Cavvy Energy Announces 2026 Guidance & Capital Program

Core Insights - Cavvy Energy Ltd. has set a robust 2026 guidance with a target for debt reduction of $50 million and an expected increase in net operating income (NOI) of over 25% compared to mid-point 2025 guidance [1][2][3] Financial Performance - The company achieved a one-year total shareholder return of approximately 333% as of December 4, 2025, due to successful execution of its business plan, which included significant reductions in long-term debt and operating costs [2] - The 2026 NOI guidance is projected to be between $125 million and $140 million, supported by the growth of the third-party processing business and hedged revenue from hydrocarbons and sulphur [13] Production and Operations - Production guidance for 2026 is set at 22,000 to 24,500 barrels of oil equivalent per day (boe/d), factoring in the continued shut-in of uneconomic dry gas production [6][7] - Sulphur production is expected to be between 1,000 and 1,150 metric tonnes per day (mt/d), with sulphur sales revenue playing a significant role in business results for 2026 [8][9] Strategic Initiatives - The company plans to direct the majority of its growing free cash flow towards paying down long-term debt, aiming for a year-end debt target of $110 million to $125 million, a decrease from an estimated $160 million at the end of 2025 [3][4] - Specific priorities for 2026 include sustaining a safe and compliant business, capturing growth opportunities in third-party gathering and processing, and minimizing facility outages to maximize revenue [5][6] Risk Management - Cavvy has hedged approximately 71,140 gigajoules per day (GJ/d) of its 2026 natural gas production at a weighted average hedge price of $3.36/GJ, and 1,465 barrels per day (bbl/d) of its condensate production with a weighted average floor price of CAD$84.75/bbl [10] - A structured sulphur pricing agreement for 2026 has been executed, providing revenue protection against volatile sulphur pricing while allowing participation in the spot market [11] Capital Expenditures - The capital program for 2026 is estimated at $40 million to $45 million, which includes allocations for maintenance turnarounds, asset retirement obligations, and IT upgrades [12]