Journey Announces Second Quarter 2025 Financial and Operating Results

Executive Summary

• Journey Energy Inc. reported financial and operating results for the three and six months ended June 30, 2025, highlighting a significant increase in Adjusted Funds Flow and net income compared to the prior year period.
• The company achieved strong initial production results from its Duvernay light oil wells, with new wells averaging IP30 rates exceeding internal expectations and contributing to a shift toward higher liquids weighting in production.
• Subsequent to the quarter, Journey entered into agreements to divest two minor producing assets for $3.2 million and updated its 2025 capital spending guidance to $54 million, while maintaining production volume guidance.

Key Details

• Financial Performance (Q2 2025):
  • Net Income: $4.1 million ($0.06 per basic/diluted share), compared to a loss of $2.3 million in Q2 2024.
  • Adjusted Funds Flow: $15.9 million ($0.24 per share), a 67% increase from $9.5 million in Q2 2024.
  • Cash Flow from Operations: $11.1 million.
  • Net Debt: $64.5 million.
• Operational Performance (Q2 2025):
  • Average Sales Volumes: 10,950 boe/d (49% crude oil, 10% NGLs, 41% natural gas).
  • Field Operating Costs: Reduced by 8% from Q1 2025 and 25% from Q2 2024 to $17.58/boe.
  • Royalty Expense: Decreased to $7.24/boe due to lower commodity prices and favorable Crown royalty rates on Duvernay wells.
• Duvernay Drilling & Production:
  • Drilled 3 (0.9 net) wells in Q2; total year-to-date drilled: 8 (2.4 net).
  • Completed 2.1 net Duvernay wells to date.
  • Well Performance (06-04-043-03W5 Pad):
    • Well 12-26-042-03W5: ~1,228 boe/d (87% liquids).
    • Well 09-27-042-03W5: ~1,315 boe/d (86% liquids).
    • Well 07-27-042-03W5: ~1,470 boe/d (86% liquids).
  • Subsequent Q3 Activity: Brought on 4 (1.2 net) wells from the 02-22-042-03W5 pad; initial 15-day averages exceeded 1,600 boe/d and 1,300 bbl/d of crude/NGLs per well.
  • Capital spent on Duvernay to date in 2025: $30.7 million (land, drilling, completions, facilities).
• Power Generation Projects:
  • Gilby: Entered Stage 5 of grid connection; capital program increased by $2 million (total ~$4.25 million); on-stream date remains Q4 2025.
  • Mazeppa: Meter station upgrade complete; engine testing planned for Q3 2025.
• Divestments:
  • Agreed to sell two minor assets in central Alberta for $3.2 million (pre-closing adjustments).
  • Expected to reduce corporate asset retirement obligations by ~$7.2 million.
  • Total minor divestments agreed to in 2025 now total $6.6 million.
• Guidance Update (2025):
  • Production: Unchanged at 10,800–11,200 boe/d (liquids weighting increased to 60%).
  • Capital Spending: Reduced from $55 million to $54 million (net of A&D).
  • YTD Capital Spent (net of A&D): $37 million.
• Commodity Prices (Q2 2025):
  • Natural Gas: $1.86/mcf (+92% YoY).
  • Crude Oil: $75.32/bbl (-19% YoY).
  • NGLs: $39.64/bbl (-14% YoY).
  • Realized Boe: $45.36/boe.