Core Concept - The report introduces the concept of capital efficiency [1]

Core Insights - Prospera Energy Inc. reported a significant increase in production and revenue in Q2 2025, driven by strategic capital investments and operational improvements [1][6]. Financial Performance - In Q2 2025, Prospera's P&NG sales revenue reached $4,902,540, a 7% increase from Q1 2025's $4,598,472, attributed to higher sales volumes despite weaker commodity prices [3][6]. - Operating costs decreased by 38% from Q1 2025 to $36.86/boe, due to the absence of unplanned maintenance and extreme cold weather costs [6]. - The operating netback improved to $1.61 million ($22.73/boe) in Q2 2025, up from $627K ($10.55/boe) in Q1 2025 [6]. Production and Capital Expenditures - Prospera invested $1.65 million in capital expenditures in Q2 2025, with $665K allocated for well reactivations, $534K for plant maintenance, and $448K for environmental work [1]. - The reactivation of eleven wells in the Luseland and Cuthbert properties added 87 boe/d of production, achieving improved capital efficiency of $7,644/boe compared to $9,317/boe in Q1 2025 [1]. Strategic Developments - The company secured $3.2 million in additional term-debt advances for development and optimization, and completed workforce optimization to streamline decision-making and reduce G&A costs [6]. - Prospera is set to participate in the EnerCom Energy Investment Conference in Denver, Colorado, on August 18 & 19, 2025, where key executives will present [5]. Operational Highlights - Average net sales increased by 18% to 780 boe/d in Q2 2025 from 660 boe/d in Q1 2025 [6]. - Total BOE sales volumes for Q2 2025 were 71,019, compared to 59,469 in Q1 2025 [3].

Financial Data and Key Metrics Changes - The company generated $38.6 million in adjusted EBITDA for Q2 2025, representing over a 600% increase quarter over quarter [11][12] - Net income for the quarter totaled $35.7 million, reflecting disciplined capital deployment [12] - Total revenue for the quarter was $68.1 million, supported by realized prices of $65.66 per barrel of oil, $8.7 per barrel for natural gas liquids, and $1.8 per Mcf for natural gas [12][13] - Total operating expenses were $25.66 per BOE, including lease operating expenses of $5.92 per BOE and general and administrative expenses of $8.58 per BOE [13][14] Business Line Data and Key Metrics Changes - The company achieved record production of 21,052 barrels of oil equivalent per day, with approximately 50% being oil, marking a 540% increase quarter over quarter [6][12] - Capital expenditures totaled $56.6 million for the quarter, aligned with the one rig development program targeting approximately 60 wells per year [5][14] Market Data and Key Metrics Changes - The company has a robust pipeline of accretive acquisition targets and is in the process of closing two additional acquisitions, adding approximately 18,000 net acres expected to close in Q3 [7][9] - The company’s hedging program covers approximately 85% of proved developed production, securing pricing of $68.04 per barrel of oil through 2025 [9][15] Company Strategy and Development Direction - The company focuses on delivering long-term sustainable value through disciplined growth, strong capital efficiency, and opportunistic portfolio expansion [4][29] - The strategy includes both organic growth and continued consolidation through acquisitions, with a commitment to capital efficiency and operational excellence [7][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving corporate cash flow breakeven and emphasized the importance of returning capital to shareholders through dividends [10][29] - The company revised its full-year production guidance from 7,000-8,000 BOE per day to 24,000-26,000 BOE per day, reflecting enhanced visibility and successful integration of recent acquisitions [28][29] Other Important Information - The company ended the quarter with total proved reserves of approximately 100 million BOE, with 55 million BOE classified as proved developed producing [16][17] - The integration of recently acquired assets has been seamless, with a focus on operational efficiency and cost control [17][18] Q&A Session Summary Question: Thoughts on M&A market and measuring returns on development locations - Management highlighted a disciplined approach to acquisitions, focusing on accretive deals at lower multiples compared to peers [35][36] Question: Key components to reduce well costs - Management discussed strategies to reduce well costs from $5.6 million to $5 million, emphasizing cost discipline and competitive vendor processes [38][39] Question: Learning curve with Bayswater assets and current production levels - Management noted that production from Bayswater assets was impacted by timing of the acquisition and expected to ramp up steadily [45][46] Question: Update on Rush Pad completions - Management confirmed that completions are on schedule and expressed excitement about the potential production rates [48][49] Question: Clarification on production numbers from Bayswater - Management clarified that the reported production numbers were accurate based on the effective date of the acquisition [56][57] Question: Guidance on future production and capital expenditures - Management indicated a significant ramp in production expected in Q3 and Q4, with capital expenditures aligned with guidance [59][61]

