2025 Annual Highlights
17% higher royalty production, 20% higher infrastructure revenue and 28% lower cash expenses.(5)
7% higher cash flow per share and 15% higher earnings per share.
Record 91% FCF Margin(1) and 18% higher Excess FCF(1) per share.
$2.8 billion of operator-funded capital spending across Topaz's royalty acreage and 10% increase in gross wells drilled led to record (17%) share of 2025 WCSB drilling activity.(6)
10% increase (6.2 mmboe) in reserves attributed to 2.4 mmboe from acquisitions and 11.9 mmboe of operator-funded activity that replaced 1.5 times the 8.2 mmboe produced in 2025.(7)
50% increase in Topaz's Clearwater reserves(8) and approximately 2.0 times higher Clearwater reserve life index (RLI) attributed to notable waterflood performance that continues to enhance heavy oil recovery.(9)
$125.4 million acquisitions including royalty and infrastructure assets in the Alberta Montney, increased royalty ownership in NEBC Montney alongside Tourmaline, and Alberta gross overriding and fee mineral title royalty interests.
4% higher dividend per share and approved the 2026 first quarter dividend at $0.34 per share ($1.36 per share annualized).
2026 Guidance Outlook
2026e Guidance Estimates(3)(13)
Annual average royalty production (boe/d, 70-72% natural gas)
23,500, 23,900
Infrastructure processing revenue and other income
$92.0 - $94.0 million
Dividend ($1.36 per share)(12)
~$210.0 million
Dividend payout ratio(1) (%)
68 %
Exit net debt(1) (before incremental acquisitions)
$420.0, $425.0
Topaz's 2026 guidance estimates include 23,500 to 23,900 boe/d(4) royalty production and $92.0 to $94.0 million annual processing revenue and other income.(3)(13) Based on estimated commodity pricing,(11) Topaz expects to exit 2026 with net debt(1) between $420.0 and $425.0 million.(3)(13) Topaz's royalty guidance range purposefully remains flexible to allow for adjustments by operators in response to supply/demand and commodity price factors in the WCSB and is based on Topaz's internal estimates regarding operators' 2026 development pace and performance and therefore could be revised in response to changes in operator plans.
2025 Reserves
2025 total proved plus probable developed reserves of 65.7 mmboe(7) increased 10% from 2024 (59.5 mmboe), driven by 50% and 10% year over year growth in Clearwater and NEBC Montney reserves, respectively.(8) These core areas together represent 56% of Topaz's 2025 total reserves,(7) and the associated RLIs have increased over the past two years by approximately 2.0 times for Clearwater and 1.3 times for NEBC Montney.(9) In 2025, 50% of the gross wells spud across Topaz's royalty acreage were in the Clearwater and NEBC Montney, Topaz's high-growth royalty areas. Together, these areas have generated 23% production growth over the past two years.
Since inception, Topaz has acquired cumulative developed reserves of 53.7 mmboe; 37.6 mmboe of which has been produced to date, and Topaz holds 65.7 mmboe of developed reserves as at December 31, 2025.(10) As a royalty entity not responsible for capital, Topaz does not report future undeveloped reserves. Topaz's 6-year history (1.3 times average annual reserve replacement)(7) demonstrates that the Company's royalty acquisitions provide both developed and undeveloped future economic value, despite the limitations in reserve reporting.(14)
Fourth Quarter 2025 UpdateFinancial Overview
Q4 2025 cash flow of $80.6 million and a 92% free cash flow (FCF) Margin,(1) provided $79.7 million of FCF.(1) Q4 2025 cash flow and FCF,(1) each $0.52 per diluted share,(2) increased 6% and 11%, respectively from Q4 2024.
Generated Q4 2025 royalty production revenue of $62.5 million ($29.02 per boe), representing 72% of Topaz's total revenue, with 28% ($24.2 million) contributed by infrastructure assets' processing revenue and other income.
Topaz's Q4 2025 net income of $32.7 million was 64% higher than Q4 2024 driven by 15% higher royalty production, 10% higher processing revenue and other income, 4% lower cash expenses, a 47% higher realized hedging gain and a lower unrealized loss on financial instruments.
