Rubellite Energy : 2023 Annual Results

2023 ANNUAL RESULTS

TO SHAREHOLDERS

Rubellite Energy Inc. ("Rubellite" or the "Company") is a Canadian energy company engaged in the exploration, development and production of heavy crude oil from the Clearwater formation in Eastern Alberta, utilizing multi-lateral drilling technology. Rubellite has a pure play Clearwater asset base and is pursuing a robust organic growth plan focused on superior corporate returns and free funds flow generation while maintaining a conservative capital structure and prioritizing ESG excellence.

Much progress has been made to advance Rubellite's business plan since the Company's inception and spin out from Perpetual Energy Inc. in September 2021 and momentum is particularly evident with the positive results posted progressively quarter-over-quarter through 2023. Production has grown nearly 12-fold from 350 bbl/d at inception to current levels in Q1 2024 levels of 4,450 - 4,500 bbl/d of heavy oil with growth driven primarily by organic drilling success in our largest core operating area at Figure Lake. During 2023, Rubellite added 127 net sections of land, including 20 net sections related to a Land Acquisition and Drilling Commitment Agreement with the Buffalo Lake Métis Settlement in the Figure Lake area, with a four well drilling commitment that was fulfilled in the fourth quarter.

Economies of scale are becoming evident with the 15% decrease in production and operating costs year-over-year as the fixed components in the cost structure spread across higher sales volume. Capital efficiencies on the 2023 drilling program decreased close to 25% to $11,300 per flowing bbl/d, driven by initial productivity rates which averaged more that 25% better than in 2022, and stable drill, complete, equip and tie-in costs against an inflationary backdrop.

Growth through the drill bit was complemented by our first material strategic acquisition, adding ~800 bbl/d of conventional heavy oil sales production from the Clearwater at closing in November 2023, along with 215 net sections of land on the Southern Clearwater play trend for a total purchase price of $34.0 million, before customary closing adjustments to reflect the October 1, 2023 effective date. Half of the new prospective acreage is adjacent to, and highly synergistic with, Rubellite's existing land base in the greater Figure Lake area, capturing close to 50 gross high-grade drilling locations, with 25 of these internally-defined locations considered development / step-out, providing immediate flexibility within the Company's drilling schedule. The remaining 108 net sections of undeveloped land in the Nixon area, approximately 80 kilometers north of Figure Lake, provides a core position for a new exploration prospect in the lower Clearwater formation. The acquisition was directly aligned with Rubellite's Clearwater-focused robust growth business plan, adding high netback heavy oil base production, extensive high-grade development and step-out inventory and prospective exploratory opportunities.

Rubellite has now grown its access to land with exposure to the Clearwater play to in excess of 530 net sections, up over 400% from the 104 net sections held by Rubellite at its inception in July of 2021. A significant portion of the newly acquired lands are complementary to existing operating areas in Ukalta and Figure Lake on the southern Clearwater trend, while the remainder of the additional new acreage supplements Rubellite's exploratory acreage in the northern Clearwater play fairway and captures land on other Clearwater exploration prospects. Our land base increased more than 40% year-over-year, capturing multiple new exploration prospects that are in the process of being evaluated, minimizing our capital exposure as best possible to prudently manage risk.

At year-end 2023, Rubellite's reserve-based net asset value ("NAV")(1) (discounted at 10%), is estimated at $321.3 million ($5.14 per share), up almost 30% year-over-year. Rubellite is poised to continue to convert our deep inventory of opportunities into increased production, reserves, adjusted funds flow and value.

For 2024, Rubellite's strategic priorities are to:

• 1. Deliver Optimized Organic Production Growth;

• 2. Drive Top Quartile Capital Efficiencies;

• 3. Increase Reserve-Based NAV/share, De-Risk Inventory and Advance Secondary Recovery;

• 4. Grow Prospective Land Base and Prospect Inventory for Chosen Play Strategies;

• 5. Maintain Pristine Balance Sheet and Manage Risk; and

• 6. Drive Operational & ESG Excellence while Capturing Cash Cost Efficiencies.

The Board of Directors and management continue to be grateful for the extraordinary commitment of the Rubellite team and the support of our shareholders, partners, advisors and service providers and the communities where we do our work. Propelled by our entrepreneurial spirit, we look forward to building this Clearwater-focused junior explorer and producer to the next level while creating value for our shareholders and benefiting all of our stakeholders.

SUE RIDDELL ROSE

President and Chief Executive Officer

March 25, 2024

(1) See "Net Asset Value" on page 7 in this Annual Results report.

RUBELLITE ENERGY INC.

2023 ANNUAL RESULTS

Page 1

ANNUAL FINANCIAL AND OPERATING HIGHLIGHTS

($ thousands, except as noted)	2023	2022	2021(1)
Financial
Oil revenue	88,968	54,491	4,923
Net income	18,561	24,605	7,702
Per share - basic(4)	0.31	0.47	0.34
Per share - diluted(4)	0.30	0.47	0.33
Total Assets	271,153	204,030	115,862
Cash flow from operating activities	55,391	23,870	1,115
Adjusted funds flow(2)	54,157	23,036	1,595
Per share - basic(3)(4)	0.90	0.44	0.07
Per share - diluted(3)(4)	0.89	0.44	0.07
Net debt (asset)(2)	50,984	26,288	(5,375)
Capital expenditures(2)
Capital expenditures, including land and other(2)	71,530	94,207	17,358
Acquisition	33,173	-	55,322
Proceeds on disposition	(7,990)	-	-
Capital expenditures, after acquisition and dispositions	96,713	94,207	72,680
Common shares (thousands)
Weighted average - basic	60,346	52,093	22,702
Weighted average - diluted	61,075	52,471	23,228
Operating
Daily average oil sales production (bbl/d)(5)	3,302	1,670	593
Rubellite average realized oil price(3)
Average realized oil price ($/bbl)	73.82	89.38	69.76
Average realized oil price - after risk management contracts($/bbl)	73.56	67.82	71.20

• (1) The 2021 comparable period reflects operating results from September 3, 2021, the effective date of the Arrangement, to December 31, 2021.