Financial Data and Key Metrics Changes - For Q2 2025, APA reported consolidated net income of $603 million or $1.67 per diluted share, with adjusted net income at $313 million or $0.87 per share, excluding significant items [23][25] - The company reduced net debt by over $850 million, a decrease of more than 15%, driven by proceeds from asset sales and positive working capital inflows [25][26] - Free cash flow generated during the quarter was $134 million, all returned to shareholders through dividends and share repurchases [24][25] Business Line Data and Key Metrics Changes - In the Permian, oil production exceeded guidance due to efficient field execution, maintaining production flat with a reduced rig count [7][8] - In Egypt, gas production exceeded quarterly guidance, while oil production declined modestly as focus shifted to gas development [9][10] - North Sea production was ahead of guidance, reflecting optimization of field operations [11] Market Data and Key Metrics Changes - The company raised guidance for gross gas volumes in Egypt for the next two quarters, benefiting from new price agreements [16] - The North Sea is expected to see a decline in taxable income due to increased production costs and lower revenues [91] Company Strategy and Development Direction - APA is committed to shareholder returns and balance sheet strengthening through debt reduction, with a long-term net debt target of $3 billion [26][27] - The company is focusing on capital efficiency improvements and cost reduction initiatives, anticipating $200 million in savings for 2025 [12][31] - Recent acreage awards in Egypt represent a 35% increase in the company's footprint, enhancing exploration potential [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability of cash flows and the ability to achieve long-term debt targets within three to five years [39][40] - The company is optimistic about the ongoing success of its gas program in Egypt and the potential for future growth in both BOE volumes and free cash flow [17][93] - Management highlighted the importance of capital efficiency in the Permian, with expectations for increased resource access and lower breakeven prices [61][66] Other Important Information - The company is advancing the Grand Morgu development in Suriname, with first oil expected in mid-2028 [17][78] - A successful discovery at Sockeye 2 in Alaska was reported, with plans for seismic reprocessing to optimize future drilling [19][84] Q&A Session Summary Question: Timeline for achieving the $3 billion long-term net debt target - Management indicated that the target is expected to be achieved in the next three to five years, depending on market conditions and cash flow generation [39][40] Question: Allocation of CapEx budget to Egypt following recent gas pricing agreements - Management confirmed that the new acreage award in Egypt would likely lead to a larger percentage of the total CapEx budget being allocated to gas development [41][42] Question: Visibility on inventory in the Permian and associated capital run rate - Management stated that they are characterizing inventory in the Permian and expect to provide more details by late this year or early next year [59][60] Question: Progress on the Grand Morgu project in Suriname - Management confirmed that the project is progressing as scheduled, with milestone payments being adjusted to reflect faster progress on certain aspects [78][79] Question: Free cash flow profile of the Egypt business - Management indicated that free cash flow for the Egypt business is expected to increase due to higher gas production and improved pricing [93]

