Advantage Announces Operations Update, Conclusion of Strategic Review and 2025 Reserves

Executive Summary

• Advantage Energy concluded its strategic review, determining that continuing its current strategic plan is optimal for maximizing shareholder value, as all evaluated sale, merger, or transaction proposals were inferior to the company's intrinsic value and long-term prospects.
• The company reported strong 2025 operational performance, including $287.7 million in net capital expenditures, Q4 production averaging 79,823 boe/d, and early 2026 production exceeding budget at 80,000 boe/d, driven by successful well performance in the Glacier and Montney areas.
• 2025 reserves increased 1% across all categories (PDP, 1P, and 2P), with total 1P reserves reaching 476.7 million boe and a net present value of $2.8 billion. The company reduced its 2026 capital program by $20 million while maintaining unchanged production guidance and prioritizing debt reduction.

Key Details

• Strategic Review Outcome: Board and Special Committee unanimously rejected all strategic alternatives (sale, merger, other transactions) as inferior to intrinsic value; Special Committee dissolved; focus remains on executing the existing strategic plan.
• 2025 Capital & Operations: Net capital expenditures totaled $287.7 million; closed a non-producing asset divestiture in January for $12 million cash proceeds; shed midstream processing contracts to reduce unit operating costs; added 22,500 GJ/d of physical natural gas transportation to the Ventura market (7-year term starting April 1, 2029).
• Production Metrics: Q4 2025 averaged 79,823 boe/d (408.3 mmcf/d gas, 7,372 bbls/d crude, 938 bbls/d condensate, 3,462 bbls/d NGLs); January 2026 averaged 80,000 boe/d (86% gas), exceeding budget by 3,000 boe/d due to strong performance from 6 new north Glacier wells and early results from Montney and Charlie Lake pads.
• Capital Efficiency: Top 9 Alberta Montney gas wells in 2025 delivered exceptional capital efficiencies based on IP90 rates.
• Hedging Program: Hedged ~33% of forecasted 2026 gas production and ~11% for 2027; hedged ~27% of 2026 oil/condensate and ~6% for 2027.
• 2026 Outlook & Capital: 2026 capital program reduced by ~$20 million by deferring lowest rate-of-return wells; production guidance unchanged (~6% growth, or ~11% excluding Glacier Gas Plant turnaround); second-half 2026 production expected to average 90,000 boe/d (86% gas) following Progress Gas Plant commissioning and Glacier turnaround in Q2.
• Free Cash Flow & Capital Returns: FCF profile weighted to H2 2026; priority on debt reduction with opportunistic share repurchases as net debt target approaches; may moderate 2027 spending if basin oversupply emerges.
• 2025 Reserves (1% YoY Increase):
• PDP: 173.4 million boe, F&D cost $9.36/boe, NPV $1.4 billion ($8.21/share)
• 1P: 476.7 million boe, F&D cost $7.68/boe, NPV $2.8 billion ($16.85/share)
• 2P: 689.2 million boe, F&D cost $8.58/boe, NPV $4.1 billion ($24.83/share)
• PDP reserve additions replaced 106% of production.
• Future Well Locations: 1,025 gross future well locations booked (601 developed, 424 undeveloped) across Glacier (490), Charlie Lake (360), Valhalla (80), Wembley (65), and Progress (30).
• Pricing Assumptions (IQRE Average Forecast 2026-2032): Canadian Light Sweet Crude projected at $77.54–$97.98 Cdn/bbl; AECO-C Natural Gas at $3.00–$3.80 Cdn/mmbtu; Exchange rate assumed at $0.73–$0.74 US/CAD.

Notable Quotes

• "The Board has determined that the continued execution of the Corporation's strategic plan is the best approach to maximize shareholder value at this time. The Special Committee ran a comprehensive and disciplined process, supported by highly experienced external advisors, and the Board is aligned in its view that none of the alternatives appropriately reflect the intrinsic value of Advantage's top-tier assets and long-term outlook. We remain committed to maximizing shareholder value and will regularly assess new opportunities as part of our strategic planning cycle." – John Festival, Chair of the Board