CA Market News
1月前
Strathcona Resources Ltd. Reports First Quarter 2026 Financial and Operating Results and Announces Quarterly DividendMay 6, 2026 5:00 PM
PR Newswire (Canada) CALGARY, AB, May 6, 2026 /CNW/ - Strathcona Resources Ltd. ("Strathcona" or the "Company") (TSX: SCR) today reported its first quarter 2026 financial and operating results. The Board of Directors also declared a quarterly dividend of $0.30 per common share. Q1 2026 HighlightsProduction of 116,542 boe/d (99.7% liquids)Operating Earnings of $194 million ($0.91 / share)(1) Free Cash Flow of $47 million ($0.22 / share)(1)
Three Months Ended(2)($ millions, unless otherwise indicated)March 31, 2026March 31, 2025December 31, 2025
WTI (US$/bbl)71.9371.4259.14WCS Hardisty (C$/bbl)79.2384.3066.89AECO 5A (C$/gj)1.902.052.11
Bitumen (bbls/d)61,37565,01662,538Heavy oil (bbls/d)54,69550,48854,660Condensate and light oil (bbls/d)7820,68265Total oil production (bbls/d)116,148136,186117,263Other NGLs (bbls/d)1511,83726Natural gas (mcf/d)2,268279,5172,558Production (boe/d)116,542194,609117,715Sales (boe/d)118,155194,884116,355% Liquids 99.7 %76.1 %99.7 %
Oil and natural gas sales, net of blending and other income(1)8241,133710Royalties14213899Production and operating – Energy777665Production and operating – Non-energy10815590Transportation and processing9414295General and administrative282524Depletion, depreciation and amortization142216152Interest and finance costs(3)395939Operating Earnings(1)194322146Other items(3)155116245Income (loss) and comprehensive income (loss) ncome39206(99)
Operating Earnings(1)194322146Non-cash items(3)153237167Gain (loss) on risk management and foreign exchange contracts – realized, operating17(1)(75)Funds from Operations(1)364558238Capital expenditures(298)(350)(176)Decommissioning costs(19)(23)(9)Free Cash Flow(1)4718553
Debt, net of cash, marketable securities and cross-currency swap asset / liability(3) 2,0822,4162,100Common shares (millions)214214214(1)A non-GAAP financial measure which does not have a standardized meaning under IFRS® Accounting Standards (the "Accounting Standards"); see "Non-GAAP Measures and Ratios" section of this press release.(2)During the year ended December 31, 2025 the Company entered into three separate asset purchase and sale agreements to dispose of its Montney assets, which has been presented in the Company's condensed consolidated interim financial statements and management's discussion and analysis for the three months ended March 31, 2026 and 2025 as discontinued operations. The financial and operating results for these periods have been presented throughout this press release based on the aggregation of continuing and discontinued operations. The aggregation of continuing and discontinued financial results are non-GAAP measures and do not have a standardized meaning under the Accounting Standards; see "Non-GAAP Measures and Ratios" section of this press release.(3)See "Supplementary Financial Measures" section of this press release.
Three Months Ended(1)($/boe, unless otherwise indicated)March 31, 2026March 31, 2025December 31, 2025
Oil and natural gas sales, net of blending costs and other income(2) 77.4864.6566.38Royalties13.367.889.24Production and operating – Energy7.194.326.23Production and operating – Non-energy10.178.878.30Transportation and processing8.828.128.80General and administrative2.651.412.23Depletion, depreciation and amortization13.3512.3014.23Interest and finance costs3.703.373.58Operating Earnings(2)18.2418.3813.77Effective royalty rate (%)(2)17.2 %12.2 %13.9 %(1)During the year ended December 31, 2025 the Company entered into three separate asset purchase and sale agreements to dispose of its Montney assets, which has been presented in the Company's condensed consolidated interim financial statements and management's discussion and analysis for the three months ended March 31, 2026 and 2025 as discontinued operations. The financial and operating results for these periods have been presented throughout this press release based on the aggregation of continuing and discontinued operations. The aggregation of continuing and discontinued financial results are non-GAAP measures and do not have a standardized meaning under the Accounting Standards; see "Non-GAAP Measures and Ratios" section of this press release.(2)A non-GAAP financial measure which does not have a standardized meaning under the Accounting Standards; see "Non-GAAP Measures and Ratios" section of this press release.Quarter Review and Near-Term PrioritiesProduction for the first quarter of 2026 of 117 Mboe / d (99.7% liquids) was in-line versus the fourth quarter of 2025. Operating earnings of $194 million ($0.91 / share) reflected a 33% increase versus the prior quarter, largely driven by higher oil prices. Free cash flow of $47 million ($0.22 / share) was roughly flat versus the prior quarter, with higher operating earnings being offset by increased capital expenditures under Strathcona's annual capital program, which is weighted to the first half of 2026.In Cold Lake, production decreased approximately 2% quarter-over-quarter with strong initial performance from new C-East lower-drainage wells ("LDWs") at Tucker being offset by downtime at the Company's Lindbergh property. Downtime at Lindbergh was driven by the mechanical failure of Lindbergh's main fuel gas supply pipeline, which caused the curtailment of steam generation and non-condensable gas ("NCG") volumes during the quarter. The pipeline is in the process of being repaired and is expected to return to full capacity in the third quarter of 2026.In Lloydminster Thermal, capital activity remains focused on the Company's $360 million Meota Central brownfield development project, which is now approximately 91% complete, on-time and on-budget. The Company expects to achieve first steam from Meota Central in the third quarter of 2026 and first oil early in the fourth quarter of 2026, ramping to an expected peak rate of approximately 13 Mbbls / d by mid-2027. Activity is also focused at Edam-Vawn, where the Company has begun steaming the 10-well VAF pad targeting the Waseca formation for the first time. The Company expects to complete the first 5 of 10 wells on the VAF pad in 2026, targeting a per well peak rate of approximately 750 bbls / d.In Lloydminster Conventional, the Company completed its annual winter drilling program at Cactus Lake, Druid and Winter, drilling a total of 46 wells (including 4 multi-lateral horizontal wells). Early results from the program are in-line with expectations on both costs and volumes, with an additional 46 wells planned for later in 2026. Following underperformance at the Company's polymer floods in Cactus Lake and Bodo-Cosine in 2025, current production from each asset has since improved approximately 5% versus the end of 2025, as a result of successful flood conformance projects.OutlookStrathcona's 2026 production guidance of 120 to 130 Mbbls / d and capital budget of $1.0 billion is unchanged, as is its 2026 first half production guidance of 115 to 120 Mbbls / d and year end 2026 exit rate of approximately 135 Mbbls / d (reflecting an approximately 15% exit-to-exit growth rate).At current strip prices1, Strathcona expects to generate approximately $1.0 billion of free cash flow in 2026. Free cash flow will initially be allocated to debt repayment, with share buybacks and M&A to be evaluated opportunistically throughout the year and additional dividends to be evaluated closer to year end.______________________________1 Approximately C$95 / bbl for Western Canada Select and C$2.00 / Mcf for AECO for full-year 2026.Quarterly DividendStrathcona's Board of Directors has declared a quarterly dividend of $0.30 per share to be paid on June 17, 2026 to shareholders of record on June 8, 2026. Payments to shareholders who are not residents of Canada will be net of any Canadian withholding taxes that may be applicable. Dividends paid by Strathcona are considered "eligible dividends" for Canadian tax purposes.About StrathconaStrathcona is one of North America's fastest growing pure play heavy oil producers with operations focused on thermal oil and enhanced oil recovery. Strathcona is built on an innovative approach to growth achieved through the consolidation and development of long-life assets. Strathcona's common shares (symbol SCR) are listed on the Toronto Stock Exchange (TSX).For more information about Strathcona, visit www.strathconaresources.com.Non-GAAP Measures and RatiosThe financial results for the three months ended March 31, 2026 and 2025, are presented below to reconcile continuing and discontinued operations to total results. Total results in a non-GAAP measure used by Management to assess the historical financial performance of the total business and is not intended to be indicative of future results.