• (2) Non-GAAP measure. See "Non-GAAP and Other Financial Measures" in this Annual Results report for an explanation of composition.

• (3) Non-GAAP ratio. See "Non-GAAP and Other Financial Measures" in this Annual Results report for an explanation of composition.

• (4) Per share amounts are calculated using the weighted average number of basic or diluted common shares.

• (5) Heavy crude oil sales production excludes tank inventory volumes.

ADVISORIES

This letter to shareholders, 2023 annual highlights and Annual Results report refer to certain non-GAAP measures and metrics commonly used in the oil and natural gas industry and provides forward-looking information and statements. Further detailed information regarding these measures is provided in this Annual Results report in "Management's Discussion and Analysis - NON-GAAP AND OTHER FINANCIAL MEASURES" on pages 18 to 21, "Management's Discussion and Analysis - FORWARD-LOOKING INFORMATION" on pages 22 and 23.

In addition to the disclosure set out in the Company's Management's Discussion and Analysis for the period ended December 31, 2023, we provide certain supplementary disclosure throughout this Annual Results report in respect of certain specified financial measures (as such term is defined in National Instrument 51-112 - Non-GAAP and Other Financial Measures) and in respect of certain oil and gas metrics.

2023 FOURTH QUARTER AND ANNUAL FINANCIAL AND OPERATING HIGHLIGHTS

• • Achieved fourth quarter conventional heavy crude oil sales production of 4,209 bbl/d, representing a 93% year-over-year increase and an 33% increase from Q3 2023, driven by positive drilling results and its previously announced asset acquisition completed in November 2023. 2023 sales production of 3,302 bbl/d exceeded guidance and increased 98% relative to 2022.

• • Generated adjusted funds flow before transaction costs(1) of $17.1 million ($0.27 per share) in the fourth quarter of 2023, a 110% increase over the comparative period, driven by production increases, and a 9% increase from Q3 2023 on higher production, partially offset by lower Western Canadian Select ("WCS") pricing.

• • Posted strong Finding and Development ("F&D") costs of $20.38/boe on a total proved plus probable producing basis and $18.03/boe on a total proved plus probable basis, with a recycle ratio of 2.6x and 2.9x, respectively, based on Rubellite's 2023 operating netback.

• • Invested $25.1 million in development capital expenditures(1), excluding land purchases, during the fourth quarter to drill eleven (11.0 net) multi-lateral horizontal wells at Figure Lake, with eight (8.0 net) wells which progressively contributed to sales production during the fourth quarter. One (1.0 net) additional well at Figure Lake was spud on December 15, 2023 and was rig released on January 6, 2024 with a majority of that well's capital being spent during the fourth quarter of 2023. Development capital expenditures for full year 2023 were $67.5 million before land purchases, acquisitions and proceeds from dispositions. Capital expenditures included $51.1 million for drilling and completions, $7.1 million in lease preparation costs for drilling activities, and $9.3 million for facilities, the majority of which related to the drilling of thirty (29.5 net) wells during 2023. This included twenty one (21.0 net) development wells in Figure Lake, six (6.0 net) step out wells at Figure Lake, two (2.0 net) exploratory wells at Peavine and one (0.5 net) exploratory well at Dawson.

• • Land purchases in the quarter were $1.2 million, bringing total land expenditures for 2023 to $4.0 million. In 2023, Rubellite added 28.0 net sections of land, and fulfilled its four well drilling commitment on the 20.0 net sections acquired under a Land Acquisition and Drilling Agreement with the Buffalo Lake Métis Settlement ("BLMS"). Including the 215 net sections of land acquired in the November 2023 asset acquisition and net of expiries, the Company held 471.1 net sections of land in the Clearwater formation at December 31, 2023.

• • Acquisition spending of $33.2 million, net of customary closing adjustments, resulted in approximately 800 bbl/d of heavy crude oil production which contributed; 436 bbl/d to fourth quarter 2023 production attributed to fifteen (15.0 net) wells, 107 net sections of Clearwater lands in the Figure Lake/Edwand area, as well as 108 net sections of undeveloped lands in the Nixon area.

• • Proceeds on disposition of $8.0 million related to the closing of a 1.5% non-convertible royalty sale at Figure Lake which converts to a 1.0% royalty after payout.

• • Generated net income of $9.5 million ($0.15/share) in the fourth quarter of 2023, and $18.6 million ($0.31/share) for full year 2023.

• • Net debt(1) was $51.0 million at December 31, 2023, with a net debt to Q4 2023 annualized adjusted funds flow(1) ratio of 0.8 times.

