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"ifrs-full:PaymentsOfLeaseLiabilitiesClassifiedAsFinancingActivities", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:CAD" } }, "ConsolidatedStatementsOfCashFlows_NegatedLabel_0086": { "value": "65000.0", "decimals": -3, "dimensions": { "concept": "ifrs-full:PaymentsOfLeaseLiabilitiesClassifiedAsFinancingActivities", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:CAD" } }, "ConsolidatedStatementsOfCashFlows_TotalLabel_00291": { "value": "-243000.0", "decimals": -3, "dimensions": { "concept": "ifrs-full:CashFlowsFromUsedInFinancingActivities", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:CAD" } }, "ConsolidatedStatementsOfCashFlows_TotalLabel_00290": { "value": "-65000.0", "decimals": -3, "dimensions": { "concept": "ifrs-full:CashFlowsFromUsedInFinancingActivities", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:CAD" } }, "ConsolidatedStatementsOfCashFlows_Label_0088": { "value": "101000.0", "decimals": -3, "dimensions": { "concept": "ifrs-full:EffectOfExchangeRateChangesOnCashAndCashEquivalents", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:CAD" } }, "ConsolidatedStatementsOfCashFlows_Label_0087": { "value": "0.0", "decimals": -3, "dimensions": { "concept": "ifrs-full:EffectOfExchangeRateChangesOnCashAndCashEquivalents", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:CAD" } }, "ConsolidatedStatementsOfCashFlows_TotalLabel_00157": { "value": "-6473000.0", "decimals": -3, "dimensions": { "concept": "ifrs-full:IncreaseDecreaseInCashAndCashEquivalents", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:CAD" } }, "ConsolidatedStatementsOfCashFlows_TotalLabel_00156": { "value": "-3251000.0", "decimals": -3, "dimensions": { "concept": "ifrs-full:IncreaseDecreaseInCashAndCashEquivalents", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:CAD" } }, "ConsolidatedStatementsOfCashFlows_PeriodStartLabel_00159": { "value": "31791000.0", "decimals": -3, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalentsIfDifferentFromStatementOfFinancialPosition", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00", "unit": "iso4217:CAD" } }, "ConsolidatedStatementsOfCashFlows_PeriodStartLabel_00158": { "value": "35038000.0", "decimals": -3, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalentsIfDifferentFromStatementOfFinancialPosition", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2024-01-01T00:00:00", "unit": "iso4217:CAD" } }, "ConsolidatedStatementsOfCashFlows_PeriodEndLabel_00317": { "value": "25419000.0", "decimals": -3, "dimensions": { "concept": "qec:CashAndCashEquivalentsEndOfYear", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2026-01-01T00:00:00", "unit": "iso4217:CAD" } }, "ConsolidatedStatementsOfCashFlows_PeriodEndLabel_00318": { "value": "31787000.0", "decimals": -3, "dimensions": { "concept": "qec:CashAndCashEquivalentsEndOfYear", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00", "unit": "iso4217:CAD" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_0098": { "value": "1. Reporting Entity
Questerre Energy Corporation (\u201cQuesterre\u201d or the \u201cCompany\u201d) is an energy technology and innovation
company actively engaged in the acquisition, exploration and development of oil and gas projects,
specifically, non-conventional projects such as tight oil, oil shale, shale oil and shale gas. Questerre is
incorporated under the laws of the Province of Alberta and is domiciled in Canada. The address of its
registered office is 1650, 801 Sixth Avenue SW, Calgary, Alberta.These consolidated financial statements are presented in Canadian dollars, which is the functional currency of the parent company. ", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_0094": { "value": "Questerre Energy Corporation (\u201cQuesterre\u201d or the \u201cCompany\u201d) is an energy technology and innovation company actively engaged in the acquisition, exploration and development of oil and gas projects, specifically, non-conventional projects such as tight oil, oil shale, shale oil and shale gas. ", "dimensions": { "concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_0092": { "value": "Questerre Energy Corporation", "dimensions": { "concept": "ifrs-full:NameOfParentEntity", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_0095": { "value": "Questerre Energy Corporation", "dimensions": { "concept": "ifrs-full:NameOfUltimateParentOfGroup", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_0089": { "value": "Questerre Energy Corporation", "dimensions": { "concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_0097": { "value": "Corporation", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_0090": { "value": "Alberta", "dimensions": { "concept": "ifrs-full:PrincipalPlaceOfBusiness", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_0096": { "value": "Canada", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_0093": { "value": "Canada", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_0091": { "value": "1650, 801 Sixth Avenue SW, Calgary, Alberta.", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_0099": { "value": "The consolidated financial statements of the Company are comprised of Questerre Energy Corporation,
and its wholly-owned subsidiaries including Questerre Energy Corporation/Jordan, which holds interests
in Jordan, Paran\u00e1 Xisto S.A. (\u201cPX Energy\u201d), based in Brazil that owns the integrated oil shale assets in the
country and Red Leaf Resources Inc. (Red Leaf\u201d), a technology company in the USA focused on
developing, its proprietary technology to produce oil from organic material, primarily oil shale.", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00101": { "value": "a) Segmented Disclosure
Management has determined the operating segments based on information regularly reviewed for the
purposes of decision making, allocating resources, and assessing operational performance by Questerre\u2019s
chief operating decision makers comprising of the Chief Executive Officer and other members of executive
management. The operating segments have been aggregated based on several factors including
geographic location and stage of development as well as the assignment of reserves and resources.
The accounting policies applied by the segments are the same as those applied by the Company.
The Company\u2019s operating segments at year-end are as follows:
\u2022
Brazil \u2013 Integrated oil shale operations include, mining, refining, processing, and distribution
\u2022
Western Canada \u2013 Exploration and development activities in Western Canada including Alberta,
Saskatchewan and Manitoba with existing production of natural gas, crude oil and natural gas
liquids
\u2022
Quebec \u2013 Claim against the Government of Quebec for an attempted revocation of licenses for a
significant natural gas discovery in the province
\u2022
Corporate & other \u2013 General and administrative resources to manage the respective operating
segments. Includes exploration activities in the Kingdom of Jordan and ownership of Red Leaf", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00100": { "value": "a) Segmented Disclosure
Management has determined the operating segments based on information regularly reviewed for the
purposes of decision making, allocating resources, and assessing operational performance by Questerre\u2019s
chief operating decision makers comprising of the Chief Executive Officer and other members of executive
management. The operating segments have been aggregated based on several factors including
geographic location and stage of development as well as the assignment of reserves and resources.
The accounting policies applied by the segments are the same as those applied by the Company.
The Company\u2019s operating segments at year-end are as follows:
\u2022
Brazil \u2013 Integrated oil shale operations include, mining, refining, processing, and distribution
\u2022
Western Canada \u2013 Exploration and development activities in Western Canada including Alberta,
Saskatchewan and Manitoba with existing production of natural gas, crude oil and natural gas
liquids
\u2022
Quebec \u2013 Claim against the Government of Quebec for an attempted revocation of licenses for a
significant natural gas discovery in the province
\u2022
Corporate & other \u2013 General and administrative resources to manage the respective operating
segments. Includes exploration activities in the Kingdom of Jordan and ownership of Red Leaf
Segmented assets are those assets associated with each operating segment as recorded on the
consolidated balance sheets.
The table below details the breakdown of assets by operating segment to the consolidated balance sheets
and the reconciliation of loss by operating segment to the consolidated statements of net loss and
comprehensive loss.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0 \u00a0
Western
\u00a0
Corporate
\u00a0
($ thousands
)
Brazil
Canada
Quebec
& other
Consolidated
Assets by operating segment
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Exploration and Evaluation
$
\u2013
$
5,599
$
\u2013
$
\u2013
$
5,599
Property, Plant & Equipment
190,765
81,589
\u2013
3,570
275,924
Other
35,004
51,456
\u2013
27,278
113,739
Total Assets, December 31, 2025
$
225,770
$
138,644
$
\u2013
$
30,848
$
395,262
Exploration and Evaluation
$
\u2013
$
13,106
$
\u2013
$
\u2013
$
13,106
Property, Plant & Equipment
\u2013
116,695
\u2013
\u2013
116,695
Other
\u2013
4,644
7,551
28,727
40,922
Total Assets, December 31, 2024
$
\u2013
$
134,445
$
7,551
$
28,727
$
170,723
Results by operating segment
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Revenues
$
31,673
$
45,463
$
\u2013
$
\u2013
$
77,136
Operating costs including royalties
(26,452)
(26,575)
(722)
\u2013
(53,749)
General and administrative
(2,393)
(5,143)
(1,493)
\u2013
(9,029)
Depletion, depreciation, impairment and accretion
(14,556)
(67,716)
\u2013
\u2013
(82,272)
Other income (expenses)
(11,128)
\u2013
\u2013
(2,034)
(13,162)
Loss before taxes
$
(22,856)
$
(53,971)
$
(2,215)
$
(2,034)
$
(81,076)
Deferred tax recovery
\u00a0 \u00a0 \u00a0 \u00a0
2,141
Net Loss, December 31, 2025
\u00a0 \u00a0 \u00a0
$
(78,935)
Revenues
$
\u2013
$
36,927
$
\u2013
$
\u2013
$
36,927
Operating costs including royalties
\u2013
(17,262)
(671)
\u2013
(17,933)
General and administrative
\u2013
(5,530)
\u2013
\u2013
(5,530)
Depletion, depreciation, impairment and accretion
\u2013
(20,348)
\u2013
\u2013
(20,348)
Other income (expenses)
\u2013
\u2013
\u2013
(445)
(445)
Loss before taxes
$
\u2013
$
(6,213)
$
(671)
$
(445)
$
(7,329)
Deferred tax recovery
\u00a0 \u00a0 \u00a0 \u00a0
\u2013
Net Loss, December 31, 2024
\u00a0 \u00a0 \u00a0
$
(7,329)
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00102": { "value": "2. Basis of Preparation
a) Statement of compliance
The Company prepares its consolidated financial statements in accordance with International Financial
Reporting Standards (\u201cIFRS\u201d) as issued by the International Accounting Standards Boards (\u201cIASB\u201d). The
policies applied in these consolidated financial statements are based on IFRS issued and outstanding as at
March 31, 2026, the date the Board of Directors approved the statements.
b) Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis except for financial
assets classified as fair value through profit and loss which are measured at fair value with changes in fair
value recorded in profit or loss and changes due to currency translation adjustments recorded through
other comprehensive income or loss as disclosed in Note
3.", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00103": { "value": "a) Statement of compliance
The Company prepares its consolidated financial statements in accordance with International Financial
Reporting Standards (\u201cIFRS\u201d) as issued by the International Accounting Standards Boards (\u201cIASB\u201d). The
policies applied in these consolidated financial statements are based on IFRS issued and outstanding as at
March 31, 2026, the date the Board of Directors approved the statements.", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00104": { "value": "The
policies applied in these consolidated financial statements are based on IFRS issued and outstanding as at
March 31, 2026, the date the Board of Directors approved the statements.", "dimensions": { "concept": "ifrs-full:DisclosureOfAuthorisationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00105": { "value": "c) Functional and presentation currency
These consolidated financial statements are presented in Canadian dollars, which is the functional currency
of the parent company.
The functional currency of the Company\u2019s subsidiary in Brazil is the Brazilian real, Jordanian dinar for
Questerre Energy corporation/Jordan, and Red leaf\u2019s functional currency is the United States dollar. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00224": { "value": "d) Jointly controlled assets
The Company conducts many of its oil and gas production activities through jointly controlled operations.
Interests in joint arrangements are classified as either joint operations or joint ventures, depending on the
rights and obligations of the parties to the arrangement. Joint operations arise when the Company has
rights to the assets and obligations for the liabilities of the arrangement. The Company recognizes its share
of assets, liabilities, revenues and expenses of a joint operation. Joint ventures arise when the Company
has rights to the net assets of the arrangement. Joint ventures are accounted for under the equity method.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsInJointVentures", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00107": { "value": "d) Jointly controlled assets
The Company conducts many of its oil and gas production activities through jointly controlled operations.
Interests in joint arrangements are classified as either joint operations or joint ventures, depending on the
rights and obligations of the parties to the arrangement. Joint operations arise when the Company has
rights to the assets and obligations for the liabilities of the arrangement. The Company recognizes its share
of assets, liabilities, revenues and expenses of a joint operation. Joint ventures arise when the Company
has rights to the net assets of the arrangement. Joint ventures are accounted for under the equity method.", "dimensions": { "concept": "ifrs-full:DisclosureOfJointVenturesExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00106": { "value": "d) Jointly controlled assets
The Company conducts many of its oil and gas production activities through jointly controlled operations.
Interests in joint arrangements are classified as either joint operations or joint ventures, depending on the
rights and obligations of the parties to the arrangement. Joint operations arise when the Company has
rights to the assets and obligations for the liabilities of the arrangement. The Company recognizes its share
of assets, liabilities, revenues and expenses of a joint operation. Joint ventures arise when the Company
has rights to the net assets of the arrangement. Joint ventures are accounted for under the equity method.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociatesAndJointVenturesExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00109": { "value": "e) Use of estimates and judgments The timely preparation of consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. These estimates and judgments have risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Petroleum and natural gas reserves All of Questerre\u2019s petroleum and natural gas reserves are evaluated and reported on by independent reserve engineers in accordance with the COGE Handbook and Canadian Securities Administrators\u2019 National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities. The estimation of reserves is a subjective process. Forecasts are based on engineering data, anticipated future commodity prices, expected production volumes, future operating and development costs, all of which are subject to numerous uncertainties and various interpretations. The Company expects that its estimates of reserves \nwill change to reflect updated information. Reserve estimates can be revised upward or downward based \non the results of future drilling, testing, production levels and changes in costs and commodity prices. \nThese estimates are evaluated by independent reserve engineers at least annually. \nProved and probable reserves are estimated using independent reserve engineer reports and represent \nthe estimated quantities of crude oil, natural gas and natural gas liquids which geological, geophysical and \nengineering data demonstrate with a specified degree of certainty to be recoverable in future years from \nknown reservoirs and which are considered commercially producible. If probabilistic methods are used, \nthere should be at least a 50 percent probability that the quantities actually recovered will equal or exceed \nthe estimated proved plus probable reserves and there should be at least a 90 percent probability that the \nquantities actually recovered will equal or exceed the estimated proved reserves. Reserve estimates \nimpact a number of areas, in particular, the valuation of property, plant, and equipment (\u201cPP&E\u201d), and the \ncalculation of depletion. All reserves have been evaluated at December 31, 2025, by an independent \nqualified reserves evaluators. \nIdentification of cash-generating units \nThe Company\u2019s assets are aggregated into cash-generating units (\u201cCGU\u201d) for the purpose of calculating \ndepletion and impairment. A CGU is defined as the lowest grouping of assets that generate identifiable \ncash inflows that are largely independent of the cash inflows of other assets or groups of assets. The \nallocation of assets into CGUs requires significant judgment and interpretations. Factors considered in the \nclassification include geography and the way management monitors and makes decisions about its \noperations. \nImpairment of property, plant and equipment, exploration and evaluation assets and goodwill \nThe Company assesses its oil and gas properties, including exploration and evaluation assets (\u201cE&E\u201d) and \ngoodwill, for possible impairment or reversal of previously recognized impairments, other than goodwill, if \nthere are events or changes in circumstances that indicate that carrying values of the assets may not be \nrecoverable or indications that previously recognized losses should be reversed. Determining if there are \nfacts and circumstances present that indicate that carrying values of the assets may not be recoverable \nrequires management\u2019s judgment and analysis of the facts and circumstances. \nThe recoverable amounts of CGUs have been determined based on the higher of value in use (\u201cVIU\u201d) and \nthe fair value less costs of disposal (\u201cFVLCD\u201d). The net book value of PP&E recognized is based on \nhistorical cost until tested for impairment using market values. The market value of PP&E is the estimated \namount for which PP&E could be exchanged on the acquisition date between a willing buyer and a willing \nseller in an arm\u2019s length transaction after proper marketing wherein the parties had each acted \nknowledgeably, prudently and without compulsion. The market value of oil and natural gas interests \n(included in PP&E) are generally estimated with reference to the discounted cash flows expected to be \nderived from oil and natural gas production based on internally and externally prepared reserve reports. \nThe significant assumptions are based on Level 3 unobservable information with the primary inputs being \nforecasted production, escalated pricing, royalties, operating costs, future development costs. The after- tax discount rate is specific to the asset with reference to general market conditions. The market value of E&E assets is estimated with reference to the market values of current arm\u2019s length transactions in comparable locations. Exploration and evaluation assets The application of the Company's accounting policy for E&E requires judgement in determining whether it is likely that future economic benefit exists when activities have not reached a stage where technical feasibility and commercial viability can be reasonably determined. In addition, Management uses judgement to determine when E&E assets are reclassified to PP&E assets. Exploration and evaluation assets are subject to ongoing management review to confirm the continued intent to establish the technical feasibility and commercial viability of the assets. In making this determination, various factors are considered such as drilling results, future capital and operating expenditures, including judgement over the amount of economically recoverable resources, and whether the appropriate government, regulatory, or internal approvals are likely to be received. Income tax accounting Deferred tax assets are recognized when it is considered probable that deductible temporary differences will be recovered in the foreseeable future. To the extent that future taxable income and the application of existing tax laws in each jurisdiction differ significantly from the Company\u2019s estimate, the ability of the Company to realize the deferred tax assets could be impacted. The determination of the Company\u2019s income and other tax assets or liabilities requires interpretation of complex laws and regulations. All tax filings are subject to audit and potential reassessment after the lapse of considerable time. Accordingly, the actual income tax asset or liability may differ significantly from that estimated and recorded by management. Business combinations In a business combination, management makes estimates of the acquisition-date fair value of assets acquired and liabilities assumed which includes assessing the estimated fair value of petroleum and natural gas properties (included in property, plant and equipment) from the use of various modelling techniques. Asset retirement obligation Determination of the Company\u2019s asset retirement obligation is based on Government regulations, operator estimates and internal estimates using current costs and technology in accordance with existing legislation and industry practice and must also estimate timing, a risk-free rate and inflation rate in the calculation. These estimates are subject to change over time and, as such, may impact the charge against profit or loss. The amount recognized is the present value of estimated future expenditures required to settle the obligation using a risk-free rate. The associated abandonment and retirement costs are capitalized as part of the carrying amount of the related asset. The capitalized amount is depleted on a unit of production basis in accordance with the Company\u2019s depletion policy. Changes to assumptions related to future expected costs, risk-free rates and timing may have a material impact on the amounts presented. Share based compensation The Company has a stock option plan enabling employees, officers and directors to receive Class \u201cA\u201d Common voting shares (\u201cCommon Shares\u201d) or cash at exercise prices equal to the market price or above on the date the option is granted. The Company has the right and full discretion to settle any exercised options by issuing shares and accordingly uses the equity settled method of accounting. Under the equity settled method, compensation costs attributable to stock options granted to employees, officers or directors are measured at fair value using the Black-Scholes option pricing model. The assumptions used in the calculation are the volatility of the stock price, risk-free rates of return and the expected lives of the options. A forfeiture rate is estimated on the grant date and is adjusted to reflect the actual number of options that vest. Changes to assumptions may have a material impact on the amounts presented. ", "dimensions": { "concept": "ifrs-full:ExplanationOfAssumptionAboutFutureWithSignificantRiskOfResultingInMaterialAdjustments", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00108": { "value": "e) Use of estimates and judgments
The timely preparation of consolidated financial statements requires management to make judgments,
estimates and assumptions that affect the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ from these estimates. These estimates
and judgments have risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial
year.
Petroleum and natural gas reserves
All of Questerre\u2019s petroleum and natural gas reserves are evaluated and reported on by independent
reserve engineers in accordance with the COGE Handbook and Canadian Securities Administrators\u2019
National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities
. The estimation of reserves
is a subjective process. Forecasts are based on engineering data, anticipated future commodity prices,
expected production volumes, future operating and development costs, all of which are subject to
\n
numerous uncertainties and various interpretations. The Company expects that its estimates of reserves
\n
will change to reflect updated information. Reserve estimates can be revised upward or downward based
\n
on the results of future drilling, testing, production levels and changes in costs and commodity prices.
\n
These estimates are evaluated by independent reserve engineers at least annually.
\n
Proved and probable reserves are estimated using independent reserve engineer reports and represent
\n
the estimated quantities of crude oil, natural gas and natural gas liquids which geological, geophysical and
\n
engineering data demonstrate with a specified degree of certainty to be recoverable in future
years from
\n
known reservoirs and which are considered commercially producible. If probabilistic methods are used,
\n
there should be at least a 50
percent probability that the quantities actually recovered will equal or exceed
\n
the estimated proved plus probable reserves and there should be at least a 90
percent probability that the
\n
quantities actually recovered will equal or exceed the estimated proved reserves. Reserve estimates
\n
impact a number of areas, in particular, the valuation of property, plant, and equipment (\u201cPP&E\u201d), and the
\n
calculation of depletion. All reserves have been evaluated at December 31, 2025, by an independent
\n
qualified reserves evaluators.
\n
Identification of cash-generating units
\n
The Company\u2019s assets are aggregated into cash-generating units (\u201cCGU\u201d) for the purpose of calculating
\n
depletion and impairment. A CGU is defined as the lowest grouping of assets that generate identifiable
\n
cash inflows that are largely independent of the cash inflows of other assets or groups of assets. The
\n
allocation of assets into CGUs requires significant judgment and interpretations. Factors considered in the
\n
classification include geography and the way management monitors and makes decisions about its
\n
operations.
\n
Impairment of property, plant and equipment, exploration and evaluation assets and goodwill
\n
The Company assesses its oil and gas properties, including exploration and evaluation assets (\u201cE&E\u201d) and
\n
goodwill, for possible impairment or reversal of previously recognized impairments, other than goodwill, if
\n
there are events or changes in circumstances that indicate that carrying values of the assets may not be
\n
recoverable or indications that previously recognized losses should be reversed. Determining if there are
\n
facts and circumstances present that indicate that carrying values of the assets may not be recoverable
\n
requires management\u2019s judgment and analysis of the facts and circumstances.
\n
The recoverable amounts of CGUs have been determined based on the higher of value in use (\u201cVIU\u201d) and
\n
the fair value less costs of disposal (\u201cFVLCD\u201d). The net book value of PP&E recognized is based on
\n
historical cost until tested for impairment using market values. The market value of PP&E is the estimated
\n
amount for which PP&E could be exchanged on the acquisition date between a willing buyer and a willing
\n
seller in an arm\u2019s length transaction after proper marketing wherein the parties had each acted
\n
knowledgeably, prudently and without compulsion. The market value of oil and natural gas interests
\n
(included in PP&E) are generally estimated with reference to the discounted cash flows expected to be
\n
derived from oil and natural gas production based on internally and externally prepared reserve reports.
\n
The significant assumptions are based on Level 3 unobservable information with the primary inputs being
\n
forecasted production, escalated pricing, royalties, operating costs, future development costs. The after-
tax discount rate is specific to the asset with reference to general market conditions. The market value of
E&E assets is estimated with reference to the market values of current arm\u2019s length transactions in
comparable locations.
Exploration and evaluation assets
The application of the Company's accounting policy for E&E requires judgement in determining whether it
is likely that future economic benefit exists when activities have not reached a stage where technical
feasibility and commercial viability can be reasonably determined. In addition, Management uses
judgement to determine when E&E assets are reclassified to PP&E assets.
Exploration and evaluation assets are subject to ongoing management review to confirm the continued
intent to establish the technical feasibility and commercial viability of the assets. In making this
determination, various factors are considered such as drilling results, future capital and operating
expenditures, including judgement over the amount of economically recoverable resources, and whether
the appropriate government, regulatory, or internal approvals are likely to be received.
Income tax accounting
Deferred tax assets are recognized when it is considered probable that deductible temporary differences
will be recovered in the foreseeable future. To the extent that future taxable income and the application of
existing tax laws in each jurisdiction differ significantly from the Company\u2019s estimate, the ability of the
Company to realize the deferred tax assets could be impacted.
The determination of the Company\u2019s income and other tax assets or liabilities requires interpretation of
complex laws and regulations. All tax filings are subject to audit and potential reassessment after the lapse
of considerable time. Accordingly, the actual income tax asset or liability may differ significantly from that
estimated and recorded by management.
Business combinations
In a business combination, management makes estimates of the acquisition-date fair value of assets
acquired and liabilities assumed which includes assessing the estimated fair value of petroleum and natural
gas properties (included in property, plant and equipment) from the use of various modelling techniques.
Asset retirement obligation
Determination of the Company\u2019s asset retirement obligation is based on Government regulations, operator
estimates and internal estimates using current costs and technology in accordance with existing legislation
and industry practice and must also estimate timing, a risk-free rate and inflation rate in the calculation.
These estimates are subject to change over time and, as such, may impact the charge against profit or
loss. The amount recognized is the present value of estimated future expenditures required to settle the
obligation using a risk-free rate. The associated abandonment and retirement costs are capitalized as part
of the carrying amount of the related asset. The capitalized amount is depleted on a unit of production
basis in accordance with the Company\u2019s depletion policy. Changes to assumptions related to future
expected costs, risk-free rates and timing may have a material impact on the amounts presented.
