Cavvy Releases Q2 2025 Financial and Operating Results

Core Insights - Cavvy Energy Ltd. reported strong financial results for Q2 2025, with a production of 26,064 boe/d and a Net Operating Income (NOI) of $26.5 million, reflecting a strategic focus on debt reduction and operational optimization [1][5][2] Financial Performance - The company generated a NOI of $26.5 million, equating to $0.09 per share, and a Funds Flow from Operations of $14.5 million, or $0.05 per share [5] - Net debt was reduced by $18.6 million to $166.9 million, demonstrating a commitment to lowering financial leverage [2][5] - Operating expenses decreased by $12.6 million (24%) compared to Q2 2024, totaling $40.4 million, attributed to the shut-in of uneconomic production [5] Production and Processing - Total production was 26,064 boe/d, with 81% being natural gas, down 16% from Q2 2024 due to the voluntary shut-in of approximately 9,000 boe/d of uneconomic dry gas production [5] - Third-party processing volumes increased by 66.0 MMcf/d (123%) compared to Q2 2024, reaching 119.8 MMcf/d, which contributed to a revenue increase of $5.4 million (129%) [5][10] Strategic Initiatives - The company is focused on filling gas processing facilities and preparing for the expiration of a long-term fixed price sulphur marketing agreement on December 31, 2025, which is expected to enhance revenue opportunities [2][11] - A corporate rebranding to Cavvy Energy Ltd. was completed on May 12, 2025, aligning with its strategic pivot as a western Canadian energy company [5] Market Outlook - The company does not plan to resume drilling operations in 2025 due to current natural gas price outlook but may participate in a non-operated, liquids-rich gas drilling prospect [12] - Management expects 2025 NOI to be at or above the high end of the guidance range, with total production guidance set between 23,000 and 25,000 boe/d [7][8] Hedging Strategy - Cavvy has hedged 110,000 GJ/d of its 2025 natural gas production at a weighted average fixed price of $3.32/GJ, and 1,679 bbl/d of condensate production with a floor price of CAD$84.42/bbl [14] - The company’s hedge portfolio had a discounted unrealized gain of approximately $52.5 million as of August 12, 2025 [15]