TENAZ ENERGY CORP. ANNOUNCES Q2 2025 RESULTS

Executive Summary

• Tenaz Energy Corp. reported financial and operating results for the three and six months ended June 30, 2025, marking the first full reporting period since the acquisition of NAM Offshore B.V. (TEN).
• The company reported a significant increase in profitability, with Q2 2025 Net Income reaching $188.6 million ($6.73/share) and Funds Flow from Operations (FFO) of $17.2 million ($0.61/share), driven by two months of TEN production and a $192.2 million gain on acquisition.
• Production volumes surged 176% quarter-over-quarter to an average of 7,998 boe/d, primarily due to the inclusion of TEN assets, despite planned maintenance turnarounds affecting both Canadian and Dutch operations.

Key Details

• Financial Performance (Q2 2025):
  • Net Income: $188.6 million ($6.73/share basic, $5.77/share diluted).
  • Funds Flow from Operations (FFO): $17.2 million ($0.61/share basic, $0.53/share diluted).
  • Net Debt: $100.2 million (largely attributable to contingent earn-out liabilities of $53.7 million current and $35.6 million long-term).
  • Capital Expenditures: $10.8 million.
• Financial Performance (Six Months Ended June 30, 2025):
  • Net Income: $183.3 million ($6.59/share basic, $5.60/share diluted).
  • FFO: $18.2 million ($0.65/share basic, $0.56/share diluted).
  • Cash Flow from Operating Activities: $46.0 million.
• Production Volumes:
  • Q2 2025 Average Daily Production: 7,998 boe/d (up 176% from Q1 2025).
  • Breakdown: 1,244 bbl/d Heavy Crude Oil, 103 bbl/d NGLs, 39,909 Mcf/d Natural Gas.
  • Canadian Production: Up 19% from Q1 2025 and 32% from Q2 2024, driven by new wells drilled in Q1 2025 (approx. 1,000 boe/d gross).
  • Netherlands (Pre-NOBV) Production: 775 boe/d (down 20% from Q1 due to maintenance downtime).
• Operational Updates:
  • Successfully completed a 21-day major turnaround at the Den Helder Gas Terminal (HiCal and LoCal plants) and K14 offshore hub.
  • TEN contributed approximately $23.5 million to Q2 FFO.
  • Residual transaction costs of $6.8 million were recorded related to the TEN acquisition transition.
• Capital Allocation & Shareholder Returns:
  • NCIB Program: Deployed $3.1 million year-to-date, repurchasing 0.21 million shares at an average price of $14.83/share.
  • Total shares retired since Q3 2022: 2.3 million (8.0% of basic common shares) at an average cost of $3.90/share.
• Commodity Prices & Hedging:
  • TTF Gas (Netherlands): Averaged €35.37/MWh ($16.27/Mcf) in Q2 2025. Hedged ~50% of 2025 Netherlands gas production at an average price of €35.45/MWh.
  • WCS/WTI: WCS differential averaged ~US$10/bbl. Hedged 21% of H2 2025 WTI exposure via collar (floor $60/bbl, ceiling $75/bbl).
  • AECO Gas: Averaged $1.69/MMBtu. Hedged 18% of H2 2025 AECO exposure at $2.56/MMBtu.
• Corporate Actions:
  • Appointment of Mirzeta Delkic as Vice President of Human Resources and Sustainability.
  • Acquisition of NAM Offshore B.V. closed on May 1, 2025; recognized a $192.2 million gain on acquisition due to fair value of assets exceeding consideration paid.

Notable Quotes

• "We are encouraged by the commitment of the Netherlands to secure gas supply through responsible offshore development... Our Tenaz strategy is well timed to advance Europe's objective to increase gas production, and we are fortunate to have an asset base that has the potential to contribute meaningfully." – President's Message
• "Our primary objective now is to mobilize the necessary services to convert our compelling opportunity set into executed projects... We also intend to initiate a new well drilling program and are in the process of contracting a jack-up rig." – President's Message