Three Months Ended March 31, 2026Three Months Ended March 31, 2025(1)($ millions, unless otherwise indicated)ContinuingDiscontinuedTotalContinuingDiscontinuedTotal
Revenues and other income
Oil and natural gas sales1,121—1,1211,1762831,459Sale of purchased product4—47—7Royalties(142)—(142)(112)(26)(138)Oil and natural gas revenues983—9831,0712571,328Loss on risk management contracts(71)—(71)(78)—(78)Midstream revenue9—9———Other income ———1—1
921—9219942571,251
Expenses
Purchased product4—48—8Blending costs306—306326—326Production and operating185—18518249231Transportation and processing94—948854142General and administrative28—2819625Interest28—2838—38Transaction related costs———1—1Finance costs11—1112921Depletion, depreciation and amortization 142—14214868216Foreign exchange loss (gain) 4—4(1)—(1)Changes in decommissioning liabilities13—13———Loss on contingent consideration42—42———
857—8578211861,007
Gain on marketable securities———23—23Income before income taxes64—6419671267
Income tax expense25—25431861Income and comprehensive income39—3915353206(1)Comparative period has been revised to reflect current period presentation."Oil and natural gas sales, net of blending and other income" is calculated by deducting purchased product and blending costs from oil and natural gas sales, sales of purchased product, midstream revenue and other income. Management uses this metric to isolate all revenue after accounting for the unavoidable cost of blending. Oil and natural gas sales, net of blending and other income, is also reflected on a per boe basis calculated using sales volumes. This ratio is useful to management when analyzing realized pricing against benchmark commodity prices.
Three Months Ended($ millions, unless otherwise indicated)March 31, 2026March 31, 2025 (1)December 31, 2025
Oil and natural gas sales 1,1211,459937Sales of purchased products4714Other income—12Purchased product(4)(8)(15)Blending costs (306)(326)(236)Midstream revenue9—8Oil and natural gas sales, net of blending and other income 8241,133710(1)Comparative period has been revised to reflect current period presentation."Effective royalty rate" is calculated by dividing royalties by oil and natural gas sales and sale of purchased product, net of blending and purchased product. This metric allows management to analyze the movement of royalty expenses in relation to realized and benchmark commodity prices."Oil and natural gas sales, net of blending" is calculated by deducting purchased product and blending costs from oil and natural gas sales, sales of purchased product, and midstream revenue. Management uses this metric to isolate the revenue associated with the Company's production after accounting for the unavoidable cost of blending. Oil and natural gas sales, net of blending, is also reflected on a per boe basis calculated using sales volumes. This ratio is useful to management when analyzing realized pricing against benchmark commodity prices. A quantitative reconciliation of oil and natural gas sales, net of blending to the most directly comparable GAAP financial measure, Oil and natural gas sales, is presented below."Operating Earnings – Discontinued" is considered a key financial metric for evaluating the profitability of Strathcona's discontinued operations. "Operating Earnings - Continuing" is a GAAP financial measure as it is used by the Chief Operating Decision Makers to evaluate profit or loss and is presented in the condensed consolidated interim financial statements for the three months ended March 31, 2026 and 2025. A quantitative reconciliation of Operating Earnings – Discontinued to the most directly comparable GAAP financial measure, Oil and natural gas sales, is presented below.
Three Months Ended March 31, 2026Three Months Ended March 31, 2025(1)($ millions, unless otherwise indicated) ContinuingDiscontinuedTotalContinuingDiscontinuedTotal
Revenues
Oil and natural gas sales1,121—1,1211,1762831,459Sale of purchased product4—47—7Blending costs(306)—(306)(326)—(326)Purchased product(4)—(4)(8)—(8)Midstream revenue9—9———Oil and natural gas sales, net of blending824—8248492831,132
Expenses
Royalties142—14211226138Production and operating185—18518249231Transportation and processing94—948854142Field operating income403—403467154621
Depletion, depreciation and amortization142—14214868216General and administrative28—2819625Finance costs11—1112921Other income———(1)—(1)Interest28—2838—38Operating Earnings 194—19425171322(1)Comparative period has been revised to reflect current period presentation."Funds from Operations" is used by management to analyze operating performance and provides an indication of the funds generated by Strathcona's principal business to either fund operating activities, re-invest to either maintain or grow the business or make debt repayments. Funds from Operations is derived from Operating Earnings and adjusted for depletion, depreciation and amortization ("DD&A"), finance costs, gains and losses on risk management contracts – realized and gains and losses on foreign exchange - realized, operating."Free Cash Flow" indicates funds available for deleveraging, funding future growth, or shareholder returns. Free Cash Flow is derived from Operating Earnings and adjusted for DD&A, finance costs, gains and losses on risk management contracts – realized and gains and losses on foreign exchange - realized, operating, capital expenditures and decommissioning costs.Quantitative reconciliations of Funds from Operations and Free Cash Flow for both continuing and discontinued operations to the most directly comparable GAAP financial measure, Operating Earnings, are set forth below.
Three Months Ended($ millions, unless otherwise indicated)March 31, 2026March 31, 2025(1)December 31, 2025
Operating Earnings - Continuing194251138Depletion, depreciation and amortization142148152Finance costs111215Gain (loss) on risk management contracts - realized 16(1)(75)Foreign exchange gain - realized, operating1——Funds from Operations - Continuing364410230Capital expenditures(298)(233)(188)Decommissioning costs(19)(8)(9)Free Cash Flow - Continuing4716933(1) Comparative period has been revised to reflect current period presentation.
Three Months Ended($ millions, unless otherwise indicated)March 31, 2026March 31, 2025(1)December 31, 2025
Operating Earnings - Discontinued—718Depletion, depreciation and amortization—68—Finance costs—9—Funds from Operations - Discontinued —1488Capital expenditures—(117)12Decommissioning costs—(15)—Free Cash Flow - Discontinued—1620(1) Comparative period has been revised to reflect current period presentation.The following table reconciles Operating Earnings, Funds from Operations and Free Cash Flow for both continuing and discontinued operations:
Three Months Ended($ millions, unless otherwise indicated)March 31, 2026March 31, 2025(1)December 31, 2025
Operating Earnings194322146Depletion, depreciation and amortization142216152Finance costs112115Gain (loss) on risk management contracts - realized 16(1)(75)Foreign exchange gain - realized, operating1——Funds from Operations364558238Capital expenditures(298)(350)(176)Decommissioning costs(19)(23)(9)Free Cash Flow4718553(1) Comparative period has been revised to reflect current period presentation.Supplementary Financial Measures"Interest and finance costs" is an aggregation of interest and finance costs. Management uses this metric to obtain a fulsome understanding of all interest and accretion costs the Company is subject to."Other items" is an aggregation of risk management contracts, foreign exchange, transaction related costs, gain on marketable securities, loss on sale of assets, deferred tax expense (recovery), change in decommissioning liabilities, loss on contingent consideration and impairment from both continuing and discontinued operations. They are presented in such a manner to yield prominence to key financial metrics such as income and comprehensive income, Funds from Operations and Free Cash Flow.
