Financial Statements (NZ BOD 2025 11 30 NZEC Financial Statements Q3 2025 Final)

(Expressed in Canadian Dollars) (Unaudited)

Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the condensed consolidated interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The accompanying unaudited condensed consolidated interim financial statements of New Zealand Energy Corp. ("the Company" or "NZEC") have been prepared by and are the responsibility of the Company's management.

The Company's independent auditor has not performed a review of these financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for the review of condensed consolidated interim financial statements by an entity's auditor.

(Expressed in Canadian Dollars)

Description of business and going concern (Note 1) Commitments (Note 16)

These unaudited condensed consolidated financial statements are authorized for issuance by the Board of Directors on 1 December 2025.

"Michael Adams" "Bill Treuren"

Michael Adams, Director Bill Treuren, Director See accompanying notes.

(Expressed in Canadian Dollars) Unaudited

See accompanying notes.

(Expressed in Canadian Dollars) Unaudited

1. Exchange difference on translation of foreign currency may be subsequently reclassified to profit or loss.

   See accompanying notes.

   .

   CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS For the nine month periods ended 30 September 2025 and 2024

   (Expressed in Canadian Dollars) Unaudited

   Notes Nine months ended 30 September

   	2025		2024
   	$		$
   Operating activities
   Net loss for the period	(1,886,151)		(3,371,103)
   Changes for non-cash operating items
   Gain on Convertible loan	(2,155,488)		-
   Depreciation and depletion	6,7	386,120	227,789
   Accretion and accrued interest		383,059	389,183
   Abandonment provision movement		98,105	20,521
   Foreign exchange loss		136,924	204,557
   Change in working capital items
   Accounts and other receivables		7,215	(804,559)
   Prepaid expenses		(11,901)	(4,358)
   Inventories		(237,073)	18,980
   Accounts payable and accrued liabilities		531,125	1,314,745
   Cash used in operating activities		(2,748,065)	(2,004,245)
   Investing activities Oil and gas properties expenditures	6	(354,257)	(2,182,163)
   Purchase of property, plant and equipment	6	-	(9,495)

   Cash used in investing activities (354,257) (2,191,658)

   Financing activities

   Private placement 3,041,320 4,788,562

   Convertible loan 10	(500,000)	-
   Cash provided by financing activities	2,541,320	4,788,562
   Net (decrease) increase in cash	(561,002)	592,659
   Effect of exchange rate changes on cash	(2,980)	1,056
   Cash, beginning of the period	1,131,605	1,180,393
   Cash and equivalents, end of the period	567,623	1,774,108

   See accompanying notes.

   1. DESCRIPTION OF BUSINESS AND GOING CONCERN

      The Company commenced operations on 19 April 2010 through wholly-owned subsidiary, East Coast Energy Ventures Limited. The Company was subsequently incorporated on 29 October 2010 under the name 0894134 B.C. Ltd. Pursuant to the Business Corporation Act (British Columbia). On 10 November 2010, 0894134 B.C. Ltd. Changed its name to New Zealand Energy Corp.

      The Company, through its subsidiaries (collectively the "Group"), is engaged in the exploration, appraisal, development and production of oil and natural gas, as well as the operation of midstream assets, in New Zealand.

      The Company's registered and records office is located at Suite 2700, 1133 Melville Street, Vancouver, BC, V6E 4E5. The

      Company's principal place of business is 11 Young Street, New Plymouth, New Zealand 4312.

      The Company's shares are listed on the TSX Venture Exchange under the symbol "NZ".

      Going Concern

      These condensed consolidated interim financial statements have been prepared on a going-concern basis, which assumes the realization of assets and settlement of liabilities in the normal course of operations. The Company incurred a net loss of

      $1,886,151 for the nine months ended 30 September 2025 (2024 - $3,371,103) and used $2,748,065 in operating cash flows (2024 - $2,004,245). As at 30 September 2025, the Company had a working-capital deficit of approximately $1.0 million (2024 - deficit $1.6 million). These conditions give rise to a material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern.

