Gear Energy Ltd T.GXE

IMPLEMENTATION OF A MONTHLY DIVIDEND

[Betteryear2]

• With the generation of $24.6 million in free funds from operations during the second quarter and a continued strong outlook, Gear's Board of Directors has approved the implementation of a new monthly dividend of $0.01 per common share. To account for no dividend being distributed in July, the initial dividend for the month of August will be $0.02 per common share and thereafter will revert to $0.01 per common share for the following months. The $0.02 dividend will be paid on August 31, 2022 to shareholders of record as of close of business on August 15, 2022. The dividend is designated as an "eligible dividend" for income tax purposes.

• After reviewing the impacts and results of the initial variable dividend payment completed in the second quarter, Gear will be revising its dividend program going forward by converting to a monthly dividend program to provide investors with more predictable returns. With the initiation of the new monthly $0.01 per share dividend, Gear still anticipates maintaining a strong balance sheet with the current forecast (using forward market pricing as of July 26, 2022) showing a continual net surplus in the future. In the first four months of 2022, Gear dedicated all of its free funds from operations to debt repayments. Under the current forecast from May 2022 to December 2022, Gear anticipates approximately 75 per cent of free funds from operations (approximately 25 per cent of funds from operations) will be returned to shareholders as dividends with the remaining free funds from operations dedicated to potential future capital expansions, cash funded acquisitions, share buybacks and/or future dividend increases. Management and the Board of Directors will continue to monitor the future commodity markets and the strength of the business to ensure that the distribution of future dividends remains aligned with all other strategic goals.