ACT Energy Technologies Ltd. — Regulatory Filings 2021

Aug 4, 2021

FORM 51-102F3 MATERIAL CHANGE REPORT

1. Name and Address of Company:

Cathedral Energy Services Ltd. (the " Cathedral ") 6030 - 3 Street S.E. Calgary, AB T2H 1K2

2. Date of Material Change:

July 22, 2021

3. News Release:

Cathedral and Precision Drilling Corporation (" Precision ") issued a joint news release, which was issued and disseminated through the facilities of Canada NewsWire and filed on SEDAR on July 23, 2021.

4. Summary of Material Change:

On July 22, 2021, Cathedral and Precision completed the sale of Precision's directional drilling business (the " Transaction ") for a purchase price of $6,350,000. The Transaction was completed pursuant to the terms of an asset purchase agreement dated July 22, 2021 among Cathedral, Precision, and Precision Directional Services Ltd., an affiliate of Precision (the " Asset Purchase Agreement ").

In connection with the Transaction, Cathedral appointed Shuja Goraya to its board of directors (the " Cathedral Board ") as of July 22, 2021.

5. Full Description of Material Change:

5.1 Full Description of Material Change

On July 22, 2021, Cathedral and Precision completed the Transaction for a purchase price of $6,350,000 by way of the issuance of 13,400,000 common shares of Cathedral (" Consideration Shares ") and warrants to purchase 2,000,000 common shares of Cathedral at an exercise price of $0.60 per share for a period of two years from the closing date (" Consideration Warrants "). The Transaction included operating assets and personnel of Precision's directional drilling business (including its operations facility in Nisku, Alberta), along with an additional $3 million cash investment by Precision to support growth and expansion of Cathedral. As part of the Transaction, Cathedral and Precision entered into a strategic marketing alliance, which is expected to produce new U.S. and Canadian customer opportunities for Cathedral as well as potential integrated service offerings for customers.

Precision nominee Shuja Goraya, who is currently employed by Precision as their Chief Technology Officer, has been appointed to the Cathedral Board. Based in Houston, Texas, Mr. Goraya has a Bachelor of Engineering degree and has worked for over 25 years in the energy services sector, most recently with Schlumberger Limited. Mr. Goraya's technical expertise and extensive directional drilling background will be a strong complement to Cathedral's board.

In addition to a 4-month statutory hold period on the Consideration Shares, the parties have agreed to contractual restrictions on resale as follows: 25% of the Consideration Shares are restricted until January 22, 2022; a further 25% of the Consideration Shares are restricted until July 22, 2022; and a further 50% of the Consideration Shares are restricted until July 22, 2023, subject to certain exceptions.

The parties also entered into an investor rights agreement pursuant to which, among other things, Precision was granted the right to nominate a member to Cathedral's board of directors and certain customary participation rights in respect of future sales of securities by Cathedral. Precision will maintain such rights for so long as it continues to hold 10% or more of Cathedral's common shares (calculated on a partially diluted basis giving effect to the exercise or conversion of any convertible securities which may be held by Precision).

Precision did not hold any securities of Cathedral prior to the transaction. Post-closing, Precision owns approximately 17.5% of Cathedral's issued and outstanding common shares on a non-diluted basis and approximately 19.6% on a partially diluted basis giving effect to the exercise of the warrants.

5.2 Disclosure of Restructuring Transaction

Not applicable.

6. Reliance on Subsection 7.1(2) of National Instrument 51-102:

Not applicable.

7. Omitted Information:

Not applicable.

8. Executive Officer:

The name and business telephone number of the executive officer of the Company who is knowledgeable about the material change and this report is:

Ian Graham Chief Financial Officer (403) 265-2560

9. Date of Report:

August 3, 2021.

Forward-Looking Information

This material change report contains statements and information that, to the extent that they are not historical fact, may constitute "forward-looking information" within the meaning of applicable securities legislation. Forward-looking information is typically, but not always, identified by the use of words such as "proposed", "expected", "will" and similar words, including negatives thereof, or other similar expressions concerning matters that are not historical facts. Forward-looking information in this material change report includes, but is not limited to, statements regarding: the expected benefits of the strategic marketing alliance, use of cash received as part of the transaction, expected market share growth and expanded offering to Precision's former directional drilling customers and other statements relating to the expected operation of and benefit from the assets and business purchased in the Transaction going forward. Such forward-looking information is based on various assumptions and factors that may prove to be incorrect, including, but not limited to, factors and assumptions with respect to: the ability of Cathedral to integrate the acquired business into Cathedral's business; and the ability of Cathedral and Precision to successfully implement their strategic plans and initiatives and whether such strategic plans and initiatives will yield the expected benefits. Although Cathedral and Precision believe that the assumptions and factors on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Cathedral and Precision can give no assurance that it will prove to be correct or that any of the events anticipated by such forward-looking information will transpire or occur, or if any of them do so, what benefits Cathedral and Precision will derive there from. Actual results could differ materially from those currently anticipated due to a number of factors and risks including, but not limited to: conditions in the oil and gas market; fluctuations in market conditions, including in securities markets; economic factors; and the impact of general economic conditions and the COVID-19 pandemic in Canada and the United States. Additional information regarding risks and uncertainties relating to Cathedral's business are contained under the heading "Risk Factors" in Cathedral's annual information form for the financial year ended December 31, 2020 and Cathedral's other public filings, copies of which are available under Cathedral's profile on SEDAR at www.sedar.com.

The forward-looking information included in this material change report is made as of the date of this material change report and Cathedral and Precision do not undertake an obligation to publicly update such forwardlooking information to reflect new information, subsequent events or otherwise, except as required by applicable law.