Big Sky Industrial Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Third quarter 2026 revenue totaled $2.0 million, a 12% increase year-over-year compared to $1.7 million in Q3 2025, driven by a 30% increase in average realized price per BOE offsetting lower volumes.
• Production in Q3 2026 was 30,628 BOE (76% oil), down from 35,326 BOE in Q3 2025, primarily due to 2025 divestitures of Wyoming and West Texas properties and natural declines.
• Average realized prices in Q3 2026 were $77.30/bbl for oil and $3.35/mcf for natural gas, resulting in an average of $63.83/BOE, compared to $49.20/BOE in Q3 2025.
• Lease operating expenses (LOE) totaled $2.1 million in Q3 2026 versus $1.0 million in Q3 2025; excluding $1.2 million in environmental remediation costs, LOE was $0.9 million ($29.71/BOE) compared to $29.58/BOE in the prior year period.
• Cash general and administrative expenses were $1.6 million in Q3 2026, down from $1.7 million in Q3 2025.
• Equity compensation expense was $0.6 million in Q3 2026, up from $0.4 million in Q3 2025.
• Net loss for Q3 2026 was $3.5 million ($0.07 per share), compared to a net loss of $3.3 million ($0.10 per share) in Q3 2025, which included a $0.9 million impairment.
• Adjusted EBITDA for Q3 2026 was $(0.8) million, improving from $(1.3) million in Q3 2025, excluding $1.2 million in environmental remediation costs.
• As of September 30, 2026, cash balance was $2.9 million with total available liquidity of $14.4 million, including $11.5 million of undrawn capacity under the senior secured credit facility.
• Total debt outstanding increased to $8.5 million as of September 30, 2026, from $2.5 million as of December 31, 2025.
• Net debt balance was $5.585 million as of September 30, 2026, compared to $2.071 million as of December 31, 2025.
• For the nine months ended September 30, 2026, total revenue was $5.7 million, down from $6.0 million in the same period in 2025.
• Net loss for the nine months ended September 30, 2026, was $9.0 million ($0.18 per share), compared to $12.5 million ($0.37 per share) in the prior year period.
• Net cash used in operating activities for the nine months ended September 30, 2026, was $4.8 million, compared to $6.3 million in the prior year period.
• Net cash used in investing activities for the nine months ended September 30, 2026, was $15.7 million, compared to $9.7 million in the prior year period.
• Net cash provided by financing activities for the nine months ended September 30, 2026, was $22.9 million, compared to $9.6 million in the prior year period.

Guidance and Future Outlook:

• The Company targets first production at the Big Sky Carbon Hub in spring 2027.
• Phase 1 plant fabrication is underway, with on-site civil work beginning in the coming weeks and equipment installation planned from late Q4 2026 into Q1 2027.
• A final investment decision on Phase 2 is expected in the coming months, following the completion of financing and final plant sizing.
• Discussions are ongoing regarding a new, larger senior secured credit facility to expand borrowing capacity and financial flexibility.
• Discussions on monetizing Phase 1 Section 45Q tax credits are progressing.
• The Big Rose MRV plan is in the final stage of the EPA approval process, with the timing of the final decision resting with the agency.

Business Segments and Product Lines:

• The Company operates three distinct business lines: helium production, carbon management, and low-decline oil production.
• Phase 1 of the Big Sky Carbon Hub is designed to produce approximately 14 MMcf of high-purity helium per year and capture/sequester approximately 125,000 metric tons of CO₂ annually at initial operations.
• In April 2026, the Company executed a five-year, 100% take-or-pay helium sales agreement with an investment-grade global industrial gas company at a fixed price of $285 per Mcf realized at the plant gate, with CPI-linked escalation beginning March 1, 2028.
• The helium offtake agreement provides contracted revenue from first production, with the buyer responsible for all transportation, logistics, and downstream delivery.
• In-field gathering and injection lines connecting production wells to the processing facility and carrying CO₂ to the Big Rose injection well are complete.
• Three production wells are drilled, completed, and ready for tie-in; two Class II permitted injection wells are operational.
• Engineering and planning are underway for Phase 2, a second processing plant on the same footprint utilizing existing infrastructure and permits.
• The Cut Bank MRV plan, submitted December 17, 2025, supports CO₂-enhanced oil recovery development at the Cut Bank field.

Market and Competitive Landscape:

• On October 23, 2026, the U.S. Department of Designated helium a critical material under the Energy Act of 2020, citing its essential role in semiconductor manufacturing and supply chain risks.
• The Company's pivot to an industrial gas, energy, and carbon management platform was funded by the monetization of legacy assets, including divestitures of Wyoming and West Texas properties in 2025.

Risks and Challenges:

• Lease operating expenses included $1.2 million in remediation costs associated with a released gathering line in legacy oil operations; the Company has submitted an insurance claim for up to $1.0 million but recognized no receivable as of quarter-end.
• The timing of the EPA's final decision on the Big Rose MRV plan rests with the agency, though the plan is not a condition to starting Phase 1 or selling helium.
• Forward-looking statements highlight risks related to construction completion on time and on budget, access to capital, commodity price volatility, regulatory changes, and potential insurance recovery delays.

Management Commentary and Tone:

• CEO Ryan Smith described the third quarter as focused on execution, noting that the project remains on schedule.
• Management expressed confidence in the outcome of the EPA approval process, stating that agency feedback has not changed their expectations.
• Management highlighted the strategic value of the domestic helium supply following the DOE's critical material designation.
• The tone regarding the path to first production was described as "clear," with the Company executing against its plan.

Other Key Points:

• Subsequent to quarter-end, the Company sold 15 non-core wells in East Texas for net proceeds of approximately $0.4 million, with the buyer assuming approximately $0.9 million of asset retirement obligations.
• The Company's helium is sold under a five-year, 100% take-or-pay contract from day one.
• The Big Rose MRV plan was submitted October 9, 2025, and accepted by the EPA November 12, 2025, following a federal government shutdown.
• The Company is in discussions on a new, larger credit facility and 45Q monetization to support the path to first production.
• Phase 1 processing facility fabrication has begun under a fixed-scope EPC agreement with CANUSA EPC.