Core Insights - The company has invested $1.4 billion since 2018 in acquiring nearly 3 million acres of assets, which were previously undervalued, allowing for cash generation through sales [1][2] - The company emphasizes delivering exceptional cash returns, having distributed $1.3 billion to unitholders since inception, with a focus on maximizing distributions as a key strategic pillar [4][3] - The company has achieved an annualized yield of 15% and an average cash return on capital exceeding 30% over the last five years, showcasing strong performance compared to peers [3][4] Investment Strategy - The company has strategically acquired assets in distressed areas, allowing for drilling opportunities without high upfront costs, contrasting with competitors who pay significantly for fashionable locations [2][5] - The company plans to test the market for recouping costs associated with the Deep Anadarko and is not in a hurry to sell its San Juan land, which is held by production [5][6] - The company hedges 50% of its production in the first year and 25% in the second year to secure cash flow while maintaining exposure to future price increases [6][7] Operational Performance - The company has drilled over 250 Oswego locations since 2021, achieving rates of return above 50%, and plans to focus on natural gas wells in the San Juan and Deep Anadarko in 2026 [8][12] - The projected cost to drill and complete wells in the Deep Anadarko is between $14 million to $15 million per location, with an estimated ultimate recovery of approximately 19.5 Bcf [12][13] - The company aims to maintain a debt to EBITDA ratio of one times to ensure financial strength and flexibility for future acquisitions [14][10] Financial Results - For 2025, the company reported year-end reserves of 705 million barrels of oil equivalent, with production averaging 154,000 BOE per day [17][18] - Total revenues for the quarter reached $388 million, with adjusted EBITDA of $187 million and cash available for distribution amounting to $89 million [18][19] - The company has maintained a consistent distribution of $0.53 per unit, reflecting its commitment to returning cash to unitholders [19][4] Market Outlook - The company anticipates that oil prices will rise faster than inflation over the coming decades, reinforcing its belief in the long-term value of oil and natural gas [6][15] - The company is cautious about M&A activities until it reduces its current leverage from 1.3x, focusing on paying down debt before pursuing acquisitions [24][27] - The company is optimistic about the Mancos reservoir, expecting it to yield high rates of return as costs are lowered [30][39]

Financial Data and Key Metrics Changes - Year-end reserves for 2025 more than doubled from 337 million to 705 million barrels of oil equivalent [17] - Production for the quarter was 154,000 BOE per day, with a breakdown of 17% oil, 68% natural gas, and 15% NGLs [18] - Average realized prices were $58.14 per barrel of oil, $2.54 per Mcf of gas, and $21.28 per barrel of NGLs [18] - Total revenues for the quarter were $388 million, including $331 million from oil and gas revenues [19] - Adjusted EBITDA was $187 million, with operating cash flow of $169 million [19] Business Line Data and Key Metrics Changes - The company shifted focus from oil-dominated assets to dry gas locations in the Deep Anadarko and San Juan [9] - In 2025, the company achieved a rate of return of approximately 40% by transitioning to natural gas [12] - The company plans to drill 7-8 dry gas Mancos wells in the San Juan, with projected costs of $15 million per well [13] Market Data and Key Metrics Changes - The Bloomberg fair value price for West Texas Intermediate crude oil decreased from $71.72 in 2024 to $57.42 in 2025, while the price for Henry Hub Natural Gas improved from $3.43 in 2024 to $4.42 in 2025 [9] - The company anticipates a tightening of basis in the San Juan due to weather conditions affecting supply [53] Company Strategy and Development Direction - The company emphasizes delivering exceptional cash returns through distributions, having returned $1.3 billion to unitholders since 2018 [3] - The strategy includes disciplined execution in acquisitions, ensuring no asset is purchased above PDP PV-10 [4] - The company aims to maintain a debt-to-EBITDA ratio of 1x to ensure financial strength and flexibility for future acquisitions [14][15] Management's Comments on Operating Environment and Future Outlook - Management believes that the business will remain critical in the coming decades, with prices expected to rise faster than inflation [8] - The company is cautious about M&A activities until debt levels are reduced, currently at 