Financial Data and Key Metrics Changes - The company reported consolidated EBITDAX of $338 million and adjusted free cash flow of $36 million for the second quarter [5] - Total production and oil volumes met guidance, despite weather-related impacts reducing daily production by approximately 780 barrels of oil equivalent per day [5] - Capital expenditures for the quarter were $257 million, exceeding the high end of guidance due to accelerated activities and drilling cost overruns [5][6] - Net debt increased by $8 million, while net working capital was reduced by $41 million [12] Business Line Data and Key Metrics Changes - The company executed three Horseshoe wells using water-based fluids, achieving significant cost savings [6] - Completion stage architecture improvements led to a 9% reduction in pumping cycle times, saving $13 per foot [7] - The company drilled the longest wells in its history, including a lateral of 16,515 feet, and set records for feet drilled in a single day [7][8] Market Data and Key Metrics Changes - The company has hedged approximately 95% of expected second-half oil production at an average price of $69 per barrel, along with hedging for natural gas and other products [14] - The optimization strategy is expected to lower WTI breakevens by about $5 per barrel across 1,300,000 completable lateral feet [10] Company Strategy and Development Direction - The company is shifting from an acquisition-focused strategy to optimizing existing assets, resulting in a 10% reduction in employee and contractor headcount [11][12] - The focus remains on generating adjusted free cash flow and reducing debt to build long-term shareholder value [14] - The company plans to bring 38 wells online by October, with expectations for significant debt reduction in the latter half of the year [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in generating substantial adjusted free cash flow in 2025, with a target of reducing net debt by approximately $185 million for the remainder of the year [13] - The company is optimistic about capital efficiency improvements and the potential for larger-scale developments in 2026 [20][41] Other Important Information - The company achieved a major milestone by drilling a stacked Horseshoe development, which is believed to be a first in the industry [9] - Sustainable savings from operational efficiencies are expected to deliver an incremental $25 million in cash flow per year [10] Q&A Session Summary Question: Production trajectory into 2026 and capital efficiency - Management highlighted improvements in capital efficiency and successful drilling practices that support production growth into 2026 [18][20] Question: Cost accomplishments and LOE projections - Management discussed ongoing cost reduction initiatives and the impact of transitioning to more efficient lift types [22][24] Question: Production cadence heading into 2026 - Management indicated that production would be high in Q4 2025 but expected a slight decrease in early 2026 due to timing [30] Question: Non-core asset sales and future cadence - Management stated that non-core asset sales are opportunistic and will continue as long as favorable prices are available [33] Question: Net debt trends and leverage outlook for 2026 - Management expects to continue paying down debt in 2026, with a corporate breakeven below $55 per barrel [39] Question: Development program and capital allocation for 2026 - Management confirmed a focus on larger-scale developments and capital efficiency opportunities moving into 2026 [41][42]

Migration & Technology - Extended is migrating from StarkEx to Starknet to build a more composable, trustless, and capital-efficient financial system [1] - The migration to Starknet will enable the introduction of a natively integrated lending and borrowing layer [3] - Extended is building an EVM-compatible network on top of Starknet, embedding unified margin logic directly into the base layer [6] Product & Features - Unified margin is at the core of Extended's vision, requiring a settlement layer capable of supporting multi-asset collateral, native borrowing and lending, and shared state across applications [1][2] - Users will be able to post any supported asset, including yield-bearing ones, as collateral and earn yield while trading [3] - Spot markets will be introduced, enabling unified margin to span perps, lending, and spot within a single cross-asset collateral engine [4] - The system aims to maximize available capital and reduce fragmentation by allowing users to manage one account with all assets contributing to a unified margin pool [4] User Experience & Vision - The transition to Starknet will be seamless from a user perspective, with Starknet serving as the settlement layer [5] - EVM users will be able to deposit and withdraw instantly across six major chains without directly interacting with Starknet [5] - The long-term vision includes a composable, trustless margin system designed for scale, with shared liquidity across apps, global access to margin, and unified risk management [6][7]

Core Viewpoint - NuVista Energy Ltd. has reported strong financial and operational results for the second quarter of 2025, highlighting a disciplined approach to capital allocation and a commitment to returning value to shareholders through share repurchases and production growth. Financial Highlights - Petroleum and natural gas revenues for Q2 2025 were $267.3 million, a decrease of 17% from $323.4 million in Q2 2024 [19] - Adjusted funds flow was $134.3 million ($0.67/share), down 4% from $140.2 million ($0.68/share) in Q2 2024 [19] - Net earnings for Q2 2025 were $80.5 million ($0.40/share), a decline of 28% from $111.0 million ($0.54/share) in Q2 2024 [19] - Net capital expenditures were $81.7 million, a decrease of 33% from $121.5 million in Q2 2024 [19] - The company ended the quarter with net debt of $303 million, maintaining a net debt to adjusted funds flow ratio of 0.6x [10] Operational Highlights - Average daily production for Q2 2025 was 73,595 Boe/d, slightly above the revised guidance of 73,500 Boe/d [6] - Production composition was 29% condensate, 9% natural gas liquids (NGLs), and 62% natural gas [6] - The company successfully drilled and completed 12 and 4 wells, respectively, during the quarter [6] - Operating netback was $24.27/Boe, reflecting a 12% increase compared to Q2 2024 [19] - Corporate netback was $20.05/Boe, an 8% increase from the previous year [19] Shareholder Returns - Over $100 million was directed towards share repurchases in the first half of 2025, with a commitment to return a minimum of $100 million through buybacks [7][8] - The company has renewed its Normal Course Issuer Bid (NCIB) program, allowing for the repurchase of up to 16,398,617 common shares [6] Guidance and Future Outlook - The company anticipates reaching a production milestone of 100,000 Boe/d in Q4 2025, with a full-year production guidance of approximately 83,000 Boe/d [12][13] - Annual net capital expenditure guidance for 2025 has been reduced to $425 - $450 million from $450 million [14] - For 2026, capital expenditures are projected to be $500 - $525 million, maintaining a production outlook of approximately 100,000 Boe/d [15] - The company expects to generate approximately $150 million in free adjusted funds flow in the second half of 2025, with a focus on shareholder returns [8][16]

