Core Insights - Cavvy Energy Ltd. reported strong financial results for Q3 2025, with a net operating income (NOI) of $30.6 million and a production rate of 23,956 boe/d, reflecting a 4% increase from Q3 2024 [1][5] - The company achieved a 14% growth in third-party processing volumes compared to Q2 2025, reaching 136.1 MMcf/d, which significantly contributed to revenue growth [2][5] - A structured forward pricing agreement for sulphur sales in 2026 was executed, providing downside revenue protection while allowing for upside participation in the market [2][8] Financial Performance - Net operating income for Q3 2025 was $30.6 million, translating to $0.11 per share, while funds flow from operations was $12.9 million, or $0.04 per share [5][6] - The company reduced net debt by $3.2 million from Q2 2025, bringing it down to $163.7 million [5][6] - Operating expenses decreased by $1.8 million (5%) compared to Q3 2024, totaling $36.7 million [5] Production and Processing - Total production for Q3 2025 was 23,956 boe/d, with 80% being natural gas, which is a 4% increase from Q3 2024 [5] - Third-party raw gas processing volumes increased by 69.6 MMcf/d (105%) compared to Q3 2024, resulting in an 87% increase in processing and marketing revenue [5] - Sulphur production was 1,120 mt/d, with 85% sold under a below-market contract expiring on December 31, 2025 [5][7] Pricing and Market Strategy - The realized sulphur price for Q3 2025 was $34.59/mt, significantly higher than the previous year [6] - The structured pricing agreement for sulphur sales includes a fixed price of US$225/mt for one-third of sales, a collar structure for another third, and spot market pricing for the remaining third [9][10] - The company is focused on optimizing infrastructure and reducing costs to maintain profitability amid commodity price fluctuations [10][11] Guidance and Outlook - Cavvy Energy has revised its 2025 guidance, expecting total production to remain between 23,000 and 25,000 boe/d and net operating income to range from $100 million to $110 million [12] - The company plans to prioritize strengthening its balance sheet and attracting incremental third-party volumes while minimizing facility outages [9][10] - Management aims to continue improving operational efficiency and identifying growth opportunities for shareholders [10][11]

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]

About Cavvy Energy Cavvy Energy is a Canadian energy company headquartered in Calgary, Alberta. The Company is a significant upstream producer and midstream custom processor of natural gas, NGLs, condensate, and sulphur from Western Canada. Cavvy's vision is to provide responsible, affordable natural gas and derived products to meet society's energy security needs. For further information, visit www.cavvyenergy.com, or please contact: | Darcy Reding, President & Chief Executive Officer | Adam Gray, Chief Fi ...