Three Months Ended($ millions, unless otherwise indicated) March 31, 2026March 31, 2025December 31, 2025
Loss on risk management contracts71781Foreign exchange loss (gain)4(1)(11)Transaction related costs —133Gain on marketable securities—(23)(102)Loss on sale of assets——12Deferred tax expense (recovery)2561(51)Change in decommissioning liabilities13—(13)Loss on contingent consideration42——Impairment——376Other items155116245"Non-cash items" is an aggregation of depletion, depreciation and amortization, and finance costs."Debt, net of cash, marketable securities and cross-currency swap asset / liability" is comprised of debt less cash, marketable securities and cross-currency swap asset / liability, as derived under the Accounting Standards.Presentation of Oil and Gas InformationThis press release contains various references to the abbreviation "boe" which means barrels of oil equivalent. All boe conversions in this press release are derived by converting gas to oil at the ratio of six thousand cubic feet ("mcf") of natural gas to one barrel ("bbl") of crude oil. Boe may be misleading, particularly if used in isolation. A boe conversion rate of 1 bbl : 6 mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio of oil compared to natural gas based on currently prevailing prices is significantly different than the energy equivalency ratio of 1 bbl : 6 mcf, utilizing a conversion ratio of 1 bbl : 6 mcf may be misleading as an indication of value.References in this press release to initial production rates and other short-term production rates, test results and peak rates are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long-term performance or of ultimate recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating aggregate production for the Company or the assets for which such rates are provided. A pressure transient analysis or well-test interpretation has not been carried out in respect of all wells. Accordingly, the test results should be considered to be preliminary.Product Type Production InformationNational Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities includes condensate within the natural gas liquids product type. The Company has disclosed condensate as combined with light oil and separately from other natural gas liquids in this press release since the price of condensate as compared to other natural gas liquids is currently significantly higher and the Company believes that this presentation provides a more accurate description of its operations and results therefrom. References to "natural gas" in this press release refer to conventional natural gas. References to "liquids" in this press release refer to, collectively, bitumen, heavy oil, condensate and light oil (comprised of condensate and light oil) and other natural gas liquids (comprised of ethane, propane and butane only).The Company's quarterly average daily production volumes for three months ended 2026 and 2025, and the references to "natural gas", "crude oil" and "condensate", reported in this press release consist of the following product types, as defined in NI 51-101 and using a conversion ratio of 6 mcf : 1 bbl where applicable:
Three Months Ended
March 31, 2026March 31, 2025December 31, 2025
Heavy crude oil (bbl/d)54,69550,48854,660Light and medium crude oil (bbl/d) 6950461Total crude oil (bbl/d)54,76450,99254,721Bitumen (bbl/d)61,37565,01662,538NGLs (bbl/d)2432,01530Total liquids (bbl/d)116,163148,023117,289Conventional natural gas (mcf/d)2,268279,5172,558Total (boe/d)116,542194,609117,715Forward-Looking InformationCertain statements contained in this press release constitute forward-looking information within the meaning of applicable securities laws. The forward-looking information in this press release is based on Strathcona's current internal expectations, estimates, projections, assumptions and beliefs. Such forward-looking information is not a guarantee of future performance and involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. The Company believes the material factors, expectations and assumptions reflected in the forward-looking information are reasonable as of the time of such information, but no assurance can be given that these factors, expectations and assumptions will prove to be correct, and such forward-looking information included in this press release should not be unduly relied upon.The use of any of the words "expect", "target", "anticipate", "intend", "estimate", "objective", "ongoing", "may", "will", "project", "believe", "depends", "could" and similar expressions are intended to identify forward-looking information. In particular, but without limiting the generality of the foregoing, this press release contains forward-looking information pertaining to the following: the Company's business strategy and future plans; expected operating strategy; the expectation that the Company's capital expenditures will be weighted to the first half of 2026; the expected repair timeline for the fuel gas supply pipeline at Lindbergh; timeline and budget expectations for the Company's Meota Central brownfield development project, including an expected total installed cost of approximately $360 million, first steam in the third quarter of 2026 and first oil early in the fourth quarter of 2026, ramping to an expected peak rate of approximately 13 Mbbls / d by mid-2027; the Company's expectation of completing the first 5 of 10 wells at Edam-Vawn in 2026, targeting a per well peak rate of approximately 750 bbls / d; the drilling of an additional 46 wells at Cactus Lake, Druid and Winter later in 2026; the Company's 2026 production guidance of 120 to 130 Mbbls / d and capital budget of $1.0 billion, first half 2026 production guidance of 115 to 120 Mbbls / d and year end 2026 exit rate guidance of approximately 135 Mbbls / d; the Company's expectation of generating approximately $1.0 billion of free cash flow in 2026 and the expected uses thereof. All forward-looking information reflects Strathcona's beliefs and assumptions based on information available at the time the applicable forward-looking information is disclosed and in light of the Company's current expectations with respect to such things as: the success of Strathcona's operations and growth and expansion projects; expectations regarding production growth, future well production rates and reserve volumes; expectations regarding Strathcona's capital program; Strathcona's ability to declare and pay dividends; expectations regarding the impact of tariffs on Strathcona's operations and its ability to effectively mitigate the impact thereof; the outlook for general economic trends, industry trends, prevailing and future commodity prices, foreign exchange rates and interest rates; prevailing and future royalty regimes and tax laws; future well production rates and reserve volumes; fluctuations in energy prices based on worldwide demand and geopolitical events; the impact of inflation; the integrity and reliability of Strathcona's assets; decommissioning obligations; Strathcona's ability to comply with its financial covenants; and the governmental, regulatory and legal environment, including expectations regarding the current and future carbon tax regime and regulations. In addition, certain forward-looking information with respect to the Company's 2026 guidance assumes commodity prices and exchange rates of: US$85 / bbl WTI, US$15 / bbl WCS-WTI differential, 1.36 USD-CAD and C$2.00 / mcf AECO. Management believes that its assumptions and expectations reflected in the forward-looking information contained herein are reasonable based on the information available on the date such information is provided and the process used to prepare the information. However, it cannot assure readers that these expectations will prove to be correct.The forward-looking information included in this press release is not a guarantee of future performance and involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information, including, without limitation: changes in commodity prices; changes in the demand for or supply of Strathcona's products; the continued impact, or further deterioration, in global economic and market conditions, including from inflation and/or certain geopolitical conflicts, such as the conflict in the Middle East, including the closure of the Strait of Hormuz, the ongoing Russia/Ukraine conflict, and other heightened geopolitical risks, including the imposition of tariffs or other trade barriers, and the ability of the Company to carry on operations as contemplated in light of the foregoing; determinations by the Organization of the Petroleum Exporting Countries and other countries as to production levels; unanticipated operating results or production declines; changes in tax or environmental laws, climate change, royalty rates or other regulatory matters; changes in Strathcona's development plans or by third party operators of Strathcona's properties; failure to achieve anticipated results of its operations; competition from other producers; inability to retain drilling rigs and other services; failure to realize the anticipated benefits of the Company's acquisitions, dispositions or corporate reorganizations; failure to execute the Company's growth strategy and objectives; incorrect assessment of the value of acquisitions; delays resulting from or inability to obtain required regulatory approvals; increased debt levels or debt service requirements; inflation; changes in foreign exchange rates; inaccurate estimation of Strathcona's oil and gas reserve and contingent resource volumes; limited, unfavourable or a lack of access to capital markets or other sources of capital; increased costs; a lack of adequate insurance coverage; the impact of competitors; and the other factors discussed under the "Risk Factors" section in Strathcona's Management's Discussion & Analysis and Annual Information Form, each for the year ended December 31, 2025, and from time to time in Strathcona's public disclosure documents, which are available at www.sedarplus.ca. Declaration of dividends, including the Company's quarterly or any special or additional dividends, is at the sole discretion of the board of directors of Strathcona and will continue to be evaluated on an ongoing basis. There are risks that may result in Strathcona changing, suspending or discontinuing its quarterly dividends, including changes to its free cash flow, operating results, capital requirements, financial position, debt levels, market conditions or corporate strategy and the need to comply with requirements under its credit agreement and applicable laws respecting the declaration and payment of dividends. There are no assurances as to the continuing declaration and payment of future dividends or the amount or timing of any such dividends.Management approved the capital budget and production guidance contained herein as of the date of this press release. The purpose of the capital budget and production guidance is to assist readers in understanding Strathcona's expected and targeted financial position and performance, and this information may not be appropriate for other purposes.This earnings release contains information that may constitute future-oriented financial information or financial outlook information (collectively, "FOFI") about Strathcona's prospective financial performance, financial position or cash flows, all of which is subject to the same assumptions, risk factors, limitations and qualifications as set forth above. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise or inaccurate and, as such, undue reliance should not be placed on FOFI. Strathcona's actual results, performance and achievements could differ materially from those expressed in, or implied by, FOFI. Strathcona has included FOFI in order to provide readers with a more complete perspective on Strathcona's future operations and management's current expectations relating to Strathcona's future performance. Readers are cautioned that such information may not be appropriate for other purposes.The foregoing risks should not be construed as exhaustive. The forward-looking information contained in this press release speaks only as of the date of this press release and Strathcona does not assume any obligation to publicly update or revise such forward-looking information to reflect new events or circumstances, except as may be required pursuant to applicable laws. Any forward-looking information contained herein is expressly qualified by this cautionary statement. View original content to download multimedia:https://www.prnewswire.com/news-releases/strathcona-resources-ltd-reports-first-quarter-2026-financial-and-operating-results-and-announces-quarterly-dividend-302764632.htmlSOURCE Strathcona Resources Ltd. Original: Strathcona Resources Ltd. Reports First Quarter 2026 Financial and Operating Results and Announces Quarterly Dividend
CA Market News
3月前
Strathcona Resources Ltd. Reports Fourth Quarter and Full Year 2025 Financial and Operating Results, Year End Reserves, Announces Quarterly Dividend and Board Approval to Commence Normal Course Issuer BidMarch 11, 2026 10:25 PM
PR Newswire (US)
CALGARY, AB, March 11, 2026 /PRNewswire/ - Strathcona Resources Ltd. ("Strathcona" or the "Company") (TSX: SCR) today reported its fourth quarter and full year 2025 financial and operating results as well as its year-end 2025 reserves. The Board of Directors also declared a quarterly dividend of $0.30 per common share and approved a share repurchase program for up to 5% of its outstanding shares, subject to customary TSX approvals.