Share based compensation
The Company has a stock option plan enabling employees, officers and directors to receive Class
\u201cA\u201d
Common voting shares (\u201cCommon Shares\u201d) or cash at exercise prices equal to the market price or above
on the date the option is granted. The Company has the right and full discretion to settle any exercised
options by issuing shares and accordingly uses the equity settled method of accounting. Under the equity
settled method, compensation costs attributable to stock options granted to employees, officers or
directors are measured at fair value using the Black-Scholes option pricing model. The assumptions used
in the calculation are the volatility of the stock price, risk-free rates of return and the expected lives of the
options. A forfeiture rate is estimated on the grant date and is adjusted to reflect the actual number of
options that vest. Changes to assumptions may have a material impact on the amounts presented. A reconciliation of the PP&E assets is detailed below. \n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
($ thousands
)
Total
Cost or deemed cost:
\u00a0
Balance, December 31, 2023
$
314,321
Capital additions including change to asset retirement
4,000
Transfer from exploration and evaluation assets
8,605
Balance, December 31, 2024
326,926
Acquired through a business combination (Note 5)
209,203
Asset acquisition (Note 6)
3,570
Capital additions
9,609
Transfer from exploration and evaluation assets
23,515
Changes to asset retirement obligation
426
Foreign exchange adjustments
(8,403)
Balance, December 31, 2025
$
564,846
Accumulated depletion, depreciation and impairment losses:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
Balance, December 31, 2023
$
198,386
Depletion and depreciation
11,845
Balance, December 31, 2024
210,231
Depletion and depreciation
29,280
Impairment
49,795
Foreign exchange adjustments
(384)
Balance, December 31, 2025
$
288,922
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
($ thousands
)
Total
Net book value:
\u00a0
At December 31, 2024
$
116,695
At December 31, 2025
$
275,924
\nA reconciliation of the movements in exploration and evaluation assets is detailed below. \n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
December 31,
December 31,
($ thousands
)
2025
2024
Balance, beginning of year
$
13,106
$
12,287
Additions
16,008
16,344
Transfers to property, plant and equipment
(23,515)
(8,605)
Foreign currency translation adjustment - Jordan
\u2013
943
Impairment of Jordan asset
\u2013
(7,863)
Balance, end of period
$
5,599
$
13,106
\n12. Income Taxes
The tax on the Company\u2019s net loss before taxes differs from the amount that would arise using the
weighted average tax rate applicable to profits or losses of the consolidated entities as follows:
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Net loss before taxes
$
(81,076)
$
(7,329)
Combined federal and provincial tax rate
23.82%
23.82%
Statutory tax (recovery)
(19,312)
(1,746)
Increase/(deduction) in tax expense resulting from:
\u00a0 \u00a0
Non-deductible differences and permanent items
273
1,567
Change in deferred tax asset not recognized
13,609
179
Change in deferred tax asset due to obtaining control of Red Leaf
5,620
\u2013
Difference in jurisdictional tax rates
(2,336)
\u2013
Other
5
\u2013
Total income tax expense
$
(2,141)
$
\u2013
\n
The Company evaluated the recoverability of its deferred tax assets using forecasted before-tax cash
flows based on proved reserves, with escalating prices and future development costs obtained from
an independent reserve evaluation report and a deduction for estimated general and administrative
costs associated with these proved reserves. As a result, deferred tax assets were not recognized.
\n
The combined statutory tax rate was 23.82% in 2025 and 2024.
\n
The breakdown of deductible and taxable temporary differences during the
year are as follows:
\n\n \n
December 31,
December 31,
($ thousands)
2025
2024
Petroleum and natural gas properties
$
236,833
$
165,651
Asset Retirement Obligation
19,120
19,420
Non-Capital Losses
163,925
\u2013
Capital Losses
36,480
36,488
Tax Reserves
14,501
\u2013
Other
\u2013
33,908
Total deductible temporary differences
$
470,859
$
255,467
Taxable temporary differences:
Petroleum and natural gas properties
$
(228,265)
$
\u2013
Tax reserves
(2,039)
\u2013
Other
(100)
\u2013
Total taxable temporary differences
$
(230,404)
$
\u2013
Total net deductible temporary differences
$
240,455
$
255,467
Total deductible temporary differences not recognized
(408,975)
(255,467)
Total net taxable temporary differences recognized
$
(168,520)
$
\u2013
\n
The deferred tax liabilities are as follows:
\n\n \n
December 31,
December 31,
($ thousands)
2025
2024
Petroleum and natural gas properties
(56,603)
\u2013
Tax Reserves
(694)
\u2013
Deferred tax liability
$
(57,297)
$
\u2013
\n
A deferred tax asset is recognized to the extent that it is probable future taxable profits will be available
\n
against which the asset can be utilized. See note 2(e) for detail on the related judgments used in this
\n
determination. The provision of deferred tax assets and liabilities reflects the tax consequences that
\n
would follow from the expected recovery or settlement of the carrying amount of its assets and
\n
liabilities. We have not recognized $409 million (2024: $255 million) of deductible temporary
\n
differences.
\n
Deferred income tax assets are recognized for tax loss carry forwards to the extent that the realization
\n
of the related tax benefit is probably based on estimated future earnings. As of December 31, 2025,
our Canadian non-capital loss carry forwards were $45.9 million and capital loss carry forwards were
$36.5 million. The non-capital loss carry forwards begin to expire in 2045 and the capital losses do not
expire but can only be utilized against future capital gains. Our Brazil non-capital loss carry forwards
were $118 million which do not expire but the annual use is restricted.
Change in deferred income tax balances:
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Net deferred income tax liability, beginning of year
$
\u2013
$
\u2013
Deferred tax liability from FRBH acquisition
(61,873)
\u2013
Deferred tax recovery
2,141
\u2013
Other FX translation differences
2,435
\u2013
Net deferred income tax liability, end of year
$
(57,297)
$
\u2013
The following table provides a reconciliation of the Company\u2019s total asset retirement obligation: \n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Balance, beginning of year
$
19,410
$
19,064
Acquired through a business combination (Note 5)
9,200
\u2013
Revaluation of obligation acquired through a business combination
2,676
\u2013
Acquired on asset acquisition (Note 6)
3,098
\u2013
Liabilities incurred
110
352
Liabilities settled
(1,072)
(49)
Revisions due to change in estimates and discount rates
315
(537)
Accretion
2,817
580
Foreign exchange adjustments
(509)
\u2013
Balance, end of year
$
36,045
$
19,410
Current portion
2,945
799
Non-current portion
33,100
18,611
Balance, end of period
$
36,045
$
19,410
\n20. Share Based Compensation
The Company has a stock option program that provides for the issuance of options to purchase Common
Shares to its directors, officers and employees at or above grant date market prices. The options granted
under the plan generally vest evenly over a three-year period starting at the grant date or one
year from
the grant date. The grants expire five
years from the grant date.
Under the Company\u2019s option plan, a put right is included that allows the optionee to settle options with
cash or equity. Under the put right, the optionee will receive the net cash proceeds that is the excess of
the closing price of the Common Shares at the day of the put notice over the exercise price of the option.
The Company has the option to decline a put right exercise at any time in 2025. The Company did settle
$0.2 million options in cash.
The number and weighted average exercise prices of stock options are as follows:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Options Outstanding
Options Exercisable
\u00a0 \u00a0
Weighted
Weighted
\u00a0
Weighted
Weighted
\u00a0
Number of
Average
Average
Number of
Average
Average
\u00a0
Options
Years to
Exercise
Options
Years to
Exercise
\u00a0
(thousands)
Expiry
Price
(thousands)
Expiry
Price
$0.18 - $0.20
7,775
0.07
$
0.18
7,775
0.07
$
0.18
$0.21 - $0.23
11,725
3.13
0.23
6,702
2.56
0.23
$0.24 - $0.26
5,950
3.10
0.25
3,471
3.10
0.25
$0.27 - $0.34
10,340
1.06
0.34
10,340
1.06
0.34
\u00a0
35,790
1.86
$
0.25
28,288
1.39
$
0.26
The following table summarizes information about stock options outstanding and exercisable at December
31, 2025:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
December 31, 2025
December 31, 2024
\u00a0 \u00a0
Weighted
\u00a0
Weighted
\u00a0
Number of
Average
Number of
Average
\u00a0
Options
Exercise
Options
Exercise
\u00a0
(thousands)
Price
(thousands)
Price
Outstanding, beginning of period
38,295
$
0.25
38,140
$
0.26
Granted
6,675
0.23
6,950
0.25
Forfeited
(2,880)
0.22
(620)
0.27
Expired
(325)
0.16
(6,175)
0.29
Exercised
(5,975)
0.20
\u2013
\u2013
Outstanding, end of period
35,790
$
0.25
38,295
$
0.25
Exercisable, end of period
28,288
$
0.26
29,704
$
0.25
\n
The fair value of the options granted were calculated using the Black-Scholes valuation model. The
following weighted average assumptions were used in the model for options granted in 2025 and 2024:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
December 31,
December 31,
\u00a0
2025
2024
Weighted average fair value per award ($)
0.18
0.19
Volatility (%)
102.60
103.47
Forfeiture rate (%)
8.46
8.85
Expected life (years)
5.00
5.00
Risk free interest rate (%)
2.91
3.54
\n
This forfeiture rate estimate is adjusted to the actual forfeiture rate. Expected volatility and expected
life is based on historical information.", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00273": { "value": "Business combinations
In a business combination, management makes estimates of the acquisition-date fair value of assets
acquired and liabilities assumed which includes assessing the estimated fair value of petroleum and natural
gas properties (included in property, plant and equipment) from the use of various modelling techniques.Business combinations
The purchase method of accounting is used to account for acquisitions of businesses and assets that meet
the definition of a business under IFRS. The cost of an acquisition is measured as the fair value of the
assets given up, equity instruments issued and liabilities incurred or assumed at the date of exchange.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are
measured initially at their acquisition date fair values. If the consideration of acquisition given up is less
than the fair value of the net assets received, the difference is recognized immediately in the income
statement. If the consideration of acquisition is greater than the fair value of the net assets received, the
difference is recognized as goodwill on the statement of financial position. Acquisition costs incurred are
expensed.
There is an option to apply a concentration test that permits a simplified assessment of whether an
acquired set of activities and assets is in fact a business. The optional concentration test is met if
substantially all of the fair value of the assets acquired is concentrated in a single identifiable asset or group
of similar identifiable assets. An entity may make such an election separately for each transaction or other
event. If the concentration test is met, the set of activities and assets is determined not to be a business
combination, and no further assessment is needed.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00111": { "value": "3. Material Accounting Policy Information
The accounting policies set out below have been applied consistently to all periods presented in these
consolidated financial statements.
Basis of consolidation
i)
Subsidiaries
Subsidiaries are entities controlled by the Company. Control exists when the Company has the power to
govern the financial and operating policies of an entity to obtain benefits from its activities. In assessing
control, potential voting rights that currently are exercisable are considered.
ii)
Transactions eliminated on consolidation
Intercompany balances and transactions, and any unrealized income and expenses arising from
intercompany transactions, are eliminated in preparing the consolidated financial statements.
Foreign currency
i)
Foreign currency transactions
Transactions in foreign currencies are translated into the respective entity's functional currency at the
exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign
currencies are translated into the functional currency at the exchange rate at the reporting date. Non-
monetary assets that are measured in a foreign currency at historical cost are translated using the exchange
rate at the date of the transaction. Translation gains and losses are included in earnings in the period in
which they arise.
ii)
Foreign Operations
In preparing the Company's consolidated financial statements, the financial statements of each entity are
translated into Canadian dollars. The assets and liabilities of foreign operations are translated at the
exchange rates at the reporting date. The revenues and expenses of foreign operations are translated at
the exchange rates that approximate those dates of the transactions.
Foreign currency differences are recognized in other comprehensive income (\"OCI\") and accumulated in
the translation reserve.
Business combinations
The purchase method of accounting is used to account for acquisitions of businesses and assets that meet
the definition of a business under IFRS. The cost of an acquisition is measured as the fair value of the
assets given up, equity instruments issued and liabilities incurred or assumed at the date of exchange.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are
measured initially at their acquisition date fair values. If the consideration of acquisition given up is less
than the fair value of the net assets received, the difference is recognized immediately in the income
statement. If the consideration of acquisition is greater than the fair value of the net assets received, the
difference is recognized as goodwill on the statement of financial position. Acquisition costs incurred are
expensed.
There is an option to apply a concentration test that permits a simplified assessment of whether an
acquired set of activities and assets is in fact a business. The optional concentration test is met if
substantially all of the fair value of the assets acquired is concentrated in a single identifiable asset or group
of similar identifiable assets. An entity may make such an election separately for each transaction or other
event. If the concentration test is met, the set of activities and assets is determined not to be a business
combination, and no further assessment is needed.
Financial instruments
Financial assets and liabilities are recognized when the Company becomes a party to the contractual
provisions of the instrument. Financial assets are derecognized when the rights to receive cash flows from
the assets have expired or have been transferred and the Company has transferred substantially all risks
and rewards of ownership. Financial liabilities are derecognized when the obligation specified in the
contract is discharged, cancelled or expires.
Financial assets and liabilities are offset and the net amount is reported in the balance sheet when there
is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net
basis or realize the asset and settle the liability simultaneously.
The Company classifies its financial instruments in the following categories, at initial recognition,
depending on the purpose for which the instruments were acquired.
Financial assets and liabilities at fair value through profit or loss
A financial asset or liability is classified in this category if it is held for trading. Derivatives are also included
in this category unless they are designated as hedges. The Company has designated its risk management
contracts in this category.
Financial assets at amortized cost
Financial assets at amortized cost are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. They include accounts receivable and deposits. These assets are
included in current assets due to their short-term nature. They are recognized initially at the amount
expected to be received, less, when material, a discount to reduce to fair value. Subsequently, they are
measured at amortized cost using the effective interest method less a provision for impairment.
Cash and cash equivalents include deposits held with banks, less outstanding cheques, and short-term
deposits with original maturities of one
year or less.
Financial liabilities at amortized cost
Financial liabilities at amortized cost comprise credit facilities and accounts payable and accrued liabilities.
Financial liabilities are initially recognized at the amount required to be paid, less, when material, a discount
to reduce the payables to fair value. Subsequently, financial liabilities are measured at amortized cost using
the effective interest method.
Financial liabilities are classified as current liabilities if payment is due within twelve
months.
Investments
The Company had investment in certain private companies including its investment in Red Leaf. The
Company acquired remainder of Red Leaf in December 2025. Thereafter, Red Leaf is a wholly owned
subsidiary of the Company. See Note 6 for further details.
Share capital
Common Shares are classified as equity. Incremental costs directly attributable to the issue of Common
Shares are recognized as a deduction from equity, net of any tax effects.
Exploration and evaluation assets
Exploration and evaluation costs, including the costs of acquiring licenses, exploratory well expenditures,
costs to evaluate the commercial potential of underlying resources and directly attributable general and
administrative costs, are capitalized as E&E assets. The costs are accumulated in cost centres by
exploration area pending determination of technical feasibility and commercial viability. Gains and losses
on E&E assets are recognized on disposal through the income statement.
The technical feasibility and commercial viability of extracting a mineral resource is considered to be
determinable based on several factors including the assignment of reserves. A review of each exploration
license or field is carried out, at each reporting date, to ascertain whether technical feasibility and
commercial viability has been achieved. Upon determination of technical feasibility and commercial
viability, intangible exploration and evaluation assets attributable to those reserves are first tested for
impairment and then reclassified from exploration and evaluation assets to property, plant and equipment.
Every reporting period, the Company evaluates individually significant exploration and evaluation wells for
impairment, if there are specific impairment indicators evident at the well level. If technical feasibility and
commercial viability of the well is not established, the well costs are written off. For insignificant wells,
overall exploration and evaluation well indicators are evaluated. If there are indicators of impairment, the
wells are tested for impairment at the CGU level.
Costs incurred prior to acquiring the legal rights to explore an area are recognized as exploration and
evaluation expense in profit or loss.
Property, Plant and Equipment
The costs to acquire and to develop oil and gas properties, including completing geological and geophysical
surveys and drilling development wells, and the costs to construct and install development infrastructure
are capitalized as oil and gas properties within Property, Plant and Equipment. Items of PP&E, which
include oil and gas development and production assets, are measured at cost less accumulated depletion
and depreciation and accumulated impairment losses.
The costs of planned major inspection, overhaul and turnaround activities that maintain PP&E and benefit
future years of operations are capitalized. Recurring planned maintenance activities performed on shorter
intervals are expensed as operating costs. Replacements outside of a major inspection, overhaul or
turnaround are capitalized when it is probable that future economic benefits will be realized by the company
and the associated carrying amount of the replaced component is derecognized.
Borrowing costs relating to assets that take over one year to construct are capitalized as part of the asset.
Capitalization of borrowing costs ceases when the asset is in the location and condition necessary for its
intended use, and is suspended when construction of an asset is ceased for extended periods.
Gains and losses on disposal of an item of PP&E, including oil and natural gas interests, are determined by
comparing the proceeds from disposal with the carrying amount of the property, plant and equipment and
are recognized net within gain (loss) on divestures in profit or loss.
Exchanges of properties are measured at fair value, unless the transaction lacks commercial substance or
fair value cannot be reliably measured. When the exchange is at fair value, a gain or loss is recognized in
profit or loss.
Depletion and depreciation
The net carrying value of development and production assets is depleted using the unit of production
method based on estimated proved and probable reserves, considering estimated future development
costs necessary to bring those reserves into production. These estimates are evaluated by independent
reserve engineers at least annually.
For the capital assets, depreciation is recognized in profit or loss on a straight-line basis over the respective
useful lives.
Depreciation methods and useful lives are reviewed at each reporting date.
Intangibles
Intangibles assets are measured at historical acquisition costs or at fair value when acquired in a business
combination, net of accumulated amortization and, if applicable, accumulated impairment losses.
Subsequent expenditures are capitalized only when they increase the future economic benefits embodied
in the specific asset to which they relate.
Amortization is calculated using the straight-line method based on the estimated useful life of the assets,
which is reviewed at each statement of financial position date.
Goodwill
In the event of a business combination or acquisition in which the activity constitutes a business, as defined
in IFRS 3 Business Combinations, the acquisition method of accounting is applied. Goodwill represents
the difference between the aggregate of the fair value of purchase consideration transferred at the
acquisition date and the fair value of the identifiable assets, liabilities and contingent liabilities acquired,
less any non-controlling interest. The Company's goodwill is related to the requirement to recognize
deferred tax for the difference between the assigned fair values and the related tax base (technical
goodwill). In accordance with IAS 12 paragraphs 15 and 24, a provision is made for deferred tax
corresponding to the difference between the acquisition cost and the transferred tax depreciation basis.
The offsetting entry to this deferred tax is goodwill. Hence, goodwill arises as a technical effect of deferred
tax. Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less
any accumulated impairment. Goodwill is treated as an asset of the relevant entity to which it relates, and
accordingly goodwill is translated into Canadian dollars at the closing rate of exchange at each reporting
date. Impairments are expected to arise as the deferred tax that gave rise to the goodwill initially naturally
unwinds in the normal course of business. Impairment losses relating to goodwill cannot be reversed in
future periods.
Impairment
Non-financial assets
The carrying amounts of the Company\u2019s non-financial assets, are reviewed at each reporting date to
determine whether there is any indication of impairment. If any such indication exists, then the asset\u2019s
recoverable amount is estimated and compared to the carrying amount. Goodwill is tested for impairment
annually.
For the purpose of impairment testing, assets are grouped together into CGUs. Exploration and evaluation
assets are allocated to related CGUs when they are assessed for impairment, both at the time of any
triggering facts and circumstances as well as upon their reclassification to producing assets.
The recoverable amount of an asset or a CGU is the greater of its VIU and FVLCD. FVLCD is determined
using discounted future cash flows of proved and probable reserves using an after tax discount rate for
FVLCD. In determining FVLCD, recent market transactions are considered, if available. In the absence of
such transactions, the discounted cash flow model is used. In assessing VIU, the estimated future cash
flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset.
An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated
recoverable amount. Impairment losses are recognized in profit or loss.
Impairment losses recognized in prior
years are assessed at each reporting date for any indications that
the loss has decreased or no longer exists. An impairment loss is reversed for all CGUs, other than
goodwill, if there has been a change in the estimates used to determine the recoverable amount. An
impairment loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the
carrying amount that would have been determined, net of depletion and depreciation or amortization, if no
impairment loss had been recognized. Impairment reversals are recognized in profit or loss.
Impairment of financial assets
Questerre applies the simplified approach to providing for expected credit losses prescribed by IFRS 9
Financial Instruments
(\u201cIFRS 9\u201d) which permits the use of the lifetime expected loss provision for all trade
receivables carried at amortized costs.
At each reporting date, the Company measures the lifetime expected loss provision taking into
consideration Questerre\u2019s historical credit loss experience as well as forward-looking information in order
to establish loss rates. The impairment loss (or reversal) is the amount of expected credit losses that is
required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.
Share based compensation
The Company has issued options to directors, officers and employees.
The Company accounts for its stock-based compensation awards on the basis that they will be equity
settled. Under the equity settled method, compensation costs attributable to stock options granted to
employees, officers or directors are measured at fair value at the grant date and expensed over the vesting
period with a corresponding increase to contributed surplus. The exercise of stock options is recorded as
an increase in Common Shares with a corresponding reduction in contributed surplus. A forfeiture rate is
estimated on the grant date and is adjusted to reflect the actual number of options that vest.
Provisions
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be
required to settle the obligation. Provisions are determined by discounting the expected future cash flows
at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific
to the liability.
Asset retirement obligation
The Company\u2019s activities give rise to dismantling, decommissioning and site disturbance remediation
activities. Provision is made for the estimated cost of site restoration and capitalized in the relevant asset
category.
Asset retirement obligations are measured at the present value of management\u2019s best estimate of
expenditure required to settle the present obligation at the balance sheet date. The best estimate of the
provision is recorded on a discounted basis using a risk-free interest rate. Subsequent to the initial
measurement, the obligation is adjusted at the end of each period to reflect the passage of time and
changes in the estimated future cash flows underlying the obligation. The increase in the provision due to
the passage of time is recognized as accretion of the asset retirement obligation whereas increases or
decreases due to changes in the estimated future cash flows and risk-free rates are adjusted through
property, plant and equipment or exploration and evaluation assets. Actual costs incurred upon settlement
of the asset retirement obligations are charged against the provision.
Revenue from commodity sales and royalties
Questerre principally generates revenue from the sale of commodities and revenue from royalties on
production from leases where it owns a working interest. Revenue is based on the consideration specified
in a contract and is recorded when control of the product or service passes to the customer in accordance
with terms of the contract. Questerre considers its performance obligations to be satisfied and control to
be transferred when all of the following conditions are satisfied:
\u2022
Questerre has transferred title and physical possession of the commodity to the buyer;
\u2022
Questerre has transferred the significant risks and rewards of ownership of the commodity to the
buyer; and
\u2022
Questerre has the present right to payment.
Revenue represents the Company\u2019s share of commodity sales net of royalty obligations to governments
and other mineral interest owners. Questerre sells its production pursuant to variable priced contracts. The
transaction price for variable priced contracts is based on the commodity price, adjusted for quality, location
or other factors, whereby each component of the pricing formula can be either fixed or variable, depending
on the contract terms. Under these contracts, the Company is required to deliver a variable volume of
crude oil, natural gas, condensate or NGLs and refined products to the contract counterparty.
Revenue is recognized when a unit of production is delivered to the contract counterparty. The amount of
revenue recognized is based on the agreed upon transaction price, whereby any variability in revenue is
related specifically to the Company\u2019s efforts to deliver production. Therefore, the resulting revenue is
allocated to the production delivered in the period during which the variability occurs. Revenues are
normally collected in the month following delivery except where contract states due upon delivery.
Questerre does not have any contracts where the period between the transfer of the promised goods or
services to the customer and payment by the customer exceeds one year and therefore Questerre does
not adjust its revenue transactions for the time value of money. The Company enters into contracts with
customers that can have performance obligations that are unsatisfied, or partially unsatisfied, at the
reporting date.
Royalty revenue is recognized as it accrues in accordance with the terms of the governing agreement,
which is generally in the month when the product is produced with production volumes primarily marketed
with the payor\u2019s production. Royalty revenue is measured at fair value of the consideration received when
Management can reliably estimate the amount pursuant to the terms of the royalty agreement. An accrual
is included in revenue and accounts receivable for amounts not received at the reporting date based on
historical trends, new wells on stream and current market prices. Differences between the estimates and
actual amounts received are adjusted and recorded in the period when the actual amounts are received.
Income tax
Income tax expense comprises current and deferred tax. Income tax expense is recognized in profit or loss
except to the extent that it relates to items recognized directly in equity, in which case it is recognized in
equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognized using the balance sheet method, providing for temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for
taxation purposes.
