approval from the TSX Venture Exchange ("TSXV") and other necessary approvals.

The Company has also signed an agreement for an additional credit facility of $9.0 million with Tallinn Capital Energy Limited Partnership ("Tallinn"). The New Facility allows Cuda to borrow up to $9.0 million, at an interest rate of 12% per annum and maturing on November 30, 2021. Tallinn will also receive customary commitment and work fees and a 1% deferred interest fee on the New Facility. Cuda intends to use the proceeds from the New Facility to fund existing and certain future capital expenditures at Barron Flats-SSRU in Converse County, Wyoming to continue its project to increase conventional crude oil production.

Cuda also announces the replacement of its existing Series A and B Convertible Debentures with a New Series C Convertible Debenture in the amount of $1,500,000 effective July 21, 2020. The New Convertible Debenture has been extended for an additional three (3) years to mature on July 21, 2023. The revised interest rate on the New Convertible Debenture will be 15% per annum, with current outstanding and future interest payable to July 21, 2022 to be added to the outstanding principal. Cuda retains the right to pay up to 50% of the semi-annual interest by issuing common shares of the Company.

KES 7 Capital Inc. ("KES 7") acted as financial advisor to the Company. Subject to the approval of the TSXV, the Company is to issue 2,852,972 warrants to KES 7, exercisable at a price of $0.07 per share for a three year term, for advisory services rendered. Also, pursuant to the previous extension of the Existing Credit Facilities described in the Company's press release dated May 7, 2020, KES 7 is to receive 2 million warrants, exercisable at a price of $0.06 per share for a three year term, for advisory services previously rendered.

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

Forward-Looking Information
This news release contains forward-looking information. All statements other than statements of historical fact included in this news release are forward-looking information that involve various risks and uncertainties and are based on forecasts of future operations, estimates of amounts not yet determinable and assumptions of management. In particular, this news release includes forward-looking information relating to: (i) the use of proceeds of the refinancing; (ii) the issuance of common shares to the Existing Lender and the issuance of warrants to KES 7; (iii) expectations regarding a material increase in production and cashflow; (iv) exploration and development activities and the timing of such activities; and (v) the timing of operational developments relating to the Company's natural gas miscible flood program. These statements are based on certain assumptions of the Company relating to current conditions and expected future developments including assumptions relating to regulatory approvals and business prospects and opportunities. Risk factors that could prevent forward looking statements relating to Cuda and its operating activities from being realized include 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, access to capital, market conditions, the availability and nature of alternative sources of energy, conclusions of economic evaluations and changes in project parameters as plans continue to be refined as well as future prices of oil and natural gas. 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.

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

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