Bonterra Energy Announces Charlie Lake Well Results, Strategic Charlie Lake Acquisition and 2026 Preliminary Budget Guidance

Executive Summary

• Bonterra announced strong Q4 2025 results from its two newest Charlie Lake wells, delivering an average 30‑day peak rate of ~1,325 BOE/d per well (combined 2,650 BOE/d).
• The company entered a definitive agreement to acquire adjacent Charlie Lake assets for $15.7 million cash, adding roughly 760 BOE/d of low‑decline production and 21 top‑tier drilling locations.
• Preliminary 2026 budget guidance was released: average daily production of 16,200–16,400 BOE/d, capital spend of $75–$80 M, funds flow of $105–$110 M, free funds flow of ~$21 M and a net‑debt/EBITDA ratio of ~1.3×.

Key Details

• Charlie Lake Well Performance
• Two gross (1.8 net) wells completed Q4 2025; three‑mile laterals with higher fracture intensity.
• Combined 30‑day peak rate: 2,650 BOE/d
  • ~1,100 bbl/d light crude oil
  • ~100 bbl/d NGLs
  • 8.7 MMcf/d conventional natural gas

• Additional 0.9‑net well to be completed and on‑stream in Q1 2026.

• Acquisition of Adjacent Asset

• Purchase price: $15.7 M cash (subject to customary closing adjustments).
• Production added: ~760 BOE/d (≈240 bbl/d light/medium crude, 40 bbl/d NGLs, 2,885 MMcf/d gas).
• Land increase: +41 net sections (36% larger Greater Bonanza Charlie Lake footprint).
• Drilling inventory gained: 21 top‑tier locations plus 3 low‑risk infill spots in the Doig formation.
• Infrastructure synergies: underutilized compression, batteries, gathering pipelines enabling “half‑cycle” drilling and new gas processing options.

• Funding: Revolving credit facility increased from $125 M to $150 M; acquisition funded via this facility; closing expected before 31 Dec 2025.

• Preliminary 2026 Budget Guidance

• Capital expenditures: $75–$80 M.
• Average daily production: 16,200–16,400 BOE/d (≈50‑52% oil & liquids).
• Funds flow: $105–$110 M ($2.87–$3.00 per share).
• Free funds flow: ~$21 M ($0.55 per share) → ~14% free‑funds‑flow yield (based on WTI $60/bbl & AECO $3.00/GJ).
• Asset retirement obligations (ARO): $8 M.

• Net‑debt/EBITDA (year‑end 2026): ≈1.3×.

• Capital Allocation Plan (2026)

• ~60% to Charlie Lake core: completion of one DUC well, drilling/completion of six gross wells, infrastructure upgrades.
• ~10% to Montney: completion of one DUC well.
• ~25% to Cardium: water‑flood projects and development drilling/completions.

• ~5% to land & facilities maintenance.

• Risk Management / Hedging

• Hedge coverage: ~31% of expected crude oil production, ~21% of natural gas (net of royalties) through H1 2026.
• Crude price contracts: WTI $55‑$72.50/bbl for 1,750 bbl/d; additional fixed price of $60.04/bbl for 500 bbl/d in H2 2026.

• Natural gas contracts: $1.75‑$3.30/GJ for 10,750 GJ/d (first half); $3.10‑$3.30/GJ for 6,679 GJ/d (second half & Q1 2027).

• Sensitivity Highlights

• +$1.00 WTI → +$2.18 M funds flow (+$0.06 per share).
• +$0.10 AECO gas price → +$1.48 M funds flow (+$0.04 per share).
• +$0.01 CAD/USD exchange rate → +$1.02 M funds flow (+$0.03 per share).

Notable Quotes

• “Coming off the two most productive wells in Bonterra’s history, this transaction complements our existing operations and adds meaningful depth and quality of drilling inventory to Bonterra’s Charlie Lake asset,” – Patrick Oliver, President & CEO.

Materiality Assessment: Material – Positive (the release contains significant operational results, a cash acquisition, and forward‑looking budget guidance that are likely to influence investor decisions).