Financial Performance - The company's total production averaged 841,000 BOE per day[2], with oil production reaching 387,000 barrels per day[2] - The company increased cash balances by $525 million to $1.8 billion[2] - Free cash flow was $589 million[12] - Q2 2025 core earnings were $0.84 per share[18] - The company paid $156 million in dividends and $249 million in share buybacks[19] Capital Management - Capital spending was $932 million, 7% under midpoint guidance[2, 13] - The company realized $400 million of annual benefit from Business Optimization Plan[3] - Full-year capital guidance lowered to a midpoint of $3.7 billion[3] - The company expects to retire $2.5 billion in absolute debt[22] Operational Efficiency - The company achieved 40% of its Business Optimization Plan[3] - Williston Basin 2-mile well costs improved by $1 million[15] - Delaware capital efficiencies improved by 12% for drilling and 15% for completions (2025 YTD vs FY 2024)[15]

Financial Data and Key Metrics Changes - The company reported a record upstream production of 831,000 barrels per day for the first half of 2025, an increase of 28,000 barrels per day compared to the previous record set in 2024 [7] - Refining throughput reached 462,000 barrels per day in the first half of 2025, surpassing the previous best by 20,000 barrels per day [9] - Adjusted funds from operations (AFFO) for Q2 was $2,700,000,000, translating to $2.2 per share, while adjusted operating earnings were $873,000,000 or $0.71 per share [32] - Operating costs for the first half of 2025 were $6,460,000,000, down $135,000,000 compared to 2024 despite higher production and throughput [12] Business Line Data and Key Metrics Changes - Upstream production in Q2 was 808,000 barrels per day, the highest second quarter in company history, with oil sands production at 748,000 barrels per day [31] - Refining utilization remained robust at 95%, with crude throughput of 442,000 barrels per day [32] - Product sales in the first half of 2025 reached 603,000 barrels per day, marking a 15,000 barrels per day increase from the previous year [10] Market Data and Key Metrics Changes - WTI crude oil prices averaged $63.7 per barrel in Q2, a decrease of almost $8 from Q1 [28] - The light-heavy differential tightened to $2.45 per barrel, while synthetic crude improved to a $1 per barrel premium [28] - The Canadian dollar strengthened against the US dollar, moving from $0.70 to $0.72 [29] Company Strategy and Development Direction - The company is focused on operational excellence and has implemented a new system to manage reliability and performance, aiming to reduce variability across its operations [23][24] - A commitment to reduce turnaround costs by $350,000,000 per year has been established, reflecting a focus on capital efficiency and operational improvements [18] - The company plans to continue enhancing its integrated business model to deliver reliable cash flows and strong returns to shareholders [27] Management's Comments on Operating Environment and Future Outlook - Management expects continued commodity market volatility but remains optimistic about refining margins due to positive supply-demand balances and low product inventories [30] - The company is confident in its ability to achieve high-end production guidance for the year, driven by operational improvements and reduced variability [70] - Future capital expenditures are expected to remain structurally lower, with a focus on maintaining resilience and returning capital to shareholders [72] Other Important Information - The company returned nearly $1,500,000,000 to shareholders in Q2, including $697,000,000 in dividends and $750,000,000 in share buybacks [26] - The company has repurchased 2.3% of its equity float so far this year, supporting future dividend and free funds flow per share growth [27] Q&A Session Summary Question: Has the stream day capacity risen on U1 after the project enhancements? - The stream day capacity remains around 140,000 barrels per day, but the upgraded metallurgy allows for extended turnaround intervals [40] Question: Is the $8,000,000,000 net debt target still appropriate given better cash flow generation? - The $8,000,000,000 target was based on a $50 per barrel WTI world, and management is open to reevaluating this as business performance improves [43] Question: How is the company driving stronger turnaround performance? - A systematic approach has been implemented, focusing on benchmarking, risk-based work selection, and detailed planning to achieve best-in-class turnaround performance [55] Question: Can you provide an update on Fort Hills' North Pit development? - Fort Hills is delivering on its three-year plan, with ongoing stripping and dewatering activities in the North Pit, and management is confident in future production increases [62] Question: What is the outlook for refining margins and the diesel market? - The refining macro environment is robust, with strong diesel cracks and record diesel production following recent turnarounds [98]