• • Rubellite had available liquidity(1) at December 31, 2023 of $27.3 million, comprised of the then $57.0 million borrowing limit on the Credit Facility, less current borrowings of $29.3 million and outstanding letters of credit of $0.4 million.

(1)

Non-GAAP financial measure, non-GAAP ratio or supplementary financial measure. See "Non-GAAP and Other Financial Measures" in this Annual Results report for an explanation of composition.

YEAR-END 2023 RESERVES

Rubellite's proved plus probable reserves(1) at year-end 2023 are 16.0 MMboe, comprised of 93% heavy crude oil (2022 - 10.3 MMboe). Reserve additions grew total Company proved plus probable reserves by 5.7 MMboe (56%) year-over-year, replacing production of 1.2 MMboe by close to 6 times.

Highlights include:

• • Total proved reserves were 10.0 MMboe at year-end 2023, representing 62% of the Company's proved plus probable reserves (2022 - 59%) and a 64% increase over 2022.

• • Total proved developed producing reserves were 5.3 MMboe at year-end 2023, an increase of 77% over year-end 2022 and representing 33% of the Company's proved plus probable reserves (2022 - 3.0 MMboe; 29% of proved plus probable reserves).

• • Proved plus probable producing reserves were 7.1 MMboe at December 31, 2023, representing 44% of total proved plus probable reserves (2022 - 3.9 MMboe; 38%).

• • Finding and Development ("F&D") costs and Finding Development and acquisition ("FD&A") costs, including changes in Future Development Capital ("FDC") were:

  ◦
  ▪	Proved developed producing reserves: $24.22/boe
  ▪	Total proved reserves: $22.78/boe
  ▪	Total proved plus probable developed producing reserves: $20.38/boe
  ▪	Total proved plus probable reserves: $18.03/boe
  ◦	FD&A:
  ▪	Proved Developed Producing reserves: $27.23/boe
  ▪	Total proved reserves: $25.40/boe
  ▪	Total proved plus probable developed producing reserves: $22.43/boe
  ▪	Total proved plus probable reserves: $19.63/boe

  F&D:

• • Strong annual operating netback of $53.14/boe and relatively low cost reserve additions delivered recycle ratios of:

  • ◦ Recycle ratio, excluding acquisitions

    • ▪ Proved developed producing reserves: 2.2x

    • ▪ Total proved reserves: 2.3x

    • ▪ Total proved plus probable developed producing reserves: 2.6x

    • ▪ Total proved plus probable reserves: 2.9x

  • ◦ Recycle ratio, including acquisitions:

    • ▪ Proved Developed Producing reserves: 2.0x

    • ▪ Total proved reserves: 2.1x

    • ▪ Total proved plus probable developed producing reserves: 2.4x

    • ▪ Total proved plus probable reserves: 2.7x

• • The McDaniel Report includes seventy five (71.9 net) booked undeveloped drilling locations, sixty two (61.0 net) of which are in the greater Figure Lake area.

• • The Figure Lake type curve(1) total proved plus probable reserves is unchanged at 130 Mboe per well with future development costs holding flat at $1.9 million per well as drilling efficiency gains offset inflationary pressures. The Figure Lake type curve IP30 rate increased slightly to 119 bbl/d from the YE 2022 type curve IP30 of 116 bbl/d due to the positive performance data from 2023 wells exceeding the IP30 rates of the prior years' drilling program.

• • Based on the three consultant average price (McDaniel, GLJ, Sproule) forecasts (the "Consultant Average Price Forecast") used by McDaniel, the net present value ("NPV") of Rubellite's total proved plus probable reserves (discounted at 10%) before income tax, was $322.1 million (2022 - $215.2 million). The 50% NPV increase related primarily to the similar year-over-year increase in reserves.

• • All abandonment, decommissioning and reclamation obligations are included in the reserve report, consistent with year-end 2022. Decommissioning obligations for wells assigned reserves are forecast to occur at end of life while the additional costs expected to be incurred to abandon and reclaim non-reserve wells, facilities and pipelines are forecast in accordance with regulatory asset retirement obligation spending requirements for inactive wells.

• • Rubellite's undeveloped land at year-end 2023, was independently assessed in the Seaton-Jordan Report(3), at $40.7 million, an increase of 30% from $31.4 million at year-end 2022.

• • Based on the Consultant Average Price Forecast, Rubellite's reserve-based net asset value ("NAV")(2) (discounted at 10%) at year-end 2023, inclusive of the independent assessment of undeveloped land and net of the Company's year-end 2023 total net debt and other obligations of $41.0 million, which includes $51.0 million of net debt and a gain on financial hedges based on the Consultant Average Price Forecast as of January 1, 2024 of $10.0 million, is estimated at $321.3 million ($5.14 per share) as compared to $218.4 million ($3.99 per share) at year-end 2022. On a proved basis, Rubellite's NAV (discounted at 10%), excluding any value for

undeveloped land and net of the Company's year-end 2023 total net debt and other obligations, is estimated at $165.0 million ($2.64 per share).

• (1) Type curve assumptions are based on the Total Proved plus Probable Undeveloped reserves contained in the McDaniel Reserve Report as disclosed in the Company's Annual Information Form which will be available under the Company's profile on SEDAR+ atwww.sedarplus.ca. "McDaniel Reserve Report" means the independent engineering evaluation of the Company's heavy crude oil and conventional natural gas reserves, prepared by McDaniel with an effective date of December 31, 2023 and a preparation date of March 14, 2024.