During 2025, Topaz realized a $19.8 million hedging gain ($15.1 million or $0.44 per mcf gain on natural gas contracts). Based on Topaz's 2026 midpoint royalty production guidance, approximately 22% of natural gas is hedged at a weighted average fixed price of C$3.18 per mcf and 12% of total liquids is hedged at a weighted average fixed price of US$67.68/bbl.(18)
Topaz paid a Q4 2025 dividend of $0.34 per share ($52.4 million), which represents a 65% payout ratio(1) and a 5.1% trailing annualized yield to the fourth quarter average share price.(16)
Generated $27.3 million of Excess FCF(1) during Q4 2025 which was allocated to debt repayment and acquisition growth. Topaz completed $10.2 million of acquisitions during the fourth quarter.
Topaz exited 2025 with $517.5 million of net debt,(1) representing 1.5x net debt to annualized Q4 2025 EBITDA.(1) As at February 24, 2026, Topaz has approximately $0.5 billion of available credit capacity(17) which provides financial flexibility for strategic growth opportunities.
Royalty Activity
Q4 2025 royalty production averaged 23,399 boe/d,(4) 15% higher than Q4 2024. Topaz's total oil and liquids royalty production of 6,889 bbl/d achieved another record in Q4 2025.(4)
Fourth quarter drilling activity (190 gross wells spud)(15) was diversified across Topaz's portfolio as follows: 47 Clearwater, 36 NEBC Montney, 54 Deep Basin, 18 Peace River, 6 Central Alberta, 1 AB Montney and 28 SE Saskatchewan/Manitoba. In total, 248 gross wells(15) were brought on production during Q4 2025 (7% increase over 231 gross wells brought on production during Q4 2024).
Based on planned operator drilling activity, Topaz expects that the current 27-30 active drilling rigs on its royalty acreage will be maintained through the first quarter of 2026.(3)
Infrastructure Activity
During Q4 2025, Topaz generated $24.2 million in processing revenue and other income which was 10% higher than Q4 2024. In Q4 2025, Topaz incurred $1.0 million in operating expenses resulting in a 96% operating margin.(1) During the quarter, the infrastructure assets generated 99% utilization and Topaz incurred $0.9 million in maintenance-related capital expenditures (before capitalized G&A).
Acquisition Activity
During Q4 2025 the Company completed an acquisition of gross overriding and fee mineral title royalty interests in Alberta for total cash consideration of $7.8 million before customary closing adjustments.
Dividend Overview
Topaz's Board has declared the first quarter 2026 dividend at $0.34 per share which is expected to be paid on March 31, 2026, to shareholders of record on March 13, 2026. The quarterly cash dividend is designated as an "eligible dividend" for Canadian income tax purposes.
Topaz has paid $6.62 per share in dividends to its shareholderrs since the inaugural dividend during the first quarter of 2020 to December 31, 2025. The unique sustainability of Topaz's 2026e dividend down to $0.01 per mcf natural gas and US$55.00 per bbl crude oil(3) is attributable to: (i) the Company's high-margin, stable infrastructure revenue which represents 44% of the 2026e dividend;(3) (ii) hedging strategy and financial derivative contracts in place;(18) and (iii) the quality and strength of Topaz's diversified asset portfolio.
FOURTH QUARTER 2025 CONFERENCE CALL
Topaz will host a conference call tomorrow, Wednesday, February 25, 2026 starting at 5:00 a.m. MST (7:00 a.m. EST). To join the conference call without operator assistance, participants can register and enter their phone number at https://emportal.ink/4kVo0Bf to receive an instant automated call back. Alternatively, participants can join by calling a live operator at 1-888-510-2154 (North American toll free). The conference call ID is 05815.
ABOUT THE COMPANY
Topaz is a unique royalty and infrastructure energy company focused on generating free cash flow growth and paying reliable and sustainable dividends to its shareholders, through its strategic relationship with Canada's largest and most active natural gas producer, Tourmaline Oil Corp. ("Tourmaline"), an investment-grade senior Canadian E&P company, and leveraging industry relationships to execute complementary acquisitions from other high-quality energy companies. Topaz focuses on top-quartile energy resources and assets best positioned to attract capital in order to generate sustainable long-term growth and profitability.