Q4 2025 Highlights Production of 117,715 boe/d (100% liquids)(1)(2)Operating Earnings of $146 million ($0.68 / share)(1)(3)Free Cash Flow of $53 million ($0.25 / share)(1)(3) FY 2025 HighlightsProduction of 152,163 boe/d (86% liquids)(1)(2)Operating Earnings of $930 million ($4.34 / share)(1)(3)Free Cash Flow of $364 million ($1.70 / share)(1)(3)YE 2025 Reserves HighlightsProved Developed Producing ("PDP"), Proved ("1P") and Proved Plus Probable ("2P") reserves of 241 MMboe, 1,226 MMboe and 2,166 MMboe, reflecting growth from continuing operations of 2%, 5%, and 7% respectivelyPDP finding and development costs ("PDP F&D")(4), including changes in future development costs ("PDP FDC"), of $21.24 / boe, equating to a 2025 PDP Recycle Ratio(4) of 1.8x; excluding approximately $400 million in capital spending on Meota Central and Cold Lake facility expansions which did not contribute to YE 2025 PDP bookings, PDP F&D was approximately $12.25 / boe, equating to a recycle ratio of 3.1x297% organic 2P reserves replacement(4); 51 Year 2P Reserves Life Index(4) (29 Years 1P)1P and 2P after-tax PV-10 net of debt(4) of $32.05 / share and $49.46 / share respectively
Three Months Ended(1)Year Ended(1)($ millions, unless otherwise indicated)December
31, 2025 December
31, 2024September
30, 2025December
31, 2025 December
31, 2024
WTI (US$/bbl)59.1470.2764.9364.8175.72WCS Hardisty (C$/bbl)66.8980.7575.1075.0683.53AECO 5A (C$/gj)2.111.400.601.591.38
Bitumen (bbls/d)62,53859,73261,15761,32759,516Heavy oil (bbls/d)54,66050,99753,94352,65851,107Condensate and light oil (bbls/d)6520,76325010,33919,922Total oil production (bbls/d)117,263131,492115,350124,324130,545Other NGLs (bbls/d)2612,9802346,05111,958Natural gas (mcf/d)2,558256,3863,701130,729243,456Production (boe/d)117,715187,203116,201152,163183,080Sales (boe/d)116,355184,120115,852152,407182,794% Liquids(2) 99.7 %77.2 %99.6 %85.7 %77.8 %
Oil and natural gas sales, net of blending and other income(3)7101,0258073,6224,255Royalties99209128470663Production and operating – Energy655937237248Production and operating – Non-energy90139104511564Transportation and processing9514492479577General and administrative24282298101Depletion, depreciation and amortization152196151697874Interest and finance costs(4)396037200258Operating Earnings(3)146190236930970Other items(4)245102(337)19366(Loss) income and comprehensive (loss) Income(99)88573911604
Operating Earnings(3)146190236930970Non-cash items(4)1672171657661,074Loss on risk management and foreign exchange contracts – realized, operating(75)(2)(18)(102)(107)Funds from Operations(3)2384053831,5941,937Capital expenditures(176)(393)(281)(1,186)(1,296)Decommissioning costs(9)(13)(8)(44)(36)Free Cash Flow(3)53(1)94364605
Debt, net of cash and marketable securities(4)2,0952,462(81)2,0952,462Common shares (millions)214214214214214(1)During the year ended December 31, 2025 the Company entered into three separate asset purchase and sale agreements to dispose of its Montney assets which has been presented in the Company's consolidated financial statements and management's discussion and analysis for the three months and year ended December 31, 2025 and 2024 as discontinued operations. The financial and operating results for these periods have been presented throughout this press release based on the aggregation of continuing and discontinued operations. The aggregation of continuing and discontinued financial results are non-GAAP measures and do not have a standardized meaning under IFRS® Accounting Standards (the "Accounting Standards"); see "Non-GAAP Measures and Ratios" section of this press release.(2)See "Product Type Production Information" section of this press release.(3)A non-GAAP financial measure which does not have a standardized meaning under the Accounting Standards; see "Non-GAAP Measures and Ratios" section of this press release.(4)See "Supplementary Financial Measures" Section of this press release.
Three Months Ended(1)Year Ended(1)($/boe, unless otherwise indicated)December
31, 2025December
31, 2024September
30, 2025December
31, 2025December
31, 2024
Oil and natural gas sales, net of blending costs and other income(2)66.3860.4975.7465.1263.60Royalties9.2412.3112.028.459.91Production and operating – Energy6.233.463.514.283.71Production and operating – Non-energy8.308.189.799.188.42Transportation and processing8.808.518.638.618.62General and administrative2.231.682.061.761.51Depletion, depreciation and amortization14.2311.5914.2012.5213.06Interest and finance costs3.583.543.443.593.86Operating Earnings(2)13.7711.2222.0916.7314.51Effective royalty rate (%)(2)13.9 %20.3 %15.9 %13.0 %15.6 %(1)During the year ended December 31, 2025 the Company entered into three separate asset purchase and sale agreements to dispose of its Montney assets which has been presented in the Company's consolidated financial statements and management's discussion and analysis for the three months and year ended December 31, 2025 and 2024 as discontinued operations. The financial and operating results for these periods have been presented throughout this press release based on the aggregation of continuing and discontinued operations. The aggregation of continuing and discontinued financial results are non-GAAP measures and do not have a standardized meaning under the Accounting Standards; see "Non-GAAP Measures and Ratios" section of this press release.(2)A non-GAAP financial measure which does not have a standardized meaning under the Accounting Standards; see "Non-GAAP Measures and Ratios" section of this press release.Annual Letter to Strathcona ShareholdersStrathcona has posted a letter to shareholders providing an in-depth review of the Company's 2025 financial and operating performance and year-end reserves, which has been posted on Strathcona's website at strathconaresources.com/investors/reports. Strathcona shareholders are encouraged to review the letter, which provides details regarding the Company's strategy going forward.Quarter Review and Near-Term PrioritiesStrathcona's fourth quarter production of 118 Mboe / d, up 1% quarter-over-quarter, was in-line with expectations, with full year capital expenditures of $1,186 million lower than the Company's 2025 capital budget of $1,200 million. Fourth quarter non-energy production and operating costs of $8.30 / boe reflected a decrease of 15% versus the third quarter, reflecting savings achieved across the portfolio following successful execution of cost improvement initiatives undertaken mid-year. Free cash flow of $53 million for the fourth quarter was impacted by $75 million of realized hedging losses, following the restructuring of the Company's WCS differential swaps at the end of 2025, as previously disclosed. Strathcona's WTI exposure remains unhedged for 2026, with approximately 50% of its WCS Hardisty differential exposure hedged at US$12.00 / bbl, and approximately 80% of its natural gas purchase exposure hedged at C$2.00 / GJ AECO.In Cold Lake, production increased 2% quarter-over-quarter driven by the continued ramp up of Lower Drainage Wells ("LDWs") on the 105 and 108 pads at Orion. Subsequent to year-end, seven LDWs on the C-East pad were brought online at Tucker, which have exceeded expectations thus far with an average rate of over 750 bbls / d per well. Current activity is focused on the 8 well pair D01 West pad at Lindbergh, which began steaming in early 2026 and is expected to ramp to a peak rate of approximately 6,500 bbls / d.In Lloydminster Thermal, in December Strathcona closed on its acquisition of the Vawn thermal project ("Vawn") and undeveloped thermal lands at Plover Lake and Glenbogie. Vawn has since been fully incorporated into Strathcona's existing operations at Edam (located directly adjacent to Vawn, sharing the same reservoir), with both assets now benefiting from shared services and integrated reservoir management. Strathcona expects to be able to meaningfully increase Vawn's production above historical levels of approximately 5 Mbbls / d by year-end 2026 and will provide further details in coming quarters. Current capital activity remains focused on the Meota Central project, which is targeting first oil in the fourth quarter of 2026 and is expected to deliver a peak oil rate of approximately 13 Mbbls / d at a total installed cost of approximately $360 million. The