Advantage Announces 2026 Budget, Featuring Strong Per-Share Growth with Accelerating Free Cash Flow Outlook

Executive Summary

• Advantage Energy released its 2026 budget, projecting a 26% year‑over‑year increase in adjusted funds flow per share and production growth of ~6% (11% excluding a Glacier Gas Plant turnaround).
• Total capital spending is forecast at $300 M–$330 M, with $215 M–$245 M allocated to drill‑complete‑equip‑tie‑in (DCET) activities focused on high‑return Montney gas wells.
• The company expects free cash flow yield of 8%–10%, a reinvestment ratio of ~65% of AFF, and plans to allocate all FCF to share repurchases once net debt is within the $400 M–$500 M target range.

Key Details

• Production Outlook: Average 81,000–85,000 boe/d in 2026 (≈76,000 boe/d H1; 90,000 boe/d H2). Glacier Gas Plant turnaround (21 days, Q2) will reduce output by ~3,800 boe/d.
• Capital Program:
• Total spend: $300 M–$330 M.
• DCET spend: $215 M–$245 M (≈$8,000/boe/d efficiency).
• Progress Gas Plant completion: $35 M (commissioning Q2‑2026).
• Glacier Gas Plant turnaround: $20 M (Q2‑2026).
• Well Activity: 15 Glacier Montney wells, 3 Progress Montney wells, 6 net Charlie Lake wells planned for 2026.
• Financial Metrics:
• AFF per share growth: +26% YoY (based on strip pricing as of 17 Nov 2025).
• Reinvestment ratio: ~65% of AFF.
• Free cash flow yield: 8%–10%.
• Net debt target: $400 M–$500 M (<1.0× debt/AFF).
• Operational Highlights:
• Record Montney well pad: First well IP30 = 4,567 boe/d (26.5 mmcf/d gas, 150 bbl/d NGLs); second well IP30 = 3,067 boe/d; third well averaging 17.8 mmcf/d raw gas since 19 Nov 2025.
• Planned Glacier Gas Plant turnaround in May 2026 will integrate Entropy’s CCS project and a 15 MW turbine, cutting emissions >85%.
• Hedging Program: Approx. 43% of Q4‑2025 natural gas forecast hedged; 31% for calendar 2026 and 10% for 2027. Oil & condensate hedged at 43% (Q4‑2025) and 17% (H1‑2026).
• Three‑Year Plan Update: 2026 capital $10 M lower than original plan; expected FCF $350 M–$400 M over next two years; no cash income taxes anticipated until 2028.

Notable Quotes

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