• (2) Non-GAAP financial measure or non-GAAP ratio. See "Non-GAAP and Other Financial Measures" in this Annual Results report.

• (3) The value of Rubellite's undeveloped land was assessed by an independent third party, Seaton-Jordan & Associates Ltd., as at December 31, 2023 in a report dated February 5, 2024 (the "Seaton-Jordan Report"). Estimates of the value of Rubellite's undeveloped acreage was prepared in accordance with NI 51-101 5.9(1)(e) for purposes of the net asset value calculation and is based on past Crown land sale activity, adjusted for tenure and other considerations. No undeveloped land value is assigned where proved and/or probable undeveloped reserves have been booked.

Reserves Disclosure

Working interest reserves included herein refer to working interest reserves before royalty deductions. Reserves information is based on an independent reserves evaluation report prepared by McDaniel & Associates Consultants Ltd. ("McDaniel") with an effective date of December 31, 2023 (the "McDaniel Report"), and has been prepared in accordance with National Instrument 51-101 ("NI 51-101") using the Consultant Average Price Forecast. Complete NI 51-101 reserves disclosure including after-tax reserve values, reserves by major property and abandonment costs will be included in Rubellite's Annual Information Form ("AIF"), which, when filed, is available on the Company's website atwww.rubelliteenergy.com and SEDAR atwww.sedar.com.

Rubellite's reserves at December 31, 2023 are summarized below:

Working Interest Reserves at December 31, 2023(1)

Light and Medium CrudeConventionalNatural Gas

Oil (Mbbl)Heavy Oil (Mbbl)

Natural Gas

(MMcf)

Liquids (Mbbl)

Oil Equivalent

(Mboe)

Proved Producing Proved Non-Producing Proved Undeveloped Total Proved Probable Producing Probable Non-Producing Probable Undeveloped Total Probable

Total Proved plus Probable (1) May not add due to rounding.

- - - - - - - - -

4,989 85 4,230 9,304 1,593 39 4,033 5,664 14,968

2,147 - 5,347

140 - 109

1,629 - 4,501

3,917

- 9,957

823 - 1,730

41 - 46

1,496 - 4,282

2,359 6,276

- 6,058

- 16,014

Reserves Reconciliation

Working Interest Reserves(1)

Barrels of Oil Equivalent (Mboe)

Proved

ProbableProved and Probable

Opening Balance, December 31, 2022 Extensions and Improved Recovery Discoveries

6,079

4,197 10,276

3,420

1,346 4,766

0

0 0

Technical Revisions Acquisitions Dispositions Production Economic Factors

465

(225) 240

1,192

733 1,925

0

(1,205)

Closing Balance, December 31, 2023 (1) May not add due to rounding.

6 9,957

0 0 6 6,058

0 (1,205)

12 16,014

The Clearwater 2023 drilling program resulted in proved producing drilling extensions of 1,214 Mboe attributed to the addition of fifteen (14.5 net) producing wells, as well as 1,744 Mboe associated with drilling extensions for eighteen (18.0 net) proved undeveloped locations. Additional extensions of 462 Mboe are assigned to solution gas attributed to the gas tie-in project that is underway with gas sales to commence in early 2025. Assets acquired in the Edwand and Figure Lake areas resulted in acquisition adds totaling 1,192 Mboe split to fourteen (14.0 net) proved producing wells with 598 Mboe of reserves, and eight (7.7 net) proved undeveloped locations with 594 Mboe of reserves. Category transfers of 373 Mboe, which are grouped as technical revisions, are the aggregate of revisions from eleven (11.0 net) drills booked as proved undeveloped transferring to proved producing. Other technical revisions of 92 Mboe represent an increase to base producing well proved reserves.

The Clearwater 2023 drilling program resulted in proved plus probable producing drilling extensions of 1,145 Mboe attributed to the addition of eleven (10.5 net) producing wells as well as 2,851 Mboe associated with drilling extensions for twenty two (22.0 net) proved plus probable undeveloped locations. Additional extensions of 770 Mboe are assigned to solution gas attributed to the gas tie-in project that is underway with gas sales to commence in early 2025. Assets acquired in the Edwand and Figure Lake areas resulted in proved plus probable acquisition adds totaling 1,925 Mboe split to fourteen (14.0 net) proved producing wells with 802 Mboe of reserves and twelve (10.4 net) proved plus probable undeveloped locations with 1,123 Mboe of reserves. Category transfers of 313 Mboe, which are grouped as technical revisions, are the aggregate of revisions from fifteen (15.0 net) drills booked as proved plus probable undeveloped transferring to proved plus probable producing. Other technical revisions of -73 Mboe were mainly adjustments to base producing well reserves.

The table below summarizes the future development capital ("FDC") estimated by McDaniel by play type to bring proved plus probable non-producing and undeveloped reserves to production.

Future Development Capital(1)

($ millions)	2024	2025	2026	2027	2028	Remainder	Total
Figure Lake	52.2	47.4	24.1	0.1	0.1	0.1	123.9
Marten Hills	-	-	-	1.6	-	-	1.6
Ukalta	-	9.8	9.9	-	-	-	19.7
Total	52.2	57.2	33.9	1.7	0.1	0.1	145.2

(1) May not add due to rounding.