Financial Data and Key Metrics Changes - The company reported a record upstream production of 831,000 barrels per day for the first half of 2025, surpassing the previous record by 28,000 barrels per day [6] - Refining throughput reached 462,000 barrels per day in the first half of 2025, also a record, exceeding the previous best by 20,000 barrels per day [7] - Adjusted funds from operations (AFFO) for Q2 was $2,700,000,000, translating to $2.2 per share, while adjusted operating earnings were $873,000,000 or $0.71 per share [30] - The total operating costs for the first half of 2025 were $6,460,000,000, down $135,000,000 compared to 2024, despite higher production and throughput [10] Business Line Data and Key Metrics Changes - Upstream production in Q2 was 808,000 barrels per day, marking the highest second quarter in company history [29] - Oil sands production averaged 748,000 barrels per day in Q2, impacted by turnaround activities [29] - Refining utilization remained robust at 95%, with crude throughput of 442,000 barrels per day [30] - Product sales reached 603,000 barrels per day in the first half of 2025, a record high, with a 72,000 barrels per day increase compared to 2023 [9] Market Data and Key Metrics Changes - WTI crude prices averaged $63.7 per barrel in Q2, a decrease of nearly $8 from Q1 [25] - The light-heavy differential tightened to $2.45 per barrel, while synthetic crude improved to a $1 per barrel premium [26] - Diesel cracks remained strong, contributing positively to the refining margins [96] Company Strategy and Development Direction - The company is focused on operational excellence and reducing turnaround costs, raising the annual turnaround capital reduction target from $250,000,000 to $350,000,000 [17] - A new operational excellence system has been implemented to standardize performance across sites, aiming for best-in-class operations [22][23] - The company plans to maintain a disciplined approach to capital expenditures, with a revised guidance range of $5,700,000,000 to $5,900,000, reflecting a structural reduction [21][72] Management's Comments on Operating Environment and Future Outlook - Management anticipates continued commodity market volatility but remains optimistic about refining margins due to positive supply-demand balances [28] - The company is committed to returning excess funds to shareholders through buybacks and dividends, having returned $13,600,000,000 since the beginning of 2023 [25] - Future growth projects and long-term plans will be discussed at the end of 2025, as the company aims to achieve its three-year plan ahead of schedule [90][91] Other Important Information - The company completed significant capital projects under budget, including the Base Plant U1 coke drum replacement and the Syncrude Mildred Lake West mine extension [19][20] - The balance sheet remains strong with net debt at $7,700,000,000, and the company expects to manage working capital effectively [31] Q&A Session Summary Question: Has the stream day capacity risen on U1 after the project? - The stream day capacity remains around 140,000 barrels per day, but the upgraded metallurgy allows for extended turnaround intervals [40] Question: Is $8,000,000,000 the right net debt target going forward? - The $8,000,000,000 target was set based on a $50 per barrel WTI environment, and management is open to reevaluating this as cash flow generation improves [42][43] Question: How is the company driving stronger turnaround performance? - A systematic approach has been implemented, focusing on benchmarking, risk-based work selection, and detailed planning to achieve best-in-class turnaround performance [55][56] Question: Can you provide an update on Fort Hills' North Pit development? - Fort Hills is on track with its three-year plan, and the North Pit development is progressing as planned, with confidence in increasing production [61] Question: When will the company discuss growth projects like Firebag expansion? - The company plans to provide more details on growth projects at the end of 2025, as it aims to achieve its current three-year plan ahead of schedule [90][91] Question: What is the outlook for the refining macro environment? - The refining environment is expected to remain robust, particularly for diesel, with strong local and global demand supporting the business [96]