Deferred tax is not recognized on the initial recognition of assets or liabilities in a transaction that is not a
business combination. Deferred tax is measured at the tax rates that are expected to be applied to
temporary differences when they reverse, based on the laws that have been enacted or substantively
enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable
right to offset, and they relate to income taxes levied by the same tax authority on the same taxable entity,
or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their
tax assets and liabilities will be realized simultaneously.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available
against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting
date and are reduced to the extent that it is no longer probable that the related tax asset will be realized.
The effect of a change in enacted or substantively enacted income tax rates on future income tax assets
and liabilities is recognized in profit or loss in the period that the change occurs unless the original entry
was recorded to equity.
Inventories
The Company\u2019s crude oil inventories may be marketed in their raw state, as well as consumed in the
production process of their by-products. Work-in-process products are composed of product streams that
have already gone through at least one processing unit but still need to be processed, treated, or converted
to be made available for sale. Materials and supplies mainly represent production inputs and operating
materials that will be used in the Company\u2019s activities and are presented at average purchase cost.
Product inventories are valued at the lower of cost, using a first-in, first-out, or weighted average cost
basis, and net realizable value. Parts and supplies are valued at the lower of weighted average cost and
net realizable value. The cost of inventory includes purchase costs, direct production costs, and depletion,
depreciation and accretion (\u201cDD&A\u201d). Net realizable value is the estimated selling price in the ordinary
course of business less expected selling costs. If the carrying amount exceeds net realizable value, a write-
down is recognized in net earnings (loss).
Net profit or loss per share
Basic per share amounts are calculated using the weighted average number of shares outstanding during
the
year. Diluted per share amounts are calculated using the weighted average number of shares
outstanding, adjusted for the potential number of shares which may have a dilutive impact on net profit.
Potentially dilutive shares include stock options. The weighted average number of diluted shares is
calculated in accordance with the treasury stock method. The treasury stock method assumes that the
proceeds received from the exercise of all potentially dilutive instruments are used to repurchase Common
Shares at the average market price.
Since the options may be settled in cash or shares at the Company\u2019s discretion and therefore there is no
obligation to settle in cash, the share units are accounted for as equity-settled share based payment
transactions and included in diluted profit per share if the effect is dilutive.
Leases
Under IFRS 16, the Company recognizes right-of-use assets and lease liabilities for most leases. Certain
short-term leases (less than 12 months) and leases of low-value assets are exempt from the requirements
and may continue to be treated as operating leases. The right-of-use assets recognized are subsequently
depreciated using the straight-line method from the commencement date to the earlier of the end of the
useful life of the right-of-use assets or the end of the lease term. The estimated useful lives of right-of-use
assets are determined on the same basis as those of property and equipment. In addition, the right-of-use
assets are periodically reduced by impairment losses, if any, and adjusted for certain re-measurements of
the lease liabilities.
The lease liabilities are initially measured at the present value of the lease payments that are not paid at
the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be
readily determined, the Company's incremental borrowing rate. The Company uses its incremental
borrowing rate as the discount rate.
The lease liabilities are subsequently measured at amortized cost using the effective interest method. It is
re-measured when there is a change in future lease payments arising from a change in an index or rate, if
there is a change in the Company's estimate of the amount expected to be payable under a residual value
guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or
termination option.
When the lease liabilities are re-measured in this way, a corresponding adjustment is made to the carrying
amount of the right-of-use assets or is recorded in profit or loss if the carrying amount of the right-of-use
assets has been reduced to nil. The Company presents right-of-use assets and lease liabilities separately
in the balance sheet.
The application of IFRS 16 requires significant judgments and estimations to be made. Areas that require
judgment include identifying whether a contract (or part of a contract) includes a lease, determining
whether it is reasonably certain that an extension or termination option will be exercised, determining
whether variable payments are in substance fixed, establishing whether there are multiple leases in an
arrangement and determining the stand-alone amounts for lease and non-lease components. Other
sources of estimation uncertainty in the application of IFRS 16 include estimating the lease term,
determining the appropriate discount rate to apply to lease payments and assessing whether a right-of-use
assets are impaired. ", "dimensions": { "concept": "ifrs-full:DisclosureOfMaterialAccountingPolicyInformationExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00190": { "value": "Basis of consolidation
i)
Subsidiaries
Subsidiaries are entities controlled by the Company. Control exists when the Company has the power to
govern the financial and operating policies of an entity to obtain benefits from its activities. In assessing
control, potential voting rights that currently are exercisable are considered.
ii)
Transactions eliminated on consolidation
Intercompany balances and transactions, and any unrealized income and expenses arising from
intercompany transactions, are eliminated in preparing the consolidated financial statements.", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00192": { "value": "i)
Subsidiaries
Subsidiaries are entities controlled by the Company. Control exists when the Company has the power to
govern the financial and operating policies of an entity to obtain benefits from its activities. In assessing
control, potential voting rights that currently are exercisable are considered.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00191": { "value": "Foreign currency
i)
Foreign currency transactions
Transactions in foreign currencies are translated into the respective entity's functional currency at the
exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign
currencies are translated into the functional currency at the exchange rate at the reporting date. Non-
monetary assets that are measured in a foreign currency at historical cost are translated using the exchange
rate at the date of the transaction. Translation gains and losses are included in earnings in the period in
which they arise.
ii)
Foreign Operations
In preparing the Company's consolidated financial statements, the financial statements of each entity are
translated into Canadian dollars. The assets and liabilities of foreign operations are translated at the
exchange rates at the reporting date. The revenues and expenses of foreign operations are translated at
the exchange rates that approximate those dates of the transactions.
Foreign currency differences are recognized in other comprehensive income (\"OCI\") and accumulated in
the translation reserve.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00322": { "value": "Business combinations
The purchase method of accounting is used to account for acquisitions of businesses and assets that meet
the definition of a business under IFRS. The cost of an acquisition is measured as the fair value of the
assets given up, equity instruments issued and liabilities incurred or assumed at the date of exchange.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are
measured initially at their acquisition date fair values. If the consideration of acquisition given up is less
than the fair value of the net assets received, the difference is recognized immediately in the income
statement. If the consideration of acquisition is greater than the fair value of the net assets received, the
difference is recognized as goodwill on the statement of financial position. Acquisition costs incurred are
expensed.
There is an option to apply a concentration test that permits a simplified assessment of whether an
acquired set of activities and assets is in fact a business. The optional concentration test is met if
substantially all of the fair value of the assets acquired is concentrated in a single identifiable asset or group
of similar identifiable assets. An entity may make such an election separately for each transaction or other
event. If the concentration test is met, the set of activities and assets is determined not to be a business
combination, and no further assessment is needed.Goodwill
In the event of a business combination or acquisition in which the activity constitutes a business, as defined
in IFRS 3 Business Combinations, the acquisition method of accounting is applied. Goodwill represents
the difference between the aggregate of the fair value of purchase consideration transferred at the
acquisition date and the fair value of the identifiable assets, liabilities and contingent liabilities acquired,
less any non-controlling interest. The Company's goodwill is related to the requirement to recognize
deferred tax for the difference between the assigned fair values and the related tax base (technical
goodwill). In accordance with IAS 12 paragraphs 15 and 24, a provision is made for deferred tax
corresponding to the difference between the acquisition cost and the transferred tax depreciation basis.
The offsetting entry to this deferred tax is goodwill. Hence, goodwill arises as a technical effect of deferred
tax. Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less
any accumulated impairment. Goodwill is treated as an asset of the relevant entity to which it relates, and
accordingly goodwill is translated into Canadian dollars at the closing rate of exchange at each reporting
date. Impairments are expected to arise as the deferred tax that gave rise to the goodwill initially naturally
unwinds in the normal course of business. Impairment losses relating to goodwill cannot be reversed in
future periods.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00206": { "value": "Financial instruments
Financial assets and liabilities are recognized when the Company becomes a party to the contractual
provisions of the instrument. Financial assets are derecognized when the rights to receive cash flows from
the assets have expired or have been transferred and the Company has transferred substantially all risks
and rewards of ownership. Financial liabilities are derecognized when the obligation specified in the
contract is discharged, cancelled or expires.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerecognitionOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00193": { "value": "Financial instruments
Financial assets and liabilities are recognized when the Company becomes a party to the contractual
provisions of the instrument. Financial assets are derecognized when the rights to receive cash flows from
the assets have expired or have been transferred and the Company has transferred substantially all risks
and rewards of ownership. Financial liabilities are derecognized when the obligation specified in the
contract is discharged, cancelled or expires.
Financial assets and liabilities are offset and the net amount is reported in the balance sheet when there
is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net
basis or realize the asset and settle the liability simultaneously.
The Company classifies its financial instruments in the following categories, at initial recognition,
depending on the purpose for which the instruments were acquired.
Financial assets and liabilities at fair value through profit or loss
A financial asset or liability is classified in this category if it is held for trading. Derivatives are also included
in this category unless they are designated as hedges. The Company has designated its risk management
contracts in this category.
Financial assets at amortized cost
Financial assets at amortized cost are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. They include accounts receivable and deposits. These assets are
included in current assets due to their short-term nature. They are recognized initially at the amount
expected to be received, less, when material, a discount to reduce to fair value. Subsequently, they are
measured at amortized cost using the effective interest method less a provision for impairment.
Cash and cash equivalents include deposits held with banks, less outstanding cheques, and short-term
deposits with original maturities of one
year or less.
Financial liabilities at amortized cost
Financial liabilities at amortized cost comprise credit facilities and accounts payable and accrued liabilities.
Financial liabilities are initially recognized at the amount required to be paid, less, when material, a discount
to reduce the payables to fair value. Subsequently, financial liabilities are measured at amortized cost using
the effective interest method.
Financial liabilities are classified as current liabilities if payment is due within twelve
months.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00200": { "value": "Financial instruments
Financial assets and liabilities are recognized when the Company becomes a party to the contractual
provisions of the instrument. Financial assets are derecognized when the rights to receive cash flows from
the assets have expired or have been transferred and the Company has transferred substantially all risks
and rewards of ownership. Financial liabilities are derecognized when the obligation specified in the
contract is discharged, cancelled or expires.
Financial assets and liabilities are offset and the net amount is reported in the balance sheet when there
is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net
basis or realize the asset and settle the liability simultaneously.
The Company classifies its financial instruments in the following categories, at initial recognition,
depending on the purpose for which the instruments were acquired.
Financial assets and liabilities at fair value through profit or loss
A financial asset or liability is classified in this category if it is held for trading. Derivatives are also included
in this category unless they are designated as hedges. The Company has designated its risk management
contracts in this category.
Financial assets at amortized cost
Financial assets at amortized cost are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. They include accounts receivable and deposits. These assets are
included in current assets due to their short-term nature. They are recognized initially at the amount
expected to be received, less, when material, a discount to reduce to fair value. Subsequently, they are
measured at amortized cost using the effective interest method less a provision for impairment.
Cash and cash equivalents include deposits held with banks, less outstanding cheques, and short-term
deposits with original maturities of one
year or less.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00201": { "value": "Financial instruments
Financial assets and liabilities are recognized when the Company becomes a party to the contractual
provisions of the instrument. Financial assets are derecognized when the rights to receive cash flows from
the assets have expired or have been transferred and the Company has transferred substantially all risks
and rewards of ownership. Financial liabilities are derecognized when the obligation specified in the
contract is discharged, cancelled or expires.
Financial assets and liabilities are offset and the net amount is reported in the balance sheet when there
is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net
basis or realize the asset and settle the liability simultaneously.
The Company classifies its financial instruments in the following categories, at initial recognition,
depending on the purpose for which the instruments were acquired.
Financial assets and liabilities at fair value through profit or loss
A financial asset or liability is classified in this category if it is held for trading. Derivatives are also included
in this category unless they are designated as hedges. The Company has designated its risk management
contracts in this category.Financial liabilities at amortized cost
Financial liabilities at amortized cost comprise credit facilities and accounts payable and accrued liabilities.
Financial liabilities are initially recognized at the amount required to be paid, less, when material, a discount
to reduce the payables to fair value. Subsequently, financial liabilities are measured at amortized cost using
the effective interest method.
Financial liabilities are classified as current liabilities if payment is due within twelve
months.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00199": { "value": "Financial assets and liabilities are offset and the net amount is reported in the balance sheet when there
is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net
basis or realize the asset and settle the liability simultaneously.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForOffsettingOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00208": { "value": "Financial assets and liabilities at fair value through profit or loss
A financial asset or liability is classified in this category if it is held for trading. Derivatives are also included
in this category unless they are designated as hedges. The Company has designated its risk management
contracts in this category.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00207": { "value": "Financial assets and liabilities at fair value through profit or loss
A financial asset or liability is classified in this category if it is held for trading. Derivatives are also included
in this category unless they are designated as hedges. The Company has designated its risk management
contracts in this category.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00319": { "value": "Financial assets and liabilities at fair value through profit or loss
A financial asset or liability is classified in this category if it is held for trading. Derivatives are also included
in this category unless they are designated as hedges. The Company has designated its risk management
contracts in this category.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00209": { "value": "Financial assets at amortized costCash and cash equivalents include deposits held with banks, less outstanding cheques, and short-term
deposits with original maturities of one
year or less.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00198": { "value": "Financial assets at amortized cost
Financial assets at amortized cost are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. They include accounts receivable and deposits. These assets are
included in current assets due to their short-term nature. They are recognized initially at the amount
expected to be received, less, when material, a discount to reduce to fair value. Subsequently, they are
measured at amortized cost using the effective interest method less a provision for impairment.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00132": { "value": "Investments
The Company had investment in certain private companies including its investment in Red Leaf. The
Company acquired remainder of Red Leaf in December 2025. Thereafter, Red Leaf is a wholly owned
subsidiary of the Company. See Note 6 for further details.6. Red Leaf Acquisition
Red Leaf Resources Inc. (\u201cRed Leaf\u201d) is a private Utah-based oil shale and technology company whose
principal assets are its proprietary HCCO technology to recover oil from shale, its oil shale leases and its
assets in the Uinta Basin in the State of Utah.
On December 30, 2025, the Company acquired the remaining equity interest in Red Leaf, increasing its
ownership from approximately 38% to 100%. Total consideration of $8.6 million consisted primarily of (i)
the issuance of Questerre common shares to Red Leaf common shareholders and (ii) cash consideration
payable in respect of the acquisition of Red Leaf preferred shares. As at December 31, 2025, the portion
of consideration related to the preferred shares remains unpaid and has been recognized as a current
liability of $2.2 million. Immediately prior to the acquisition, the Company held approximately 38% of the
common share capital and approximately 16% of the issued and outstanding preferred share capital of Red
Leaf on a non-diluted basis.
The Company assessed the acquired set of activities and assets and concluded that Red Leaf did not meet
the definition of a business for the purposes of IFRS 3
Business Combinations
. In making this
determination, the Company applied the optional concentration test in IFRS 3 and concluded that
substantially all of the fair value of the gross assets acquired was concentrated in a group of similar
identifiable assets. As a result, the transaction was accounted for as an asset acquisition and not as a
business combination.
The following table summarizes the Company\u2019s allocation of the acquisition costs to the identified assets
acquire and liabilities assumed:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
($ thousands
)
Cash and cash equivalents
$
10,792
Restricted cash
2,050
Property, plant and equipment
3,570
Asset retirement obligation
(3,098)
Net Assets Acquired
$
13,314
The table below summarizes the changes in the investment in Red Leaf:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
December 31,
December 31,
($ thousands
)
2025
2024
Balance, beginning of year
$
4,359
$
4,471
Reclassification on change of control
(6,623)
\u2013
Gain (loss) on equity investment
2,388
(474)
Gain (loss) on foreign exchange
(124)
362
Balance, end of the year
$
\u2013
$
4,359
\n
The previously held interest in Red Leaf was re-measured to fair value at the acquisition date. The
acquisition date fair value of the previously held interest was estimated to be $6.7 million and the net
carrying value of the Red Leaf assets was $4.4 million. As a result, the Company recognized a non-cash
revaluation gain of its existing interest of $2.4 million in the consolidated statements of net loss
. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00320": { "value": "Share capital
Common Shares are classified as equity. Incremental costs directly attributable to the issue of Common
Shares are recognized as a deduction from equity, net of any tax effects.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIssuedCapitalExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00275": { "value": "Exploration and evaluation assets
Exploration and evaluation costs, including the costs of acquiring licenses, exploratory well expenditures,
costs to evaluate the commercial potential of underlying resources and directly attributable general and
administrative costs, are capitalized as E&E assets. The costs are accumulated in cost centres by
exploration area pending determination of technical feasibility and commercial viability. Gains and losses
on E&E assets are recognized on disposal through the income statement.
The technical feasibility and commercial viability of extracting a mineral resource is considered to be
determinable based on several factors including the assignment of reserves. A review of each exploration
license or field is carried out, at each reporting date, to ascertain whether technical feasibility and
commercial viability has been achieved. Upon determination of technical feasibility and commercial
viability, intangible exploration and evaluation assets attributable to those reserves are first tested for
impairment and then reclassified from exploration and evaluation assets to property, plant and equipment.
Every reporting period, the Company evaluates individually significant exploration and evaluation wells for
impairment, if there are specific impairment indicators evident at the well level. If technical feasibility and
commercial viability of the well is not established, the well costs are written off. For insignificant wells,
overall exploration and evaluation well indicators are evaluated. If there are indicators of impairment, the
wells are tested for impairment at the CGU level.
Costs incurred prior to acquiring the legal rights to explore an area are recognized as exploration and
evaluation expense in profit or loss.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForExplorationAndEvaluationExpenditures", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00272": { "value": "Exploration and evaluation assets
Exploration and evaluation costs, including the costs of acquiring licenses, exploratory well expenditures,
costs to evaluate the commercial potential of underlying resources and directly attributable general and
administrative costs, are capitalized as E&E assets. The costs are accumulated in cost centres by
exploration area pending determination of technical feasibility and commercial viability. Gains and losses
on E&E assets are recognized on disposal through the income statement.
The technical feasibility and commercial viability of extracting a mineral resource is considered to be
determinable based on several factors including the assignment of reserves. A review of each exploration
license or field is carried out, at each reporting date, to ascertain whether technical feasibility and
commercial viability has been achieved. Upon determination of technical feasibility and commercial
viability, intangible exploration and evaluation assets attributable to those reserves are first tested for
impairment and then reclassified from exploration and evaluation assets to property, plant and equipment.
Every reporting period, the Company evaluates individually significant exploration and evaluation wells for
impairment, if there are specific impairment indicators evident at the well level. If technical feasibility and
commercial viability of the well is not established, the well costs are written off. For insignificant wells,
overall exploration and evaluation well indicators are evaluated. If there are indicators of impairment, the
wells are tested for impairment at the CGU level.
Costs incurred prior to acquiring the legal rights to explore an area are recognized as exploration and
evaluation expense in profit or loss.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForMiningAssetsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00271": { "value": "Property, Plant and Equipment
The costs to acquire and to develop oil and gas properties, including completing geological and geophysical
surveys and drilling development wells, and the costs to construct and install development infrastructure
are capitalized as oil and gas properties within Property, Plant and Equipment. Items of PP&E, which
include oil and gas development and production assets, are measured at cost less accumulated depletion
and depreciation and accumulated impairment losses.
The costs of planned major inspection, overhaul and turnaround activities that maintain PP&E and benefit
future years of operations are capitalized. Recurring planned maintenance activities performed on shorter
intervals are expensed as operating costs. Replacements outside of a major inspection, overhaul or
turnaround are capitalized when it is probable that future economic benefits will be realized by the company
and the associated carrying amount of the replaced component is derecognized.
Borrowing costs relating to assets that take over one year to construct are capitalized as part of the asset.
Capitalization of borrowing costs ceases when the asset is in the location and condition necessary for its
intended use, and is suspended when construction of an asset is ceased for extended periods.
Gains and losses on disposal of an item of PP&E, including oil and natural gas interests, are determined by
comparing the proceeds from disposal with the carrying amount of the property, plant and equipment and
are recognized net within gain (loss) on divestures in profit or loss.
Exchanges of properties are measured at fair value, unless the transaction lacks commercial substance or
fair value cannot be reliably measured. When the exchange is at fair value, a gain or loss is recognized in
profit or loss.
Depletion and depreciation
The net carrying value of development and production assets is depleted using the unit of production
method based on estimated proved and probable reserves, considering estimated future development
costs necessary to bring those reserves into production. These estimates are evaluated by independent
reserve engineers at least annually.
For the capital assets, depreciation is recognized in profit or loss on a straight-line basis over the respective
useful lives.
Depreciation methods and useful lives are reviewed at each reporting date.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00274": { "value": "Depletion and depreciation
The net carrying value of development and production assets is depleted using the unit of production
method based on estimated proved and probable reserves, considering estimated future development
costs necessary to bring those reserves into production. These estimates are evaluated by independent
reserve engineers at least annually.
For the capital assets, depreciation is recognized in profit or loss on a straight-line basis over the respective
useful lives.
Depreciation methods and useful lives are reviewed at each reporting date.
Intangibles
Intangibles assets are measured at historical acquisition costs or at fair value when acquired in a business
combination, net of accumulated amortization and, if applicable, accumulated impairment losses.
Subsequent expenditures are capitalized only when they increase the future economic benefits embodied
in the specific asset to which they relate.
Amortization is calculated using the straight-line method based on the estimated useful life of the assets,
which is reviewed at each statement of financial position date.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00276": { "value": "Intangibles
Intangibles assets are measured at historical acquisition costs or at fair value when acquired in a business
combination, net of accumulated amortization and, if applicable, accumulated impairment losses.
Subsequent expenditures are capitalized only when they increase the future economic benefits embodied
in the specific asset to which they relate.
Amortization is calculated using the straight-line method based on the estimated useful life of the assets,
which is reviewed at each statement of financial position date.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00277": { "value": "Goodwill
In the event of a business combination or acquisition in which the activity constitutes a business, as defined
in IFRS 3 Business Combinations, the acquisition method of accounting is applied. Goodwill represents
the difference between the aggregate of the fair value of purchase consideration transferred at the
acquisition date and the fair value of the identifiable assets, liabilities and contingent liabilities acquired,
less any non-controlling interest. The Company's goodwill is related to the requirement to recognize
deferred tax for the difference between the assigned fair values and the related tax base (technical
goodwill). In accordance with IAS 12 paragraphs 15 and 24, a provision is made for deferred tax
corresponding to the difference between the acquisition cost and the transferred tax depreciation basis.
The offsetting entry to this deferred tax is goodwill. Hence, goodwill arises as a technical effect of deferred
tax. Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less
any accumulated impairment. Goodwill is treated as an asset of the relevant entity to which it relates, and
accordingly goodwill is translated into Canadian dollars at the closing rate of exchange at each reporting
date. Impairments are expected to arise as the deferred tax that gave rise to the goodwill initially naturally
unwinds in the normal course of business. Impairment losses relating to goodwill cannot be reversed in
future periods.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00278": { "value": "Impairment
Non-financial assets
The carrying amounts of the Company\u2019s non-financial assets, are reviewed at each reporting date to
determine whether there is any indication of impairment. If any such indication exists, then the asset\u2019s
recoverable amount is estimated and compared to the carrying amount. Goodwill is tested for impairment
annually.
For the purpose of impairment testing, assets are grouped together into CGUs. Exploration and evaluation
assets are allocated to related CGUs when they are assessed for impairment, both at the time of any
triggering facts and circumstances as well as upon their reclassification to producing assets.
The recoverable amount of an asset or a CGU is the greater of its VIU and FVLCD. FVLCD is determined
using discounted future cash flows of proved and probable reserves using an after tax discount rate for
FVLCD. In determining FVLCD, recent market transactions are considered, if available. In the absence of
such transactions, the discounted cash flow model is used. In assessing VIU, the estimated future cash
flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset.
An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated
recoverable amount. Impairment losses are recognized in profit or loss.
Impairment losses recognized in prior
years are assessed at each reporting date for any indications that
the loss has decreased or no longer exists. An impairment loss is reversed for all CGUs, other than
goodwill, if there has been a change in the estimates used to determine the recoverable amount. An
impairment loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the
carrying amount that would have been determined, net of depletion and depreciation or amortization, if no
impairment loss had been recognized. Impairment reversals are recognized in profit or loss.
Impairment of financial assets
Questerre applies the simplified approach to providing for expected credit losses prescribed by IFRS 9
Financial Instruments
(\u201cIFRS 9\u201d) which permits the use of the lifetime expected loss provision for all trade
receivables carried at amortized costs.
At each reporting date, the Company measures the lifetime expected loss provision taking into
consideration Questerre\u2019s historical credit loss experience as well as forward-looking information in order
to establish loss rates. The impairment loss (or reversal) is the amount of expected credit losses that is
required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00279": { "value": "Non-financial assets
The carrying amounts of the Company\u2019s non-financial assets, are reviewed at each reporting date to
determine whether there is any indication of impairment. If any such indication exists, then the asset\u2019s
recoverable amount is estimated and compared to the carrying amount. Goodwill is tested for impairment
annually.
For the purpose of impairment testing, assets are grouped together into CGUs. Exploration and evaluation
assets are allocated to related CGUs when they are assessed for impairment, both at the time of any
triggering facts and circumstances as well as upon their reclassification to producing assets.