1.3 times leverage [25] - Management expressed confidence in the performance of the Mancos reservoir, expecting it to yield high rates of return once costs are lowered [36] Other Important Information - The company has distributed $5.67 per unit from the beginning of 2024, resulting in an annualized yield of 15% [3] - The company has a low corporate decline rate of 17%, allowing for stable production levels without the need for acquisitions [15] Q&A Session Summary Question: Are there other activities to take advantage of oil prices? - Management indicated that if cash flow increases, they may consider adding another rig to drill more oil wells [22] Question: Any insights on the M&A market? - Management is currently sidelined for M&A until debt is reduced, focusing on paying down debt before considering acquisitions [25] Question: Can midstream assets be monetized to reduce debt? - Management prefers to retain midstream assets for long-term cash flow rather than selling them off [27] Question: What oil price is needed to proceed with the Oswego rig? - Management stated that oil prices above $70 would yield rates of return well north of 50%, justifying the use of capital for the Oswego program [41] Question: What caused the change in midstream profit guidance? - The improvement was due to reclassification of midstream operating expenses, leading to better operating profit [62]

Financial Data and Key Metrics Changes - Year-end reserves for 2025 more than doubled from 337 million to 705 million barrels of oil equivalent [16] - Production for the quarter was 154,000 BOE per day, with 17% oil, 68% natural gas, and 15% NGLs [17] - Average realized prices were $58.14 per barrel of oil, $2.54 per Mcf of gas, and $21.28 per barrel of NGLs [17] - Total revenues for the quarter were $388 million, with adjusted EBITDA at $187 million and operating cash flow at $169 million [18] Business Line Data and Key Metrics Changes - The company shifted focus from oil-dominated assets to dry gas locations in the Deep Anadarko and San Juan, with a successful transition reflected in production rates [8][11] - Development costs for 2025 were $252 million, representing 47% of operating cash flow, while development CapEx for the quarter was $77 million, or 46% of operating cash flow [18] Market Data and Key Metrics Changes - The Bloomberg fair value price for West Texas Intermediate crude oil decreased from $71.72 in 2024 to $57.42 in 2025, while the price for Henry Hub Natural Gas improved from $3.43 to $4.42 [8] - The company anticipates a tightening of basis in the San Juan market due to weather conditions affecting supply dynamics [50] Company Strategy and Development Direction - The company emphasizes maximizing cash distributions to unitholders, with a target reinvestment rate of no more than 50% [10] - The strategy includes disciplined execution in acquisitions, ensuring assets are not overpaid for, and maintaining a low debt-to-EBITDA ratio of 1x [13] - The company plans to drill 7-8 dry gas Mancos wells in 2026, focusing on cost reduction and maximizing returns [12][68] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term value of oil and natural gas, highlighting the importance of patience in acquisition strategies [15] - The company is currently focused on paying down debt before pursuing further acquisitions, with a preference for maintaining production levels through drilling [23][24] Other Important Information - The company has distributed a total of $1.3 billion to unitholders since its inception, showcasing a consistent cash return strategy [3] - The company has a strong belief that prices for oil and gas will rise faster than inflation over the coming decades [7] Q&A Session Summary Question: Plans for additional rig and secondary activities - Management indicated that if cash flow increases, they would consider adding a second rig to capitalize on higher oil prices, particularly in the $70 range [20][21] Question: M&A market opportunities - Management is currently sidelined for M&A until debt levels decrease, focusing on paying down existing debt before considering acquisitions [22][24] Question: Monetizing midstream assets - Management expressed reluctance to sell midstream assets, as they provide valuable long-term cash flow [25] Question: Guidance on natural gas differentials - Management noted widening basis in the Anadarko and San Juan markets but expects tightening as weather conditions normalize [50] Question: Performance of recent wells - Recent wells in the Deep Anadarko performed as expected, with the Mancos reservoir showing potential for high rates of return once costs are reduced [34][52]