project is currently 85% complete, on time and on budget.In Lloydminster Conventional, production of 21 Mbbls / d reflected a 7% decrease quarter-over-quarter, driven by flood conformance challenges at Strathcona's Cactus Lake and Bodo-Cosine polymer floods. Production has since stabilized following successful conformance work completed over the previous quarter. Current capital activity is concentrated on the Company's annual drilling programs in Winter and Druid, which include a mixture of single and multi-lateral horizontal wells.Selina Project AcquisitionToday Strathcona signed and closed the acquisition of a 50% operated working interest in the Selina Project ("Selina") in Cold Lake for total consideration of $23 million in cash. Strathcona previously held a 50% non-operated working interest in Selina, increasing its working interest to 100% and taking over operatorship. Selina is located near Strathcona's existing Lindbergh thermal project, with approvals from the Alberta Energy Regulatory ("AER") in place for 12,500 bbls / d of production. Strathcona expects to develop Selina over time in a capital-efficient manner by leveraging its existing central processing facility at Lindbergh. Strathcona estimates approximately 160 MMbbls of recoverable oil at Selina, none of which was booked in its reserves or contingent resources at year-end 2025 due to Strathcona previously not holding operatorship.Normal Course Issuer BidStrathcona's Board has approved the filing of a notice with the Toronto Stock Exchange ("TSX") to commence a normal course issuer bid ("NCIB"). Once approved by the TSX, Strathcona may repurchase up to 5% of its issued and outstanding shares (up to a maximum of approximately 10.7 million common shares) over a twelve-month period.Strathcona intends to act opportunistically from time to time to repurchase its shares at what it views as a discount to its intrinsic value, conservatively determined and after applying a margin of safety. For further details regarding the Company's rationale and strategy regarding the NCIB, shareholders are encouraged to review the Company's year-end shareholder letter posted on its website.OutlookStrathcona's 2026 production guidance of 120 to 130 Mbbls/d and capital budget of $1.0 billion is unchanged. Strathcona expects production of 115 to 120 Mbbls / d in the first half of 2026, ramping to an exit rate of approximately 135 Mbbls / d by 2026 year-end.Following the Selina acquisition, Strathcona holds an estimated 3.0 billion of recoverable resources, equating to over 65 years relative to its 2026 production. Strathcona's long-range plan remains to grow production from 125 Mbbls / d in 2026 to 200 Mbbls / d by 2031 and 300 Mbbls / d by 2035 (in each case a 10% compound annual growth rate).Quarterly DividendStrathcona's Board of Directors has declared a quarterly dividend of $0.30 per share to be paid on March 27, 2026 to shareholders of record on March 20, 2026. Payments to shareholders who are not residents of Canada will be net of any Canadian withholding taxes that may be applicable. Dividends paid by Strathcona are considered "eligible dividends" for Canadian tax purposes.2025 Year End Reserves DetailsThe tables below summarize Strathcona's Year End 2025 reserves which were prepared by McDaniel & Associates Consultants Ltd. ("McDaniel"). A complete filing of our oil and gas reserves and other oil and gas information presented in accordance with National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities is included in Strathcona's Annual Information Form for the year ended December 31, 2025, which can be found at www.sedarplus.ca and www.strathconaresources.com.Summary of Oil and Gas Reserves (Forecast Prices and Costs) as of December 31, 2025Reserves CategoryLight &Medium Crude OilHeavyCrude OilBitumenGross
(Mbbl)Net
(Mbbl)Gross
(Mbbl)Net
(Mbbl)Gross
(Mbbl)Net
(Mbbl)
Proved
Developed Producing—2101,46493,159139,440103,453Developed Non-Producing——580540——Undeveloped——415,399373,398568,041392,449Total Proved(1)—2517,443467,097707,481495,903Total Probable—1219,899193,777720,159467,720Total Proved Plus Probable(1)—3737,343660,8741,427,640963,623
Reserves CategoryConventional Natural Gas Natural Gas LiquidsOil EquivalentGross
(MMcf)Net
(MMcf)Gross
(Mbbl)Net
(Mbbl)Gross
(Mboe)Net
(Mboe)
Proved
Developed Producing2,4382,14611241,312196,974Developed Non-Producing33——581540Undeveloped2,4662,195——983,851766,213Total Proved(1)4,9074,343111,225,743963,727Total Probable2,2832,0271—940,440661,837Total Proved Plus Probable(1)7,1906,371222,166,1831,625,564(1)Figures may not add due to rounding.Summary of Net Present Value of Future Net Revenue Attributable to Oil and Gas Reserves (Forecast Prices and Costs) as of December 31, 2025Reserves CategoryBefore Deducting Income TaxesAfter Deducting Income Taxes0 %5 %10 %15 %20 %Unit Value(2)0 %5 %10 %15 %20 %Unit Value(3)(in $ millions)(1)$/boe(in $ millions)(1)$/boeProved
Developed Producing5,2214,9284,3423,8443,44722.044,3964,2503,7733,3593,02719.16 Developed Non-Producing16141210921.65121098715.97 Undeveloped22,94112,5467,4024,5792,9039.6617,2259,1315,1783,0371,7816.76Total Proved(4)28,17817,48711,7558,4346,35912.2021,63313,3918,9606,4044,8159.30Total Probable26,60210,4245,1222,9391,8767.7420,2027,7483,7322,1011,3175.64Total Proved plus Probable(4)54,78027,91216,87711,3738,23510.3841,83521,13812,6928,5056,1327.81(1)Net present value of future net revenue includes all resource income, including the sale of oil, gas, by-product reserves, processing third party reserves and other income.(2)Calculated using net present value of future net revenue before deducting income taxes, discounted at 10% per year, and net reserves. The unit values are based on net reserves volumes.(3)Calculated using net present value of future net revenue after deducting income taxes, discounted at 10% per year, and net reserves. The unit values are based on net reserves volumes.(4)Figures may not add due to rounding.Forecast Prices and Costs as of December 31, 2025Year
(1)Inflation
(%)(2)Exchange Rate
(Cdn$/US$)
(3)Crude OilNatural GasNatural Gas LiquidsWTI Cushing Oklahoma
40 API
($US/bbl)Canadian Light Sweet Crude
40 API
($Cdn/bbl)Western Canadian Select
20.5 API
($Cdn/bbl)Alberta AECO-C Spot
($Cdn/
mmbtu)Edmonton Pentanes Plus
($Cdn/bbl)Edmonton Butane
($Cdn/bbl)Edmonton Propane
($Cdn/bbl)Ethane Plant Gate
($Cdn/bbl)
2026— %1.3759.9277.5465.133.0080.0136.9525.109.5920272 %1.3665.1083.6070.433.3086.1939.7927.2810.6420282 %1.3570.2890.1776.903.4992.8342.8729.6711.3420292 %1.3571.9392.3278.713.5895.0443.8930.3711.6620302 %1.3573.3794.1780.293.6596.9444.7730.9811.8920312 %1.3574.8496.0681.903.7298.8945.6631.6012.1420322 %1.3576.3497.9883.533.80100.8646.5832.2312.3920332 %1.3577.8799.9385.203.88102.8847.5132.8712.6420342 %1.3579.42101.9386.913.95104.9448.4633.5312.9020352 %1.3581.01103.9788.654.03107.0449.4334.2013.16Escalation of 2% per year thereafter(1)Product sale prices will reflect these reference prices with further adjustments for quality and transportation to point of sale.(2)Inflation rates for forecasting costs only. Prices inflated at 2% after 2026 where applicable.(3)The exchange rate is used to generate the benchmark reference prices in this table.Reconciliation of Changes in Gross Reserves(1)
Light &
Medium
Crude Oil(Mbbl)Heavy Crude
Oil(Mbbl)Bitumen(Mbbl)Conventional
Natural Gas(MMcf)Natural Gas
Liquids(Mbbl)Oil Equivalent(Mboe)
Proved
December 31, 20241,829470,436698,3051,330,420141,6761,533,983Extensions and improved recovery(2)—8,2648,11517—16,382Technical revisions(3)(92)20,19323,849(1,376)10443,824Discoveries(4)——————Acquisitions—41,114———41,114Dispositions(1,642)(1,469)—(1,276,334)(135,891)(351,724)Economic factors(5)(4)(1,870)(404)(103)—(2,296)Production(91)(19,224)(22,384)(47,716)(5,887)(55,540)Infill drilling——————December 31, 2025(6)—517,443707,4814,90711,225,743
Probable
December 31, 20244,549167,287684,5341,044,35090,4241,120,852Extensions and improved recovery(2)—34,54835,5824—70,131Technical revisions(3)(29)(3,484)155(3,371)(399)(4,319)Discoveries(4)——————Acquisitions—24,725———24,725Dispositions(4,520)(2,705)—(1,038,679)(90,024)(270,362)Economic factors(5)—(472)(112)(20)—(587)Production——————Infill drilling——————December 31, 2025(6)—219,899720,1592,2831940,440
Proved Plus Probable
