Cavvy Releases Q3 2025 Financial and Operating Results, Executes Forward Price Agreement for 2026 Sulphur Sales, and Increases 2025 Guidance
Executive Summary
- Cavvy Energy reported Q3 2025 net operating income of $30.6 M and funds flow from operations of $12.9 M, driven by a 105% increase in third‑party gas processing volumes.
- The company executed a structured forward sulphur pricing agreement for 2026, providing downside protection (minimum $225/mt) while retaining upside participation.
- Revised 2025 guidance lifts net operating income to $100–110 M and operating netback to $11.50–12.50/boe, without increasing capital spend.
Key Details
- Production & Processing
- Produced 23,956 boe/d (80% natural gas), up 4% YoY.
- Third‑party raw gas processing volumes: 136.1 MMcf/d, a 105% increase vs Q3 2024.
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Sulphur production: 1,120 mt/d, 85% sold under below‑market contract expiring 31 Dec 2025.
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Financial Highlights
- Net operating income (NOI): $30.6 M ($0.11 per share).
- Funds flow from operations: $12.9 M ($0.04 per share).
- Net debt reduced to $163.7 M, down $3.2 M QoQ.
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Operating expenses decreased by $1.8 M (5%) to $36.7 M YoY.
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Forward Sulphur Pricing Agreement (2026)
- One‑third of sales at fixed US$225/mt.
- One‑third under collar: floor US$205/mt, cap US$250/mt.
- One‑third at spot FOB Vancouver price.
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Applies to 100% of marketed sulphur; no minimum volume commitment.
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Revised 2025 Guidance | Metric | Revised Low | Revised High | |--------|-------------|--------------| | Total production (boe/d) | 23,000 | 25,000 | | Net operating income ($000s) | 100,000 | 110,000 | | Operating netback ($/boe) | 11.50 | 12.50 | | Capital expenditures ($000s) | 25,000 | 30,000 |
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Hedge Position (as of 6 Nov 2025)
- Natural gas: 110,000 GJ/d hedged at avg $3.32/GJ.
- Condensate: 1,641 bbl/d hedged with floor $84.67/bbl, ceiling $92.05/bbl.
- Power purchases: 55 MW hedged at $79.08/MWh.
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Unrealized hedge gain ≈ $22.5 M.
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Outlook & Priorities
- Focus on balance‑sheet strengthening, third‑party volume growth, cost reductions, and non‑core asset dispositions.
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No new development drilling planned for 2025; low‑interest, non‑operated well to spud in Oct 2025.
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Conference Call
- Date: 7 Nov 2025, 8:30 a.m. MDT / 10:30 a.m. EDT.
- Webcast registration links provided.
Notable Quotes
“We generated over $30 million of net operating income, supported by 14% growth in third‑party processing volumes… we are also very pleased to announce the execution of a structured forward pricing agreement for our 2026 sulphur sales which provides downside revenue protection while preserving meaningful upside participation.” – Darcy Reding, President & CEO.