Financial Data and Key Metrics Changes - The company reported annual revenue of approximately CAD 3.5 billion in 2025, an increase of 11% compared to 2024 [14] - Adjusted EBITDA was about CAD 1.9 billion, reflecting a 26% increase from the previous year [14] - Adjusted net earnings reached just under CAD 630 million, representing a 115% improvement compared to 2024 [14] - The balance sheet remains strong, ending the year with approximately CAD 1.2 billion in cash and short-term investments, and CAD 1 billion in total debt [15] Business Line Data and Key Metrics Changes - In the uranium segment, the company produced 21 million pounds on a consolidated basis in 2025, exceeding revised annual guidance [15] - The fuel services segment delivered strong performance, including record UF6 production at Port Hope [16] - The company has commitments to deliver an average of about 28 million pounds of uranium annually over the next five years [13] Market Data and Key Metrics Changes - Long-term contracting volumes in 2025 remained below replacement rate levels, indicating a need for continued discipline in supply [12] - Average realized prices improved, reflecting a strengthening long-term market environment [14] - The company ended the year with approximately 230 million pounds committed under long-term contracts [14] Company Strategy and Development Direction - The company aims to maintain a disciplined approach to production and supply, focusing on long-term strategies despite market volatility [8][11] - Investments in next-generation enrichment and partnerships, such as with Westinghouse, are expected to enhance the company's position in the nuclear fuel cycle [10][18] - The company is strategically preserving uncommitted productive capacity to deploy as market fundamentals strengthen [14] Management's Comments on Operating Environment and Future Outlook - Management highlighted ongoing geopolitical turmoil and market volatility but emphasized resilience and disciplined execution as key themes for 2025 [8] - The outlook for growth across the nuclear fuel cycle is expected to continue, driven by electrification, decarbonization, and energy security priorities [19] - The company anticipates producing between 19.5 million and 21.5 million pounds of uranium in 2026, with an average realized price between CAD 85 and CAD 89 [21] Other Important Information - The company is actively negotiating contracts to unlock value while preserving significant uncommitted volumes for future pricing opportunities [12][13] - The investment in Westinghouse is expected to yield strong performance, with an outlook for adjusted EBITDA from Westinghouse of approximately CAD 370 million to CAD 430 million in 2026 [22] Q&A Session Summary Question: Guidance framework for Westinghouse business - Management discussed the exciting opportunities in Westinghouse and the potential financial impact of projects, emphasizing a disciplined approach to guidance [28][32] Question: Average realized pricing outlook for uranium - Management explained the lack of immediate price appreciation is due to a disciplined marketing strategy, preserving pounds for when demand increases [34][36] Question: Production outlook at McArthur River - Management addressed delays at McArthur River and the decision to pace production according to market demand, emphasizing a systematic approach [50][52] Question: Technical risks around McArthur River - Management confirmed that risks are being managed proactively and that the current issues are not indicative of a riskier environment [62][64] Question: Future demand and production backfill - Management expressed confidence in the demand for uranium and the ability to prepare assets for future production needs [68][70] Question: Conversion market contracting - Management highlighted the importance of securing long-term contracts in the conversion market and the strategy to maximize value over time [78][80]

Financial Data and Key Metrics Changes - Annual revenue increased to approximately CAD 3.5 billion in 2025, up 11% compared to 2024 [14] - Adjusted EBITDA was about CAD 1.9 billion, which was up 26% from the previous year [14] - Adjusted net earnings of just under CAD 630 million represent a 115% improvement compared to 2024 [14] - The balance sheet remains strong, ending the year with approximately CAD 1.2 billion in cash and short-term investments, CAD 1 billion in total debt [15] Business Line Data and Key Metrics Changes - Uranium segment produced 21 million pounds on a consolidated basis in 2025, exceeding revised annual guidance [15] - Fuel services segment delivered strong performance, including record UF6 production at Port Hope [16] - JV Inkai met its annual production