Cardinal Energy Ltd. Announces Second Quarter 2025 Operating and Financial Results

Executive Summary

• Cardinal Energy Ltd. reported its operating and financial results for the second quarter ended June 30, 2025, highlighting a 3% increase in production over budget despite drilling only one conventional well in the first half of the year.
• The company reported Adjusted Funds Flow of $49.4 million for the quarter, a significant decrease from the prior year period, driven by lower realized commodity pricing and reduced production volumes.
• The Reford SAGD thermal project remains on budget and schedule, with all modular components installed and first steam expected in late August 2025, targeting 6,000 bbl/d of heavy oil production in early Q1 2026.

Key Details

• Production:
  • Average daily production: 21,184 boe/d (down 5% from Q2 2024's 22,376 boe/d).
  • Light oil: 7,332 bbl/d.
  • Medium/heavy oil: 10,822 bbl/d.
  • NGL: 832 bbl/d.
  • Conventional natural gas: 13,190 mcf/d.
• Financial Performance (Q2 2025 vs Q2 2024):
  • Petroleum and natural gas revenue: $127.4 million (down 25%).
  • Cash flow from operating activities: $43.6 million (down 39%).
  • Adjusted funds flow: $49.4 million ($0.31 per share), down from $81.8 million ($0.51 per share) in Q2 2024.
  • Net earnings: $15.5 million ($0.10 per share), down from $40.7 million ($0.26 per share) in Q2 2024.
  • Netback: $30.15/boe (down 30% from $43.04/boe in Q2 2024).
  • Net operating expenses: $23.04/boe (down 5% from prior period).
• Capital Expenditures:
  • Total capital expenditures: $12.7 million (down 35% from Q2 2024).
  • Development capital expenditures: $12.7 million.
  • Exploration & Evaluation (E&E) expenditures: $41.3 million (up 282% from Q2 2024, largely due to Reford project costs).
  • Reford thermal project investment: $32.3 million in Q2 2025.
• Balance Sheet & Debt:
  • Net debt increased to $227.1 million (from $99.2 million at June 30, 2024).
  • Bank debt drawn: $94.6 million (39% of the $240 million credit facility).
  • Debentures: $99.5 million (issued in Q1 2025).
  • Net debt to adjusted funds flow ratio: 0.9x.
• Shareholder Returns:
  • Dividends declared: $28.9 million ($0.06 per share per month).
  • Total payout ratio: 84%.
• Project Updates:
  • Reford SAGD: All modular components installed and mechanically complete; six initial SAGD well pairs drilled and completed ahead of schedule; commissioning underway; first steam expected late August 2025.
  • Conventional: One well drilled and completed in Q2 2025; four additional wells planned for H2 2025.
  • ESG: Approximately 42,000 tonnes of CO2 sequestered in Q2 2025; total 5.9 million tonnes sequestered at Midale, contributing to a 10% production increase over the past year.

Notable Quotes

• "Second quarter 2025 production of 21,184 boe/d which was 3% higher than budget despite drilling only one (1.0 net) conventional oil producer in the first half of 2025 as we continued to focus our capital expenditures on the completion of the Reford steam-assisted gravity drainage ("SAGD") project..."
• "During the second quarter of 2025, Cardinal incurred approximately $32.3 million on our thermal project at Reford, Saskatchewan which has now moved into the testing and commissioning stage with first steam scheduled for later in the third quarter. The project continues to remain on budget and on schedule..."
• "Cardinal remained committed to our successful shareholder return strategy with a consistent $0.06 per share per month dividend leading to $28.9 million being returned to shareholders in the second quarter of 2025 resulting in an 84% total payout ratio."