The McDaniel Report estimates that FDC of $145.2 million will be required over the life of the Company's proved plus probable reserves. The FDC is attributed to 75 (71.9 net) locations booked in the Clearwater play. Proved plus probable reserve forecast FDC increased by $39.6 million from $105.6 million (38%) at December 31, 2022. The increase in FDC reflects an increase in locations booked from 59 (55.5 net ) at December 31, 2021 as well as increased capital costs per well.

RESERVE LIFE INDEX

Rubellite's proved plus probable reserves to production ratio, also referred to as reserve life index ("RLI"), was 9.3 years at year-end 2023, while the proved RLI was 6.3 years, based upon the 2023 production estimates in the McDaniel Report. The following table summarizes Rubellite's historical calculated RLI.

Reserve Life Index

Year-end	2023	2022	2021
Total Proved	6.3	6.2	4.6
Total Proved plus Probable	9.3	9.6	6.6

NET PRESENT VALUE OF RESERVES SUMMARY

Rubellite's heavy crude oil reserves were evaluated by McDaniel using the Consultant Average Price Forecast effective January 1, 2024 but prior to provision for financial oil hedges, foreign exchange contracts, income taxes, interest, debt service charges and general and administrative expenses. The following table summarizes the NPV of future revenue from reserves at December 31, 2023, assuming various discount rates:

NPV of Reserves, before income tax(1)(2)(3)(4)

Reserves Categories	Unit Value Before
Income Tax
Discounted At
10%/Year(3)
($ millions)(1)	0%	5%	10%	15%	20%	($/boe)
Proved Producing(2)	182	162	145	131	120	31.17
Proved Non Producing	4	3	3	3	2	31.31
Proved Undeveloped	105	78	58	43	33	14.45
Total Proved	292	244	206	177	155	23.51
Probable Producing	67	48	36	29	24	25.32
Probable Non Producing	2	1	1	1	1	27.86
Probable Undeveloped	156	108	79	60	47	20.86
Total Probable	226	158	116	90	72	22.13
Proved plus Probable	517	401	322	267	227	22.99

Before Income Taxes Discounted at (%)

• (1) January 1,2024 Consultant Average Price Forecast.

• (2) Inclusive of all asset retirement obligations of the Corporation.

• (3) The unit values are based on net reserve volumes.

• (4) May not add due to rounding

McDaniel's NPV10 estimate of Rubellite's total proved plus probable reserves at year-end 2023 was $322.1 million, up 50% from $215.2 million at year-end 2022. At a 10% discount factor, total proved reserves account for 64% (2022 - 62%) of the proved plus probable value. Proved plus probable producing reserves represent 56% (2022 - 53%) of the total proved plus probable value (discounted at 10%) as obligations for non-producing wells, facilities and pipelines and carbon tax reduce the value of the developed producing reserves.

FAIR MARKET VALUE OF UNDEVELOPED LAND

Rubellite held 67,662 net undeveloped acres of land as at December 31, 2023. Undeveloped acres refers to land where there are not any existing wells within the rights associated with those lands and includes. The estimate of the fair market value of the Company's undeveloped acreage was prepared by Seaton-Jordan & Associates Ltd. ("Seaton Jordan") and is based on past Crown land sale activity, adjusted for tenure and other considerations. No undeveloped land value was assigned where proved and probable undeveloped reserves have been booked. The fair market value of Rubellite's undeveloped land as estimated by Seaton Jordan at year-end 2023 is $40.7 million.

NET ASSET VALUE

The following NAV table shows what is normally referred to as a "produce-out" NAV calculation under which the Company's reserves would be produced at forecast future prices and costs. The value is a snapshot in time and is based on various assumptions including commodity prices and foreign exchange rates that vary over time. It should not be assumed that the NAV represents the fair market value of Rubellite's shares. The calculations below do not reflect the value of the Company's prospect inventory to the extent that the prospects are not recognized within the NI 51-101 compliant reserve assessment, except as they are valued through the estimate of the fair market value of undeveloped land.

Pre-tax NAV at December 31, 2023(1)(4)

($ millions, except as noted)	Undiscounted	5%	10%	15%
Total Proved plus Probable Reserves(2)	517	401	322	267
Fair market value of undeveloped lands	41	41	41	41
Mark-to-Consultant Average Price Forecast	10	10	10	10
Net debt(4)	(51)	(51)	(51)	(51)
NAV	516	401	321	266
Common shares outstanding (million)(3)	62.5	62.5	62.5	62.5
NAV per share ($/share)(4)	8.27	6.41	5.14	4.26

• (1) Financial information is per Rubellite's 2023 audited financial statements.

• (2) Reserve values per McDaniel Report as at December 31, 2023. All abandonment and reclamation obligations, including future abandonment and reclamation costs for pipelines and facilities and non-reserve wells, are included in the McDaniel Report.

• (3) Shares outstanding as at December 31, 2023.

• (4) Non-GAAP financial measure or non-GAAP ratio. See "Non-GAAP and Other Financial Measures" in this Annual Results report.

The above evaluation includes FDC expectations required to bring undeveloped reserves on production, as recognized by McDaniel, that meet the criteria for booking under NI 51-101. The fair market value of undeveloped land does not reflect the value of the Company's extensive prospect inventory which is anticipated to be converted into reserves and production over time through future capital investment.

