Bonterra Energy Announces Second Quarter 2025 Financial Results and Operations Update

Executive Summary

• Bonterra Energy Corp. reported its financial and operating results for the second quarter and first half of 2025, highlighting record production levels, a reduction in net debt, and an upward revision of annual production guidance.
• The company achieved a 15% year-over-year increase in production, averaging 16,399 BOE per day in Q2 2025, driven by successful drilling in the Charlie Lake and Montney plays.
• Financially, the company reported a net loss for the six-month period primarily due to a one-time debt extinguishment cost of $11.6 million, but maintained strong cash flow generation and improved its balance sheet through refinancing activities.

Key Details

• Production:
  • Q2 2025 average production: 16,399 BOE per day (vs. 14,242 BOE per day in Q2 2024).
  • Light oil: 6,794 bbl/day (avg price $79.85/bbl).
  • NGLs: 1,508 bbl/day (avg price $42.58/bbl).
  • Conventional natural gas: 48,584 MCF/day (avg price $2.03/MCF).
  • 2025 Annual Production Guidance raised to 15,000–15,200 BOE per day (from 14,600–14,800 BOE per day).
• Financial Performance (Three Months Ended June 30, 2025):
  • Revenue: $64.2 million.
  • Funds Flow: $23.1 million ($0.62 per diluted share).
  • Cash Flow from Operations: $30.0 million.
  • Net Loss: $(1.3) million ($(0.04) per share).
  • Field Netback: $21.28 per BOE.
  • Cash Netback: $15.47 per BOE.
  • Production Costs: $16.44 per BOE (down 8% from Q1 2025).
• Financial Performance (Six Months Ended June 30, 2025):
  • Revenue: $134.9 million.
  • Funds Flow: $50.7 million ($1.35 per diluted share).
  • Cash Flow from Operations: $59.6 million.
  • Net Loss: $(8.9) million ($(0.24) per share), primarily due to $11.6 million in one-time debt extinguishment costs.
  • Capital Expenditures: $38.8 million.
• Balance Sheet & Debt:
  • Net Debt: $169.9 million (down 9% from Q1 2025).
  • Net Debt-to-EBITDA Multiple: 1.3x.
  • Bank Debt: $29.6 million.
  • Shareholders' Equity: $530.9 million.
• Capital Allocation & Share Repurchases:
  • Normal Course Issuer Bid (NCIB): Purchased 491,500 common shares for cancellation at an average price of $3.50 per share during the first half of 2025.
  • 2025 Capital Guidance lowered to $65–$70 million (from $65–$75 million).
• Financing Activities:
  • Closed a private placement of $135 million in Senior Secured Second Lien Notes due 2030 on January 28, 2025.
  • Redeemed subordinated debentures in full on February 26, 2025.
  • Renewed Revolving Credit Facility on April 30, 2025, with increased borrowing base capacity of $125 million, lower interest rate spreads, and removal of financial covenants.
• Operational Updates:
  • Charlie Lake: Drilled and completed a three-well horizontal pad; wells averaged 90-day peak rates of 1,905 BOE/day. Plans to drill three additional gross wells in H2 2025.
  • Cardium: Drilled two wells in Q1 2025 with average per-well rates of ~140 bbl/day light crude oil.
  • Montney: Latest well producing ~585 BOE/day after 9 months; second well cumulatively produced 72,100 bbl of light crude oil over nine months.
• Risk Management:
  • Hedged approximately 35% of expected crude oil and natural gas production for the next nine months.
  • WTI collars between $55.00 and $75.50 USD/bbl for 1,811 bbl/day.
  • Natural gas prices secured between $1.75 and $3.30 per GJ for 15,122 GJ/day.

Notable Quotes

• "Production averaged record levels for the fourth consecutive quarter... This growth was driven by the success of Bonterra's drilling results to date in the Charlie Lake and Montney."
• "Higher production with less capital deployed is evidence of the Company's strategy to increase capital efficiencies while improving its free funds flow profile."