The recoverable amount of an asset or a CGU is the greater of its VIU and FVLCD. FVLCD is determined
using discounted future cash flows of proved and probable reserves using an after tax discount rate for
FVLCD. In determining FVLCD, recent market transactions are considered, if available. In the absence of
such transactions, the discounted cash flow model is used. In assessing VIU, the estimated future cash
flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset.
An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated
recoverable amount. Impairment losses are recognized in profit or loss.
Impairment losses recognized in prior
years are assessed at each reporting date for any indications that
the loss has decreased or no longer exists. An impairment loss is reversed for all CGUs, other than
goodwill, if there has been a change in the estimates used to determine the recoverable amount. An
impairment loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the
carrying amount that would have been determined, net of depletion and depreciation or amortization, if no
impairment loss had been recognized. Impairment reversals are recognized in profit or loss. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00280": { "value": "Impairment of financial assets
Questerre applies the simplified approach to providing for expected credit losses prescribed by IFRS 9
Financial Instruments
(\u201cIFRS 9\u201d) which permits the use of the lifetime expected loss provision for all trade
receivables carried at amortized costs.
At each reporting date, the Company measures the lifetime expected loss provision taking into
consideration Questerre\u2019s historical credit loss experience as well as forward-looking information in order
to establish loss rates. The impairment loss (or reversal) is the amount of expected credit losses that is
required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00281": { "value": "Share based compensation
The Company has issued options to directors, officers and employees.
The Company accounts for its stock-based compensation awards on the basis that they will be equity
settled. Under the equity settled method, compensation costs attributable to stock options granted to
employees, officers or directors are measured at fair value at the grant date and expensed over the vesting
period with a corresponding increase to contributed surplus. The exercise of stock options is recorded as
an increase in Common Shares with a corresponding reduction in contributed surplus. A forfeiture rate is
estimated on the grant date and is adjusted to reflect the actual number of options that vest.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00282": { "value": "Provisions
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be
required to settle the obligation. Provisions are determined by discounting the expected future cash flows
at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific
to the liability.
Asset retirement obligation
The Company\u2019s activities give rise to dismantling, decommissioning and site disturbance remediation
activities. Provision is made for the estimated cost of site restoration and capitalized in the relevant asset
category.
Asset retirement obligations are measured at the present value of management\u2019s best estimate of
expenditure required to settle the present obligation at the balance sheet date. The best estimate of the
provision is recorded on a discounted basis using a risk-free interest rate. Subsequent to the initial
measurement, the obligation is adjusted at the end of each period to reflect the passage of time and
changes in the estimated future cash flows underlying the obligation. The increase in the provision due to
the passage of time is recognized as accretion of the asset retirement obligation whereas increases or
decreases due to changes in the estimated future cash flows and risk-free rates are adjusted through
property, plant and equipment or exploration and evaluation assets. Actual costs incurred upon settlement
of the asset retirement obligations are charged against the provision.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00283": { "value": "Asset retirement obligation
The Company\u2019s activities give rise to dismantling, decommissioning and site disturbance remediation
activities. Provision is made for the estimated cost of site restoration and capitalized in the relevant asset
category.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDecommissioningRestorationAndRehabilitationProvisionsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00292": { "value": "Revenue from commodity sales and royalties
Questerre principally generates revenue from the sale of commodities and revenue from royalties on
production from leases where it owns a working interest. Revenue is based on the consideration specified
in a contract and is recorded when control of the product or service passes to the customer in accordance
with terms of the contract. Questerre considers its performance obligations to be satisfied and control to
be transferred when all of the following conditions are satisfied:
\u2022
Questerre has transferred title and physical possession of the commodity to the buyer;
\u2022
Questerre has transferred the significant risks and rewards of ownership of the commodity to the
buyer; and
\u2022
Questerre has the present right to payment.
Revenue represents the Company\u2019s share of commodity sales net of royalty obligations to governments
and other mineral interest owners. Questerre sells its production pursuant to variable priced contracts. The
transaction price for variable priced contracts is based on the commodity price, adjusted for quality, location
or other factors, whereby each component of the pricing formula can be either fixed or variable, depending
on the contract terms. Under these contracts, the Company is required to deliver a variable volume of
crude oil, natural gas, condensate or NGLs and refined products to the contract counterparty.
Revenue is recognized when a unit of production is delivered to the contract counterparty. The amount of
revenue recognized is based on the agreed upon transaction price, whereby any variability in revenue is
related specifically to the Company\u2019s efforts to deliver production. Therefore, the resulting revenue is
allocated to the production delivered in the period during which the variability occurs. Revenues are
normally collected in the month following delivery except where contract states due upon delivery.
Questerre does not have any contracts where the period between the transfer of the promised goods or
services to the customer and payment by the customer exceeds one year and therefore Questerre does
not adjust its revenue transactions for the time value of money. The Company enters into contracts with
customers that can have performance obligations that are unsatisfied, or partially unsatisfied, at the
reporting date.
Royalty revenue is recognized as it accrues in accordance with the terms of the governing agreement,
which is generally in the month when the product is produced with production volumes primarily marketed
with the payor\u2019s production. Royalty revenue is measured at fair value of the consideration received when
Management can reliably estimate the amount pursuant to the terms of the royalty agreement. An accrual
is included in revenue and accounts receivable for amounts not received at the reporting date based on
historical trends, new wells on stream and current market prices. Differences between the estimates and
actual amounts received are adjusted and recorded in the period when the actual amounts are received.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00315": { "value": "Income tax
Income tax expense comprises current and deferred tax. Income tax expense is recognized in profit or loss
except to the extent that it relates to items recognized directly in equity, in which case it is recognized in
equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognized using the balance sheet method, providing for temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for
taxation purposes.
Deferred tax is not recognized on the initial recognition of assets or liabilities in a transaction that is not a
business combination. Deferred tax is measured at the tax rates that are expected to be applied to
temporary differences when they reverse, based on the laws that have been enacted or substantively
enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable
right to offset, and they relate to income taxes levied by the same tax authority on the same taxable entity,
or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their
tax assets and liabilities will be realized simultaneously.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available
against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting
date and are reduced to the extent that it is no longer probable that the related tax asset will be realized.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00313": { "value": "Income tax
Income tax expense comprises current and deferred tax. Income tax expense is recognized in profit or loss
except to the extent that it relates to items recognized directly in equity, in which case it is recognized in
equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognized using the balance sheet method, providing for temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for
taxation purposes.
Deferred tax is not recognized on the initial recognition of assets or liabilities in a transaction that is not a
business combination. Deferred tax is measured at the tax rates that are expected to be applied to
temporary differences when they reverse, based on the laws that have been enacted or substantively
enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable
right to offset, and they relate to income taxes levied by the same tax authority on the same taxable entity,
or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their
tax assets and liabilities will be realized simultaneously.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available
against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting
date and are reduced to the extent that it is no longer probable that the related tax asset will be realized.
The effect of a change in enacted or substantively enacted income tax rates on future income tax assets
and liabilities is recognized in profit or loss in the period that the change occurs unless the original entry
was recorded to equity.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00314": { "value": "Inventories
The Company\u2019s crude oil inventories may be marketed in their raw state, as well as consumed in the
production process of their by-products. Work-in-process products are composed of product streams that
have already gone through at least one processing unit but still need to be processed, treated, or converted
to be made available for sale. Materials and supplies mainly represent production inputs and operating
materials that will be used in the Company\u2019s activities and are presented at average purchase cost.
Product inventories are valued at the lower of cost, using a first-in, first-out, or weighted average cost
basis, and net realizable value. Parts and supplies are valued at the lower of weighted average cost and
net realizable value. The cost of inventory includes purchase costs, direct production costs, and depletion,
depreciation and accretion (\u201cDD&A\u201d). Net realizable value is the estimated selling price in the ordinary
course of business less expected selling costs. If the carrying amount exceeds net realizable value, a write-
down is recognized in net earnings (loss).", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00316": { "value": "Net profit or loss per share
Basic per share amounts are calculated using the weighted average number of shares outstanding during
the
year. Diluted per share amounts are calculated using the weighted average number of shares
outstanding, adjusted for the potential number of shares which may have a dilutive impact on net profit.
Potentially dilutive shares include stock options. The weighted average number of diluted shares is
calculated in accordance with the treasury stock method. The treasury stock method assumes that the
proceeds received from the exercise of all potentially dilutive instruments are used to repurchase Common
Shares at the average market price.
Since the options may be settled in cash or shares at the Company\u2019s discretion and therefore there is no
obligation to settle in cash, the share units are accounted for as equity-settled share based payment
transactions and included in diluted profit per share if the effect is dilutive.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEarningsPerShareExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00321": { "value": "Leases
Under IFRS 16, the Company recognizes right-of-use assets and lease liabilities for most leases. Certain
short-term leases (less than 12 months) and leases of low-value assets are exempt from the requirements
and may continue to be treated as operating leases. The right-of-use assets recognized are subsequently
depreciated using the straight-line method from the commencement date to the earlier of the end of the
useful life of the right-of-use assets or the end of the lease term. The estimated useful lives of right-of-use
assets are determined on the same basis as those of property and equipment. In addition, the right-of-use
assets are periodically reduced by impairment losses, if any, and adjusted for certain re-measurements of
the lease liabilities.
The lease liabilities are initially measured at the present value of the lease payments that are not paid at
the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be
readily determined, the Company's incremental borrowing rate. The Company uses its incremental
borrowing rate as the discount rate.
The lease liabilities are subsequently measured at amortized cost using the effective interest method. It is
re-measured when there is a change in future lease payments arising from a change in an index or rate, if
there is a change in the Company's estimate of the amount expected to be payable under a residual value
guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or
termination option.
When the lease liabilities are re-measured in this way, a corresponding adjustment is made to the carrying
amount of the right-of-use assets or is recorded in profit or loss if the carrying amount of the right-of-use
assets has been reduced to nil. The Company presents right-of-use assets and lease liabilities separately
in the balance sheet.
The application of IFRS 16 requires significant judgments and estimations to be made. Areas that require
judgment include identifying whether a contract (or part of a contract) includes a lease, determining
whether it is reasonably certain that an extension or termination option will be exercised, determining
whether variable payments are in substance fixed, establishing whether there are multiple leases in an
arrangement and determining the stand-alone amounts for lease and non-lease components. Other
sources of estimation uncertainty in the application of IFRS 16 include estimating the lease term,
determining the appropriate discount rate to apply to lease payments and assessing whether a right-of-use
assets are impaired.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00113": { "value": "4. Recent Accounting Pronouncements
New Accounting Standards and Interpretations not yet Adopted
There are new accounting standards, amendments to accounting standards and interpretations that are
effective for annual periods beginning on or after January 1, 2026, and have not been applied in preparing
the Consolidated Financial Statements for the year ended December 31, 2025. The standards applicable
to the Company are as follows and will be adopted on their respective dates:
Financial Instruments
On May 30, 2024, the IASB issued amendments to IFRS 9, \u201cFinancial Instruments\u201d, and IFRS 7, \u201cFinancial
Instruments: Disclosures\u201d. The amendments include clarifications on the derecognition of financial
liabilities and the classification of certain financial assets. In addition, new disclosure requirements for
equity instruments designated as FVOCI were added. The amendments are effective for annual periods
beginning on or after January 1, 2026, and will be applied retrospectively. The amendments to IFRS 9 and
IFRS 7 will not have a material impact on the Consolidated Financial Statements.
Presentation and Disclosure in Financial Statements
On April 9, 2024, the IASB issued IFRS 18, \u201cPresentation and Disclosure in Financial Statements\u201d (\u201cIFRS
18\u201d), which will replace International Accounting Standard 1, \u201cPresentation of Financial Statements\u201d. IFRS
18 will establish a revised structure for the Consolidated Statements of Comprehensive Income (Loss) and
improve comparability across entities and reporting periods. IFRS 18 is effective for annual periods
beginning on or after January 1, 2027. The standard is to be applied retrospectively, with certain transition
provisions. The Company is continuing to evaluate the impacts of adopting IFRS 18 on the Consolidated
Financial Statements. The Company will adopt IFRS 18 effective January 1, 2027, using the retrospective
approach
.", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00112": { "value": "4. Recent Accounting Pronouncements
New Accounting Standards and Interpretations not yet Adopted
There are new accounting standards, amendments to accounting standards and interpretations that are
effective for annual periods beginning on or after January 1, 2026, and have not been applied in preparing
the Consolidated Financial Statements for the year ended December 31, 2025. The standards applicable
to the Company are as follows and will be adopted on their respective dates:
Financial Instruments
On May 30, 2024, the IASB issued amendments to IFRS 9, \u201cFinancial Instruments\u201d, and IFRS 7, \u201cFinancial
Instruments: Disclosures\u201d. The amendments include clarifications on the derecognition of financial
liabilities and the classification of certain financial assets. In addition, new disclosure requirements for
equity instruments designated as FVOCI were added. The amendments are effective for annual periods
beginning on or after January 1, 2026, and will be applied retrospectively. The amendments to IFRS 9 and
IFRS 7 will not have a material impact on the Consolidated Financial Statements.
Presentation and Disclosure in Financial Statements
On April 9, 2024, the IASB issued IFRS 18, \u201cPresentation and Disclosure in Financial Statements\u201d (\u201cIFRS
18\u201d), which will replace International Accounting Standard 1, \u201cPresentation of Financial Statements\u201d. IFRS
18 will establish a revised structure for the Consolidated Statements of Comprehensive Income (Loss) and
improve comparability across entities and reporting periods. IFRS 18 is effective for annual periods
beginning on or after January 1, 2027. The standard is to be applied retrospectively, with certain transition
provisions. The Company is continuing to evaluate the impacts of adopting IFRS 18 on the Consolidated
Financial Statements. The Company will adopt IFRS 18 effective January 1, 2027, using the retrospective
approach
.", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00114": { "value": "5. Business Combination
On September 26, 2025, the Company closed the acquisition of 100% of the common shares of PX Energy,
a privately held oil shale production and refining company based in southern Brazil (the \u201cAcquisition\u201d). The
Acquisition was completed by the purchase of all issued and outstanding shares of its parent company,
Forbes Resources Brazil Holding SA (\u201cFRBH\u201d), from the vendors by a wholly-owned subsidiary of the
Company.
The Acquisition has been accounted for using the acquisition method in accordance with IFRS 3 Business
Combinations. Under the acquisition method, assets and liabilities are measured at their estimated fair
value on the date of acquisition. The total consideration was allocated to the assets acquired and liabilities
assumed. Transaction related costs are recorded in the income statement.
Purchase Price Allocation
\n
The Consideration consisted of (i) 15 million Class \u201cA\u201d common voting shares of Questerre Common
\n
Shares (the \u201cFirst Tranche Common Shares\u201d), subject to a lock-up and voting agreement, with a deemed
\n
value of $5.0 million; (ii) contingent equity consideration consisting of two additional tranches of 25 million
\n
Common Shares, with an estimated fair value of $13.9 million at the acquisition date; and (iii) convertible
\n
promissory notes with principal of $15.2 million, and the assumption of a certain liabilities including
\n
obligations under a business combination agreement (\u201cBCA\u201d) with a special purpose acquisition company
\n
(\u201cSPAC\u201d) with an estimated fair value of $7.6 million.
\n
The contingent equity consideration is issuable upon the earlier of: (a) achievement of US$30 million in
\n
free cash flow within any twelve month period between the closing of the Acquisition and September 30,
\n
2027, or completion of an equity financing of $25 million at $0.50 per common share on or before
\n
September 30, 2027; and (b) achievement of US$40 million in free cash flow within any twelve month
\n
period between the closing of the Acquisition and September 30, 2028, or completion of an equity
\n
financing of $25 million at $1.00 per common share on or before September 30, 2028. The contingent
\n
equity consideration has been classified as equity.
\n
As of December 31, 2025, the First Tranche Common Shares had not been issued. The obligation to issue
\n
the shares has been recorded as liability.
\n
Convertible Promissory Notes and Current Liabilities
\n
As part of the Acquisition, the Company assumed the vendor\u2019s obligations under the BCA with the SPAC.
\n
Pursuant to the BCA, the Company\u2019s wholly owned subsidiary is required to complete a go-public
\n
transaction with the SPAC, subject to certain conditions precedent, including regulatory approvals, the filing
\n
of a Proxy/Registration Statement with the US Securities and Exchange Commission and the completion
\n
of this transaction prior to December 31, 2026. At the acquisition date, the Company recognized assumed
\n
obligations and other liabilities related to BCA with an estimated fair value of $7.6 million.
\n
In addition, subject to the issuance of the First Tranche Common Shares and related conditions under the
\n
BCA, the Company\u2019s subsidiary will assume convertible promissory notes. An obligation has been recorded
\n
to assume the notes measured at their fair value of $15.2 million. As at December 31, 2025, the notes
\n
have not been assumed and the obligation remains outstanding.
\n
Upon completion of the SPAC transaction, the notes are convertible into common shares of the SPAC. If
\n
the SPAC transaction does not proceed, the notes are due and payable or convertible into equity of the
\n
Company\u2019s subsidiary.
The following table summarizes the preliminary allocation of the consideration and the fair values of the
\n
assets acquired and liabilities assumed at the date of the acquisition and is subject to change upon the
\n
final adjustments to working capital:
\n\n \n
Consideration Transferred
($ thousands
)
Pending share issuance for acquisition
$
4,950
Contingent equity consideration
13,941
Assumed liabilities of the vendor
22,760
Total consideration transferred
$
41,651
\n\n \n
Identifiable Assets Acquired and Liabilities Assumed
($ thousands
)
Cash and cash equivalents
$
1,228
Restricted cash
1,254
Accounts receivable
5,920
Prepaid tax contributions
7,572
Inventory
9,128
Deposits and prepaid expenses
3,351
Right-of-use assets
1,698
Property, plant and equipment
209,203
Intangible asset
5,755
Other assets
709
Goodwill
47,900
Total assets acquired
$
293,718
Accounts payable and accrued liabilities
$
(15,792)
Advances from customers
(10,320)
Tax Contributions
(24,964)
Lease liabilities
(1,698)
Deferred tax liability
(61,873)
Provisions
(15,333)
Contingent consideration for original acquisition of PX Energy
(17,348)
Secured debt
(95,539)
Asset retirement obligation
(9,200)
Total liabilities assumed
$
(252,067)
Net Identifiable Assets Acquired
$
41,651
Goodwill
December 31,
December 31,
($ thousands
)
2025
2024
Balance, beginning of year
$
\u2013
$
\u2013
Arising on a business combination (Note 5)
47,900
\u2013
Foreign currency translation adjustment
(1,939)
\u2013
Balance, end of year
$
45,961
$
\u2013
\n
The goodwill of $47.9 million was recorded principally from the requirement to recognize deferred tax
\n
assets and liabilities for the difference between the assigned fair values and the tax basis of the acquired
\n
assets and liabilities assumed in a business combination. The assessment of fair values of oil and gas
\n
assets acquired is based on cash flows after tax. Nevertheless, in accordance with IAS 12 Income Taxes,
\n
paragraphs 15 and 19, a provision is made for deferred tax corresponding to the tax rate multiplied by the
\n
difference between the acquisition cost and the tax base. The offsetting entry to this deferred tax is
\n
goodwill. Hence, goodwill arises as a technical effect of deferred tax (technical goodwill).
\n
Acquisition Related Costs
\n
Acquisition related costs incurred in connection with the transaction were expensed as incurred. These
\n
costs totaled $3.3 million for the year ended December 31, 2025.
\n
The business combination with PX Energy contributed revenues of $31.7 million and operating income of
\n
$4 million since September 26, 2025 to December 31, 2025. If the Company had acquired PX Energy on
\n
January 1, 2025, the pro-forma results of the revenue and net income and comprehensive income for the
\n
year ended December 31, 2025, would have been as follows:
Pro Forma
Year
Ended
December
($ thousands
)
As Stated
PX Energy
31, 2025
Petroleum and natural gas revenue
$
77,136
$
91,569
$
168,705
Net loss
$
(78,935)
$
(30,778)
$
(109,713)
\n
Concurrent with the Acquisition, the Company executed a binding term sheet with a prospective partner
\n
(the \u201cPartner\u201d) for a 50/50 joint venture for the ownership and management of PX Energy (the \u201cJoint
\n
Venture\u201d). In January 2026, the Company was advised by the Partner that the term sheet expired in
\n
accordance with its terms. In March, the Partner notified the Company that it was seeking a penalty of
\n
US$20 million for alleged breaches by the Company pursuant to the term sheet. The Company has advised
\n
the Partner that its claim is wholly without merit and it is reserving its legal rights against the Partner and
\n
its affiliates for among other things, breach of the term sheet. Pursuant to the term sheet, the matter will
be submitted for arbitration pursuant to the ICC rules should either of the parties make a formal claim
thereunder The Company remains the 100% owner and operator of PX Energy.17. Contingent consideration for the acquisition
\u00a0
December 31,
December 31,
($ thousands
)
2025
2024
Balance, beginning of year
$
\u2013
$
\u2013
Acquired through a business combination (Note 5)
17,348
\u2013
Fair value adjustment in profit and loss (Note 23)
(255)
\u2013
Payment
(2,160)
\u2013
Foreign currency translation adjustment
1,554
\u2013
Balance, end of year
$
16,487
$
\u2013
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Current
$
3,259
$
\u2013
Long Term
$
13,228
$
\u2013
\n
In connection with the PX Energy Acquisition, the Company assumed a liability that formed part of the
\n
acquired business and recognized it as an identifiable liability assumed in the business combination. The
\n
liability was initially measured at its fair value at the acquisition date.
\n
As part of the prior acquisition agreement in respect of PX Energy, additional contingent consideration is
\n
payable annually to Petrobras, the original owner of PX Energy, until the end of 2027. The contingent
\n
consideration is determined based on incremental volumes of oil sludge purchased by PX Energy from the
\n
seller and is linked to the future price of fuel oil.
\n
The contingent consideration is classified as a financial liability and measured at fair value, taking into
\n
account the projected volumes of oil sludge purchases for the remaining term of the arrangement and
\n
forecast fuel oil prices. The fair value measurement incorporates significant unobservable inputs and is
\n
therefore classified within Level 3 of the fair value hierarchy.
\n
Subsequent changes in the fair value of the contingent consideration, other than measurement period
\n
adjustments recorded in accordance with IFRS 3, are recognized in profit or loss in the period of
\nremeasurement.", "dimensions": { "concept": "ifrs-full:DisclosureOfBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00115": { "value": "Goodwill
December 31,
December 31,
($ thousands
)
2025
2024
Balance, beginning of year
$
\u2013
$
\u2013
Arising on a business combination (Note 5)
47,900
\u2013
Foreign currency translation adjustment
(1,939)
\u2013
Balance, end of year
$
45,961
$
\u2013
\n
The goodwill of $47.9 million was recorded principally from the requirement to recognize deferred tax
\n
assets and liabilities for the difference between the assigned fair values and the tax basis of the acquired
\n
assets and liabilities assumed in a business combination. The assessment of fair values of oil and gas
\n
assets acquired is based on cash flows after tax. Nevertheless, in accordance with IAS 12 Income Taxes,
\n
paragraphs 15 and 19, a provision is made for deferred tax corresponding to the tax rate multiplied by the
\n
difference between the acquisition cost and the tax base. The offsetting entry to this deferred tax is
\ngoodwill. Hence, goodwill arises as a technical effect of deferred tax (technical goodwill).", "dimensions": { "concept": "ifrs-full:DisclosureOfGoodwillExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00133": { "value": "6. Red Leaf Acquisition
Red Leaf Resources Inc. (\u201cRed Leaf\u201d) is a private Utah-based oil shale and technology company whose
principal assets are its proprietary HCCO technology to recover oil from shale, its oil shale leases and its
assets in the Uinta Basin in the State of Utah.
On December 30, 2025, the Company acquired the remaining equity interest in Red Leaf, increasing its
ownership from approximately 38% to 100%. Total consideration of $8.6 million consisted primarily of (i)
the issuance of Questerre common shares to Red Leaf common shareholders and (ii) cash consideration
payable in respect of the acquisition of Red Leaf preferred shares. As at December 31, 2025, the portion
of consideration related to the preferred shares remains unpaid and has been recognized as a current
liability of $2.2 million. Immediately prior to the acquisition, the Company held approximately 38% of the
common share capital and approximately 16% of the issued and outstanding preferred share capital of Red
Leaf on a non-diluted basis.
The Company assessed the acquired set of activities and assets and concluded that Red Leaf did not meet
the definition of a business for the purposes of IFRS 3
Business Combinations
. In making this
determination, the Company applied the optional concentration test in IFRS 3 and concluded that
substantially all of the fair value of the gross assets acquired was concentrated in a group of similar
identifiable assets. As a result, the transaction was accounted for as an asset acquisition and not as a
business combination.