December 31, 20246,378637,7231,382,8402,374,769232,1002,654,835Extensions and improved recovery(2)—42,81243,69721—86,513Technical revisions(3)(121)16,70924,004(4,747)(295)39,505Discoveries(4)——————Acquisitions—65,839———65,839Dispositions(6,162)(4,174)—(2,315,014)(225,915)(622,086)Economic factors(5)(5)(2,342)(515)(123)—(2,883)Production(91)(19,224)(22,384)(47,716)(5,887)(55,540)Infill drilling——————December 31, 2025(6)—737,3421,427,6407,19022,166,183(1)Gross reserves means Strathcona's working interest reserves before calculation of royalties, and before consideration of Strathcona's royalty interests.(2)Additions due to new wells drilled and booked during the year, and any reserve changes due to enhanced oil recovery.(3)Technical revisions include changes in reserves associated with changes in operating costs, capital costs and commodity price offsets.(4)Additions where no reserves were previously booked.(5)Changes to reserves volumes due to changes in price forecasts and/or inflation rates.(6)Figures may not add due to rounding.Undiscounted Future Net Revenue by Reserves CategoriesReserves Category
($ millions)RevenueRoyaltiesOperating CostsDevelopment CostsAbandonment
and
Reclamation CostsFuture Net
Revenue
Before
Income TaxesIncome TaxesFuture Net
Revenue
After
Income
Taxes
Total Proved96,72321,94430,04514,6331,92228,1786,54521,633Total Probable98,38930,10626,86014,23059226,6026,40020,202Total Proved plus Probable195,11252,05056,90528,8632,51454,78012,94541,835About StrathconaStrathcona is one of North America's fastest growing pure play heavy oil producers with operations focused on thermal oil and enhanced oil recovery. Strathcona is built on an innovative approach to growth achieved through the consolidation and development of long-life assets. Strathcona's common shares (symbol SCR) are listed on the Toronto Stock Exchange (TSX).For more information about Strathcona, visit www.strathconaresources.com.Non-GAAP Measures and RatiosThe financial results for the three months and year ended December 31, 2025 and December 31, 2024, are presented below to reconcile continuing and discontinued operations to total results. Total results in a non-GAAP measure used by Management to assess the historical financial performance of the total business and is not intended to be indicative of future results.
Three Months Ended December 31, 2025Three Months Ended December 31, 2024(1)($ millions, unless otherwise indicated)ContinuingDiscontinuedTotalContinuingDiscontinuedTotal
Revenues and other income
Oil and natural gas sales937—9371,0432501,293Sale of purchased products14—1416—16Royalties(99)—(99)(185)(24)(209)Oil and natural gas revenues852—8528742261,100(Loss) gain on risk management contracts(1)—(1)10—10Midstream revenue8—8———Other income 2—2———
861—8618842261,110
Expenses
Purchased product15—1516—16Blending costs236—236268—268Production and operating163(8)15515246198Transportation and processing95—958856144General and administrative24—2421728Interest24—2439—39Transaction related costs25833———Finance costs15—1512921Depletion, depreciation and amortization152—15214155196Impairment376—376———Foreign exchange (gain) loss (11)—(11)48—48Changes in decommissioning liabilities(13)—(13)———
1,101—1,101785173958
Gain on marketable securities102—102———Loss on assets held for sale, net—(12)(12)———(Loss) income before income taxes(138)(12)(150)9953152
Income tax (recovery) expense(48)(3)(51)491564(Loss) income and comprehensive (loss) income(90)(9)(99)503888(1)Comparative periods have been revised to reflect current period presentation.
Year Ended December 31, 2025Year Ended December 31, 2024(1)($ millions, unless otherwise indicated)ContinuingDiscontinuedTotalContinuingDiscontinuedTotal
Revenues and other income
Oil and natural gas sales4,0965214,6174,3739635,336Sale of purchased product67—6775—75Royalties(435)(35)(470)(567)(96)(663)Oil and natural gas revenues3,7284864,2143,8818674,748Loss on risk management contracts(86)—(86)(44)—(44)Midstream revenue24—24———Other income16—16———
3,6824864,1683,8378674,704
Expenses
Purchased product68—6875—75Blending costs1,034—1,0341,081—1,081Production and operating67276748641171812Transportation and processing368111479364213577General and administrative8810987625101Interest131—131170—170Transaction related costs4427711—1Finance costs561369503888Depletion, depreciation and amortization60790697595279874Impairment376—376———Foreign exchange (gain) loss(34)—(34)68—68Changes in decommissioning liabilities(13)—(13)———
3,3973273,7243,1217263,847
Gain on marketable securities171—171———Gain on sale of assets, net—609609———Loss on settlement of other obligations—(1)(1)—(4)(4)Income before income taxes4567671,223716137853
Income tax expense9022231220940249Income and comprehensive income36654591150797604(1)Comparative periods have been revised to reflect current period presentation."Oil and natural gas sales, net of blending and other income" is calculated by deducting purchased product and blending costs from oil and natural gas sales, sales of purchased product, midstream revenue and other income. Management uses this metric to isolate the revenue associated with the Company's production after accounting for the unavoidable cost of blending. Oil and natural gas sales, net of blending, is also reflected on a per boe basis calculated using sales volumes. This ratio is useful to management when analyzing realized pricing against benchmark commodity prices.
Three Months EndedYear Ended($ millions, unless otherwise indicated)December
31, 2025December
31, 2024September
30, 2025December
31, 2025December
31, 2024
Oil and natural gas sales 9371,2931,0124,6175,336Sales of purchased products1416316775Other income2—816—Purchased product(15)(16)(31)(68)(75)Blending costs (236)(268)(222)(1,034)(1,081)Midstream revenue8—924—Oil and natural gas sales, net of blending and other income 7101,0258073,6224,255"Effective royalty rate" is calculated by dividing royalties by oil and natural gas sales and sale of purchased product, net of blending and purchased product. This metric allows management to analyze the movement of royalty expenses in relation to realized and benchmark commodity prices."Operating Earnings – Discontinued" is considered a key financial metric for evaluating the profitability of Strathcona's discontinued operations. "Operating Earnings - Continuing" is a GAAP financial measure as it is used by the Chief Operating Decision Makers to evaluate profit or loss and is presented in the consolidated financial statements for year ended December 31, 2025 and 2024. A quantitative reconciliation of Operating Earnings – Discontinued to the most directly comparable GAAP financial measure, Oil and natural gas sales, is presented below.
Three Months EndedYear Ended($ millions, unless otherwise indicated)December
31, 2025December
31, 2024(1)September
30, 2025December
31, 2025December
31, 2024(1)
Revenues
Oil and natural gas sales—2503521963
Expenses
Royalties—24—3596Production and operating - Energy(1)2(1)—7Production and operating - Non-energy(7)44(3)76164Transportation and processing—56—111213Depletion, depreciation and amortization—55—90279General and administrative—7(2)1025Finance costs—9—1338Operating Earnings - Discontinued8539186141(1)Comparative periods have been revised to reflect current period presentation."Funds from Operations" is used by management to analyze operating performance and provides an indication of the funds generated by Strathcona's principal business to either fund operating activities, re-invest to either maintain or grow the business or make debt repayments. Funds from Operations is derived from Operating Earnings and adjusted for DD&A, finance costs, gains and losses on risk management contracts – realized and gains and losses on foreign exchange - realized, operating."Free Cash Flow" indicates funds available for deleveraging, funding future growth, or shareholder returns. Free Cash Flow is derived from Operating Earnings and adjusted for DD&A, finance costs, gains and losses on risk management contracts – realized and gains and losses on foreign exchange - realized, operating, capital expenditures and decommissioning costs.Quantitative reconciliations of Funds from Operations and Free Cash Flow for both continuing and discontinued operations to the most directly comparable GAAP financial measure, Operating Earnings, are set forth below.