Topaz's common shares are listed and posted for trading on the TSX under the trading symbol "TPZ" and it is included in the S&P/TSX Composite Index. This is the headline index for Canada and is the principal benchmark measure for the Canadian equity markets, represented by the largest companies on the TSX.
Additional information
Additional information about Topaz, including the Financial Statements and MD&A as at and for the year ended December 31, 2025 are available on SEDAR+ at www.sedarplus.ca under the Company's profile, and on Topaz's website at www.topazenergy.ca.
Selected Financial Information
For the periods ended($000s) except per share
2025
2024
Q4 2025
Q3 2025
Q2 2025
Q1 2025
Q4 2024
Royalty production revenue
241,810
233,426
62,468
52,291
58,368
68,683
60,234
Processing revenue
82,907
66,377
21,930
21,221
20,167
19,589
18,838
Other income(4)
11,787
12,595
2,320
2,931
2,653
3,883
3,107
Total
336,504
312,398
86,718
76,443
81,188
92,155
82,179
Cash expenses:
Operating
(6,530)
(7,349)
(1,027)
(1,545)
(2,199)
(1,759)
(1,600)
Marketing
(1,537)
(1,360)
(415)
(307)
(370)
(445)
(356)
General and administrative
(9,274)
(8,220)
(3,338)
(1,864)
(1,893)
(2,179)
(2,894)
Realized gain on financial instruments
19,826
11,316
5,102
8,737
5,166
821
3,464
Interest expense
(26,227)
(27,466)
(6,486)
(6,620)
(6,267)
(6,854)
(6,940)
Cash flow
312,762
279,319
80,554
74,844
75,625
81,739
73,853
Per basic share(1)(2)
$2.03
$1.91
$0.52
$0.49
$0.49
$0.53
$0.49
Per diluted share(1)(2)
$2.03
$1.90
$0.52
$0.49
$0.49
$0.53
$0.49
Cash from operating activities
308,760
276,271
69,143
78,147
80,731
80,739
64,930
Per basic share(1)(2)
$2.01
$1.89
$0.45
$0.51
$0.52
$0.53
$0.43
Per diluted share(1)(2)
$2.00
$1.88
$0.45
$0.51
$0.52
$0.52
$0.43
Net income(9)
128,741
105,656
32,694
25,573
42,463
28,011
19,874
Per basic share(2)(9)
$0.84
$0.72
$0.21
$0.17
$0.28
$0.18
$0.13
Per diluted share(2)(9)
$0.83
$0.72
$0.21
$0.17
$0.28
$0.18
$0.13
Adjusted net income(1)(9)
127,231
113,922
32,908
30,337
26,036
37,950
33,029
Per diluted share(1)(8)(9)
$0.82
$0.77
$0.21
$0.20
$0.17
$0.25
$0.22
EBITDA(7)
338,719
306,027
86,991
81,412
81,801
88,515
80,504
Per basic share(1)(2)
$2.20
$2.09
$0.57
$0.53
$0.53
$0.58
$0.53
Per diluted share(1)(2)
$2.19
$2.08
$0.56
$0.53
$0.53
$0.57
$0.53
FCF(1)
307,501
271,989
79,667
72,980
74,017
80,837
71,435
Per basic share(1)(2)
$2.00
$1.86
$0.52
$0.47
$0.48
$0.53
$0.47
Per diluted share(1)(2)
$1.99
$1.85
$0.52
$0.47
$0.48
$0.52
$0.47
FCF Margin(1)
91 %
87 %
92 %
95 %
91 %
88 %
87 %
Dividends paid
207,687
191,167
52,356
52,303
52,283
50,745
50,617
Per share(1)(6)
$1.35
$1.30
$0.34
$0.34
$0.34
$0.33
$0.33
Payout ratio(1)
66 %
68 %
65 %
70 %
69 %
62 %
69 %
Excess FCF(1)
99,814
80,822
27,311
20,677
21,734
30,092
20,818
Capital expenditures
5,261
7,330
887
1,864
1,608
902
2,418
Work in progress capital costs