The following table summarizes the Company\u2019s allocation of the acquisition costs to the identified assets
acquire and liabilities assumed:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
($ thousands
)
Cash and cash equivalents
$
10,792
Restricted cash
2,050
Property, plant and equipment
3,570
Asset retirement obligation
(3,098)
Net Assets Acquired
$
13,314
The table below summarizes the changes in the investment in Red Leaf:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
December 31,
December 31,
($ thousands
)
2025
2024
Balance, beginning of year
$
4,359
$
4,471
Reclassification on change of control
(6,623)
\u2013
Gain (loss) on equity investment
2,388
(474)
Gain (loss) on foreign exchange
(124)
362
Balance, end of the year
$
\u2013
$
4,359
\n
The previously held interest in Red Leaf was re-measured to fair value at the acquisition date. The
acquisition date fair value of the previously held interest was estimated to be $6.7 million and the net
carrying value of the Red Leaf assets was $4.4 million. As a result, the Company recognized a non-cash
revaluation gain of its existing interest of $2.4 million in the consolidated statements of net loss
. 21. Share Capital
The Company is authorized to issue an unlimited number of Common Shares. The Company is also
authorized to issue an unlimited number of Class
\u201cB\u201d Common voting shares and an unlimited number of
preferred shares, issuable in one or more series. At December 31, 2025 and 2024, there were no Class
\u201cB\u201d
common voting shares or preferred shares outstanding.
a) Issued and outstanding
\u00a0
Number
Amount
\u00a0
(thousands)
($ thousands)
Balance, December 31, 2024
428,516
429,878
Shares issued for acquisition
17,248
5,347
Balance, December 31, 2025
445,764
$
435,225
\n
During the year, the Company issued 17.2 million Questerre Common Shares to Red Leaf common
shareholders with a deemed value of $0.31 per Common Share. As at December 31, 2025, the portion of
consideration related to the common shares remains unpaid and has been recognized as a current liability
of $3.2 million.
As part of the Acquisition, the Company is obligated to issue 15 million Class \u201cA\u201d common voting shares
(\u201cCommon Shares\u201d) with a deemed value of $5.0 million. As at December 31, 2025, these shares had not
yet been issued and the related amount has been recognized as a current liability.
In January 2026, the Company completed the economic spin out its Quebec-based assets through a
reorganization of its capital. The reorganization consisted of the exchange of one old Common Share for
one new Common Share and one Series 2 Preferred Share. The Preferred Shares entitle holders to the
economic benefits of the Quebec assets and the Common Shares represent ownership of the remaining
assets of the Company.
b) Contributed surplus
\u00a0
December 31,
December 31,
($ thousands
)
2025
2024
Balance, beginning of year
$
29,283
$
27,908
Contingent consideration for business combination classified as
\u00a0 \u00a0
equity (Note 5)
13,941
\u2013
Share based compensation
1,203
1,375
Balance, end of period
$
44,427
$
29,283
\n
The consideration also includes contingent equity consideration comprised of two additional tranches of
25 million Common Shares. At the acquisition date, these contingent shares were measured at an
estimated fair value of $13.9 million and have been classified as equity and recorded in contributed surplus.
The contingent equity consideration meets the definition of an equity instrument under IFRS and,
accordingly, is not subject to subsequent remeasurement. See Note 5 for further details regarding the
Acquisition.
c) Per share amounts
Basic and Diluted net loss per share is calculated as follows:
\u00a0
December 31,
December 31,
(thousands, except as noted)
2025
2024
Net loss
$
(78,935)
$
(7,329)
Issued Common Shares at beginning of year
428,516
428,516
Shares issued for the acquisition
17,248
\u2013
Weighted average number of Common Shares beginning and
\u00a0 \u00a0
outstanding (basic and diluted)
429,083
428,516
Basic and diluted net loss per share
$
(0.18)
$
(0.02)
\n
Under the current stock option plan, options can be exchanged for Common Shares of the Company,
or for cash at the Company\u2019s discretion. They are considered potentially dilutive and are included in
the calculation of diluted net loss per share for the period. The average market value of the Common
Shares for purposes of calculating the dilutive effect of options was based on quoted market prices
for the period that the options were outstanding. At December 31, 2025, 22.5 million options
(December 31, 2024: 23.7 million) were excluded from the diluted weighted average number of
Common Shares outstanding calculation as their effect would have been anti-dilutive.", "dimensions": { "concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00110": { "value": "6. Red Leaf Acquisition
Red Leaf Resources Inc. (\u201cRed Leaf\u201d) is a private Utah-based oil shale and technology company whose
principal assets are its proprietary HCCO technology to recover oil from shale, its oil shale leases and its
assets in the Uinta Basin in the State of Utah.
On December 30, 2025, the Company acquired the remaining equity interest in Red Leaf, increasing its
ownership from approximately 38% to 100%. Total consideration of $8.6 million consisted primarily of (i)
the issuance of Questerre common shares to Red Leaf common shareholders and (ii) cash consideration
payable in respect of the acquisition of Red Leaf preferred shares. As at December 31, 2025, the portion
of consideration related to the preferred shares remains unpaid and has been recognized as a current
liability of $2.2 million. Immediately prior to the acquisition, the Company held approximately 38% of the
common share capital and approximately 16% of the issued and outstanding preferred share capital of Red
Leaf on a non-diluted basis.
The Company assessed the acquired set of activities and assets and concluded that Red Leaf did not meet
the definition of a business for the purposes of IFRS 3
Business Combinations
. In making this
determination, the Company applied the optional concentration test in IFRS 3 and concluded that
substantially all of the fair value of the gross assets acquired was concentrated in a group of similar
identifiable assets. As a result, the transaction was accounted for as an asset acquisition and not as a
business combination.
The following table summarizes the Company\u2019s allocation of the acquisition costs to the identified assets
acquire and liabilities assumed:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
($ thousands
)
Cash and cash equivalents
$
10,792
Restricted cash
2,050
Property, plant and equipment
3,570
Asset retirement obligation
(3,098)
Net Assets Acquired
$
13,314
The table below summarizes the changes in the investment in Red Leaf:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
December 31,
December 31,
($ thousands
)
2025
2024
Balance, beginning of year
$
4,359
$
4,471
Reclassification on change of control
(6,623)
\u2013
Gain (loss) on equity investment
2,388
(474)
Gain (loss) on foreign exchange
(124)
362
Balance, end of the year
$
\u2013
$
4,359
\n
The previously held interest in Red Leaf was re-measured to fair value at the acquisition date. The
acquisition date fair value of the previously held interest was estimated to be $6.7 million and the net
carrying value of the Red Leaf assets was $4.4 million. As a result, the Company recognized a non-cash
revaluation gain of its existing interest of $2.4 million in the consolidated statements of net loss
. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestsInOtherEntitiesExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00116": { "value": "7. Cash and Cash Equivalents \n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Bank balances
$
15,095
$
10,463
Short-term bank deposits
10,324
21,328
Cash and cash equivalents
$
25,419
$
31,791
Restricted cash
$
399
$
\u2013
Restricted cash acquired (Note 5 & 6)
3,122
\u2013
Restricted cash and equivalents (Note 15)
$
3,521
$
\u2013
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00117": { "value": "8. Inventory \n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
December 31,
December 31,
($ thousands
)
2025
2024
Finished goods
(1)
2,646
$
\u2013
In-process products
(2)
876
\u2013
Materials and supplies
(3)
8,904
\u2013
Provision for inventory obsolescence
(3,814)
\u2013
Provision for adjustments to net realizable value
(19)
\u2013
Balance, end of period
$
8,593
$
\u2013
\n
(1) Includes fuel oil, LPG, sulfur, naphtha, shale water and fuel gas
(2) Shale oil and oily water
(3) Includes operating materials and sludge acquired from third-party
During 2025, inventory of $2.1 million was recorded as an expense through operating expenses.", "dimensions": { "concept": "ifrs-full:DisclosureOfInventoriesExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00134": { "value": "9. Property, Plant and Equipment
A reconciliation of the PP&E assets is detailed below.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
($ thousands
)
Total
Cost or deemed cost:
\u00a0
Balance, December 31, 2023
$
314,321
Capital additions including change to asset retirement
4,000
Transfer from exploration and evaluation assets
8,605
Balance, December 31, 2024
326,926
Acquired through a business combination (Note 5)
209,203
Asset acquisition (Note 6)
3,570
Capital additions
9,609
Transfer from exploration and evaluation assets
23,515
Changes to asset retirement obligation
426
Foreign exchange adjustments
(8,403)
Balance, December 31, 2025
$
564,846
Accumulated depletion, depreciation and impairment losses:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
Balance, December 31, 2023
$
198,386
Depletion and depreciation
11,845
Balance, December 31, 2024
210,231
Depletion and depreciation
29,280
Impairment
49,795
Foreign exchange adjustments
(384)
Balance, December 31, 2025
$
288,922
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
($ thousands
)
Total
Net book value:
\u00a0
At December 31, 2024
$
116,695
At December 31, 2025
$
275,924
\n
During the
years ended December 31, 2025, and 2024, the Company capitalized administrative
overhead charges of $0.6 million (2024: $0.4 million) and shared based compensation of $0.3 million
(2024: $0.3 million) that were directly attributable to development activities. Included in depletion
calculation at December 31, 2025 are future development costs of $279.2 million (2024: $293.6
million) for Canada and $165.9 million (2024: nil) for Brazil. Included in property, plant and equipment
are land ($9.2 million) and assets under construction ($6.7 million), which are not subject to depletion
or depreciation.
As at December 31, 2025, the future prices used for impairment testing to determine cash flows from
oil and natural gas reserves were as follows:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Average
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Annual %
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0
Change
\u00a0
2026
2027
2028
2029
2030
Thereafter
WTI (US$/barrel)
59.92
65.10
70.28
71.93
73.37
2.00
BRENT (US$/barrel)
63.92
69.13
74.36
76.10
77.62
2.00
AECO ($/MMbtu)
3.00
3.30
3.49
3.58
3.65
2.00
\n
In 2025, the Company assessed its PP&E assets for indicators of impairment or impairment reversals.
With respect to the Kakwa and Antler CGUs an indicator of impairment was identified as a result of
the reduction in the future commodity prices. The result of the impairment test based on a FVLCD
assessment of the Kakwa CGU was $44.2 million, for the Antler CGU it was $5.6 million and with no
impairment reversals recorded for any CGU. The estimates of FVLCD were determined using a
discount rate of 15% (2024: 15.8%) and forecasted after tax cash flows based on proved plus
probable reserves, with escalating prices, royalties, operating costs and future development costs.
No indicators of impairment or impairment reversals were identified for the other CGUs in 2025.
The table below illustrates the impact of changes to the discount rate and price forecasts:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0 \u00a0
Five Percent
\u00a0
One Percent
Decrease in the
\u00a0
Increase in the
Forward Price
($ thousands)
Discount Rate
Estimates
Impairment charge of property, plant and equipment
$
55,287
$
67,630
\nIn 2024, the company recorded no impairment for any of the CGUs", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00136": { "value": "9. Property, Plant and Equipment
A reconciliation of the PP&E assets is detailed below.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
($ thousands
)
Total
Cost or deemed cost:
\u00a0
Balance, December 31, 2023
$
314,321
Capital additions including change to asset retirement
4,000
Transfer from exploration and evaluation assets
8,605
Balance, December 31, 2024
326,926
Acquired through a business combination (Note 5)
209,203
Asset acquisition (Note 6)
3,570
Capital additions
9,609
Transfer from exploration and evaluation assets
23,515
Changes to asset retirement obligation
426
Foreign exchange adjustments
(8,403)
Balance, December 31, 2025
$
564,846
Accumulated depletion, depreciation and impairment losses:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
Balance, December 31, 2023
$
198,386
Depletion and depreciation
11,845
Balance, December 31, 2024
210,231
Depletion and depreciation
29,280
Impairment
49,795
Foreign exchange adjustments
(384)
Balance, December 31, 2025
$
288,922
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
($ thousands
)
Total
Net book value:
\u00a0
At December 31, 2024
$
116,695
At December 31, 2025
$
275,924
\nIn 2025, the Company assessed its PP&E assets for indicators of impairment or impairment reversals.
With respect to the Kakwa and Antler CGUs an indicator of impairment was identified as a result of
the reduction in the future commodity prices. The result of the impairment test based on a FVLCD
assessment of the Kakwa CGU was $44.2 million, for the Antler CGU it was $5.6 million and with no
impairment reversals recorded for any CGU. The estimates of FVLCD were determined using a
discount rate of 15% (2024: 15.8%) and forecasted after tax cash flows based on proved plus
probable reserves, with escalating prices, royalties, operating costs and future development costs.
No indicators of impairment or impairment reversals were identified for the other CGUs in 2025.
The table below illustrates the impact of changes to the discount rate and price forecasts:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0 \u00a0
Five Percent
\u00a0
One Percent
Decrease in the
\u00a0
Increase in the
Forward Price
($ thousands)
Discount Rate
Estimates
Impairment charge of property, plant and equipment
$
55,287
$
67,630
\nIn 2024, the company recorded no impairment for any of the CGUs", "dimensions": { "concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00135": { "value": "9. Property, Plant and Equipment
A reconciliation of the PP&E assets is detailed below.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
($ thousands
)
Total
Cost or deemed cost:
\u00a0
Balance, December 31, 2023
$
314,321
Capital additions including change to asset retirement
4,000
Transfer from exploration and evaluation assets
8,605
Balance, December 31, 2024
326,926
Acquired through a business combination (Note 5)
209,203
Asset acquisition (Note 6)
3,570
Capital additions
9,609
Transfer from exploration and evaluation assets
23,515
Changes to asset retirement obligation
426
Foreign exchange adjustments
(8,403)
Balance, December 31, 2025
$
564,846
Accumulated depletion, depreciation and impairment losses:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
Balance, December 31, 2023
$
198,386
Depletion and depreciation
11,845
Balance, December 31, 2024
210,231
Depletion and depreciation
29,280
Impairment
49,795
Foreign exchange adjustments
(384)
Balance, December 31, 2025
$
288,922
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
($ thousands
)
Total
Net book value:
\u00a0
At December 31, 2024
$
116,695
At December 31, 2025
$
275,924
\n11. Intangible Assets
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Balance, beginning of year
$
\u2013
$
\u2013
Software (acquired through a business combination see Note 5)
5,755
\u2013
Additions
14
\u2013
Depreciation
(85)
\u2013
Foreign exchange adjustments
(232)
\u2013
Balance, end of period
$
5,452
$
\u2013
($ thousands
)
\u00a0 \u00a0
Net book value:
\u00a0 \u00a0
Costs
$
5,537
$
\u2013
Accumulated depreciation
(85)
\u2013
\u00a0
$
5,452
$
\u2013
a)
Right-of-use assets
\u00a0
December 31,
December 31,
($ thousands
)
2025
2024
Balance, beginning of year
$
128
$
180
Acquired through a business combination (Note 5)
1,698
\u2013
Additions
(12)
8
Depreciation
(285)
(60)
Currency translation adjustment
(70)
\u2013
Balance, end of year
$
1,459
$
128
\n
b)
Lease liabilities
\u00a0
December 31,
December 31,
($ thousands
)
2025
2024
Balance, beginning of year
$
139
$
192
Additions
2
8
Acquired through a business combination (Note 5)
1,698
\u2013
Interest expense
22
4
Lease payments
(319)
(65)
Currency translation adjustment
(69)
\u2013
Balance, end of year
$
1,473
$
139
Current portion
988
56
Long term portion
485
83
Balance, end of year
$
1,473
$
139
", "dimensions": { "concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00137": { "value": "10. Exploration and Evaluation Assets
Exploration and evaluation assets consist of the Company\u2019s exploration projects which are pending
the determination of technical feasibility and commercial viability. Additions represent the Company\u2019s
share of costs incurred on exploration and evaluation assets during the period.
A reconciliation of the movements in exploration and evaluation assets is detailed below.
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
December 31,
December 31,
($ thousands
)
2025
2024
Balance, beginning of year
$
13,106
$
12,287
Additions
16,008
16,344
Transfers to property, plant and equipment
(23,515)
(8,605)
Foreign currency translation adjustment - Jordan
\u2013
943
Impairment of Jordan asset
\u2013
(7,863)
Balance, end of period
$
5,599
$
13,106
\n
During the
year ended December 31, 2025, the Company did not capitalize any administration
overhead or share based compensation expense directly related to exploration and evaluation
activities.
In 2024, the Company recorded an impairment expense of $7.9 million representing its E&E assets
in Jordan due to the impending expiry of its exclusive exploration rights. No impairments were
recorded for the Company\u2019s CGUs in 2025.", "dimensions": { "concept": "ifrs-full:DisclosureOfExplorationAndEvaluationAssetsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00138": { "value": "11. Intangible Assets
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Balance, beginning of year
$
\u2013
$
\u2013
Software (acquired through a business combination see Note 5)
5,755
\u2013
Additions
14
\u2013
Depreciation
(85)
\u2013
Foreign exchange adjustments
(232)
\u2013
Balance, end of period
$
5,452
$
\u2013
($ thousands
)
\u00a0 \u00a0
Net book value:
\u00a0 \u00a0
Costs
$
5,537
$
\u2013
Accumulated depreciation
(85)
\u2013
\u00a0
$
5,452
$
\u2013
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00139": { "value": "11. Intangible Assets
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Balance, beginning of year
$
\u2013
$
\u2013
Software (acquired through a business combination see Note 5)
5,755
\u2013
Additions
14
\u2013
Depreciation
(85)
\u2013
Foreign exchange adjustments
(232)
\u2013
Balance, end of period
$
5,452
$
\u2013
($ thousands
)
\u00a0 \u00a0
Net book value:
\u00a0 \u00a0
Costs
$
5,537
$
\u2013
Accumulated depreciation
(85)
\u2013
\u00a0
$
5,452
$
\u2013
", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00163": { "value": "12. Income Taxes
The tax on the Company\u2019s net loss before taxes differs from the amount that would arise using the
weighted average tax rate applicable to profits or losses of the consolidated entities as follows:
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Net loss before taxes
$
(81,076)
$
(7,329)
Combined federal and provincial tax rate
23.82%
23.82%
Statutory tax (recovery)
(19,312)
(1,746)
Increase/(deduction) in tax expense resulting from:
\u00a0 \u00a0
Non-deductible differences and permanent items
273
1,567
Change in deferred tax asset not recognized
13,609
179
Change in deferred tax asset due to obtaining control of Red Leaf
5,620
\u2013
Difference in jurisdictional tax rates
(2,336)
\u2013
Other
5
\u2013
Total income tax expense
$
(2,141)
$
\u2013
\n
The Company evaluated the recoverability of its deferred tax assets using forecasted before-tax cash
flows based on proved reserves, with escalating prices and future development costs obtained from
an independent reserve evaluation report and a deduction for estimated general and administrative
\n
costs associated with these proved reserves. As a result, deferred tax assets were not recognized.
\n
The combined statutory tax rate was 23.82% in 2025 and 2024.
\n
The breakdown of deductible and taxable temporary differences during the
year are as follows:
\n\n \n
December 31,
December 31,
($ thousands)
2025
2024
Petroleum and natural gas properties
$
236,833
$
165,651
Asset Retirement Obligation
19,120
19,420
Non-Capital Losses
163,925
\u2013
Capital Losses
36,480
36,488
Tax Reserves
14,501
\u2013
Other
\u2013
33,908
Total deductible temporary differences
$
470,859
$
255,467
Taxable temporary differences:
Petroleum and natural gas properties
$
(228,265)
$
\u2013
Tax reserves
(2,039)
\u2013
Other
(100)
\u2013
Total taxable temporary differences
$
(230,404)
$
\u2013
Total net deductible temporary differences
$
240,455
$
255,467
Total deductible temporary differences not recognized
(408,975)
(255,467)
Total net taxable temporary differences recognized
$
(168,520)
$
\u2013
\n
The deferred tax liabilities are as follows:
\n\n \n
December 31,
December 31,
($ thousands)
2025
2024
Petroleum and natural gas properties
(56,603)
\u2013
Tax Reserves
(694)
\u2013
Deferred tax liability
$
(57,297)
$
\u2013
\n
A deferred tax asset is recognized to the extent that it is probable future taxable profits will be available
\n
against which the asset can be utilized. See note 2(e) for detail on the related judgments used in this
\n
determination. The provision of deferred tax assets and liabilities reflects the tax consequences that
\n
would follow from the expected recovery or settlement of the carrying amount of its assets and
\n
liabilities. We have not recognized $409 million (2024: $255 million) of deductible temporary
\n
differences.
\n
Deferred income tax assets are recognized for tax loss carry forwards to the extent that the realization
\n
of the related tax benefit is probably based on estimated future earnings. As of December 31, 2025,
our Canadian non-capital loss carry forwards were $45.9 million and capital loss carry forwards were
$36.5 million. The non-capital loss carry forwards begin to expire in 2045 and the capital losses do not
expire but can only be utilized against future capital gains. Our Brazil non-capital loss carry forwards
were $118 million which do not expire but the annual use is restricted.
Change in deferred income tax balances:
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Net deferred income tax liability, beginning of year
$
\u2013
$
\u2013
Deferred tax liability from FRBH acquisition
(61,873)
\u2013
Deferred tax recovery
2,141
\u2013
Other FX translation differences
2,435
\u2013
Net deferred income tax liability, end of year
$
(57,297)
$
\u2013
", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00162": { "value": "12. Income Taxes
The tax on the Company\u2019s net loss before taxes differs from the amount that would arise using the
weighted average tax rate applicable to profits or losses of the consolidated entities as follows:
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Net loss before taxes
$
(81,076)
$
(7,329)
Combined federal and provincial tax rate
23.82%
23.82%
Statutory tax (recovery)
(19,312)
(1,746)
Increase/(deduction) in tax expense resulting from:
\u00a0 \u00a0
Non-deductible differences and permanent items
273
1,567
Change in deferred tax asset not recognized
13,609
179
Change in deferred tax asset due to obtaining control of Red Leaf
5,620
\u2013
Difference in jurisdictional tax rates
(2,336)
\u2013
Other
5
\u2013
Total income tax expense
$
(2,141)
$
\u2013
\n
The Company evaluated the recoverability of its deferred tax assets using forecasted before-tax cash
flows based on proved reserves, with escalating prices and future development costs obtained from
an independent reserve evaluation report and a deduction for estimated general and administrative
\n
costs associated with these proved reserves. As a result, deferred tax assets were not recognized.
\n
The combined statutory tax rate was 23.82% in 2025 and 2024.
\n
The breakdown of deductible and taxable temporary differences during the
year are as follows:
\n\n \n
December 31,
December 31,
($ thousands)
2025
2024
Petroleum and natural gas properties
$
236,833
$
165,651
Asset Retirement Obligation
19,120
19,420
Non-Capital Losses
163,925
\u2013
Capital Losses
36,480
36,488
Tax Reserves
14,501
\u2013
Other
\u2013
33,908
Total deductible temporary differences
$
470,859
$
255,467
Taxable temporary differences:
Petroleum and natural gas properties
$
(228,265)
$
\u2013
Tax reserves
(2,039)
\u2013
Other
(100)
\u2013
Total taxable temporary differences
$
(230,404)
$
\u2013
Total net deductible temporary differences
$
240,455
$
255,467
Total deductible temporary differences not recognized
(408,975)
(255,467)
Total net taxable temporary differences recognized
$
(168,520)
$
\u2013
\n
The deferred tax liabilities are as follows:
\n\n \n
December 31,
December 31,
($ thousands)
2025
2024
Petroleum and natural gas properties
(56,603)
\u2013
Tax Reserves
(694)
\u2013
Deferred tax liability
$
(57,297)
$
\u2013
\n
A deferred tax asset is recognized to the extent that it is probable future taxable profits will be available
\n
against which the asset can be utilized. See note 2(e) for detail on the related judgments used in this
\n
determination. The provision of deferred tax assets and liabilities reflects the tax consequences that
\n
would follow from the expected recovery or settlement of the carrying amount of its assets and
\n
liabilities. We have not recognized $409 million (2024: $255 million) of deductible temporary
\n
differences.
\n
Deferred income tax assets are recognized for tax loss carry forwards to the extent that the realization
\n
of the related tax benefit is probably based on estimated future earnings. As of December 31, 2025,
our Canadian non-capital loss carry forwards were $45.9 million and capital loss carry forwards were
$36.5 million. The non-capital loss carry forwards begin to expire in 2045 and the capital losses do not
expire but can only be utilized against future capital gains. Our Brazil non-capital loss carry forwards
were $118 million which do not expire but the annual use is restricted.
Change in deferred income tax balances:
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Net deferred income tax liability, beginning of year
$
\u2013
$
\u2013
Deferred tax liability from FRBH acquisition
(61,873)
\u2013
Deferred tax recovery
2,141
\u2013
Other FX translation differences
2,435
\u2013
Net deferred income tax liability, end of year
$
(57,297)
$
\u2013
", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00119": { "value": "13. Other non current assets
As at December 31, 2025, the Company\u2019s other non-current assets included a finance lease receivable of
$0.6 million (2024: nil) and recoverable indirect taxes of $5.1 million (2024: nil).
The finance lease receivable represents the Company\u2019s net investment in leases in which the Company is
the lessor. The receivable is measured at the present value of future lease payments and any estimated
residual value accrued to the Company. Finance income is recognized over the lease term using the
effective interest method.
The recoverable indirect taxes arise in the Company\u2019s wholly owned subsidiary in Brazil and relate primarily
to indirect taxation regimes, including the Imposto sobre Circula\u00e7\u00e3o de Mercadorias e Servi\u00e7os (\u201cICMS\u201d),
Programa de Integra\u00e7\u00e3o Social (\u201cPIS\u201d), Contribui\u00e7\u00e3o para o Financiamento da Seguridade Social
(\u201cCOFINS\u201d), and other value-added and transactional taxes incurred in the normal course of operations.