Three Months EndedYear Ended($ millions, unless otherwise indicated)December
31, 2025December
31, 2024(1)September
30, 2025December
31, 2025December
31, 2024(1)
Operating Earnings - Continuing138137227744829Depletion, depreciation and amortization152141151607595Finance costs1512145650Loss on risk management contracts - realized(75)(5)(20)(100)(107)Foreign exchange (loss) gain - realized, operating—32(2)—Funds from Operations - Continuing2302883741,3051,367Capital expenditures(188)(280)(281)(957)(826)Decommissioning costs(9)(7)(8)(42)(15)Free Cash Flow - Continuing33185306526(1)Comparative periods have been revised to reflect current period presentation.
Three Months EndedYear Ended($ millions, unless otherwise indicated)December
31, 2025December
31, 2024(1)September
30, 2025December
31, 2025December
31, 2024(1)
Operating Earnings - Discontinued8539186141Depletion, depreciation and amortization—55—90279Finance costs—9—1338Realized loss on deferred premium settlement ————112Funds from Operations - Discontinued81179289570Capital expenditures12(113)—(229)(470)Decommissioning costs—(6)—(2)(21)Free Cash Flow - Discontinued20(2)95879(1)Comparative periods have been revised to reflect current period presentation.The following table reconciles operating earnings, funds from operations and free cash flow from continuing and discontinued operations:
Three Months EndedYear Ended($ millions, unless otherwise indicated)December
31, 2025December
31, 2024(1)September
30, 2025December
31, 2025December
31, 2024(1)
Operating Earnings146190236930970Depletion, depreciation and amortization152196151697874Finance costs1521146988Loss on risk management contracts - realized(75)(5)(20)(100)(107)Foreign exchange (loss) gain - realized, operating—32(2)—Realized loss on deferred premium settlement ————112Funds from Operations2384053831,5941,937Capital expenditures(176)(393)(281)(1,186)(1,296)Decommissioning costs(9)(13)(8)(44)(36)Free Cash Flow53(1)94364605(1)Comparative periods have been revised to reflect current period presentation."Organic Capex" is defined as total property, plant and equipment expenditures, excluding capitalized overhead, expenditures on corporate assets, and capital expenditures on assets acquired during the period. Management uses Organic Capex to evaluate the underlying capital investment in Strathcona's existing asset base, excluding the effects of acquisitions and non-operational capital. This measure provides insight into the Company's capital efficiency. "Organic Operating Netback" is used to assess the profitability and efficiency of Strathcona's field operations before the impact of acquisitions.A quantitative reconciliation of "Organic Operating Netback" to the most comparable GAAP measure, "Oil and natural gas sales", is set forth below:
Year Ended($ millions, unless otherwise indicated)December 31, 2025
Oil and natural gas sales4,096Sale of purchased product67Purchased product(68)Blending costs(1,034)Midstream revenue24Oil and natural gas sales, net of blending - Continuing3,085
Royalties435Production and operating672Transportation 368Field operating income - Continuing1,610Less: Operating income from properties acquired in the year(14)Organic field operating income1,596
Sales volumes (boe/d)114,763Less: sales volumes from properties acquired in the year (boe/d)(479)Organic sales volumes (boe/d)114,284
Organic operating netback ($/boe)38.49A quantitative reconciliation of "Organic Capex" to the most comparable GAAP measure, "Property, plant and equipment expenditures", is set for below:
Year Ended($ millions, unless otherwise indicated)December 31, 2025
Property, plant and equipment expenditures1,186Less: capitalized overhead(49)Less: expenditures on corporate assets(7)Less: property, plant and equipment expenditures on assets disposed of in the year(229)Organic Capex901Supplementary Financial Measures"PDP F&D" are calculated as Organic Capex plus changes in PDP future development costs (-$72 million in 2025), divided by PDP reserve additions for the year (39 MMbbls in 2025), excluding the impact of acquisitions and dispositions. Management uses PDP F&D costs as a measure of capital efficiency for organic reserves development."PDP Recycle Ratio" is calculated by dividing the Organic Operating Netback by PDP F&D. PDP Recycle Ratio is used to measure the profit per barrel of oil to the cost of finding and developing that barrel of oil."Organic 2P Reserves Replacement" is calculated as 2P reserves additions, excluding acquisitions and dispositions, divided by annual production volumes."Reserves Life Index" calculated by dividing gross reserves by annualized fourth quarter production."1P and 2P after-tax PV-10 net of debt per share" is comprised of before tax present value for 1P and 2P reserves, discounted at 10 per cent, as determined in accordance with NI 51-101, adjusted for debt at the end of the period."Organic 2P Reserves Replacement" is calculated as 2P reserves additions, excluding acquisitions and dispositions, divided by annual production volumes."Interest and finance costs" is an aggregation of interest and finance costs. Management uses this metric to obtain a fulsome understanding of all interest and accretion costs the Company is subject to."Other items" is an aggregation of risk management contracts, foreign exchange, transaction related costs, gain on marketable securities, loss (gain) on sale of assets, loss on settlement of other obligations, deferred tax (recovery) expense, change in decommissioning liabilities and impairment from both continuing and discontinued operations. They are presented in such a manner to yield prominence to key financial metrics such as income and comprehensive income, Funds from Operations and Free Cash Flow.
Three Months EndedYear Ended($ millions, unless otherwise indicated)December
31, 2025December
31, 2024September
30, 2025December
31, 2025December
31, 2024
Loss (gain) on risk management contracts1(10)278644Foreign exchange (gain) loss (11)4817(34)68Transaction related costs 33—19711Gain on marketable securities(102)—(22)(171)—Loss (gain) on sale of assets12—(616)(609)—Loss on settlements of other obligations———14Deferred tax (recovery) expense(51)64238312249Change in decommissioning liabilities(13)——(13)—Impairment376——376—Other items245102(337)19366"Non-cash items" is an aggregation of depletion, depreciation and amortization, finance costs, realized loss on deferred premium settlements and other income – decommissioning government grant."Debt, net of cash and marketable securities" is comprised of debt less cash and marketable securities, as derived under the Accounting Standards.Presentation of Oil and Gas InformationThis press release contains various references to the abbreviation "boe" which means barrels of oil equivalent. All boe conversions in this press release are derived by converting gas to oil at the ratio of six thousand cubic feet ("mcf") of natural gas to one barrel ("bbl") of crude oil. Boe may be misleading, particularly if used in isolation. A boe conversion rate of 1 bbl : 6 mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio of oil compared to natural gas based on currently prevailing prices is significantly different than the energy equivalency ratio of 1 bbl : 6 mcf, utilizing a conversion ratio of 1 bbl : 6 mcf may be misleading as an indication of value.References in this press release to initial production rates and other short-term production rates and test results are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long-term performance or of ultimate recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating aggregate production for the Company or the assets for which such rates are provided. A pressure transient analysis or well-test interpretation has not been carried out in respect of all wells. Accordingly, the test results should be considered to be preliminary.Product Type Production InformationNational Instruments 51-101 – Standards of Disclosure for Oil and Gas Activities includes condensate within the natural gas liquids product type. The Company has disclosed condensate as combined with light oil and separately from other natural gas liquids in this press release since the price of condensate as compared to other natural gas liquids is currently significantly higher and the Company believes that this presentation provides a more accurate description of its operations and results therefrom. References to "natural gas" in this press release refer to conventional natural gas. References to "liquids" in this press release refer to, collectively, bitumen, heavy oil, condensate and light oil (comprised of condensate and light oil) and other natural gas liquids (comprised of ethane, propane and butane only).The Company's quarterly and year-to-date average daily production volumes, and the references to "natural gas", "crude oil" and "liquids", reported in this press release consist of the following product types, as defined in NI 51-101 and using a conversion ratio of 6 mcf : 1 bbl where applicable:
Three Months EndedYear Ended
December
31, 2025December
31, 2024September
30, 2025December
31, 2025December
31, 2024
Heavy crude oil (bbl/d)54,66050,99753,94352,65851,107Light and medium crude oil (bbl/d)6161718263651Total crude oil (bbl/d)54,72151,61453,96152,92151,758Bitumen (bbl/d)62,53859,73261,15761,32759,516NGLs (bbl/d)3033,12646616,12831,229Total liquids (bbl/d)117,289144,472115,584130,376142,503Conventional natural gas (mcf/d)2,558256,3863,701130,729243,456Total (boe/d)117,715187,203116,201152,163183,080The Company's reserve volumes, and the references to "total oil" reported in this press release consist of the following product types as defined by NI 51-101:2025
NI 51-101NI 51-101NI 51-101
Light & Medium OilHeavy OilBitumenTotal Oil Reserves Category(MMbbl)(MMbbl)(MMbbl)(MMbbl)
Proved