Page 7

OUTLOOK AND GUIDANCE

Rubellite expects exploration and development capital spending to be approximately $12 - $13 million in the first quarter of 2024 to drill, complete, equip and tie-in six (6.0 net) multi-lateral horizontal development wells at Figure Lake/Edwand and to drill and core one (1.0 net) vertical stratigraphic evaluation well. Forecast drilling activities will be funded from adjusted funds flow, with excess free funds flow applied to reduce net debt.

Factoring in recent drilling performance and type curve expectations for the remaining first quarter 2024 drilling program at Figure Lake/ Edwand, production sales volumes are expected to grow approximately 6% to 7% sequentially from the fourth quarter of 2023 to average between 4,450 - 4,500 bbl/d for Q1 2024.

With the addition of a second drilling rig as early as late in the second quarter of 2024, Rubellite expects to spend $70 to $75 million for 2024 which includes the drilling of up to thirty four (34.0 net) multi-lateral development / step-out wells in the greater Figure Lake area and $7.0 million of capital spending required for the Figure Lake gas sales plant and related pipeline tie-ins. Also included is investment in the drilling of one well (0.3 net) to initiate waterflood at Marten Hills and ongoing exploration activities.

Production sales volumes are expected to grow over 39% to 48% year-over-year to average 4,600 - 4,900 boe/d and exit the year at 5,000 - 5,200 boe/d, poised for continued growth into 2025 with strong oil production and the addition of natural gas volumes in the first quarter of 2025.

Capital spending, drilling activity and operational guidance for 2024 is as outlined in the table below:

Q1 2024 Guidance	2024 Guidance
Sales Production (bbl/d)	4,450 - 4,500	4,600 - 4,900
Development ($ millions)(1)(2)(3)	$12 - $13	$70- $75
Multi-lateral development wells (net)(1)	6.0	Up to 34.0
Heavy oil wellhead differential ($/bbl)(1)	$6.50 - $7.00	$6.50 - $7.00
Royalties (% of revenue)(1)	11.0% - 12.0%	11.0% - 12.0%
Production & operating costs ($/boe)(1)	$6.50 - $7.00	$6.00 - $6.50
Transportation costs ($/boe)(1)	$7.50 - $8.00	$7.50 - $8.00
General & administrative costs ($/boe)(1)	$5.50 - $6.00	$5.50 - $6.00

• (1) Exploration and development capital expenditure guidance excludes undeveloped land purchases and additional acquisitions. See "Non-GAAP and Other Financial Measures" in this Annual Results report.

• (2) Includes $1.4 million for the Figure Lake gas conservation project in Q1 2024 and $7.0 million for full year 2024.

• (3) Excludes land and acquisition spending.

Page 8

MANAGEMENT'S DISCUSSION AND ANALYSIS

The following is management's discussion and analysis ("MD&A") of Rubellite Energy Inc.'s ("Rubellite", the "Company" or the "Corporation") operating and financial results for the year ended December 31, 2023, as well as information and estimates concerning the Corporation's future outlook based on currently available information. This discussion should be read in conjunction with the Corporation's audited consolidated financial statements and accompanying notes for the years ended December 31, 2023 and 2022. The Corporation's financial statements are prepared in accordance with Canadian generally accepted accounting principles ("GAAP") which require publicly accountable enterprises to prepare their financial statements using IFRS Accounting Standards. The date of this MD&A is March 14, 2024.

This MD&A contains certain specified financial measures that are not recognized by GAAP and used by management to evaluate the performance of the Corporation and its business. Since certain specified financial measures may not have a standardized meaning, securities regulations require that specified financial measures are clearly defined, qualified and, where required, reconciled with their nearest GAAP measure. See "Non-GAAP and Other Financial Measures" for further information on the definition, calculation and reconciliation of these measures. This MD&A also contains forward-looking information. See "Forward-Looking Information". Readers are also referred to the other advisory sections at the end of this MD&A for additional information.

NATURE OF BUSINESS: Rubellite is a Canadian energy company headquartered in Calgary, Alberta and engaged in the exploration, development and production of conventional heavy crude oil from the Clearwater formation in Eastern Alberta, utilizing multi-lateral horizontal drilling technology. Rubellite has a pure play Clearwater asset base and is pursuing a robust growth plan focused on superior corporate returns and funds flow generation while maintaining a conservative capital structure and prioritizing environmental, social and governance ("ESG") excellence. Additional information on Rubellite can be accessed atwww.sedarplus.ca and found atwww.rubelliteenergy.com.

Rubellite's common shares trade on the Toronto Stock Exchange under the symbol "RBY".

2023 STRATEGIC ACQUISITION AND DISPOSITIONS

On November 8, 2023, the Company closed the previously announced Clearwater acquisition (the "Acquisition"). The Acquisition included approximately 800 bbl/d of conventional heavy oil sales production, along with 107 net sections of land (96 net sections undeveloped) in the the Figure Lake and Edwand areas, and 108 net sections of undeveloped land in the Nixon area of Northeast Alberta, for net cash proceeds of $33.2 million, inclusive of customary closing adjustments. The Acquisition was funded through an expanded borrowing limit to Rubellite's revolving bank debt credit facility.

On December 4, 2023, the Company sold a 1.5% non-convertible gross overriding royalty ("GORR"), reverting to a 1.0% non-convertible GORR after payout, on a select portion of the Figure Lake properties for total consideration of $8.0 million (the "Royalty Sale").