These taxes incurred on purchases of assets can be recovered in forty-eight installments, PIS and COFINS
can be recovered accordingly to the life-time of the asset.", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherNoncurrentAssetsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00120": { "value": "14. Debt
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Balance, beginning of year
$
\u2013
$
\u2013
Secured bonds acquired through a business combination (see Note 5)
95,539
\u2013
Accretion
2,271
\u2013
Foreign currency translation adjustments
2,945
\u2013
Balance, end of year
$
100,755
$
\u2013
\n
As at December 31, 2025, the entire balance was classified as long term debt.
Secured Bonds
In connection with the PX Energy Acquisition, the Company acquired senior secured bonds issued by FRBH
with a maturity date of April 26, 2028. The bonds have a face value of US$80 million and an acquisition
date fair value of US$64 million. The carrying amount will accrete from US$64 million to US$80 million with
the accretion recognized on the income statement as finance costs at the effective interest rate. Interest
will also be recognized as incurred. The bonds are secured by a fiduciary assignment of the equity of PX
Energy and security over the assets of PX Energy.
In conjunction with the closing of the Acquisition, the holders of the bonds representing a requisite majority
agreed to amend the terms of the bonds as detailed below. These amendments may need to be formalized
in an amending agreement to the Bond terms.
Interest reduced from 16% to 10% per annum effective August 1, 2025. All accrued and unpaid interest
up to December 31, 2025, converts into shares in the SPAC transaction. If the SPAC transaction does not
proceed, no interest is payable in 2025. Thereafter, interest is payable quarterly based on Brent pricing
ranging from 4% based on Brent pricing under US$55 per barrel to 20% based on Brent pricing greater
than US$95 per barrel with interest not to exceed 16% over the term of the bonds. Interest in 2026 may
be payable in cash or in kind at the issuer\u2019s election with interest in 2027 onwards payable in kind if Brent
prices are below US$65 per barrel.
The maturity may be extended for two one year terms for a fee of 2% of the principal for each extension.
Additional amendments to the bond terms were also approved including covenant waivers to permit the
normal operation of bank accounts and working capital, including waivers to reduce the minimum liquidity
to US$3.2 million and a waiver to comply with the interest coverage ratio up to and including December
31, 2025.
Below are the main financial covenant clauses of the outstanding bonds:
Interest coverage ratio greater than 1.3x;
Minimum liquidity of US$3.2 million.
As at December 31, 2025, the Company was in compliance with the covenants under the amended bond
terms.
Credit Facilities
The Company maintains credit facilities with a Canadian chartered bank at $16 million for the year. The
credit facilities include a revolving operating demand facility of $16 million. It can be used for general
corporate purposes, ongoing operations, and capital expenditures within Canada. As such, the calculation
of the covenant below excluded as amounts related to the Acquisition. Any borrowing under the credit
facilities, with the exception of letters of credit, bears interest at the bank\u2019s prime interest rate and an
applicable basis point margin. The Company has breached the covenant to notify the bank of the
establishment of wholly owned subsidiaries for the Acquisition and the issuance of shares for the
remaining equity interest in Red Leaf. A waiver was subsequently granted by the lender on March 31,
\n
2026.
\n
Under the terms of the credit facility, the Company has provided a covenant that it will maintain an Adjusted
\n
Working Capital Ratio greater than 1.0. The ratio is defined as current assets (excluding unrealized hedging
\n
gains and including undrawn Facility A availability) to current liabilities (excluding outstanding bank debt
\n
and unrealized hedging losses). The Adjusted Working Capital Ratio at December 31, 2025, was 2.55 (2024:
\n
3.92) and the covenant was met. At December 31, 2025, and 2024 effectively nil was drawn on the facility.
\n
The credit facilities are a demand facility and can be reduced, amended or eliminated by the lender for
\n
reasons beyond the Company\u2019s control. Should the credit facilities, in fact, be reduced or eliminated, the
\n
Company would need to seek alternative credit facilities or consider the issuance of equity to enhance its
\nliquidity. The next scheduled review will be in the second quarter of 2026.", "dimensions": { "concept": "ifrs-full:DisclosureOfDebtSecuritiesExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00177": { "value": "Credit Facilities
The Company maintains credit facilities with a Canadian chartered bank at $16 million for the year. The
credit facilities include a revolving operating demand facility of $16 million. It can be used for general
corporate purposes, ongoing operations, and capital expenditures within Canada. As such, the calculation
of the covenant below excluded as amounts related to the Acquisition. Any borrowing under the credit
facilities, with the exception of letters of credit, bears interest at the bank\u2019s prime interest rate and an
applicable basis point margin. The Company has breached the covenant to notify the bank of the
establishment of wholly owned subsidiaries for the Acquisition and the issuance of shares for the
\n
remaining equity interest in Red Leaf. A waiver was subsequently granted by the lender on March 31,
\n
2026.
\n
Under the terms of the credit facility, the Company has provided a covenant that it will maintain an Adjusted
\n
Working Capital Ratio greater than 1.0. The ratio is defined as current assets (excluding unrealized hedging
\n
gains and including undrawn Facility A availability) to current liabilities (excluding outstanding bank debt
\n
and unrealized hedging losses). The Adjusted Working Capital Ratio at December 31, 2025, was 2.55 (2024:
\n
3.92) and the covenant was met. At December 31, 2025, and 2024 effectively nil was drawn on the facility.
\n
The credit facilities are a demand facility and can be reduced, amended or eliminated by the lender for
\n
reasons beyond the Company\u2019s control. Should the credit facilities, in fact, be reduced or eliminated, the
\n
Company would need to seek alternative credit facilities or consider the issuance of equity to enhance its
\nliquidity. The next scheduled review will be in the second quarter of 2026.", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00178": { "value": "Any borrowing under the credit
facilities, with the exception of letters of credit, bears interest at the bank\u2019s prime interest rate and an
applicable basis point margin.", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingCostsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00176": { "value": "15. Asset Retirement Obligation
The Company\u2019s asset retirement and abandonment obligations result from its ownership interest in oil and
\n
natural gas assets. The total asset retirement obligation is estimated based on the Company\u2019s net
\n
ownership interest in all wells and facilities, estimated costs to reclaim and abandon these wells and
\n
facilities and the estimated timing of the costs to be incurred in future periods. For the Canadian assets,
\n
the Company has estimated the net present value of the asset retirement obligation to be $20 million as
\n
at December 31, 2025 (2024: $19.4 million) based on an undiscounted total future liability of $23.4 million
\n
(2024: $24.6 million). These payments are expected to be made over the next 31 years. The average
\n
discount factor, being the risk-free rate related to the liabilities, is 3% (2024: 3.06%). An inflation rate of
\n
2% (2024: 2%) over the varying lives of the assets is used to calculate the present value of the asset
\n
retirement obligation.
\n
For the Brazilian assets, the Company has estimated the net present value of the asset retirement
\n
obligation to be $13 million as at December 31, 2025 (2024: nil) based on an undiscounted total future
\n
liability of $23.9 million (2024: $24.6 million). These payments are expected to be made over the next
\n
17
years. The average discount factor, being the risk-free rate related to the liabilities, is 12.3% (2024: nil).
\n
An inflation rate of 3.5% (2024: nil) over the varying lives of the assets is used to calculate the present
\n
value of the asset retirement obligation.
The following table provides a reconciliation of the Company\u2019s total asset retirement obligation:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Balance, beginning of year
$
19,410
$
19,064
Acquired through a business combination (Note 5)
9,200
\u2013
Revaluation of obligation acquired through a business combination
2,676
\u2013
Acquired on asset acquisition (Note 6)
3,098
\u2013
Liabilities incurred
110
352
Liabilities settled
(1,072)
(49)
Revisions due to change in estimates and discount rates
315
(537)
Accretion
2,817
580
Foreign exchange adjustments
(509)
\u2013
Balance, end of year
$
36,045
$
19,410
Current portion
2,945
799
Non-current portion
33,100
18,611
Balance, end of period
$
36,045
$
19,410
\n
PX Energy maintains deposits in financial institutions to comply with the requirements of ANP Resolution
No. 854/2021. These investments have restricted cash characteristics and are only moved annually based
on the ANP's review of the amount of the subsidiary's environmental liabilities and determination of the
amount to be maintained as a restricted cash.
In the
fourth quarter of 2025, PX Energy withdrew the amount related to a prior letter of guarantee, which
had been replaced by a new letter of guarantee in the third quarter of 2025. The new letter of guarantee
includes certain financial covenant requirements. As at December 31, 2025, PX Energy identified a risk of
non-compliance with certain of these requirements and is in discussions with the
issuing bank to amend
the covenant terms and provide alternative forms of security or guarantees. Red Leaf maintains a deposit
of US$1.4 million to secure its abandonment and reclamation obligation in the State of Utah.", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00183": { "value": "16. Right-of-use Assets and Lease Liabilities
a)
Right-of-use assets
\u00a0
December 31,
December 31,
($ thousands
)
2025
2024
Balance, beginning of year
$
128
$
180
Acquired through a business combination (Note 5)
1,698
\u2013
Additions
(12)
8
Depreciation
(285)
(60)
Currency translation adjustment
(70)
\u2013
Balance, end of year
$
1,459
$
128
\n
b)
Lease liabilities
\u00a0
December 31,
December 31,
($ thousands
)
2025
2024
Balance, beginning of year
$
139
$
192
Additions
2
8
Acquired through a business combination (Note 5)
1,698
\u2013
Interest expense
22
4
Lease payments
(319)
(65)
Currency translation adjustment
(69)
\u2013
Balance, end of year
$
1,473
$
139
Current portion
988
56
Long term portion
485
83
Balance, end of year
$
1,473
$
139
", "dimensions": { "concept": "ifrs-full:DisclosureOfLeasesExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00184": { "value": "18. Other Long-Term Liabilities
\u00a0
December 31,
December 31,
($ thousands
)
2025
2024
Provision for contingencies
7,876
\u2013
Taxes and contributions
7,077
\u2013
Deferred revenue
2,026
\u2013
Other Long-term liabilities
535
\u2013
Less: Current Other liabilities
(7,327)
\u2013
Other long-term liabilities
$
10,187
$
\u2013
\n\n
Provision for contingencies
\n
The Company recognizes provisions in amounts sufficient to cover losses considered probable and for
\n
which a reliable estimate can be made. Legal proceedings that represent present obligations for which the
outflow of resources is not probable, or for which a sufficiently reliable estimate of the amount cannot be
\n
made are not recognized but are disclosed unless the likelihood of outflow is remote.
\n
As at December 31, 2025, the Company had recognized provisions for contingencies of $7.9 million in
\n
Brazil, of which $0.5 million related to labor claims and $7.4 million related to tax matters in Brazil. Of the
\n
total provision, $3 million was classified as current and the remainder of $4.9 million as long term.
These
\n
amounts were recognized based on management\u2019s assessment and the advice of internal and external
\n
legal counsel that a loss is probable.
\n
The tax risk provision relates to $4.9 million for state value added tax on triangular oil sales transactions
\n
involving inventory stored at third-party locations and $2.5 million for a dispute with the Government of the
\n
State of Paran\u00e1 initiated in the fourth quarter of 2025 concerning oil purchases made without state value
\n
added tax.
\n
Based on legal opinions and technical assessments obtained by PX Energy, management has concluded
\n
that the likelihood of loss in respect of these matters is probable and has recognized the related provisions
\n
accordingly.
\n
Taxes and contributions
\n
The Company, through its wholly owned subsidiary in Brazil, is subject to indirect taxes, including federal
\n
and state value added taxes the ICMS, PIS, COFINS and other value-added and transactional taxes, as well
\n
as direct taxes, including corporate income tax (IRPJ) and social contribution on net income (CSLL). In the
\n
normal course of operations, indirect taxes are incurred on transactions involving the sale, purchase and
\n
movement of goods and services and are recognized as liabilities when payable in accordance with
\n
applicable legislation. As at December 31, 2025, the Company had recognized indirect taxes payable of
\n
$3.6 million (2024: nil).
\n
The Company did not generate taxable income in Brazil in 2025. As at December 31, 2025, the Company
\n
recognized liabilities of $5.4 million in respect of IRPJ and CSLL obligations from prior years, of which $1.8
\n
million was classified as current and $3.6 million as long-term. These balances relate to prior year amounts
\n
the Company elected to settle in installments and are subject to a 20% penalty, together with monthly
\n
interest of 1% plus the SELIC rate.
\n
Deferred revenue
\n
As at December 31, 2025, the Company had a contract liability of $2.0 million, all of which was classified
\n
as current, related to minimum volume commitments under customer contracts. The balance represents
\n
consideration receivable for committed volumes for which the related oil had not yet been delivered as at
\n
year end. Revenue will be recognized when the related performance obligations are satisfied through
\n
delivery of the volumes
. ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00185": { "value": "18. Other Long-Term Liabilities
\u00a0
December 31,
December 31,
($ thousands
)
2025
2024
Provision for contingencies
7,876
\u2013
Taxes and contributions
7,077
\u2013
Deferred revenue
2,026
\u2013
Other Long-term liabilities
535
\u2013
Less: Current Other liabilities
(7,327)
\u2013
Other long-term liabilities
$
10,187
$
\u2013
\n\n
Provision for contingencies
\n
The Company recognizes provisions in amounts sufficient to cover losses considered probable and for
\n
which a reliable estimate can be made. Legal proceedings that represent present obligations for which the
\n
outflow of resources is not probable, or for which a sufficiently reliable estimate of the amount cannot be
\n
made are not recognized but are disclosed unless the likelihood of outflow is remote.
\n
As at December 31, 2025, the Company had recognized provisions for contingencies of $7.9 million in
\n
Brazil, of which $0.5 million related to labor claims and $7.4 million related to tax matters in Brazil. Of the
\n
total provision, $3 million was classified as current and the remainder of $4.9 million as long term.
These
\n
amounts were recognized based on management\u2019s assessment and the advice of internal and external
\n
legal counsel that a loss is probable.
\n
The tax risk provision relates to $4.9 million for state value added tax on triangular oil sales transactions
\n
involving inventory stored at third-party locations and $2.5 million for a dispute with the Government of the
\n
State of Paran\u00e1 initiated in the fourth quarter of 2025 concerning oil purchases made without state value
\n
added tax.
\n
Based on legal opinions and technical assessments obtained by PX Energy, management has concluded
\n
that the likelihood of loss in respect of these matters is probable and has recognized the related provisions
\n
accordingly.
\n
Taxes and contributions
\n
The Company, through its wholly owned subsidiary in Brazil, is subject to indirect taxes, including federal
\n
and state value added taxes the ICMS, PIS, COFINS and other value-added and transactional taxes, as well
\n
as direct taxes, including corporate income tax (IRPJ) and social contribution on net income (CSLL). In the
\n
normal course of operations, indirect taxes are incurred on transactions involving the sale, purchase and
\n
movement of goods and services and are recognized as liabilities when payable in accordance with
\n
applicable legislation. As at December 31, 2025, the Company had recognized indirect taxes payable of
\n
$3.6 million (2024: nil).
\n
The Company did not generate taxable income in Brazil in 2025. As at December 31, 2025, the Company
\n
recognized liabilities of $5.4 million in respect of IRPJ and CSLL obligations from prior years, of which $1.8
\n
million was classified as current and $3.6 million as long-term. These balances relate to prior year amounts
\n
the Company elected to settle in installments and are subject to a 20% penalty, together with monthly
\n
interest of 1% plus the SELIC rate.
\n
Deferred revenue
\n
As at December 31, 2025, the Company had a contract liability of $2.0 million, all of which was classified
\n
as current, related to minimum volume commitments under customer contracts. The balance represents
\n
consideration receivable for committed volumes for which the related oil had not yet been delivered as at
\n
year end. Revenue will be recognized when the related performance obligations are satisfied through
\n
delivery of the volumes
. ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherNoncurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00123": { "value": "19. Financial Risk Management and Determination of Fair Values
a) Overview
The Company\u2019s activities expose it to a variety of financial risks that arise as a result of its exploration,
development, production, and financing activities such as credit risk, liquidity risk and market risk. The
Company manages its exposure to these risks by operating in a manner that minimizes this exposure.
b) Fair value of financial instruments
The Company\u2019s financial instruments as at December 31, 2025, included cash and cash equivalents,
accounts receivable, deposits, credit facilities and accounts payable and accrued liabilities. As at December
31, 2025, the fair values of these financial assets and liabilities equaled their carrying values due to the
short-term maturity.
The company\u2019s long-term debt and long-term financial liabilities are recorded at amortized cost using the
effective interest method. At December 31, 2025, the carrying value of secured debt accounted for under
amortized cost was $100.8 million (December 31, 2024 \u2013 nil) and the fair value at December 31, 2025 was
$115.7 million (December 31, 2024 \u2013 $10.1 million). The estimated fair value of long-term debt is based on
pricing sourced from market data, which is considered a Level 2 fair value input.
Disclosures about the inputs to fair value measurements are required, including their classification within
a hierarchy that prioritizes the inputs to fair value measurement.
Level 1 Fair Value Measurements
Level 1 fair value measurements are based on unadjusted quoted market prices.
Level 2 Fair Value Measurements
Level 2 fair value measurements are based on valuation models and techniques where the significant
inputs are derived from quoted indices.
Level 3 Fair Value Measurements
Level 3 fair value measurements are based on unobservable information.
The fair value measurement of PP&E, E&E, right-of-use assets and contingent payments made by
subsidiary for acquisition have a fair value hierarchy of Level 3.
c) Credit risk
Credit risk represents a potential financial loss to the Company if a customer or counterparty to a financial
instrument fails to meet or discharge their obligation to the Company. Credit risk arises principally from the
Company\u2019s receivables from joint venture partners and oil and gas marketers. The carrying amounts of
accounts receivable and cash and cash equivalents represent the maximum credit exposure.
Substantially all of the accounts receivable are with oil and natural gas marketers and joint venture partners
in the oil and natural gas industry and are subject to normal industry credit risks. The Company generally
extends unsecured credit to these customers and therefore, the collection of accounts receivable may be
affected by changes in economic or other conditions. Management believes the risk is mitigated by
entering into transactions with long-standing, reputable counterparties and partners.
Accounts receivable related to the sale of the Company\u2019s petroleum and natural gas production is paid in
the following
month from major oil and natural gas marketing companies and the Company has not
experienced any credit loss relating to these sales.
Receivables from joint venture partners are typically collected within one to three
months of the joint
venture bill being issued. The Company mitigates this risk by obtaining pre-approval of significant capital
expenditures.
The Company\u2019s accounts receivables are aged as follows:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Current
$
11,016
$
3,174
31 - 60 days
3
3
61 - 90 days
105
1
>90 days
36
64
\u00a0
$
11,160
$
3,242
\n
The Company does not anticipate any material default as it transacts with creditworthy customers and
management does not expect any losses from non-performance by these customers. There are no material
financial assets that the Company considers past due that are considered impaired.
Cash and cash equivalents include cash bank balances and short-term deposits. The Company manages
the credit risk exposure by investing in Canadian banks. Management does not expect any counterparty to
fail to meet its obligations.
d) Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become
due. The Company\u2019s processes for managing liquidity risk include ensuring, to the extent possible, that it
will have sufficient liquidity to meet its liabilities when they become due. The Company prepares annual
capital expenditure budgets which are monitored and are updated as required. In addition, the Company
requires authorizations for expenditures on projects to assist with the management of capital.
Since the Company operates in the upstream oil and natural gas industry, it requires sufficient cash to fund
capital programs necessary to maintain or increase production, develop reserves and to potentially acquire
strategic assets. The Company\u2019s capital programs are funded principally by cash obtained through its credit
facilities, equity issuances and from operating activities. During times of low oil and natural gas prices or
when cash resources may be limited, a portion of capital programs can generally be deferred, however,
due to the long cycle times and the importance to future cash flow in maintaining the Company\u2019s
production, it may be necessary to utilize alternative sources of capital to continue the Company\u2019s strategic
investment plan during periods of low commodity prices. As a result, the Company frequently evaluates
the options available with respect to sources of long and short-term capital resources. Occasionally, to the
extent possible, the Company will use derivative instruments to manage cash flow in the event of
commodity price declines.
The Company\u2019s financial obligations relate to amounts due under the credit facilities, including trade and
other payables, which consist of invoices payable to trade suppliers relating to the office and field operating
activities and its capital spending program. The Company processes invoices within a normal payment
period and all amounts are due within the next 12 months.
The timing of cash outflows relating to financial liabilities as at December 31, 2025, and 2024 are as follows:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Less than
One - Two
Remaining
\u00a0
($ thousands)
one year
years
years
Total
Accounts payable and accrued liabilities
$
44,752
$
\u2013
$
\u2013
$
44,752
Advances from customers
13,367
\u2013
\u2013
13,367
Share issuance for acquisition
8,153
\u2013
\u2013
8,153
Lease liabilities
988
304
181
1,473
Secured debt
\u2013
100,755
\u2013
100,755
Current liabilities related to business combination
22,760
\u2013
\u2013
22,760
Contingent consideration for original acquisition of PX
\u00a0 \u00a0 \u00a0 \u00a0
Energy
3,259
13,228
-
16,487
Other liabilities
7,327
10,187
\u2013
17,514
December 31, 2025
$
100,606
$
124,474
$
181
$
225,261
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Less than
One - Two
Remaining
\u00a0
($ thousands)
one year
years
years
Total
Trade and other liabilities
$
12,545
$
\u2013
\u2013
$
12,545
Lease liabilities
56
\u2013
83
139
Current portion of asset retirement obligation
799
\u2013
\u2013
799
December 31, 2024
$
13,400
$
\u2013
$
83
$
13,483
\n
e) Market risk
Market risk is the risk that changes in market prices, such as commodity prices, foreign exchange rates
and interest rates will affect the Company\u2019s profit or loss or the value of the financial instruments. The
objective of the Company is to mitigate exposure to these risks while maximizing returns to the Company.
Commodity price risk
Commodity price risk is the risk that the fair value or future cash flows will fluctuate as a result of changes
in commodity prices. The Company\u2019s financial performance is closely linked to crude oil and refined product
prices (including pricing differentials for various product types) and, to some extent to electricity prices as
one of the major costs of production. Commodity prices for oil and natural gas are impacted not only by
the relationship between the Canadian and United States dollar, but also world economic events that
dictate the levels of supply and demand. The Company may enter into oil and natural gas contracts to
protect, to the extent possible, its cash flow on future sales. The contracts reduce the volatility in sales
revenue by locking in prices with respect to future deliveries of oil and natural gas. As at December 31,
2025, the Company had no outstanding commodity risk management contracts.
When assessing the potential impact of these commodity price changes, the Company believes a ten
percent volatility is a reasonable measure. A ten percent increase or decrease in commodity prices would
have resulted in $5.0 million net impact on revenue and net loss before tax.
Currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
as a result of changes in foreign exchange rates. The Company operates internationally and is exposed to
foreign exchange risk arising from transactions and balances denominated in currencies other than the
functional currency of the applicable entity, primarily the Brazilian real, Canadian dollar, U.S. dollar and
Jordanian dinar.
The Company\u2019s Canadian petroleum and natural gas sales are denominated in Canadian dollars. However,
the underlying market prices for these commodities are influenced by benchmark prices denominated in
U.S. dollars and, accordingly, are indirectly affected by movements in the Canadian dollar relative to the
U.S. dollar.
In Brazil, revenues are denominated in Brazilian reals; however, commodity prices fluctuate with underlying
market prices denominated in U.S. dollars. Operating and capital expenditures in Brazil are primarily
denominated in local currency, resulting in exposure to fluctuations in the Brazilian real relative to the
Canadian dollar.
The Company also incurs expenditures through its Jordanian subsidiary that are denominated in Jordanian
dinars and U.S. dollars, which gives rise to additional foreign currency exposure.
Following the PX Energy acquisition, the Company was also exposed to foreign currency risk in respect of
the senior secured bonds, which are denominated in U.S. dollars. Fluctuations in the U.S. dollar exchange
rate relative to the Company\u2019s functional currency may affect the carrying amount of the debt and the
related finance expense recognized in the consolidated financial statements.
The Company does not currently hedge its exposure to foreign exchange risk associated with these bonds
and, as at December 31, 2025, had no forward foreign exchange contracts in place. Management monitors
foreign exchange rates on an ongoing basis in assessing the impact of currency movements on the
Company\u2019s financial position and cash flows.
Based on the Company\u2019s foreign operations at December 31, 2025, a 10% strengthening or weakening of
the Canadian dollar relative to the functional currencies of the Company\u2019s subsidiaries, with all other
variables held constant, would have increased or decreased loss before taxes by approximately $1.9 million
as a result of translating the results of those subsidiaries into the Company\u2019s presentation currency, the
Canadian dollar.
Interest rate risk
Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest
rates. Following the PX Energy acquisition, the Company is exposed to variable-rate risk through the senior
secured bonds acquired as part of that transaction.
