Cavvy Energy Releases 2025 Q4 and Full Year Financial and Operating Results, 2025 Reserves, and Repays US$27 Million Debt in Q1 2026

Executive Summary

• Cavvy Energy reported full‑year 2025 net operating income (NOI) of $110.5 M ($0.38 per share) and Q4 2025 NOI of $20.8 M ($0.07 per share).
• Production averaged 23,904 boe/d in 2025 (80% natural gas); Q4 production was 23,003 boe/d (81% natural gas) – a modest 2% increase versus Q4‑24.
• Net debt fell to $170.6 M, a $26.9 M reduction YoY, driven by $27.0 M of long‑term debt repayments in Q1‑2026 and a $26.7 M sulphur pre‑payment that funded further loan paydowns.
• 2P reserves rose to 260.5 MMboe (+7% YoY) with an NPV10 value of $1,505.9 M (+20%).

Key Details

• Financial Highlights – 2025
• NOI: $110.5 M (‑$0.38/share); Funds Flow from Operations: $62.6 M ($0.22/share).
• Revenue: $293.8 M; Net income: $(3.2) M (loss of $0.01/share).
• Operating expenses down $21.0 M to $164.8 M (‑11%).

• Capital expenditures: $23.4 M (incl. $5.8 M reclamation/abandonment).

• Q4 2025 Highlights

• Production: 23,003 boe/d (81% gas); third‑party raw gas processing volumes 136.6 MMcf/d (+83%).
• Third‑party gathering & processing revenue: $7.2 M (+135% QoQ).

• Sulphur pricing agreement entered for 2026 to mitigate price volatility.

• Debt Repayment Activity (Q1 2026)

• Repaid US$27.0 M of long‑term debt; senior revolving facility undrawn at $22.0 M capacity.

• Senior term loan balance: US$55.3 M; subordinated loan balance: US$33.6 M (as of Mar 31 2026).

• Sulphur Pre‑payment & Warrants

• Received USD 26.7 M pre‑payment under Sulphur Pricing Agreement on Jan 6 2026; used to retire senior revolving loan ($18.1 M) and part of term loan ($8.9 M).
• Recognized $36.2 M deferred revenue for future sulphur deliveries (to be amortised Jan‑Jun 2026).

• On Mar 12 2026, exercised common share purchase warrants for $3.5 M, issuing 5,120,235 shares to Erikson affiliate.

• Reserves

• 2P reserves: 260.5 MMboe (+7% YoY); NPV10 $1,505.9 M (+20%).

• PDP reserves: 106.6 MMboe (‑7% YoY) with base decline of 5.9% (industry‑leading).

• Guidance for 2026

• Production: 22,000–24,500 boe/d; Sulphur 1,000–1,150 mt/d.

• NOI target: $125–$140 M; Capital spend: $35–$40 M; Total debt year‑end: $110–$125 M.

• Hedging Position (as of Mar 18 2026)

• Natural gas hedged: 71,140 GJ/d at avg $3.36/GJ (≈55% of guidance range).
• Condensate hedged: 1,528 bbl/d floor $84.81/bbl, ceiling $91.26/bbl.

• Sulphur sales: 1/3 fixed $225/mt, 1/3 collar $205–$250/mt, 1/3 spot FOB.

• Conference Call

• Scheduled for Thu Mar 19 2026, 8:30 a.m. MDT (10:30 a.m. EDT).

Notable Quotes

“Successful execution of our strategy led to strong performance in 2025 and created the foundation for the next phase of Cavvy’s growth,” – Darcy Reding, President & CEO.

All forward‑looking statements are subject to risks and uncertainties detailed in the full release.