Calgary, Alberta--(Newsfile Corp. - July 19, 2020) - Cuda Oil and Gas Inc. (TSXV: CUDA) ("Cuda" or the "Company") announces its financial and operational results for the first quarter ended March 31, 2020. Cuda's unaudited interim condensed consolidated financial statements, and management's discussion and analysis for the three months ended March 31, 2020 and 2019 are available under the Company's profile on the SEDAR website at www.sedar.com.

Significant First Quarter Highlights

• The Company completed the 15 well drilling program in the first quarter of 2020 with a 100% success rate on the 8 wells drilled in the fourth quarter of 2019 and 7 additional wells in the first quarter of 2020. All wells are now on line with 11 new producers and 4 new injectors. In March, the Company continued its injection program with the conversion of 4 more wells to injection wells.

• The Company realized a higher operating netback in the first quarter of 2020 despite lower average realized prices. The Company realized a higher operating netback of $16.87 per boe in the first quarter compared to $15.01 in the same quarter of 2019, representing an increase of 12% and improved from the fourth quarter 2019 operating netback of $15.71.

Financial Position

For the three months ended March 31, 2020, the Company reported a net income of $917,226 (2019 - $3,209,678), cash flows from operating activities of $958,862 (2019 - $200,566) and a working capital deficit of $56,158,775 (December 31, 2019 - $46,462,202). The COVID-19 pandemic has resulted in a sudden decline in economic activity and an unprecedented decline in crude oil prices during the quarter. The pandemic impacted the Company's performance in the quarter by reducing realized oil and natural gas prices and production from its Alberta assets. The Company was able to manage and maintain its Wyoming crude oil production within 2% of production levels from the first quarter of 2019. With ongoing uncertainty related to current economic circumstances, the Company has elected to restrict future capital spending.

At March 31, 2020, the Company has credit facilities with a principal balance of approximately $44.3 million which mature July 30, 2020, convertible debentures with a principal balance of $1.5 million which are due July 21, 2020, and capital commitments of approximately $2.5 million in Wyoming. These conditions indicate the existence of a material uncertainty that may cast significant doubt upon the Company's ability to continue as a going concern.

Further rationalization of assets and/or funding through share issuances, private placements, restructuring of existing or new credit facilities, non-core property sales, increased production from core properties combined with improvements in realized oil and gas prices received and/or a combination of these alternatives will be required to continue as a going concern.

Financial and Operational Results(1)

Below is a summary table of selected March 31, 2020 and 2019 financial and operational results:

Notes:

(1) For further discussion and disclaimers regarding the results above, see the Company's unaudited interim condensed consolidated financial statements and management's discussion and analysis for the three months ended March 31, 2020 and 2019, available under the Company's profile on SEDAR.

About Cuda Oil and Gas Inc.

Cuda Oil and Gas Inc. is engaged in the business of exploring for, developing and producing oil and natural gas, and acquiring oil and natural gas properties across North America. The Cuda management team has worked closely together for over 20 years in both private and public company environments and has an established track record of delivering strong shareholder returns. Cuda will continue to implement its proven strategy of exploring, acquiring, and exploiting with a long-term focus on large, light oil resource- based assets across North America including significant operational experience in the United States. The Cuda management team brings a full spectrum of geotechnical, engineering, negotiating and financial experience to its investment decisions.

For further information please contact:
Glenn Dawson
President and Chief Executive Officer
Cuda Oil and Gas Inc.
(403) 454-0862

Non-GAAP Measures

This news release contains the terms "operating netback" and "working capital deficit", which do not have standardized meanings prescribed by IFRS and therefore may not be comparable with the calculation of similar measures presented by other issuers.

• Operating netback denotes total revenue less royalty and production tax expenses, and operating and transportation costs calculated on a per boe basis. Management uses operating netback on a per boe basis in operational and capital allocation decisions.
• Working capital deficit is calculated as current assets less current liabilities.