Strathcona Resources Ltd. Reports Second Quarter 2025 Financial and Operating Results, and Announces Quarterly Dividend

Core Viewpoint - Strathcona Resources Ltd. reported its second quarter 2025 financial and operational results, highlighting a quarterly dividend declaration of $0.30 per common share and a strategic transition to a pure play heavy oil business following the divestiture of its Montney assets [1][15]. Financial Performance - The company experienced a decrease in production to 181,368 boe/d, a 7% decline from the previous quarter, attributed to a major turnaround at the Tucker property and the divestiture of the Groundbirch Montney property [8]. - Operating Earnings for Q2 2025 were reported at $225.5 million, translating to $1.05 per share, while Free Cash Flow was $32.0 million, or $0.15 per share [4][8]. - Oil and natural gas sales, net of blending costs, totaled $970.8 million, down from $1,184.8 million in Q2 2024 [3][21]. Production and Sales Metrics - Total oil production averaged 128,803 bbls/d, with 71% of production being oil and condensate [3][4]. - The average WTI price was $63.74 per barrel, a significant decrease from $80.57 in the same quarter of the previous year [3][4]. - The effective royalty rate decreased to 10.8% from 16.4% year-over-year, indicating improved cost management [7]. Strategic Actions - The company completed the sale of its Kakwa and Grande Prairie Montney properties, marking a significant step in its transition to focus solely on heavy oil [8]. - A total gain of approximately $760 million from the sale of Montney assets is expected to be recorded in Q3 2025 [8]. - The major turnaround at the Tucker property was completed safely, with production exceeding expectations due to the performance of new lower drainage wells [9]. Future Outlook - Strathcona's 2025 production guidance remains unchanged at a midpoint of 152 – 158 Mboe/d, with a capital budget of $1.2 billion [12]. - The company is targeting first oil from the Meota Central project in Q4 2026, with a projected peak oil rate of approximately 13 Mbbls/d [10]. - The offer for MEG Energy remains outstanding until September 15, 2025, with intentions to return approximately $10 per share to shareholders if the offer is unsuccessful [13][14].