      Management continues to advance a number of measures intended to improve liquidity and maintain operations, including:

      • Equity Financing: In July 2025, the Company completed a private placement for gross proceeds of approximately

        $3.0 million.

      • Operational Cash Flow: Production was re-established at Copper Moki-2 in June 2025 and at Waihapa Ngaere in Q3 2025, with additional workovers and optimization underway.
      • Debt Restructuring: The Company extinguished its prior convertible loan (Note 10), a significant current liability.
      • Short-Term Funding: In June 2025, NZEC secured approximately $0.5 million in short-term working-capital loans from related parties under market-based terms, which were subsequently repaid in cash or shares.
      • Strategic Initiatives: The Company continues to progress the Tariki gas-storage project and evaluate commercial arrangements, including potential pre-sales of gas and participation by strategic partners, subject to financing and regulatory approval.
      • Permit Expenditure Flexibility: Permit obligations (Note 17) can be deferred or re-sequenced to align with available funding.

      The Company anticipates that without additional capital raised within the next 6 to 9 months, further material reductions in planned activities may be required. Management has identified discretionary capital projects that can be deferred to preserve liquidity, while continuing essential production and safety operations. These actions, combined with ongoing cost-control measures and the potential for farm-out or joint-venture transactions, are intended to sustain operations while longer-term financing is pursued.

      Management believes that the measures described above will improve liquidity; however, realization of these plans is dependent on factors not wholly within the Company's control, including successful capital raising and continued improvement in operating cash flows. Accordingly, material uncertainty remains regarding the Company's ability to continue as a going concern.

      These financial statements do not reflect any adjustments that would be necessary if the going-concern assumption were inappropriate. Such adjustments could be material and would involve the reclassification and potential write-down of assets and liabilities to their recoverable amounts and settlement values.

   2. SUMMARY OF MATERIAL ACCOUNTING POLICIES

      Accounting policies specific to certain balances are described within the detailed notes in the sections below. General accounting policies adhered to in these financial statements are as follows:

      Basis of Preparation

      The unaudited condensed consolidated interim financial statements have been prepared in accordance with IFRS Accounting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") applicable to the preparation of interim financial statements, including International Accounting Standard ("IAS") 34, Interim Financial Reporting. The unaudited condensed consolidated interim financial statements should be read in conjunction with the audited annual consolidated financial statements for the year ended 31 December 2024, which have been prepared in accordance with IFRS as issued by the IASB and interpretations issued by the IFRS Interpretations Committee (IFRS IC) applicable to companies reporting under IFRS.

      These unaudited condensed consolidated interim financial statements have been prepared on a historical cost basis except as disclosed in the accounting policies. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting except for cash flow information.

      The Company has used the same accounting policies and methods of computation as in the audited annual consolidated financial statements for the year ended 31 December 2024.

   3. CASH

      	30 September	31 December
      	2025	2024
      	$	$
      Cash	567,623	1,131,605

   4. ACCOUNTS AND OTHER RECEIVABLES

      	30 September	31 December
      	2025	2024
      	$	$
      Trade receivables	73,589	78,632
      Cash covered bonds - NZPAM and First Gas	360,898	363,050
      	434,487	441,682

   5. INVENTORIES

      Current	30 September 2025 $	31 December 2024 $
      Material and supplies	161,789	159,528
      Oil inventories	679,668	385,623
      	841,457	545,151
      Non-Current
      Non-current material and supplies	324,221	384,236
      Less: write down provision to NRV	(128,998)	(129,767)
      	195,223	254,469
      Write down Provision to NRV continuity:
      Opening Balance	(129,767)	(124,951)
      Movement in provision recognised as expense	769	(4,816)
      Closing Balance	(128,998)	(129,767)

