CALGARY, Alberta, March 18, 2026 (GLOBE NEWSWIRE) -- Cavvy Energy Ltd. ("Cavvy" or the "Company") (TSX:CVVY) is pleased to announce the release of its fourth quarter and full year 2025 financial and operating results. The Company produced 23,904 boe/d and generated Net Operating Income1 ("NOI") of $110.5 million during 2025. The Company produced 23,003 boe/d and generated NOI of $20.8 million during the fourth quarter of 2025 with an exit production rate of 24,569 boe/d.
During the first quarter of 2026, Cavvy repaid US$27.0 million of long-term debt, resulting in an undrawn senior revolving facility (US$22.0 million capacity), senior term loan balance of US$55.3 million, and subordinated loan balance of US$33.6 million at March 31, 2026.
2025 ANNUAL HIGHLIGHTS
Generated NOI of $110.5 million ($0.38 per basic and fully diluted share) and Funds Flow from Operations1 of $62.6 million ($0.22 per basic and fully diluted share).
Produced 23,904 boe/d (80% natural gas), 14% lower than 2024 primarily reflecting the ongoing voluntary shut-in of dry natural gas tied-in to third-party gas processing facilities, which impacted annual production by 8,700 boe/d in 2025.
Processed 122.0 MMcf/d of third-party raw natural gas, an increase of 56.5 MMcf/d (86%) from 2024. This delivered an increase in third-party processing and marketing revenues of 92% to $38.8 million.
Reduced Net Debt1 by $26.9 million from 2024 to $170.6 million through repayment of long-term debt and reduction in the non-cash working capital deficit.
Reduced operating expenses by $21.0 million (11%) to $164.8 million compared to 2024, primarily due to lower third-party processing costs following the voluntary shut-in of volumes in Central AB along with ongoing cost reductions.
Recorded year-end 2025 NI 51-101 2P reserves of 260.5 MMboe (+7% compared to 2024) and 2P PV10 reserve value of $1,505.9 million (+20% compared to 2024) at the Jan. 1, 2026 IC4 price forecast, highlighted by an industry-leading PDP base decline of 5.9% and 2P RLI of 25.8 years.
Rebranded to Cavvy Energy Ltd. in May 2025, completing the strategic pivot to affirm our identity as a western Canadian focused energy company.
Q4 2025 HIGHLIGHTS
Generated NOI of $20.8 million ($0.07 per basic and fully diluted share) and Funds Flow from Operations2 of $13.5 million ($0.05 per basic and fully diluted share).
Produced 23,003 boe/d (81% natural gas), up 2% from Q4 2024.
Restarted 2,770 mcf/d of natural gas production in Northeast BC as AECO pricing rose above break even thresholds.
Increased third-party raw gas processing volumes by 83% to 136.6 MMcf/d compared to fourth quarter of 2024. This resulted in a 135% increase in third-party gathering, processing and marketing revenue, or $7.2 million, for the quarter compared to the fourth quarter of 2024.
Incurred reclamation and abandonment expenditures of $5.8 million, focused on asset retirement liability reduction in winter-access properties in Northeast BC.
Entered into a 12-month structured sulphur pricing agreement for 2026 (the "Sulphur Pricing Agreement"), to partially mitigate the risk of sulphur price volatility while retaining the ability to participate in the spot sulphur market.
"Successful execution of our strategy led to strong performance in 2025 and created the foundation for the next phase of Cavvy's growth" stated Darcy Reding, President and CEO. "Our focus on run-time reliability, operational excellence, third-party processing revenue growth, and debt repayment drove the strong operational and financial performance reflected in our year-end results.
Compared to 2024, we reduced operating expenses by $21.0 million, grew third-party gathering and processing revenues by $18.6 million, and reduced net debt by $26.9 million, in aggregate resulting in over $100 million of net debt reduction since Q1 2022. In conjunction with new exposure to higher sulphur market pricing in 2026, our revenue stream is now more diverse than ever, improving the resiliency and financial flexibility of the Company.
We are successfully positioning Cavvy for sustainable, long-term value creation and look forward to delivering another year of debt reduction and return for our shareholders."
SUBSEQUENT TO Q4 2025
On January 6, 2026, Cavvy received a cash payment of approximately USD$26.7 million representing the prepayment of a portion of sulphur sales expected over the first half of 2026 at a predefined price in accordance with the terms of the Sulphur Pricing Agreement (the "Prepayment"), which was previously disclosed with our Q3 2025 financial results on November 6, 2025. With proceeds from the Prepayment, Cavvy repaid the full USD$18.1 million outstanding balance of the senior revolving loan in January 2026 and an additional USD$8.9 million of the senior term loan during the first quarter of 2026, resulting in interest expense savings over 2026 and accelerating progress towards the Company's year-end debt and leverage targets.
Simultaneously, the Company recognized deferred revenue of approximately $36.2 million representing the obligation to deliver sulphur volumes, which will be reduced monthly between January and June 2026 as volumes are delivered.
On March 12, 2026, Cavvy announced the exercise of common share purchase warrants (the "Warrants") held by 2652862 Alberta Ltd., an affiliate of Erikson National Energy Inc. ("Erikson"), for proceeds of $3.5 million in exchange for the issuance of 5,120,235 common shares.