target, delivering 3.7 million pounds for 2025 [16] Market Data and Key Metrics Changes - Average realized prices improved, reflecting a strengthening long-term market environment [14] - Approximately 230 million pounds committed under long-term contracts by year-end [14] - Long-term contracting volumes in 2025 remained below replacement-rate levels, indicating a need for continued discipline [12] Company Strategy and Development Direction - The company focuses on disciplined execution and long-term strategy, adapting to market volatility [8] - Continued investment in next-generation enrichment and partnerships, including a strategic partnership with Westinghouse and the U.S. government [10][18] - Plans to ramp up uranium production in 2026, with commitments to deliver an average of about 28 million pounds annually over the next five years [13][21] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing geopolitical turmoil but emphasized resilience and adaptation within the industry [8] - The outlook for growth across the nuclear fuel cycle is driven by electrification, decarbonization, and energy security priorities [19] - The company expects to produce between 19.5 million and 21.5 million pounds of uranium in 2026, with an average realized price between CAD 85 and CAD 89 [21] Other Important Information - The company maintains significant uncommitted productive capacity to deploy as market fundamentals strengthen [14] - The investment in Westinghouse is expected to yield strong performance, with an outlook for adjusted EBITDA from Westinghouse of approximately $370 million-$430 million in 2026 [22] Q&A Session Summary Question: Guidance framework for Westinghouse business - Management discussed the potential financial impact of projects and the excitement around the Gen III reactor opportunities, emphasizing discipline in guidance [28][30] Question: Average realized pricing outlook for 2026 - Management explained the lack of significant price appreciation is due to a disciplined marketing strategy, preserving pounds for when demand increases [34][36] Question: Production outlook at McArthur River - Management acknowledged delays and emphasized a systematic approach to development, aligning production with market demand [50][52] Question: Technical risks around McArthur River - Management clarified that risks are being managed proactively and are not indicative of a riskier environment, focusing on disciplined production strategy [62][64] Question: Potential stresses on production capacity - Management expressed confidence in meeting future demand and emphasized the importance of disciplined production planning [68][70] Question: Westinghouse EBITDA guidance - Management noted that the guidance reflects core business drivers and the timing of regulatory approvals impacting immediate orders [74][76] Question: Conversion market contracting - Management highlighted the importance of securing long-term contracts at historic prices and the strategic approach to maximizing asset value [78][80]

Financial Data and Key Metrics Changes - The company reduced its net debt to EBITDA ratio from 1.0 times at the end of 2024 to 0.7 times at the end of Q1 2025 [7][25]. - Projected interest expense for 2025 was lowered by $22 million due to debt refinancing, which also eliminated quarterly amortization payments of $21 million [8][25]. - Total revenues for the quarter were $253 million, with oil contributing 49%, gas 33%, and NGLs 18% [27]. Business Line Data and Key Metrics Changes - Production for the quarter averaged 81,000 BOE per day, with a breakdown of 24% oil, 53% natural gas, and 23% NGLs [27]. - The company plans to shift its drilling focus from oil to natural gas, particularly in the Deep Anadarko Basin, while maintaining overall production levels [9][10]. Market Data and Key Metrics Changes - The current market environment is challenging, with oil prices dipping into the $50s, while the company is well-positioned with a production mix of 54% natural gas, 23% NGLs, and 23% oil projected for 2025 [9][10]. - The company expects to see double-digit growth in natural gas production in 2026 due to increased drilling activity [10]. Company Strategy and Development Direction - The company focuses on four strategic pillars: maintaining financial strength, disciplined execution, disciplined reinvestment rate, and maximizing cash distributions [4][5][17]. - The company aims to keep its reinvestment rate below 50% of operating cash flow to optimize distributions to unitholders [5][14]. - Recent acquisitions, including a $60 million deal, are aimed at enhancing cash flow and maintaining a robust drilling schedule [19][21]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to