   6. PROPERTY, PLANT AND EQUIPMENT

      Cost		Furniture and fixture $	Land and building $	Plant and equipment $	Oil and gas properties $	Total $
      Balance, 1 January 2024		66,100	1,310,450	3,629,476	25,713,827	30,719,853
      Additions		-	59,911	9,471	5,782,672	5,852,054
      Impairment		-	-	-	(2,956,000)	(2,956,000)
      Change in asset retirement cost due to change in estimate		-	-	521,768	(111,393)	410,375
      Foreign currency translation adjustment		(2,278)	(38,539)	(136,938)	(1,038,165)	(1,215,920)
      Balance, 31 December 2024		63,822	1,331,822	4,023,777	27,390,941	32,810,362
      Additions		-	-	-	354,257	354,257
      Change in asset retirement cost due change in estimate	to	-	-	62,950	221,384	284,334
      Foreign currency translation adjustment		(378)	(7,895)	(24,774)	(196,399)	(229,446)
      Balance, 30 September 2025		63,444	1,323,927	4,061,953	27,770,183	33,219,507

      Furniture and fixture Land and building Plant and equipment Oil and gas properties Total $ $ $ $ $ Accumulated depreciation

      Balance, 1 January 2024 3,801 - 1,815,117 16,381,328 18,200,246

      Depreciation and depletion 6,837 - 259,695 67,555 334,087

      Foreign currency translation adjustment (284) - (68,487) (557,917) (626,688)

      Balance, 31 December 2024 10,354 - 2,006,325 15,890,966 17,907,645

      Depreciation and depletion 4,727 - 182,853 196,487 384,067

      Foreign currency translation adjustment (131) - (14,599) (97,054) (111,784)

      Balance, 30 September 2025 14,950 - 2,174,579 15,990,399 18,179,928

      Net Book Value

      Balance, 31 December 2024 53,468 1,331,822 2,017,452 11,499,975 14,902,717

      Balance, 30 September 2025 48,494 1,323,927 1,887,374 11,779,784 15,039,579

      Included in oil and gas properties a reconciliation of Right of use assets

      2025 2024 $ $ Opening Balance 1 January 57,360 40,240

      Additions - 58,572

      Amortisation - (39,796)

      Foreign currency translation adjustment (340) (1,656)

      Closing Balance 30 September 57,020 57,360

      The right of use liability with respect to the right of use assets was $60,555 as at September 30, 2025 (2024: $40,719).

   7. INTANGIBLE ASSETS Cost Intangible Assets $ Balance, 1 January 2024 150,483

      Foreign currency translation adjustment (5,186)

      Balance, 31 December 2024 145,297

      Foreign currency translation adjustment (861)

      Balance, 30 September 2025 144,436 Intangible Assets Accumulated Amortisation $ Balance, 1 January 2024 5,984

      Amortisation 1,966

      Foreign currency translation adjustment (250)

      Balance, 31 December 2024 7,700

      Amortisation 2,053

      Foreign currency translation adjustment (76)

      Balance, 30 September 2025 9,677 Net Book Value Balance, 31 December 2024 137,597 Balance, 30 September 2025 134,759

      Intangible assets relate to the extinguishing of an overriding royalty during the 2021 year.

      Intangible assets acquired separately are measured on initial recognition at costs and are carried at cost less any accumulated amortisation and accumulated impairment losses. The useful lives of intangible assets are assessed as either finite or infinite. Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation of the intangible assets is based on the unit-of-production method by reference to the ratio of production in the year to the related total proved and probable reserves of oil and natur al gas.

      Intangible asset is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising upon derecognition of the asset is included in the statement of profit or loss.

   8. ASSET RETIREMENT OBLIGATIONS

The Group's asset retirement obligations are estimated based on the costs to abandon and reclaim its wells in certain licences and permits and restoration obligations associated with the land at the Waihapa Production Station together with the estimated timing of the costs to be paid in future periods. The estimated expected life of the long-lived assets is the later of the permit life, or economic life based on proved and probable reserves.

2,881,704 2,336,760

a) Included within trade and other payables is deferred revenue of $1,010,212, which includes a non-refundable payment of NZD$1,000,000 ($809,750) (2024: of NZD$1,000,000 ($809,750) received from Genesis Energy in connection with an Exclusivity and Assessment Agreement relating to the proposed Tariki Gas Storage Project. The payment represents consideration received in advance for future deliverables under the agreement. The amount is not repayable in cash and will be recognized as revenue when the Company has fulfilled its performance obligations, which include providing the Assessment Materials defined in Schedule 3 of the agreement. As at September 30, 2025, these deliverables had not yet been completed, and accordingly the balance remains classified as deferred revenue under IFRS 15. The liability is non-cash in nature and does not create any recourse to the Company's other assets.

1. CONVERTIBLE LOAN 30 September 2025 31 December 2024

   $ $

   Convertible loan - 2,688,244

   During the period, the Company completed the termination of its previously outstanding $2,000,000 convertible loan (the "Loan") originally entered into with Arizona Finance Limited ("Arizona") in 2021. The Loan carried interest at 10% per annum, with total accrued interest of $787,423 up to the date of settlement. The Loan had previously been extended multiple times beyond its original maturity date of August 16, 2022.

   In Q2 2025, Vliet Financing B.V. ("Vliet"), a company controlled by a director of the Company, acquired the Loan from Arizona. The Company subsequently entered into a Loan Termination Agreement with Vliet under which the Loan was fully extinguished in exchange for the following consideration:

   • A cash payment of $500,000; and

   • The issuance of 1,000,000 common shares of the Company.

   Immediately prior to settlement, the Loan was amended to remove its conversion feature, after which the Loan and all related accrued interest were fully extinguished with no remaining obligations.

   In accordance with IFRS 9 - Financial Instruments, the Company recognized a gain on extinguishment of debt representing the difference between the carrying amount of the Loan (including accrued interest) and the fair value of the consideration transferred. This gain has been presented separately in the Statement of Comprehensive Loss.

   All obligations under the Loan have been discharged, and the Company has no further exposure relating to this instrument as at September 30, 2025.

2. SHARE CAPITAL
   1. Authorized and Issued Share Capital

      The authorized share capital of the Company consists of an unlimited number of common shares without par value.

      During the nine months ended September 30, 2025:

      On July 18, 2025, the Company completed a non-brokered private placement issuing 15,103,556 common shares at $0.18 per share for gross proceeds of $2,718,640. The shares are subject to a statutory hold period expiring November 19, 2025.

      During the period, the Company settled outstanding indebtedness of $300,000 owed to Charlestown Energy Partners, LLC, a related party, through the issuance of 1,666,667 common shares at a deemed price of $0.18 per share.

      In connection with the termination of the CAD $2,000,000 convertible loan (Note 10), the Company issued 1,000,000 common shares to Vliet Financing B.V. at a deemed price of $0.18 per share.

      This issuance formed part of the consideration for extinguishment of the loan and accrued interest. There were 27,000 stock options exercised and no warrants were exercised.

   2. Incentive Stock Options

      The Company has a stock option plan for the granting of stock options to directors, employees and service providers. Under the terms of the stock option plan, the number of shares reserved for issuance as stock options will be equal to 10% of the Company's issued and outstanding shares at any time. Such options can be exercisable for a maximum of three years from the date of grant. The exercise price of each share option is set by the Board of Directors at the time of grant but cannot be less than the market price at the time of grant. Vesting of share options is at the discretion of the Board of Directors at the time the options are granted.

      Stock Options September 30, 2025

      During the nine month ended September 30, 2025, 27,000 stock options were exercised and no stock options were granted.

      The following is a continuity of outstanding stock options:
      	Options	Weighted Average of Exercise Price
      Balance as at December 31, 2023	-	$ 0.0
      Granted during the year	1,400,000	0.84
      Exercised during the year	25,000	0.84
      Balance as at December 31, 2024	1,375,000	$ 0.84
      Exercised during the period	27,000	0.84
      Balance as at September 30, 2025	1,348,000	$ 0.84

      The following table summarizes information about stock options that are outstanding at September 30, 2025:

      Number of Options	Price per Share	Expiry Date	Options Exercisable
      1,348,000 (1)	$0.84	May 13, 2027	1,348,000
      1,348,000			1,348,000

      (1) These were originally granted on May 13, 2024.