Developed Producing (1)—101139241Developed Non-Producing (1)—1—1Undeveloped (1)—415568983Total Proved (1)—5177071,225Probable (1)—220720940Total Proved plus Probable (1)—7371,4282,165(1)Figures may not add due to rounding
NI 51-101NI 51-101
Natural Gas LiquidsNatural GasTotalReserves Category(MMbbl)(Bcf)(MMboe)
Proved
Developed Producing (1)—2241Developed Non-Producing (1)——1Undeveloped (1)—2984Total Proved (1)—51,226Probable (1)—2940Total Proved plus Probable (1)—72,166(1)Figures may not add due to roundingForward-Looking InformationCertain statements contained in this press release constitute forward-looking information within the meaning of applicable securities laws. The forward-looking information in this press release is based on Strathcona's current internal expectations, estimates, projections, assumptions and beliefs. Such forward-looking information is not a guarantee of future performance and involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. The Company believes the material factors, expectations and assumptions reflected in the forward-looking information are reasonable as of the time of such information, but no assurance can be given that these factors, expectations and assumptions will prove to be correct, and such forward-looking information included in this press release should not be unduly relied upon.The use of any of the words "expect", "target", "anticipate", "intend", "estimate", "objective", "ongoing", "may", "will", "project", "believe", "depends", "could" and similar expressions are intended to identify forward-looking information. In particular, but without limiting the generality of the foregoing, this press release contains forward-looking information pertaining to the following: the Company's business strategy and future plans; the expected peak rate of the 8 well pair D01 West pad at Lindbergh, including the timing thereof; the expectation that Strathcona will be able to meaningfully increase Vawn's production above historical levels and that Strathcona will provide further details in respect of the same in coming quarters; the expected peak oil rate, total installed costs and timing for first oil in respect of the Meota Central project; Strathcona's expectations in respect of the Selina Project, including its ability to leverage its existing central processing facility at Lindbergh to reduce capital costs and the amount of recoverable oil; Strathcona's intention to commence a normal course issuer bid, including the number of shares to be repurchased thereunder and Strathcona's strategy in respect of the same; Strathcona's initial 2026 production guidance of 120 to 130 Mbbls/d and capital budget of $1.0 billion; Strathcona's expected production of 115 to 120 Mbbls / d in the first half of 2026, and its expectation of ramping to an exit rate of approximately 135 Mbbls / d by year-end; and Strathcona's long-range plan to grow existing production from 125 Mbbls / d in 2026 to 200 Mbbls / d by 2031 and 300 Mbbls / d by 2035.All forward-looking information reflects Strathcona's beliefs and assumptions based on information available at the time the applicable forward-looking information is disclosed and in light of the Company's current expectations with respect to such things as: Strathcona's ability to generate sufficient cash flow to fund debt repayment and dividend payments; Strathcona's ability to declare and pay dividends; the success of Strathcona's operations and growth and expansion projects; expectations regarding production growth, future well production rates and reserve volumes; expectations regarding Strathcona's capital program, including the outlook for general economic trends, industry trends, prevailing and future commodity prices, foreign exchange rates and interest rates; the availability of third party services; prevailing and future royalty regimes and tax laws; future well production rates and reserve volumes; fluctuations in energy prices based on worldwide demand and geopolitical events; the impact of inflation; the integrity and reliability of Strathcona's assets; decommissioning obligations; Strathcona's ability to comply with its financial covenants; and the governmental, regulatory and legal environment. In addition, certain forward-looking information with respect to the Company's 2025 guidance assumes commodity prices and exchange rates of: US$70 / bbl WTI, US$12 / bbl WCS-WTI differential, 1.36 USD-CAD and C$2.75 / GJ AECO. Management believes that its assumptions and expectations reflected in the forward-looking information contained herein are reasonable based on the information available on the date such information is provided and the process used to prepare the information. However, it cannot assure readers that these expectations will prove to be correct.The forward-looking information included in this press release is not a guarantee of future performance and involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information, including, without limitation: changes in commodity prices; changes in the demand for or supply of Strathcona's products; the continued impact, or further deterioration, in global economic and market conditions, including from inflation, tariffs and/or certain geopolitical conflicts, such as the ongoing Russia/Ukraine conflict and the conflict in the Middle East, and other heightened geopolitical risks and the ability of the Company to carry on operations as contemplated in light of the foregoing; determinations by the Organization of the Petroleum Exporting Countries and other countries as to production levels; unanticipated operating results or production declines; changes in tax or environmental laws, climate change, royalty rates or other regulatory matters; changes in Strathcona's development plans or by third party operators of Strathcona's properties; competition from other producers; inability to retain drilling rigs and other services; failure to realize the anticipated benefits of the Company's acquisitions; incorrect assessment of the value of acquisitions; delays resulting from or inability to obtain required regulatory approvals, including TSX approval of our normal course issuer bid; increased debt levels or debt service requirements; changes in foreign exchange rates; inaccurate estimation of Strathcona's oil and gas reserve and contingent resource volumes; limited, unfavourable or a lack of access to capital markets or other sources of capital; increased costs; a lack of adequate insurance coverage; the impact of competitors; and the other factors discussed under the "Risk Factors" section in Strathcona's Management's Discussion & Analysis and Annual Information Form, each for the year ended December 31, 2025, and from time to time in Strathcona's public disclosure documents, which are available at www.sedarplus.ca.Declaration of dividends is at the sole discretion of the board of directors of Strathcona and will continue to be evaluated on an ongoing basis. There are risks that may result in Strathcona changing, suspending or discontinuing its quarterly dividends, including changes to its free cash flow, operating results, capital requirements, financial position, debt levels, market conditions or corporate strategy and the need to comply with requirements under its credit agreement and applicable laws respecting the declaration and payment of dividends. There are no assurances as to the continuing declaration and payment of future dividends or the amount or timing of any such dividends.Management approved the capital budget and production guidance contained herein as of the date of this press release. The purpose of the capital budget and production guidance is to assist readers in understanding Strathcona's expected and targeted financial position and performance, and this information may not be appropriate for other purposes.This earnings release contains information that may constitute future-oriented financial information or financial outlook information (collectively, "FOFI") about Strathcona's prospective financial performance, financial position or cash flows, all of which is subject to the same assumptions, risk factors, limitations and qualifications as set forth above. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise or inaccurate and, as such, undue reliance should not be placed on FOFI. Strathcona's actual results, performance and achievements could differ materially from those expressed in, or implied by, FOFI. Strathcona has included FOFI in order to provide readers with a more complete perspective on Strathcona's future operations and management's current expectations relating to Strathcona's future performance. Readers are cautioned that such information may not be appropriate for other purposes.The foregoing risks should not be construed as exhaustive. The forward-looking information contained in this press release speaks only as of the date of this press release and Strathcona does not assume any obligation to publicly update or revise such forward-looking information to reflect new events or circumstances, except as may be required pursuant to applicable laws. Any forward-looking information contained herein is expressly qualified by this cautionary statement.
View original content to download multimedia:https://www.prnewswire.com/news-releases/strathcona-resources-ltd-reports-fourth-quarter-and-full-year-2025-financial-and-operating-results-year-end-reserves-announces-quarterly-dividend-and-board-approval-to-commence-normal-course-issuer-bid-302711731.htmlSOURCE Strathcona Resources Ltd.
Original: Strathcona Resources Ltd. Reports Fourth Quarter and Full Year 2025 Financial and Operating Results, Year End Reserves, Announces Quarterly Dividend and Board Approval to Commence Normal Course Issuer Bid
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