FOURTH QUARTER AND ANNUAL 2023 OPERATIONAL AND FINANCIAL HIGHLIGHTS

• • Fourth quarter conventional heavy oil sales production of 4,209 bbl/d exceeded guidance and was up 93% from the fourth quarter of

  • 2022 (Q4 2022 - 2,181 bbl/d). 2023 sales production of 3,302 bbl/d increased 98% from 2022 (2022 - 1,670 bbl/d) as a result of the

  • 2023 drilling program and the Clearwater Acquisition that added fifteen (15.0 net) producing wells in the Greater Figure Lake area during the fourth quarter.

• • Exploration and development capital expenditures(1) for the fourth quarter totaled $25.1 million, which included the pre-ordering of $1.6 million of inventory for future drilling, bringing expenditures to $67.5 million for 2023 as compared to the $66.0 million forecasted upper end of the prior guidance range. During 2023 thirty (29.5 net) wells were rig released, which included twenty one (21.0 net) development wells in Figure Lake, six (6.0 net) step out wells at Figure Lake, two (2.0 net) exploratory wells at Peavine and one (0.5 net) exploratory well at Dawson.

• • Land purchases in the quarter were $1.2 million, bringing total land expenditures for 2023 to $4.0 million. In 2023, Rubellite added 28.0 net sections of land, and fulfilled its four well drilling commitment on the 20.0 net sections acquired under a Land Acquisition and Drilling Agreement with the Buffalo Lake Métis Settlement ("BLMS"). Including the 215 net sections of land acquired in the Acquisition and net of expiries, the Company held 471.1 net sections of land in the Clearwater formation at December 31, 2023.

• • Adjusted funds flow before transaction costs(1) in the fourth quarter was $17.1 million ($0.27 per share) and $54.3 million ($0.90 per share) in 2023 (Q4 2022 - $8.1 million and $0.15 per share; 2022 - $23.0 million and $0.44 per share).

• • Cash costs(1) were $7.9 million or $20.49/boe in the fourth quarter of 2023 (Q4 2022 - $4.1 million or $20.27/boe). Full year cash costs were $25.7 million or $21.29/boe in 2023 (2022 - $12.5 million or $20.51/boe).

• • Net income was $9.5 million in the fourth quarter of 2023 (Q4 2022 - $18.7 million) and $18.6 million in 2023 (2022 - $24.6 million).

• • As at December 31, 2023, net debt(1) was $51.0 million, an increase from $28.2 million as at December 31, 2022.

• • Rubellite had available liquidity (see "Liquidity, Capitalization and Financial Resources - Capital Management") at December 31, 2023 of $27.3 million, comprised of the $57.0 million borrowing limit of Rubellite's first lien credit facility ("Credit Facility Borrowing Limit"), less current borrowings of $29.3 million and outstanding letters of credit of $0.4 million.

(1) Non-GAAP financial measure, non-GAAP ratio or supplementary financial measure. See "Non-GAAP and Other Financial Measures".

OPERATIONS UPDATE

A total of eleven (11.0 net) wells were rig released in Rubellite's two-rig, fourth quarter development drilling program at Figure Lake and were a combination of seven (7.0 net) development wells and four (4.0 net) step-out wells. These wells began to contribute materially to the ramp up of oil sales production volumes throughout December, peaking in January 2024 as new multi-lateral wells from the two-rig Q4/23 drilling program were rig released and achieved full recovery of oil-based drilling mud ("OBM"). OBM is not recorded as sales production as the OBM is recovered and re-used in future drilling operations to the maximum extent possible or, when no longer re-usable it is sold, and in both cases credited back to drilling capital.

During the fourth quarter, development drilling operations were focused on three pads including: finishing the last two of eight wells on the pad at 15-24-63-18W4 (the "15-24 Pad"); drilling four (4.0 net) horizontal multi-lateral wells at a new development pad at 9-3-63-18W4 (the "9-3 Pad"); and drilling one (1.0 net) horizontal multi-lateral development well on a new development pad to the north at 14-22-63-18W4 (the "14-22 Pad").

The Company is pleased with the step out drilling program executed by the second rig which was windowed in during the fourth quarter. Four (4.0 net) step out wells were drilled and rig released during the fourth quarter, including two new drills from a pad on the Buffalo Lake Métis Settlement ("BLMS") at 5-32-63-17W4 (the "5-32 Pad"); and one well on each of two pads south of Figure Lake at 6-19-62-18W4 (the "6-19 Pad") and 5-24-62-18W4 (the "5-24 Pad"). Both new step-out wells drilled at the BLMS 5-32 Pad have recovered their OBM load fluid and progressed through their respective IP30 production periods, recording strong IP30 rates of 325 and 168 bbl/d respectively, as compared to the Figure Lake type curve(1) IP30 of 119 bbl/d. Rubellite's four well commitment on the BLMS lands is now fully satisfied. The step-out well drilled on the 6-19 Pad in the fourth quarter, which straddled legacy Rubellite lands as well as lands acquired in November 2023 as part of the Acquisition, fully recovered its OBM during the last week of December and is performing very strong, recording an average IP30 production rate of 256 bbl/d. The step-out well drilled on the 5-24 Pad recovered its OBM load fluid and is producing sales oil at an initial rate below the Figure Lake type curve and with a high water cut. Based on early time production performance to date, two of these four Figure Lake step out wells are Rubellite's most prolific performers drilled to date since the Company's inception, and have served to extend the development trend at Figure Lake to both the North and South.