Selected 2025 Financial and Operating Highlights
($ 000s unless otherwise noted)
2025
2024
2023
Production
Natural gas (mcf/d)
114,730
139,710
168,821
Condensate (bbl/d)
2,320
2,397
2,339
NGLs (bbl/d)
2,462
2,082
2,296
Total production (boe/d)(1)
23,904
27,763
32,772
Sulphur (mt/d)
1,078
1,319
1,306
Third-party volumes processed (mcf/d)(2)
122,013
65,475
60,834
Reserves
Net proved plus probable ("2P") reserves NPV10(3)
1,505,907
1,252,170
1,371,735
Proved developed producing ("PDP") reserves NPV10(3)
711,083
621,393
614,072
2P reserve life index ("RLI", years)
25.83
25.08
20.38
Financial
Natural Gas Price ($/mcf)
Realized before Risk Management Contracts(4)
1.74
1.58
2.67
Realized after Risk Management Contracts(4)
3.65
3.15
3.67
Benchmark natural gas price
1.68
1.45
2.63
Condensate Price ($/bbl)
Realized before Risk Management Contracts(4)
85.08
94.48
97.01
Realized after Risk Management Contracts(4)
84.59
86.73
95.55
Benchmark condensate price
88.54
100.02
102.73
Sulphur Price ($/mt)
Realized sulphur price(5)
31.68
13.52
21.86
Benchmark sulphur price USD (Vancouver FOB)
285.35
94.04
94.18
Revenue(6)
293,838
268,840
374,029
Net Income
(3,151
)
(38,905
)
8,981
Net (loss) Income $ per share basic
(0.01
)
(0.20
)
0.06
Net (loss) Income $ per share diluted
(0.01
)
(0.20
)
0.04
Net operating income(7)
110,457
64,608
130,929
Cashflow provided by operating activities
36,453
7,132
104,202
Funds flow from operations
62,625
19,115
85,692
Operating netback ($/boe)(7)
12.66
6.35
10.95
Total assets
540,136
612,423
638,541
Adjusted working capital (deficit)(7)
(19,769
)
(29,777
)
(31,830
)
Net debt(7)
(170,617
)
(197,564
)
(204,046
)
Non-current liabilities
290,762
326,853
300,261
Capital expenditures(8)
23,359
25,697
55,539
(1) Total production excludes sulphur.
(2) Third-party volumes processed are raw natural gas volumes reported by activity month.
(3) Estimated pre-tax net present value of discounted cash flows from reserves using a 10% discount rate.
(4) Includes physical commodity and financial risk management contracts inclusive of cash flow hedges, together ("Risk Management Contracts").
(5) Realized sulphur price is net of customary deductions such as transportation, marketing and storage fees.
(6) Revenue is inclusive of petroleum and natural gas revenue, royalties, processing, marketing and other revenue, and realized gains and losses on risk management contracts.
(7) Refer to the "Net Operating Income", "Capital Resources", "Funds Flow from Operations" and "Working Capital and Capital Strategy" sections of the Company's MD&A for reference to non-GAAP and other financial measures.
(8) Excludes reclamation and abandonment activities.
2025 RESERVES
Deloitte LLP., Cavvy's independent reserves evaluator, performed National Instrument 51-101 Standards of Disclosure of Oil and Gas Activities ("NI 51-101") compliant reserves evaluations on the Company's assets at December 31, 2025 and 2024. The following table summarizes those evaluations based on the Deloitte NI 51-101 reserve report using the January 1, 2026 and January 1, 2025 IC4 price forecasts, respectively:
Year ended December 31
Year ended December 31
Reserve Volume and Net Present Value
MMboe
$000, NPV10(1)
2025
2024
% Change
2025
2024
% Change
Reserves Category(2)
Net proved developed producing (PDP) reserves
106.6
114.9
(7
)
711,084
621,393
14
Net proved (1P) reserves
196.2
183.2
7
1,173,560
961,492
22
Net proved plus probable (2P) reserves
260.5
244.4
7
1,505,907
1,252,170
20
(1) Estimated pre-tax net present value of discounted cash flows from reserves using a 10% discount rate at evaluator consensus (IC4) year end price forecast.
(2) Net reserves reflect working interest share of the asset prior to the deduction of royalties.
Selected 2025 Reserve Highlights
2P Reserve Life Index ("RLI") increased to 25.8 years from 25.1 years in 2024.
2026 forecasted PDP base decline of 5.9%, one of the lowest natural decline rates among peer companies.
Lower operating costs allocated to the Company's producing wells due to offsetting third-party processing revenue and stronger sulphur prices drove the increase in year-end 2025 NPV10.
Recategorized certain PDP volumes into PDNP due to the extended well shut-ins in Central AB.
Refer to the Company's Annual Information Form ("AIF") for the year ended December 31, 2025 for more detailed information on Cavvy's 2025 reserves.
2025 Reserve Reconciliation
Light & Medium Oil
Conventional Gas
Natural Gas Liquids
Proved
Probable
Proved + Probable
Proved
Probable
Proved + Probable
Proved
Probable
Proved + Probable
Mbbl
Mbbl
Mbbl
MMcf
MMcf
MMcf
Mbbl
Mbbl
Mbbl
Opening Balance
-
-
-
913,127
315,011
1,228,138
31,046
8,607
39,653
Production
(2.6)
-
(2.6)
(42,158)
-
(42,158)
(1,708)
-
(1,708)
Technical Revisions
2.6
-