Under the terms of the bonds, all accrued and unpaid interest up to December 31, 2025 converts into
shares if the contemplated SPAC transaction is completed. If the SPAC transaction does not proceed, no
interest is payable in 2025. Thereafter, interest is payable quarterly at variable rates determined by
reference to Brent crude oil prices, ranging from 4% when Brent is below US$55 per barrel to 20% when
Brent exceeds US$95 per barrel, subject to an overall cap such that interest does not exceed 16% over
the term of the bonds. Interest in 2026 may be settled in cash or in kind at the issuer\u2019s election. From 2027
onward, interest is payable in kind if Brent prices are below US$65 per barrel. The maturity of the bonds
may also be extended for up to two additional one-year terms for a fee equal to 2% of principal for each
extension.
At December 31, 2025, the Company\u2019s exposure to variable-rate debt under these bonds was US$80
million (2024 \u2013 nil). As a result, changes in Brent pricing may affect the amount and timing of interest
payable and, in certain periods, whether interest is settled in cash or in kind. The Company monitors this
exposure in assessing its financing costs and expected liquidity requirements.
At December 31, 2025, and 2024, the Company\u2019s credit facilities outstanding balance was essentially nil.
f) Capital management
The Company\u2019s objective in managing capital is to maintain financial flexibility, preserve its ability to meet
financial obligations as they become due and provide sufficient liquidity to fund ongoing operations and
execute its business strategy. The Company believes that, with expected cash flow from operations,
existing credit facilities and other available sources of financing, it will be able to meet its foreseeable
capital obligations in the normal course of operations in the near term. The Company defines its capital
structure as shareholders\u2019 equity, long-term debt, including the senior secured bonds assumed in
connection with the PX Energy acquisition, and working capital. The Company monitors its capital structure
having regard to current and projected cash flow from operations, debt levels, available liquidity and
forecast capital expenditures.
The volatility of commodity prices has a material impact on the Company\u2019s cash flow from operations. The
Company attempts to mitigate the effect of lower prices by entering into risk management contracts,
shutting in production in unusually low pricing environments, reallocating capital to more profitable areas
and reducing capital spending based on results and other market considerations. The Company will adjust
its capital structure to minimize risk and its cost of capital through the issuance of shares, securing
additional credit facilities and adjusting its capital spending as required. The Company monitors its capital
structure based on the current and projected funds flow from operations.
Annual and updated budgets are approved by the Board of Directors and are regularly reviewed to assess
the Company\u2019s funding requirements and financial flexibility.", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00118": { "value": "19. Financial Risk Management and Determination of Fair Values
a) Overview
The Company\u2019s activities expose it to a variety of financial risks that arise as a result of its exploration,
development, production, and financing activities such as credit risk, liquidity risk and market risk. The
Company manages its exposure to these risks by operating in a manner that minimizes this exposure.
b) Fair value of financial instruments
The Company\u2019s financial instruments as at December 31, 2025, included cash and cash equivalents,
accounts receivable, deposits, credit facilities and accounts payable and accrued liabilities. As at December
31, 2025, the fair values of these financial assets and liabilities equaled their carrying values due to the
short-term maturity.
The company\u2019s long-term debt and long-term financial liabilities are recorded at amortized cost using the
effective interest method. At December 31, 2025, the carrying value of secured debt accounted for under
amortized cost was $100.8 million (December 31, 2024 \u2013 nil) and the fair value at December 31, 2025 was
$115.7 million (December 31, 2024 \u2013 $10.1 million). The estimated fair value of long-term debt is based on
pricing sourced from market data, which is considered a Level 2 fair value input.
Disclosures about the inputs to fair value measurements are required, including their classification within
a hierarchy that prioritizes the inputs to fair value measurement.
Level 1 Fair Value Measurements
Level 1 fair value measurements are based on unadjusted quoted market prices.
Level 2 Fair Value Measurements
Level 2 fair value measurements are based on valuation models and techniques where the significant
inputs are derived from quoted indices.
Level 3 Fair Value Measurements
Level 3 fair value measurements are based on unobservable information.
The fair value measurement of PP&E, E&E, right-of-use assets and contingent payments made by
subsidiary for acquisition have a fair value hierarchy of Level 3.
c) Credit risk
Credit risk represents a potential financial loss to the Company if a customer or counterparty to a financial
instrument fails to meet or discharge their obligation to the Company. Credit risk arises principally from the
Company\u2019s receivables from joint venture partners and oil and gas marketers. The carrying amounts of
accounts receivable and cash and cash equivalents represent the maximum credit exposure.
Substantially all of the accounts receivable are with oil and natural gas marketers and joint venture partners
in the oil and natural gas industry and are subject to normal industry credit risks. The Company generally
extends unsecured credit to these customers and therefore, the collection of accounts receivable may be
affected by changes in economic or other conditions. Management believes the risk is mitigated by
entering into transactions with long-standing, reputable counterparties and partners.
Accounts receivable related to the sale of the Company\u2019s petroleum and natural gas production is paid in
the following
month from major oil and natural gas marketing companies and the Company has not
experienced any credit loss relating to these sales.
Receivables from joint venture partners are typically collected within one to three
months of the joint
venture bill being issued. The Company mitigates this risk by obtaining pre-approval of significant capital
expenditures.
The Company\u2019s accounts receivables are aged as follows:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Current
$
11,016
$
3,174
31 - 60 days
3
3
61 - 90 days
105
1
>90 days
36
64
\u00a0
$
11,160
$
3,242
\n
The Company does not anticipate any material default as it transacts with creditworthy customers and
management does not expect any losses from non-performance by these customers. There are no material
financial assets that the Company considers past due that are considered impaired.
Cash and cash equivalents include cash bank balances and short-term deposits. The Company manages
the credit risk exposure by investing in Canadian banks. Management does not expect any counterparty to
fail to meet its obligations.
d) Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become
due. The Company\u2019s processes for managing liquidity risk include ensuring, to the extent possible, that it
will have sufficient liquidity to meet its liabilities when they become due. The Company prepares annual
capital expenditure budgets which are monitored and are updated as required. In addition, the Company
requires authorizations for expenditures on projects to assist with the management of capital.
Since the Company operates in the upstream oil and natural gas industry, it requires sufficient cash to fund
capital programs necessary to maintain or increase production, develop reserves and to potentially acquire
strategic assets. The Company\u2019s capital programs are funded principally by cash obtained through its credit
facilities, equity issuances and from operating activities. During times of low oil and natural gas prices or
when cash resources may be limited, a portion of capital programs can generally be deferred, however,
due to the long cycle times and the importance to future cash flow in maintaining the Company\u2019s
production, it may be necessary to utilize alternative sources of capital to continue the Company\u2019s strategic
investment plan during periods of low commodity prices. As a result, the Company frequently evaluates
the options available with respect to sources of long and short-term capital resources. Occasionally, to the
extent possible, the Company will use derivative instruments to manage cash flow in the event of
commodity price declines.
The Company\u2019s financial obligations relate to amounts due under the credit facilities, including trade and
other payables, which consist of invoices payable to trade suppliers relating to the office and field operating
activities and its capital spending program. The Company processes invoices within a normal payment
period and all amounts are due within the next 12 months.
The timing of cash outflows relating to financial liabilities as at December 31, 2025, and 2024 are as follows:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Less than
One - Two
Remaining
\u00a0
($ thousands)
one year
years
years
Total
Accounts payable and accrued liabilities
$
44,752
$
\u2013
$
\u2013
$
44,752
Advances from customers
13,367
\u2013
\u2013
13,367
Share issuance for acquisition
8,153
\u2013
\u2013
8,153
Lease liabilities
988
304
181
1,473
Secured debt
\u2013
100,755
\u2013
100,755
Current liabilities related to business combination
22,760
\u2013
\u2013
22,760
Contingent consideration for original acquisition of PX
\u00a0 \u00a0 \u00a0 \u00a0
Energy
3,259
13,228
-
16,487
Other liabilities
7,327
10,187
\u2013
17,514
December 31, 2025
$
100,606
$
124,474
$
181
$
225,261
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Less than
One - Two
Remaining
\u00a0
($ thousands)
one year
years
years
Total
Trade and other liabilities
$
12,545
$
\u2013
\u2013
$
12,545
Lease liabilities
56
\u2013
83
139
Current portion of asset retirement obligation
799
\u2013
\u2013
799
December 31, 2024
$
13,400
$
\u2013
$
83
$
13,483
\n
e) Market risk
Market risk is the risk that changes in market prices, such as commodity prices, foreign exchange rates
and interest rates will affect the Company\u2019s profit or loss or the value of the financial instruments. The
objective of the Company is to mitigate exposure to these risks while maximizing returns to the Company.
Commodity price risk
Commodity price risk is the risk that the fair value or future cash flows will fluctuate as a result of changes
in commodity prices. The Company\u2019s financial performance is closely linked to crude oil and refined product
prices (including pricing differentials for various product types) and, to some extent to electricity prices as
one of the major costs of production. Commodity prices for oil and natural gas are impacted not only by
the relationship between the Canadian and United States dollar, but also world economic events that
dictate the levels of supply and demand. The Company may enter into oil and natural gas contracts to
protect, to the extent possible, its cash flow on future sales. The contracts reduce the volatility in sales
revenue by locking in prices with respect to future deliveries of oil and natural gas. As at December 31,
2025, the Company had no outstanding commodity risk management contracts.
When assessing the potential impact of these commodity price changes, the Company believes a ten
percent volatility is a reasonable measure. A ten percent increase or decrease in commodity prices would
have resulted in $5.0 million net impact on revenue and net loss before tax.
Currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
as a result of changes in foreign exchange rates. The Company operates internationally and is exposed to
foreign exchange risk arising from transactions and balances denominated in currencies other than the
functional currency of the applicable entity, primarily the Brazilian real, Canadian dollar, U.S. dollar and
Jordanian dinar.
The Company\u2019s Canadian petroleum and natural gas sales are denominated in Canadian dollars. However,
the underlying market prices for these commodities are influenced by benchmark prices denominated in
U.S. dollars and, accordingly, are indirectly affected by movements in the Canadian dollar relative to the
U.S. dollar.
In Brazil, revenues are denominated in Brazilian reals; however, commodity prices fluctuate with underlying
market prices denominated in U.S. dollars. Operating and capital expenditures in Brazil are primarily
denominated in local currency, resulting in exposure to fluctuations in the Brazilian real relative to the
Canadian dollar.
The Company also incurs expenditures through its Jordanian subsidiary that are denominated in Jordanian
dinars and U.S. dollars, which gives rise to additional foreign currency exposure.
Following the PX Energy acquisition, the Company was also exposed to foreign currency risk in respect of
the senior secured bonds, which are denominated in U.S. dollars. Fluctuations in the U.S. dollar exchange
rate relative to the Company\u2019s functional currency may affect the carrying amount of the debt and the
related finance expense recognized in the consolidated financial statements.
The Company does not currently hedge its exposure to foreign exchange risk associated with these bonds
and, as at December 31, 2025, had no forward foreign exchange contracts in place. Management monitors
foreign exchange rates on an ongoing basis in assessing the impact of currency movements on the
Company\u2019s financial position and cash flows.
Based on the Company\u2019s foreign operations at December 31, 2025, a 10% strengthening or weakening of
the Canadian dollar relative to the functional currencies of the Company\u2019s subsidiaries, with all other
variables held constant, would have increased or decreased loss before taxes by approximately $1.9 million
as a result of translating the results of those subsidiaries into the Company\u2019s presentation currency, the
Canadian dollar.
Interest rate risk
Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest
rates. Following the PX Energy acquisition, the Company is exposed to variable-rate risk through the senior
secured bonds acquired as part of that transaction.
Under the terms of the bonds, all accrued and unpaid interest up to December 31, 2025 converts into
shares if the contemplated SPAC transaction is completed. If the SPAC transaction does not proceed, no
interest is payable in 2025. Thereafter, interest is payable quarterly at variable rates determined by
reference to Brent crude oil prices, ranging from 4% when Brent is below US$55 per barrel to 20% when
Brent exceeds US$95 per barrel, subject to an overall cap such that interest does not exceed 16% over
the term of the bonds. Interest in 2026 may be settled in cash or in kind at the issuer\u2019s election. From 2027
onward, interest is payable in kind if Brent prices are below US$65 per barrel. The maturity of the bonds
may also be extended for up to two additional one-year terms for a fee equal to 2% of principal for each
extension.
At December 31, 2025, the Company\u2019s exposure to variable-rate debt under these bonds was US$80
million (2024 \u2013 nil). As a result, changes in Brent pricing may affect the amount and timing of interest
payable and, in certain periods, whether interest is settled in cash or in kind. The Company monitors this
exposure in assessing its financing costs and expected liquidity requirements.
At December 31, 2025, and 2024, the Company\u2019s credit facilities outstanding balance was essentially nil.
f) Capital management
The Company\u2019s objective in managing capital is to maintain financial flexibility, preserve its ability to meet
financial obligations as they become due and provide sufficient liquidity to fund ongoing operations and
execute its business strategy. The Company believes that, with expected cash flow from operations,
existing credit facilities and other available sources of financing, it will be able to meet its foreseeable
capital obligations in the normal course of operations in the near term. The Company defines its capital
structure as shareholders\u2019 equity, long-term debt, including the senior secured bonds assumed in
connection with the PX Energy acquisition, and working capital. The Company monitors its capital structure
having regard to current and projected cash flow from operations, debt levels, available liquidity and
forecast capital expenditures.
The volatility of commodity prices has a material impact on the Company\u2019s cash flow from operations. The
Company attempts to mitigate the effect of lower prices by entering into risk management contracts,
shutting in production in unusually low pricing environments, reallocating capital to more profitable areas
and reducing capital spending based on results and other market considerations. The Company will adjust
its capital structure to minimize risk and its cost of capital through the issuance of shares, securing
additional credit facilities and adjusting its capital spending as required. The Company monitors its capital
structure based on the current and projected funds flow from operations.
Annual and updated budgets are approved by the Board of Directors and are regularly reviewed to assess
the Company\u2019s funding requirements and financial flexibility.", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00122": { "value": "b) Fair value of financial instruments
The Company\u2019s financial instruments as at December 31, 2025, included cash and cash equivalents,
accounts receivable, deposits, credit facilities and accounts payable and accrued liabilities. As at December
31, 2025, the fair values of these financial assets and liabilities equaled their carrying values due to the
short-term maturity.
The company\u2019s long-term debt and long-term financial liabilities are recorded at amortized cost using the
effective interest method. At December 31, 2025, the carrying value of secured debt accounted for under
amortized cost was $100.8 million (December 31, 2024 \u2013 nil) and the fair value at December 31, 2025 was
$115.7 million (December 31, 2024 \u2013 $10.1 million). The estimated fair value of long-term debt is based on
pricing sourced from market data, which is considered a Level 2 fair value input.
Disclosures about the inputs to fair value measurements are required, including their classification within
a hierarchy that prioritizes the inputs to fair value measurement.
Level 1 Fair Value Measurements
Level 1 fair value measurements are based on unadjusted quoted market prices.
Level 2 Fair Value Measurements
Level 2 fair value measurements are based on valuation models and techniques where the significant
inputs are derived from quoted indices.
Level 3 Fair Value Measurements
Level 3 fair value measurements are based on unobservable information.
The fair value measurement of PP&E, E&E, right-of-use assets and contingent payments made by
subsidiary for acquisition have a fair value hierarchy of Level 3.", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00124": { "value": "Disclosures about the inputs to fair value measurements are required, including their classification within
a hierarchy that prioritizes the inputs to fair value measurement.
Level 1 Fair Value Measurements
Level 1 fair value measurements are based on unadjusted quoted market prices.
Level 2 Fair Value Measurements
Level 2 fair value measurements are based on valuation models and techniques where the significant
inputs are derived from quoted indices.
Level 3 Fair Value Measurements
Level 3 fair value measurements are based on unobservable information.
The fair value measurement of PP&E, E&E, right-of-use assets and contingent payments made by
subsidiary for acquisition have a fair value hierarchy of Level 3.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00125": { "value": "Disclosures about the inputs to fair value measurements are required, including their classification within
a hierarchy that prioritizes the inputs to fair value measurement.
Level 1 Fair Value Measurements
Level 1 fair value measurements are based on unadjusted quoted market prices.
Level 2 Fair Value Measurements
Level 2 fair value measurements are based on valuation models and techniques where the significant
inputs are derived from quoted indices.
Level 3 Fair Value Measurements
Level 3 fair value measurements are based on unobservable information.
The fair value measurement of PP&E, E&E, right-of-use assets and contingent payments made by
subsidiary for acquisition have a fair value hierarchy of Level 3.", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00131": { "value": "c) Credit risk
Credit risk represents a potential financial loss to the Company if a customer or counterparty to a financial
instrument fails to meet or discharge their obligation to the Company. Credit risk arises principally from the
Company\u2019s receivables from joint venture partners and oil and gas marketers. The carrying amounts of
accounts receivable and cash and cash equivalents represent the maximum credit exposure.
Substantially all of the accounts receivable are with oil and natural gas marketers and joint venture partners
in the oil and natural gas industry and are subject to normal industry credit risks. The Company generally
extends unsecured credit to these customers and therefore, the collection of accounts receivable may be
affected by changes in economic or other conditions. Management believes the risk is mitigated by
entering into transactions with long-standing, reputable counterparties and partners.
Accounts receivable related to the sale of the Company\u2019s petroleum and natural gas production is paid in
the following
month from major oil and natural gas marketing companies and the Company has not
experienced any credit loss relating to these sales.
Receivables from joint venture partners are typically collected within one to three
months of the joint
venture bill being issued. The Company mitigates this risk by obtaining pre-approval of significant capital
expenditures.
The Company\u2019s accounts receivables are aged as follows:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Current
$
11,016
$
3,174
31 - 60 days
3
3
61 - 90 days
105
1
>90 days
36
64
\u00a0
$
11,160
$
3,242
\n
The Company does not anticipate any material default as it transacts with creditworthy customers and
management does not expect any losses from non-performance by these customers. There are no material
financial assets that the Company considers past due that are considered impaired.
Cash and cash equivalents include cash bank balances and short-term deposits. The Company manages
the credit risk exposure by investing in Canadian banks. Management does not expect any counterparty to
fail to meet its obligations.", "dimensions": { "concept": "ifrs-full:DisclosureOfAllowanceForCreditLossesExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00126": { "value": "c) Credit risk
Credit risk represents a potential financial loss to the Company if a customer or counterparty to a financial
instrument fails to meet or discharge their obligation to the Company. Credit risk arises principally from the
Company\u2019s receivables from joint venture partners and oil and gas marketers. The carrying amounts of
accounts receivable and cash and cash equivalents represent the maximum credit exposure.
Substantially all of the accounts receivable are with oil and natural gas marketers and joint venture partners
in the oil and natural gas industry and are subject to normal industry credit risks. The Company generally
extends unsecured credit to these customers and therefore, the collection of accounts receivable may be
affected by changes in economic or other conditions. Management believes the risk is mitigated by
entering into transactions with long-standing, reputable counterparties and partners.
Accounts receivable related to the sale of the Company\u2019s petroleum and natural gas production is paid in
the following
month from major oil and natural gas marketing companies and the Company has not
experienced any credit loss relating to these sales.
Receivables from joint venture partners are typically collected within one to three
months of the joint
venture bill being issued. The Company mitigates this risk by obtaining pre-approval of significant capital
expenditures.
The Company\u2019s accounts receivables are aged as follows:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Current
$
11,016
$
3,174
31 - 60 days
3
3
61 - 90 days
105
1
>90 days
36
64
\u00a0
$
11,160
$
3,242
\n
The Company does not anticipate any material default as it transacts with creditworthy customers and
management does not expect any losses from non-performance by these customers. There are no material
financial assets that the Company considers past due that are considered impaired.
Cash and cash equivalents include cash bank balances and short-term deposits. The Company manages
the credit risk exposure by investing in Canadian banks. Management does not expect any counterparty to
fail to meet its obligations.", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00121": { "value": "Credit risk arises principally from the
Company\u2019s receivables from joint venture partners and oil and gas marketers. The carrying amounts of
accounts receivable and cash and cash equivalents represent the maximum credit exposure.
Substantially all of the accounts receivable are with oil and natural gas marketers and joint venture partners
in the oil and natural gas industry and are subject to normal industry credit risks. The Company generally
extends unsecured credit to these customers and therefore, the collection of accounts receivable may be
affected by changes in economic or other conditions. Management believes the risk is mitigated by
entering into transactions with long-standing, reputable counterparties and partners.
Accounts receivable related to the sale of the Company\u2019s petroleum and natural gas production is paid in
the following
month from major oil and natural gas marketing companies and the Company has not
experienced any credit loss relating to these sales.
Receivables from joint venture partners are typically collected within one to three
months of the joint
venture bill being issued. The Company mitigates this risk by obtaining pre-approval of significant capital
expenditures.
The Company\u2019s accounts receivables are aged as follows:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Current
$
11,016
$
3,174
31 - 60 days
3
3
61 - 90 days
105
1
>90 days
36
64
\u00a0
$
11,160
$
3,242
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00127": { "value": "d) Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become
due. The Company\u2019s processes for managing liquidity risk include ensuring, to the extent possible, that it
will have sufficient liquidity to meet its liabilities when they become due. The Company prepares annual
capital expenditure budgets which are monitored and are updated as required. In addition, the Company
requires authorizations for expenditures on projects to assist with the management of capital.
Since the Company operates in the upstream oil and natural gas industry, it requires sufficient cash to fund
capital programs necessary to maintain or increase production, develop reserves and to potentially acquire
strategic assets. The Company\u2019s capital programs are funded principally by cash obtained through its credit
facilities, equity issuances and from operating activities. During times of low oil and natural gas prices or
when cash resources may be limited, a portion of capital programs can generally be deferred, however,
due to the long cycle times and the importance to future cash flow in maintaining the Company\u2019s
production, it may be necessary to utilize alternative sources of capital to continue the Company\u2019s strategic
investment plan during periods of low commodity prices. As a result, the Company frequently evaluates
the options available with respect to sources of long and short-term capital resources. Occasionally, to the
extent possible, the Company will use derivative instruments to manage cash flow in the event of
commodity price declines.
The Company\u2019s financial obligations relate to amounts due under the credit facilities, including trade and
other payables, which consist of invoices payable to trade suppliers relating to the office and field operating
activities and its capital spending program. The Company processes invoices within a normal payment
period and all amounts are due within the next 12 months.
The timing of cash outflows relating to financial liabilities as at December 31, 2025, and 2024 are as follows:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Less than
One - Two
Remaining
\u00a0
($ thousands)
one year
years
years
Total
Accounts payable and accrued liabilities
$
44,752
$
\u2013
$
\u2013
$
44,752
Advances from customers
13,367
\u2013
\u2013
13,367
Share issuance for acquisition
8,153
\u2013
\u2013
8,153
Lease liabilities
988
304
181
1,473
Secured debt
\u2013
100,755
\u2013
100,755
Current liabilities related to business combination
22,760
\u2013
\u2013
22,760
Contingent consideration for original acquisition of PX
\u00a0 \u00a0 \u00a0 \u00a0
Energy
3,259
13,228
-
16,487
Other liabilities
7,327
10,187
\u2013
17,514
December 31, 2025
$
100,606
$
124,474
$
181
$
225,261
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Less than
One - Two
Remaining
\u00a0
($ thousands)
one year
years
years
Total
Trade and other liabilities
$
12,545
$
\u2013
\u2013
$
12,545
Lease liabilities
56
\u2013
83
139
Current portion of asset retirement obligation
799
\u2013
\u2013
799
December 31, 2024
$
13,400
$
\u2013
$
83
$
13,483
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00128": { "value": "e) Market risk
Market risk is the risk that changes in market prices, such as commodity prices, foreign exchange rates
and interest rates will affect the Company\u2019s profit or loss or the value of the financial instruments. The
objective of the Company is to mitigate exposure to these risks while maximizing returns to the Company.
Commodity price risk
Commodity price risk is the risk that the fair value or future cash flows will fluctuate as a result of changes
in commodity prices. The Company\u2019s financial performance is closely linked to crude oil and refined product
prices (including pricing differentials for various product types) and, to some extent to electricity prices as
one of the major costs of production. Commodity prices for oil and natural gas are impacted not only by
the relationship between the Canadian and United States dollar, but also world economic events that
dictate the levels of supply and demand. The Company may enter into oil and natural gas contracts to
protect, to the extent possible, its cash flow on future sales. The contracts reduce the volatility in sales
revenue by locking in prices with respect to future deliveries of oil and natural gas. As at December 31,
2025, the Company had no outstanding commodity risk management contracts.
When assessing the potential impact of these commodity price changes, the Company believes a ten
percent volatility is a reasonable measure. A ten percent increase or decrease in commodity prices would
have resulted in $5.0 million net impact on revenue and net loss before tax.
Currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
as a result of changes in foreign exchange rates. The Company operates internationally and is exposed to
foreign exchange risk arising from transactions and balances denominated in currencies other than the
functional currency of the applicable entity, primarily the Brazilian real, Canadian dollar, U.S. dollar and
Jordanian dinar.
The Company\u2019s Canadian petroleum and natural gas sales are denominated in Canadian dollars. However,
the underlying market prices for these commodities are influenced by benchmark prices denominated in
U.S. dollars and, accordingly, are indirectly affected by movements in the Canadian dollar relative to the
U.S. dollar.