      As at September 30, 2025, the weighted average contractual remaining life is 1.62 years.

      The Company applies the Black-Scholes option pricing model using the closing market prices on the grant dates and to date the Company has calculated option benefits.

      Risk-free interest rate Expected stock price volatility Expected option life in years Dividend rate

      May 13, 2024 0.321% 140.0% 3 Years Nil

   3. Broker Warrants

      The following is a continuity of outstanding broker warrants:
      	Broker Warrants	Weighted Average of Exercise Price
      Balance as at December 31, 2023	-	$ -
      Granted during the year	-	-
      Balance as at December 31, 2024	-	$ -
      Granted during the period	56,383	-
      Balance as at September 30, 2025	56,383	$ 0.75

      The following table summarizes information about broker warrants that are outstanding at September 30, 2025:

      Number of Warrants	Price per Share	Expiry Date
      56,383	$0.75	November 8, 2025
      56,383

      As at September 30, 2025, the weighted average contractual remaining life is 0.11 years.

      The Company applies the Black-Scholes pricing model using the closing market prices on the grant dates and to date the Company has calculated benefit.

      Risk-free interest rate Expected price volatility Expected life in years Dividend rate

      May 9, 2024 3.21% 140.0% 0.92 Years Nil

   4. Loss Per Share

      Basic and diluted weighted average shares outstanding for the nine month period ended September 30, 2025 was 25,415,415 (September 30, 2024: 14,987,902). Basic and diluted weighted average shares outstanding for the three month period ended September 30, 2025 was 34,893,403 (September 30, 2024: 14,987,902).

3. REVENUE Note Three months ended 30 September Nine months ended 30 September

   		2025 $	2024 $	2025 $	2024 $
   Oil sales		330,772	79,926	466,219	382,170
   Gas sales		(205)	-	53,061	-
   Processing revenue		93,790	145,065	334,838	419,509
   Other revenue	a)	26,888	65,337	81,449	127,754
   Total revenue		451,245	290,328	935,567	929,433

   1. The Group has provided services to a third party, that have been performed through a combination of work by employees and subcontracted companies. NZEC has used judgement and concluded it is the principal party, as it has the performance obligation to the customer, and has discretion in establishing pricing with the customer.

4. GENERAL AND ADMINISTRATIVE EXPENSES Three months ended 30 September Nine months ended 30 September

   	2025 $	2024 $	2025 $	2024 $
   Professional fees	15,135	19,027	228,318	251,443
   Consulting fees	(23)	32,530	40,734	90,598
   Travel and promotion	2,140	6,927	5,601	45,505
   Administrative expenses	319,048	79,396	498,424	241,247
   Rent	7,644	10,545	20,247	29,288
   Leases	-	1,738	(14,413)	5,877
   Filing and transfer agent fees	19,381	1,213	49,608	27,038
   Insurance	(8,427)	(375)	122,002	98,155
   Salary and wages	267,727	413,053	773,943	1,172,957
   	622,625	564,054	1,724,464	1,962,108

5. RELATED PARTY TRANSACTIONS

   Related parties of the Company include entities controlled by Directors or officers, as well as Directors and members of key management personnel. Related-party transactions are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

   During 2024 and 2025, related-party entities included Vliet Techniek B.V., Jacobs Dutch Holdings B.V., and Charlestown Energy Partners, LLC, which are controlled by Directors of the Company.

