Next Bridge Hydrocarbons, Inc.

Business focus

• Energy company engaged in the acquisition, exploration, exploitation and development of oil and natural gas properties in the United States.
• Primary emphasis on West Texas (Hazel Project in the Midland Basin). Other interests include Oklahoma properties and Louisiana mineral leases via Louisiana-based projects.

Corporate structure

• Nine wholly owned subsidiaries:
  • Torchlight Energy, Inc. (Nevada)
  • Hudspeth Oil Corporation (Texas)
  • Torchlight Hazel, LLC (Texas)
  • Wolfbone Investments, LLC (Texas)
  • Hudspeth Operating, LLC (Texas)
  • Wildcat Panther, LLC (Texas)
  • Wildcat Valentine, LLC (Texas)
  • Wildcat Cowboy, LLC (Texas)
  • Wildcat Packer, LLC (Texas)
• Intercompany transactions are eliminated in consolidation.

Project portfolio

Hazel Project (Midland Basin, West Texas)

• 80% working interest (effective June 1, 2017); 75% net revenue interest.
• Incremental interests acquired over time; historically involved in a development program funded by a third party (MHP).
• The project remains subject to development-cost and revenue-sharing arrangements with MHP, which entitle MHP to reimbursements and limit the company’s downstream economics.

Oklahoma Properties (Hunton play, Central Oklahoma)

• Producing wells in the Viking Area of Mutual Interest and Prairie Grove.

Louisiana projects

• In March 2024, Wildcat-related Louisiana leases (Cowboy, Packer, Panther, Valentine) were contributed to Next Bridge in a transaction that included stock consideration.
• Valentine and Panther leases were subject to Magnetar participation agreements. Magnetar paid cash to Next Bridge with delay rental arrangements and drilling options. Next Bridge had the option to participate (up to one-third) in certain wells but did not continue participation in Valentine and Panther wells.
• 2025 drilling on Valentine leases through the Magnetar Drilling Fund resulted in a dry hole. Remaining Louisiana mineral leases held by Wildcat Cowboy and Wildcat Packer were impaired as of 12/31/2025.
• No ongoing value was recognized for other Louisiana leases beyond impairment and limited related income.

2025 operational highlights

Production volumes (net)

• Oklahoma properties: 86 barrels of oil and 2,441 Mcf of gas produced in 2025.
• Hazel Project: two producing wells (Flying B Ranch #3H and #4H) producing from the Wolfcamp formation. As of year-end 2025, no proved reserves or proved developed nonproducing reserves were recognized for the Hazel wells because of revenue pass-through obligations to MHP.
• Louisiana (Wildcat leases): one initial test well on Valentine via Magnetar; no sustained economic interest for Next Bridge. Results included impairment and net 0 BOE reserves for 2025 due to option and revenue pass-through arrangements.

Drilling activity

• Hazel Project: no dry or productive wells reported in 2025.
• Louisiana Panther: one dry well drilled in 2025; development costs for Panther (and previously for Cowboy/Packer) were impaired in 2025.

Reserves and present value

• As of 12/31/2025, net producing reserves from the Hazel wells were 0 BOE due to the revenue pass-through to MHP. The Standardized Measure of Future Net Cash Flows related to proved oil and gas properties was 0.
• Proved reserves and standard measures related to the Hazel project were not recognized for 2024 and 2025 because recoverable value is allocated under the Option Agreement and related arrangements.

Impairments

• 2025 impairment charge of $4,777,673 related to the Panther (Louisiana) project after determination the wells would not be economically viable.
• Cumulative impairments for Wildcat Cowboy and Wildcat Packer were recognized in prior periods; those assets were fully impaired by 12/31/2025.

Investments in property and development

• 2025 property development costs: $4,803,655 (total development costs for 2025: $4,803,655).
• 2024 property acquisition costs: $1,244,408; 2024 development costs: $448,477.
• 2025 capitalized interest on unevaluated properties: $0.

Strategic income events (Louisiana)

• 2024: 2,500,000 shares issued as consideration for Louisiana assets; related proceeds and adjustments were recorded in 2024.
• Magnetar transactions:
  • Valentine leases: Magnetar paid net proceeds; Next Bridge received a nominal 0.8% working interest in the initial Valentine well. A spud fee of $600,000 was paid; $360,000 of that was recognized as other income after consultant costs.
  • Panther leases: Magnetar paid $428,918.05 plus $70,081.95 related to delay rentals. Next Bridge had an option to participate up to one-third in the initial test well and subsequent wells under specified terms.

Financial snapshot (as of and for the year ended 12/31/2025)

• Employees: 0; contractors and consultants engaged as needed.
• Revenue and income:
  • 2025 oil and gas sales revenue recognized as $0 due to the revenue pass-through obligation to MHP (7,846 barrels were sold at an average price of about $63.70 per barrel, but proceeds were allocated to other parties).
  • 2025 net loss: $10,561,149.
  • 2025 net cash used in operating activities: $1,896,509.
  • Accumulated deficit: $170,109,011.
  • Working capital deficit: $61,853,377 (vs. $51,418,849 at 12/31/2024).
• Assets and capital expenditures:
  • 2025 property development costs: $4,803,655 (including the $4,777,673 impairment on the Panther project).
  • 2024 property development costs: $1,692,885 (including $2,182,539 in capitalized interest on unevaluated properties for 2024).
  • 2025 property acquisitions: $0 (2024 acquisitions included Louisiana assets valued at about $1,243,565 in equity issuance plus related debt adjustments).
• Debt and liquidity:
  • 2022 Note: outstanding drawn balance as of 12/31/2025 was $24.63 million. The note includes covenants and default risk.
  • 2021 Note: initially $15 million, later increased to $20 million; the lender succeeded the prior lender on 8/7/2023. These notes carry covenants that restrict certain corporate actions and could require repayment on default.
  • 2022 Note maximum principal balance available: $25 million (increased from $20 million); $24.63 million had been drawn as of 12/31/2025.
  • Loan Agreement: maximum balance of $5.0 million; as of 12/31/2025 the maximum had been used.
• Liquidity and going concern:
  • Auditors issued a going concern qualification due to net losses, a substantial working capital deficit, limited internal resources and dependence on external financing.
  • The company intends to raise additional capital or pursue strategic alternatives (joint ventures, asset sales, mergers or financing) to support ongoing operations.

Market and operations context

• Revenue is generally tied to spot oil prices and short-term gas pricing; sales are typically handled by marketing partners or operators.
• The company relies on third-party operators and partners for marketing, transportation and some development activities.
• Environmental, regulatory and market risks include sensitivity to commodity prices, potential regulatory changes (including rules affecting hydraulic fracturing and methane emissions) and possible oilfield liabilities.

Other non-operational details

• The company is not DTC-eligible for electronic trading, which may affect liquidity for investors.
• Series A Redeemable Preferred Stock: 3,000,000 shares issued August 20, 2025, with 18% accruing dividends starting August 20, 2026, liquidation preferences over common stock and optional redemption provisions.

Bottom line

Next Bridge Hydrocarbons, Inc. is an oil and gas company focused on the Hazel Project in Texas, Oklahoma properties and Louisiana mineral leases. The company operates with no employees, has experienced significant losses and liquidity constraints, and depends on external financing, including related-party debt. For 2025, it reported a net loss of $10.56 million, recognized no oil and gas revenue due to pass-through arrangements, and recorded impairment charges tied to Louisiana assets. Its asset base consists of capitalized development costs and cumulative impairments, with substantial value affected by revenue pass-through structures and impaired leases.