Rubellite has utilized one drilling rig during the first quarter of 2024 and intends to keep this drilling rig running continuously at Figure Lake through break up in late March, to drill a total of six (6.0 net) multi-lateral horizontal wells along with one (1.0 net) vertical stratigraphic evaluation well during the first quarter of 2024. One additional development well was rig released on the 14-22 Pad in mid-January. Given ungulate restrictions, drilling operations shifted to the south end of Figure Lake to drill two wells on lands added through the Acquisition at a pad in Edwand at 3-17-61-17W4 (the "3-17 Pad"), applying an OBM drilling fluid system to this pool to compare to the water-based mud results from wells drilled by the previous operator. Two additional multi-lateral horizontal wells have recently been rig released on the 6-19 Pad and the drilling rig has now moved back to the 5-32 Pad on the BLMS to drill six additional wells, one of which is expected to be rig released and begin load oil recovery prior to the end of the first quarter.

In early January, Rubellite re-activated its horizontal multi-lateral Northern Exploration well at Dawson (5-16-81-16W5) which was rig released in late January 2023. The Company plans to monitor production performance through the winter operating season.

The existing rig will continue to drill an additional eighteen (18.0 net) wells at Figure Lake over the last nine months of 2024, with a second rig anticipated to arrive as early as late in the second quarter to drill up to ten (10.0 net) additional development / step-out delineation multi-lateral horizontal wells at Figure Lake over the balance of the year.

Permitting is underway and equipment has been ordered to construct a sales gas plant at Figure Lake to direct solution gas to sales beginning in the first quarter of 2025. By utilizing existing pipeline infrastructure acquired from legacy shallow gas producers in the area, the solution gas tie-in project will not only significantly reduce emissions from the Figure Lake property where natural gas is currently being incinerated on multiple pad sites, it is also economically attractive, with a forecast rate of return of >75% on the approximately $7 million capital investment, with project payout expected in 2026 based on current forward natural gas prices.

Rubellite also plans to continue exploration activities to pursue additional prospective land capture and de-risk acreage during 2024.

(1) Type curve assumptions are based on the Total Proved plus Probable Undeveloped reserves contained in the McDaniel Reserve Report as disclosed in the

Company's Annual Information Form which is available under the Company's profile on SEDAR+ atwww.sedarplus.ca. "McDaniel" means McDaniel & Associates Consultants Ltd. independent qualified reserves evaluators. "McDaniel Reserve Report" means the independent engineering evaluation of the heavy crude oil and conventional natural gas reserves, prepared by McDaniel with an effective date of December 31, 2023 and a preparation date of March 14, 2024.

OUTLOOK AND GUIDANCE

Rubellite expects exploration and development capital spending to be approximately $12 - $13 million in the first quarter of 2024 to drill, complete, equip and tie-in six (6.0 net) multi-lateral horizontal development wells at Figure Lake/Edwand and to drill and core one (1.0 net) vertical stratigraphic evaluation well. Forecast drilling activities will be funded from adjusted funds flow, with excess free funds flow applied to reduce net debt.

Factoring in recent drilling performance and type curve expectations for the remaining first quarter 2024 drilling program at Figure Lake/ Edwand, production sales volumes are expected to grow approximately 6% to 7% sequentially from the fourth quarter of 2023 to average between 4,450 - 4,500 bbl/d for Q1 2024.

With the addition of a second drilling rig as early as late in the second quarter of 2024, Rubellite expects to spend $70 to $75 million for 2024 which includes the drilling of up to thirty four (34.0 net) multi-lateral development / step-out wells in the greater Figure Lake area and $7.0 million of capital spending required for the Figure Lake gas sales plant and related pipeline tie-ins. Also included is investment in the drilling of one well (0.3 net) to initiate waterflood at Marten Hills and ongoing exploration activities.

Production sales volumes are expected to grow over 39% to 48% year-over-year to average 4,600 - 4,900 boe/d and exit the year at 5,000 - 5,200 boe/d, poised for continued growth into 2025 with strong oil production and the addition of natural gas volumes in the first quarter of 2025.

Capital spending, drilling activity and operational guidance for the first quarter and full year 2024 is as outlined in the table below:

Q1 2024 Guidance	2024 Guidance
Sales Production (bbl/d)	4,450 - 4,500	4,600 - 4,900
Exploration and Development spending ($ millions)(2)(3)	$12 - $13	$70- $75
Multi-lateral development / step-out wells (net)(2)	6.0	Up to 34.0
Heavy oil wellhead differential ($/bbl)(2)	$6.50 - $7.00	$6.50 - $7.00
Royalties (% of revenue)(2)	11.0% - 12.0%	11.0% - 12.0%
Production and operating costs ($/boe)(2)	$6.50 - $7.00	$6.00 - $6.50
Transportation costs ($/boe)(2)	$7.50 - $8.00	$7.50 - $8.00
General and administrative costs ($/boe)(2)	$5.50 - $6.00	$5.50 - $6.00

• (1) Non-GAAP financial measure, non-GAAP ratio or supplementary financial measure. See "Non-GAAP and Other Financial Measures".

• (2) Includes $1.4 million for the Figure Lake gas conservation project in Q1 2024 and $7.0 million for full year 2024.

• (3) Excludes land and acquisition spending.

2023 ANNUAL RESULTS