weather market volatility and build a stronger foundation for future growth [25][26]. - The company anticipates a balanced natural gas market in 2026, with significant production growth expected if two rigs are deployed in the Deep Anadarko [85][86]. Other Important Information - The company has distributed over $1 billion back to unitholders since its inception, with an upcoming distribution of $0.79 per unit, resulting in a 20% yield [18]. - The company has made 21 acquisitions since early 2018, spending over $2 billion, focusing on cash-flowing properties at discounted prices [20]. Q&A Session Summary Question: Can you elaborate on the recent acquisition and its impact? - Management confirmed the acquisition added significant acreage but only modest production, emphasizing the long-term value of the land [34][39]. Question: What is the current rig count and future plans? - The company is currently operating four rigs, with plans to reduce to two in June and potentially add a third rig in the Deep Anadarko by Q4, depending on cash flow [42][43]. Question: How does the company view the oil to gas ratio moving forward? - Management indicated that the decision to drill in the Oswego area is driven by the rate of return, with current conditions favoring natural gas over oil [50][51]. Question: What is the outlook for natural gas prices? - Management expressed a balanced outlook for natural gas, noting that while there are uncertainties, the market appears stable for the upcoming year [86].

Financial Data and Key Metrics Changes - The company reported an average production of 81,000 BOE per day, with a revenue of $253 million, where oil contributed 49%, gas 33%, and NGLs 18% [25][26] - The net debt to EBITDA ratio improved from 1.0 times at the end of 2024 to 0.7 times at the end of Q1 2025 [6][23] - Projected interest expense for 2025 is expected to decrease by $22 million due to debt refinancing [6] Business Line Data and Key Metrics Changes - The production mix for the quarter was 24% oil, 53% natural gas, and 23% NGLs [25] - The company plans to shift its drilling focus towards natural gas, with a projected increase in natural gas production while keeping overall barrel oil equivalent flat [7][8] Market Data and Key Metrics Changes - Oil prices have recently dipped into the $50 range, impacting the company's strategy to focus on natural gas drilling [7] - The company maintains a strong position in the natural gas market, with a volume mix of 54% natural gas projected for 2025 [7] Company Strategy and Development Direction - The company emphasizes four strategic pillars: maintaining financial strength, disciplined execution, disciplined reinvestment rate, and maximizing cash distributions [3][4] - The company aims to keep its reinvestment rate below 50% of operating cash flow to optimize distributions to unitholders [4][12] - The recent acquisition of XTO assets is expected to enhance the company's drilling opportunities and production capabilities [10][17] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenging market environment but believes the company is well-positioned to navigate through commodity cycles [7][23] - The company anticipates double-digit growth in natural gas production in 2026, driven by increased drilling activity in the Deep Anadarko Basin [7][8] Other Important Information - The company has distributed over $1 billion back to unitholders since inception, with a current distribution of $0.79 per unit, resulting in a 20% yield [16] - The company has made 21 acquisitions since early 2018, spending over $2 billion, focusing on cash-flowing properties at discounted prices [18] Q&A Session Summary Question: Can you elaborate on the recent acquisition and its impact? - The acquisition adds significant acreage but only produces about 1,600 BOE per day. It includes 1 million acres across various regions, primarily in the Greater Anadarko Basin [32][34] Question: What is the strategy regarding the reinvestment rate and rig deployment? - The company plans to maintain a reinvestment rate below 50%. Currently, two rigs will be operational, with a potential third rig added later in the year depending on cash flow [40][42] Question: How does the company view the oil to gas ratio in future development? - The company will prioritize gas drilling when gas prices are favorable compared to oil, with a focus on maintaining high rates of return [48][49] Question: What are the expectations for natural gas prices and production in 2026? - The company expects significant growth in gas production in 2026, with a projected increase of over 20% in gas volumes while oil production may decrease slightly [65]