In Brazil, revenues are denominated in Brazilian reals; however, commodity prices fluctuate with underlying
market prices denominated in U.S. dollars. Operating and capital expenditures in Brazil are primarily
denominated in local currency, resulting in exposure to fluctuations in the Brazilian real relative to the
Canadian dollar.
The Company also incurs expenditures through its Jordanian subsidiary that are denominated in Jordanian
dinars and U.S. dollars, which gives rise to additional foreign currency exposure.
Following the PX Energy acquisition, the Company was also exposed to foreign currency risk in respect of
the senior secured bonds, which are denominated in U.S. dollars. Fluctuations in the U.S. dollar exchange
rate relative to the Company\u2019s functional currency may affect the carrying amount of the debt and the
related finance expense recognized in the consolidated financial statements.
The Company does not currently hedge its exposure to foreign exchange risk associated with these bonds
and, as at December 31, 2025, had no forward foreign exchange contracts in place. Management monitors
foreign exchange rates on an ongoing basis in assessing the impact of currency movements on the
Company\u2019s financial position and cash flows.
Based on the Company\u2019s foreign operations at December 31, 2025, a 10% strengthening or weakening of
the Canadian dollar relative to the functional currencies of the Company\u2019s subsidiaries, with all other
variables held constant, would have increased or decreased loss before taxes by approximately $1.9 million
as a result of translating the results of those subsidiaries into the Company\u2019s presentation currency, the
Canadian dollar.
Interest rate risk
Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest
rates. Following the PX Energy acquisition, the Company is exposed to variable-rate risk through the senior
secured bonds acquired as part of that transaction.
Under the terms of the bonds, all accrued and unpaid interest up to December 31, 2025 converts into
shares if the contemplated SPAC transaction is completed. If the SPAC transaction does not proceed, no
interest is payable in 2025. Thereafter, interest is payable quarterly at variable rates determined by
reference to Brent crude oil prices, ranging from 4% when Brent is below US$55 per barrel to 20% when
Brent exceeds US$95 per barrel, subject to an overall cap such that interest does not exceed 16% over
the term of the bonds. Interest in 2026 may be settled in cash or in kind at the issuer\u2019s election. From 2027
onward, interest is payable in kind if Brent prices are below US$65 per barrel. The maturity of the bonds
may also be extended for up to two additional one-year terms for a fee equal to 2% of principal for each
extension.
At December 31, 2025, the Company\u2019s exposure to variable-rate debt under these bonds was US$80
million (2024 \u2013 nil). As a result, changes in Brent pricing may affect the amount and timing of interest
payable and, in certain periods, whether interest is settled in cash or in kind. The Company monitors this
exposure in assessing its financing costs and expected liquidity requirements.
At December 31, 2025, and 2024, the Company\u2019s credit facilities outstanding balance was essentially nil. ", "dimensions": { "concept": "ifrs-full:DisclosureOfMarketRiskExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00129": { "value": "Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
as a result of changes in foreign exchange rates. The Company operates internationally and is exposed to
foreign exchange risk arising from transactions and balances denominated in currencies other than the
functional currency of the applicable entity, primarily the Brazilian real, Canadian dollar, U.S. dollar and
Jordanian dinar.
The Company\u2019s Canadian petroleum and natural gas sales are denominated in Canadian dollars. However,
the underlying market prices for these commodities are influenced by benchmark prices denominated in
U.S. dollars and, accordingly, are indirectly affected by movements in the Canadian dollar relative to the
U.S. dollar.
In Brazil, revenues are denominated in Brazilian reals; however, commodity prices fluctuate with underlying
market prices denominated in U.S. dollars. Operating and capital expenditures in Brazil are primarily
denominated in local currency, resulting in exposure to fluctuations in the Brazilian real relative to the
Canadian dollar.
The Company also incurs expenditures through its Jordanian subsidiary that are denominated in Jordanian
dinars and U.S. dollars, which gives rise to additional foreign currency exposure.
Following the PX Energy acquisition, the Company was also exposed to foreign currency risk in respect of
the senior secured bonds, which are denominated in U.S. dollars. Fluctuations in the U.S. dollar exchange
rate relative to the Company\u2019s functional currency may affect the carrying amount of the debt and the
related finance expense recognized in the consolidated financial statements.
The Company does not currently hedge its exposure to foreign exchange risk associated with these bonds
and, as at December 31, 2025, had no forward foreign exchange contracts in place. Management monitors
foreign exchange rates on an ongoing basis in assessing the impact of currency movements on the
Company\u2019s financial position and cash flows.
Based on the Company\u2019s foreign operations at December 31, 2025, a 10% strengthening or weakening of
the Canadian dollar relative to the functional currencies of the Company\u2019s subsidiaries, with all other
variables held constant, would have increased or decreased loss before taxes by approximately $1.9 million
as a result of translating the results of those subsidiaries into the Company\u2019s presentation currency, the
Canadian dollar. ", "dimensions": { "concept": "ifrs-full:DisclosureOfEffectOfChangesInForeignExchangeRatesExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00130": { "value": "f) Capital management
The Company\u2019s objective in managing capital is to maintain financial flexibility, preserve its ability to meet
financial obligations as they become due and provide sufficient liquidity to fund ongoing operations and
execute its business strategy. The Company believes that, with expected cash flow from operations,
existing credit facilities and other available sources of financing, it will be able to meet its foreseeable
capital obligations in the normal course of operations in the near term. The Company defines its capital
structure as shareholders\u2019 equity, long-term debt, including the senior secured bonds assumed in
connection with the PX Energy acquisition, and working capital. The Company monitors its capital structure
having regard to current and projected cash flow from operations, debt levels, available liquidity and
forecast capital expenditures.
The volatility of commodity prices has a material impact on the Company\u2019s cash flow from operations. The
Company attempts to mitigate the effect of lower prices by entering into risk management contracts,
shutting in production in unusually low pricing environments, reallocating capital to more profitable areas
and reducing capital spending based on results and other market considerations. The Company will adjust
its capital structure to minimize risk and its cost of capital through the issuance of shares, securing
additional credit facilities and adjusting its capital spending as required. The Company monitors its capital
structure based on the current and projected funds flow from operations.
Annual and updated budgets are approved by the Board of Directors and are regularly reviewed to assess
the Company\u2019s funding requirements and financial flexibility.", "dimensions": { "concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00164": { "value": "20. Share Based Compensation
The Company has a stock option program that provides for the issuance of options to purchase Common
Shares to its directors, officers and employees at or above grant date market prices. The options granted
under the plan generally vest evenly over a three-year period starting at the grant date or one
year from
the grant date. The grants expire five
years from the grant date.
Under the Company\u2019s option plan, a put right is included that allows the optionee to settle options with
cash or equity. Under the put right, the optionee will receive the net cash proceeds that is the excess of
the closing price of the Common Shares at the day of the put notice over the exercise price of the option.
The Company has the option to decline a put right exercise at any time in 2025. The Company did settle
$0.2 million options in cash.
The number and weighted average exercise prices of stock options are as follows:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
Options Outstanding
Options Exercisable
\u00a0 \u00a0
Weighted
Weighted
\u00a0
Weighted
Weighted
\u00a0
Number of
Average
Average
Number of
Average
Average
\u00a0
Options
Years to
Exercise
Options
Years to
Exercise
\u00a0
(thousands)
Expiry
Price
(thousands)
Expiry
Price
$0.18 - $0.20
7,775
0.07
$
0.18
7,775
0.07
$
0.18
$0.21 - $0.23
11,725
3.13
0.23
6,702
2.56
0.23
$0.24 - $0.26
5,950
3.10
0.25
3,471
3.10
0.25
$0.27 - $0.34
10,340
1.06
0.34
10,340
1.06
0.34
\u00a0
35,790
1.86
$
0.25
28,288
1.39
$
0.26
The following table summarizes information about stock options outstanding and exercisable at December
31, 2025:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
December 31, 2025
December 31, 2024
\u00a0 \u00a0
Weighted
\u00a0
Weighted
\u00a0
Number of
Average
Number of
Average
\u00a0
Options
Exercise
Options
Exercise
\u00a0
(thousands)
Price
(thousands)
Price
Outstanding, beginning of period
38,295
$
0.25
38,140
$
0.26
Granted
6,675
0.23
6,950
0.25
Forfeited
(2,880)
0.22
(620)
0.27
Expired
(325)
0.16
(6,175)
0.29
Exercised
(5,975)
0.20
\u2013
\u2013
Outstanding, end of period
35,790
$
0.25
38,295
$
0.25
Exercisable, end of period
28,288
$
0.26
29,704
$
0.25
\n
The fair value of the options granted were calculated using the Black-Scholes valuation model. The
following weighted average assumptions were used in the model for options granted in 2025 and 2024:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
December 31,
December 31,
\u00a0
2025
2024
Weighted average fair value per award ($)
0.18
0.19
Volatility (%)
102.60
103.47
Forfeiture rate (%)
8.46
8.85
Expected life (years)
5.00
5.00
Risk free interest rate (%)
2.91
3.54
\n
This forfeiture rate estimate is adjusted to the actual forfeiture rate. Expected volatility and expected
life is based on historical information.", "dimensions": { "concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00179": { "value": "21. Share Capital
The Company is authorized to issue an unlimited number of Common Shares. The Company is also
authorized to issue an unlimited number of Class
\u201cB\u201d Common voting shares and an unlimited number of
preferred shares, issuable in one or more series. At December 31, 2025 and 2024, there were no Class
\u201cB\u201d
common voting shares or preferred shares outstanding.
a) Issued and outstanding
\u00a0
Number
Amount
\u00a0
(thousands)
($ thousands)
Balance, December 31, 2024
428,516
429,878
Shares issued for acquisition
17,248
5,347
Balance, December 31, 2025
445,764
$
435,225
\n
During the year, the Company issued 17.2 million Questerre Common Shares to Red Leaf common
shareholders with a deemed value of $0.31 per Common Share. As at December 31, 2025, the portion of
consideration related to the common shares remains unpaid and has been recognized as a current liability
of $3.2 million.
As part of the Acquisition, the Company is obligated to issue 15 million Class \u201cA\u201d common voting shares
(\u201cCommon Shares\u201d) with a deemed value of $5.0 million. As at December 31, 2025, these shares had not
yet been issued and the related amount has been recognized as a current liability.
In January 2026, the Company completed the economic spin out its Quebec-based assets through a
reorganization of its capital. The reorganization consisted of the exchange of one old Common Share for
one new Common Share and one Series 2 Preferred Share. The Preferred Shares entitle holders to the
economic benefits of the Quebec assets and the Common Shares represent ownership of the remaining
assets of the Company.
b) Contributed surplus
\u00a0
December 31,
December 31,
($ thousands
)
2025
2024
Balance, beginning of year
$
29,283
$
27,908
Contingent consideration for business combination classified as
\u00a0 \u00a0
equity (Note 5)
13,941
\u2013
Share based compensation
1,203
1,375
Balance, end of period
$
44,427
$
29,283
\n
The consideration also includes contingent equity consideration comprised of two additional tranches of
25 million Common Shares. At the acquisition date, these contingent shares were measured at an
estimated fair value of $13.9 million and have been classified as equity and recorded in contributed surplus.
The contingent equity consideration meets the definition of an equity instrument under IFRS and,
accordingly, is not subject to subsequent remeasurement. See Note 5 for further details regarding the
Acquisition.
c) Per share amounts
Basic and Diluted net loss per share is calculated as follows:
\u00a0
December 31,
December 31,
(thousands, except as noted)
2025
2024
Net loss
$
(78,935)
$
(7,329)
Issued Common Shares at beginning of year
428,516
428,516
Shares issued for the acquisition
17,248
\u2013
Weighted average number of Common Shares beginning and
\u00a0 \u00a0
outstanding (basic and diluted)
429,083
428,516
Basic and diluted net loss per share
$
(0.18)
$
(0.02)
\n
Under the current stock option plan, options can be exchanged for Common Shares of the Company,
or for cash at the Company\u2019s discretion. They are considered potentially dilutive and are included in
the calculation of diluted net loss per share for the period. The average market value of the Common
Shares for purposes of calculating the dilutive effect of options was based on quoted market prices
for the period that the options were outstanding. At December 31, 2025, 22.5 million options
(December 31, 2024: 23.7 million) were excluded from the diluted weighted average number of
Common Shares outstanding calculation as their effect would have been anti-dilutive.", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00165": { "value": "b) Contributed surplus
\u00a0
December 31,
December 31,
($ thousands
)
2025
2024
Balance, beginning of year
$
29,283
$
27,908
Contingent consideration for business combination classified as
\u00a0 \u00a0
equity (Note 5)
13,941
\u2013
Share based compensation
1,203
1,375
Balance, end of period
$
44,427
$
29,283
\n
The consideration also includes contingent equity consideration comprised of two additional tranches of
25 million Common Shares. At the acquisition date, these contingent shares were measured at an
estimated fair value of $13.9 million and have been classified as equity and recorded in contributed surplus.
The contingent equity consideration meets the definition of an equity instrument under IFRS and,
accordingly, is not subject to subsequent remeasurement. See Note 5 for further details regarding the
Acquisition.", "dimensions": { "concept": "ifrs-full:DisclosureOfReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00180": { "value": "c) Per share amounts
Basic and Diluted net loss per share is calculated as follows:
\u00a0
December 31,
December 31,
(thousands, except as noted)
2025
2024
Net loss
$
(78,935)
$
(7,329)
Issued Common Shares at beginning of year
428,516
428,516
Shares issued for the acquisition
17,248
\u2013
Weighted average number of Common Shares beginning and
\u00a0 \u00a0
outstanding (basic and diluted)
429,083
428,516
Basic and diluted net loss per share
$
(0.18)
$
(0.02)
\n
Under the current stock option plan, options can be exchanged for Common Shares of the Company,
or for cash at the Company\u2019s discretion. They are considered potentially dilutive and are included in
the calculation of diluted net loss per share for the period. The average market value of the Common
Shares for purposes of calculating the dilutive effect of options was based on quoted market prices
for the period that the options were outstanding. At December 31, 2025, 22.5 million options
(December 31, 2024: 23.7 million) were excluded from the diluted weighted average number of
Common Shares outstanding calculation as their effect would have been anti-dilutive.", "dimensions": { "concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00166": { "value": "22. Petroleum and Natural Gas Revenue
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Oil and liquids
$
39,942
$
34,148
Natural gas
4,996
2,699
Royalty revenue
525
80
Total Canada
$
45,463
$
36,927
Oil and liquids
29,554
\u2013
Natural gas
2,119
\u2013
Total Brazil
$
31,673
$
\u2013
Total Company
$
77,136
$
36,927
", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00167": { "value": "22. Petroleum and Natural Gas Revenue
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Oil and liquids
$
39,942
$
34,148
Natural gas
4,996
2,699
Royalty revenue
525
80
Total Canada
$
45,463
$
36,927
Oil and liquids
29,554
\u2013
Natural gas
2,119
\u2013
Total Brazil
$
31,673
$
\u2013
Total Company
$
77,136
$
36,927
", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueFromContractsWithCustomersExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00168": { "value": "23. Other Gains
Other income consists of the following:
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Rental income
$
1,999
$
\u2013
Fair value adjustment for contingent consideration of former owner
255
\u2013
Other
(641)
\u2013
Balance, end of year
$
1,613
$
\u2013
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00174": { "value": "24. Net Finance Expenses
\u00a0
December 31,
December 31,
($ thousands
)
2025
2024
Finance Income
\u00a0 \u00a0
Foreign exchange gain
$
1,270
$
\u2013
Income from financial investments
562
1,149
Interest income from leases
24
\u2013
Other finance income
46
\u2013
Total finance income
$
1,902
$
1,149
Finance expenses
\u00a0 \u00a0
Lease finance costs
$
41
$
4
Interest expenses
6,250
\u2013
Bond accretion
2,271
\u2013
Foreign exchange loss
6,010
\u2013
Brazil financial transactions tax (IOF)
86
\u2013
Other
122
\u2013
Total finance expense
$
14,780
4
Net finance (costs) income
$
(12,878)
$
1,145
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestExpenseExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00173": { "value": "24. Net Finance Expenses
\u00a0
December 31,
December 31,
($ thousands
)
2025
2024
Finance Income
\u00a0 \u00a0
Foreign exchange gain
$
1,270
$
\u2013
Income from financial investments
562
1,149
Interest income from leases
24
\u2013
Other finance income
46
\u2013
Total finance income
$
1,902
$
1,149
Finance expenses
\u00a0 \u00a0
Lease finance costs
$
41
$
4
Interest expenses
6,250
\u2013
Bond accretion
2,271
\u2013
Foreign exchange loss
6,010
\u2013
Brazil financial transactions tax (IOF)
86
\u2013
Other
122
\u2013
Total finance expense
$
14,780
4
Net finance (costs) income
$
(12,878)
$
1,145
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00172": { "value": "24. Net Finance Expenses
\u00a0
December 31,
December 31,
($ thousands
)
2025
2024
Finance Income
\u00a0 \u00a0
Foreign exchange gain
$
1,270
$
\u2013
Income from financial investments
562
1,149
Interest income from leases
24
\u2013
Other finance income
46
\u2013
Total finance income
$
1,902
$
1,149
Finance expenses
\u00a0 \u00a0
Lease finance costs
$
41
$
4
Interest expenses
6,250
\u2013
Bond accretion
2,271
\u2013
Foreign exchange loss
6,010
\u2013
Brazil financial transactions tax (IOF)
86
\u2013
Other
122
\u2013
Total finance expense
$
14,780
4
Net finance (costs) income
$
(12,878)
$
1,145
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExpenseExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00171": { "value": "24. Net Finance Expenses
\u00a0
December 31,
December 31,
($ thousands
)
2025
2024
Finance Income
\u00a0 \u00a0
Foreign exchange gain
$
1,270
$
\u2013
Income from financial investments
562
1,149
Interest income from leases
24
\u2013
Other finance income
46
\u2013
Total finance income
$
1,902
$
1,149
Finance expenses
\u00a0 \u00a0
Lease finance costs
$
41
$
4
Interest expenses
6,250
\u2013
Bond accretion
2,271
\u2013
Foreign exchange loss
6,010
\u2013
Brazil financial transactions tax (IOF)
86
\u2013
Other
122
\u2013
Total finance expense
$
14,780
4
Net finance (costs) income
$
(12,878)
$
1,145
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceCostExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00170": { "value": "24. Net Finance Expenses
\u00a0
December 31,
December 31,
($ thousands
)
2025
2024
Finance Income
\u00a0 \u00a0
Foreign exchange gain
$
1,270
$
\u2013
Income from financial investments
562
1,149
Interest income from leases
24
\u2013
Other finance income
46
\u2013
Total finance income
$
1,902
$
1,149
Finance expenses
\u00a0 \u00a0
Lease finance costs
$
41
$
4
Interest expenses
6,250
\u2013
Bond accretion
2,271
\u2013
Foreign exchange loss
6,010
\u2013
Brazil financial transactions tax (IOF)
86
\u2013
Other
122
\u2013
Total finance expense
$
14,780
4
Net finance (costs) income
$
(12,878)
$
1,145
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00169": { "value": "24. Net Finance Expenses
\u00a0
December 31,
December 31,
($ thousands
)
2025
2024
Finance Income
\u00a0 \u00a0
Foreign exchange gain
$
1,270
$
\u2013
Income from financial investments
562
1,149
Interest income from leases
24
\u2013
Other finance income
46
\u2013
Total finance income
$
1,902
$
1,149
Finance expenses
\u00a0 \u00a0
Lease finance costs
$
41
$
4
Interest expenses
6,250
\u2013
Bond accretion
2,271
\u2013
Foreign exchange loss
6,010
\u2013
Brazil financial transactions tax (IOF)
86
\u2013
Other
122
\u2013
Total finance expense
$
14,780
4
Net finance (costs) income
$
(12,878)
$
1,145
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExpenseExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00175": { "value": "25. Employee Salaries and Benefits
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Salaries, bonuses and other short-term benefits
$
2,694
$
2,518
Share based compensation
920
1,205
\u00a0
$
3,614
$
3,723
", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00189": { "value": "26. Key Management Compensation
Key management includes directors and officers. The compensation paid or payable to key management
is as follows:
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Salaries, bonuses, director fees and other short-term benefits
$
2,359
$
2,128
Share based compensation
1,015
1,296
\u00a0
$
3,374
$
3,424
\n
The Company has entered into written executive employment agreements with each of the officers
of the Company. Each of these written agreements provides that in the event of a change of control
of the Company, each of the officers is entitled to: (i) 18 months of then applicable base salary with
24 months for the CEO; and (ii) the vesting of all options to purchase Common Shares. In the event
of a change in control, all options will vest and the severance payable to key management would have
been $2.8 million at December 31, 2025. This amount does not include accelerated share-based
compensation expense. ", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00181": { "value": "26. Key Management Compensation
Key management includes directors and officers. The compensation paid or payable to key management
is as follows:
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Salaries, bonuses, director fees and other short-term benefits
$
2,359
$
2,128
Share based compensation
1,015
1,296
\u00a0
$
3,374
$
3,424
\n
The Company has entered into written executive employment agreements with each of the officers
of the Company. Each of these written agreements provides that in the event of a change of control
of the Company, each of the officers is entitled to: (i) 18 months of then applicable base salary with
24 months for the CEO; and (ii) the vesting of all options to purchase Common Shares. In the event
of a change in control, all options will vest and the severance payable to key management would have
been $2.8 million at December 31, 2025. This amount does not include accelerated share-based
compensation expense. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00182": { "value": "27. Supplemental Cash Flow Information
Changes in non-cash working capital are detailed below:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Accounts receivable
$
(143)
$
(226)
Deposits and prepaid expenses
5,953
16
Inventory
692
\u2013
Other long term assets
(5,053)
\u2013
Accounts payable and accrued liabilities
(3,862)
3,105
Other liabilities
(639)
\u2013
Change in non-cash working capital
$
(3,052)
$
2,895
Related to:
\u00a0 \u00a0
Operating activities
$
214
$
(890)
Investing activities
(3,266)
3,785
\u00a0
$
(3,052)
$
2,895
\n
Other Non-cash items:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
\u00a0
December 31,
December 31,
($ thousands)
2025
2024
Inventory obsolescence
$
(157)
$
\u2013
Fair value adjustment for contingent consideration of former owner
(255)
\u2013
Provision for contingencies
2,820
\u2013
Foreign exchange
637
\u2013
Tax penalties relief
(1,272)
\u2013
Total other non-cash items
$
1,773
$
\u2013
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfCashFlowStatementExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00187": { "value": "28. Commitments
A summary of the Company\u2019s net commitments at December 31, 2025, follows:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
($ thousands)
2026
2027
Total
Transportation and Processing
$
2,153
$
1,043
$
3,196
Refinery maintenance contract
$
15,897
$
1,199
$
17,096
Supply contracts
$
6,149
$
\u2013
$
6,149
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00186": { "value": "28. Commitments
A summary of the Company\u2019s net commitments at December 31, 2025, follows:
\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\u00a0 \u00a0
($ thousands)
2026
2027
Total
Transportation and Processing
$
2,153
$
1,043
$
3,196
Refinery maintenance contract
$
15,897
$
1,199
$
17,096
Supply contracts
$
6,149
$
\u2013
$
6,149
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "TagsThatMustBeAppliedIfCorrespondingInformationIsPresentInAReport_Label_00188": { "value": "29. Subsequent Events
On February 26, 2026,the Company\u2019s indirect subsidiary FRBH formally acknowledged a liability in the
\n
amount of $3.2 million, related to the prior acquisition of PX Energy (see Note 17). The liability will be
\n
settled in eleven monthly installments consisting of principal and interest. FRBH is required to provide a
\n
financial guarantee for this amount.
\n
In January 2026, the Company completed the economic spin out its Quebec-based assets (the \u201cQuebec
\n
Spinout\u201d) through a reorganization of its capital. The reorganization consisted of the exchange of one old
\n
Common Share for one new Common Share and one Series 2 Preferred Share. The Preferred Shares
\n
entitle holders to the economic benefits of the Quebec assets and the Common Shares represent
\n
ownership of the remaining assets of the Company. The Company is assessing options to have the
\n
Preferred Shares listed for trading.
\n
Concurrent with the Acquisition, the Company executed a binding term sheet with a prospective partner
\n
(the \u201cPartner\u201d) for a 50/50 joint venture for the ownership and management of PX Energy (the \u201cJoint
\n
Venture\u201d). In January 2026, the Company was advised by the Partner that the term sheet expired in
\n
accordance with its terms. In March, the Partner notified the Company that it was seeking a penalty of
\n
US$20 million for alleged breaches by the Company pursuant to the term sheet. The Company has advised
\n
the Partner that its claim is wholly without merit and it is reserving its legal rights against the Partner and
\n
its affiliates for among other things, breech of the term sheet. Pursuant to the term sheet, the matter will
\n
be submitted for arbitration pursuant to the ICC rules should either of the parties make a formal claim
\nthereunder.", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:549300TM45EIWBPD7W54", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } } } }