Calgary - LEUCROTTA EXPLORATION INC. (TSXV: LXE) ('Leucrotta' or the 'Company') is pleased to announce its financial and operating results for the three and six months ended June 30, 2021.

HIGHLIGHTS

Increased adjusted funds flow (1) by 209% to $0.9 million in Q2 2021 from negative $0.8 million in Q2 2020.

Closed the sale of certain natural gas assets located in Doe, BC for gross proceeds of $30.0 million (recognized as assets held for sale at March 31, 2021).

June 30, 2021 adjusted working capital (1) balance of $57.0 million.

Selected financial and operational information outlined in this news release should be read in conjunction with Leucrotta's unaudited condensed interim financial statements and related Management's Discussion and Analysis ('MD&A') for the three and six months ended June 30, 2021, which are available for review under the Company's profile on The System for Electronic Document Analysis and Retrieval ('SEDAR') at www.sedar.com.

NON-GAAP MEASURES

This news release refers to certain financial measures that are not determined in accordance with IFRS (or 'GAAP'). This news release contains the terms 'adjusted funds flow (used)', 'adjusted funds flow (used) per share', 'adjusted working capital (deficiency), 'operating netback' and 'net operating expenses' which do not have any standardized meaning prescribed by GAAP and therefore may not be comparable to similar measures used by other companies. The Company uses these measures to help evaluate its performance. Please refer to the MD&A for additional information relating to Non-GAAP Measures.

Management uses adjusted funds flow (used) to analyze performance and considers it a key measure as it demonstrates the Company's ability to generate the cash necessary to fund future capital investments and abandonment obligations and to repay debt, if any. Adjusted funds flow (used) is a non-GAAP measure and has been defined by the Company as cash flow from (used in) operating activities excluding the change in non-cash working capital related to operating activities, expenditures on decommissioning obligations, and transaction costs on property dispositions. The Company also presents adjusted funds flow (used) per share whereby amounts per share are calculated using weighted average shares outstanding, consistent with the calculation of net loss per share. Adjusted funds flow (used) is reconciled from cash flow from (used in) operating activities under the heading 'Cash Flow From (Used In) Operations and Adjusted Funds Flow (Used)'.

Management uses adjusted working capital (deficiency) as a measure to assess the Company's financial position. Adjusted working capital (deficiency) includes current assets less current liabilities excluding the effects of any current portion of risk management contracts.

Management considers operating netback an important measure as it demonstrates its profitability relative to current commodity prices. Operating netback, which is calculated as average unit sales price less royalties, net operating expenses, and transportation and marketing expenses, represents the cash margin for every barrel of oil equivalent sold. Operating netback per boe is reconciled to net loss per boe under the heading 'Operating Netback'.

FORWARD-LOOKING INFORMATION

This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words 'expect', 'anticipate', 'continue', 'estimate', 'may', 'will', 'should', 'believe', 'intends', 'forecast', 'plans', 'guidance' and similar expressions are intended to identify forward-looking statements or information.

More particularly and without limitation, this news release contains forward-looking statements and information relating to the Company's risk management program, oil, NGLs, and natural gas production, capital programs, and debt. The forward-looking statements and information are based on certain key expectations and assumptions made by the Company, including expectations and assumptions relating to prevailing commodity prices and exchange rates, applicable royalty rates and tax laws, future well production rates, the performance of existing wells, the success of drilling new wells, the availability of capital to undertake planned activities, and the availability and cost of labour and services.

Although the Company believes that the expectations reflected in such forward-looking statements and information are reasonable, it can give no assurance that such expectations will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, the uncertainty of estimates and projections relating to production rates, costs, and expenses, commodity price and exchange rate fluctuations, marketing and transportation, environmental risks, competition, the ability to access sufficient capital from internal and external sources and changes in tax, royalty, and environmental legislation. The forward-looking statements and information contained in this document are made as of the date hereof for the purpose of providing the readers with the Company's expectations for the coming year. The forward-looking statements and information may not be appropriate for other purposes. The Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Contact:

Tel: (403) 705-4525

Web: www.leucrotta.ca

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