   The following transactions and balances with these related parties occurred during the periods presented:

   Note Three months ended 30 September Nine months ended 30 September

   	2025 $	2024 $	2025 $	2024 $
   General and administrative expenses	13,724	35,927	13,724	201,712
   Trade payables	-	7,738	2,592	7,738
   Working Capital Loans	-	-	385,447	-

   Short-Term Working-Capital Loans

   During the nine months ended 30 September 2025, the Company obtained short-term working-capital loans totalling $482,000 from related parties to address immediate liquidity needs (see Note 1). The details are as follows:

   Name of Lender Relationship to NZEC Gross Value (CAD) Key Terms

   Charlestown Energy Shareholder; Robert Bose, Managing 300,000 90-day term; 15% interest per annum;

   Partners LLC

   Member, is also a Director of NZEC

   10% original issue discount

   Vliet Financing B.V. Entity controlled by Director Frank Jacobs 182,000 90-day term; 15% interest per annum;

   10% original issue discount

   These loans were reviewed and approved by the independent members of the Board of Directors, who determined the terms to be commercially reasonable given the Company's financial circumstances at the time. The advances, including accrued interest and discounts, were fully settled during 2025 through a combination of cash and common-share issuances.

   Key Management and Personnel Compensation

   The key management personnel include the directors and other officers of the Company. Key management compensation consists of the following:

   Three months ended 30 September Nine months ended 30 September 2025 2024 2025 2024 $ $ $ $

   Salary and consulting fees 215,222 215,222 615,312 615,312

   -	63,518	-	130,024
   -	29,368	-	149,079
   54,475	69,476	179,789	192,399
   13,724	-	13,724	-

   Included in the above amounts are: Upstream Consulting Ltd (James Willis)

   Vliet Techniek BV, Jacobs Dutch Holdings BV (Frank Jacobs)

   2X Energy Limited (Michael Adams) Paradigm Enterprises Limited (Bill Trueren)

6. SEGMENTED DISCLOSURES

   Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segment, has been identified as the Chief Executive Officer.

   The Group conducts its business as a single operating segment being the acquisition, exploration, appraisal, development and production of conventional oil and natural gas resources in New Zealand. The Group's geographic area for all assets, liabilities and revenues is New Zealand.

7. COMMITMENTS

   As at 30 September 2025, the Group had the following undiscounted contractual obligations:

   	2025 $	2026 and onwards $	Total $
   Operating leases	45,000	23,000	68,000
   Contract and purchase commitments	226,000	395,000	621,000
   	271,000	418,000	689,000

   Contract commitments relate mostly to future lease payment commitments to landowners on which permits lie.

   Bank Guarantees

   Bonds provided to the Crown in respect of the Tariki, Waihapa and Ngaere petroleum mining licences are issued by Bank of New Zealand (NZ$375,000).

   These bonds are secured by way of general security agreement over the present and after acquired assets of Taranaki Ventures Limited ("TVL") with NZEC subsidiaries NZEC Holdings Limited, NZEC Tariki Limited, NZEC Waihapa Limited and NZEC Management Limited guaranteeing the obligations of TVL under the facility, during 2024 the bonds were fully cash collateralised.

8. PERMIT EXPENDITURE PLANS

   The Group undertakes oil and gas production, development and exploration activities and has plans to complete certain exploration activities. Certain permits and licences held by the Group require various work obligations to be performed in order to maintain the permits or licences in good standing. The Group and, where relevant, its co-venturers in a permit, may apply to alter the exploration programs, request extensions, reject development costs, relinquish certain permits or farm out an interest in permits. The permit expenditure plans include those required to maintain its permits in good standing during the current permit term, prior to the Group committing to the next stage of the permit term, where additional expenditure would be required.

   Maintaining the permits in good standing during the permit term is based on the fulfilment of the work program and is not based on a specific expenditure level. The anticipated cost of the works planned are set out below and relate to the following permits/licences (in the Taranaki Basin):

   Permit/Licence Note Type 2025 2026 and onwards Total $ $ $

   Eltham Permit Exploration - - -

   Copper Moki i Producing 800,000 - 800,000

   Tariki Licence ii Producing 300,000 - 300,000 Waihapa Ngaere Licence iii Producing 200,000 - 200,000

   1,300,000 - 1,300,000

   1. Copper Moki costs to bring back to production.

   2. Drill Tariki Well and facilities

   3. Waihapa Ngaere: costs to increase production.

9. SUBSEQUENT EVENTS

On November 9, 2025, 56,383 broker warrants had expired unexercised.