Cavvy Energy (CVVY) investor relations material

Executive summary

• Achieved significant growth in midstream/third-party processing and strong cash flow, with net operating income of $26.5 million and funds flow from operations at $14.5 million in Q2 2025, supported by hedging gains.

• Net debt reduced by $18.6 million to $166.9 million at quarter end, reflecting ongoing deleveraging efforts.

• Production averaged slightly over 26,000 BOE/day (81% natural gas), down 16% year-over-year due to voluntary shut-ins of uneconomic dry gas.

• Strategic pivot completed, including sale of LNG assets in 2024 and rebranding to Cavi/Cavvy Energy in May 2025, focusing on Western Canadian upstream and midstream operations.

• Positioned as a leading small to mid-cap energy company with low production decline and extensive infrastructure.

Financial highlights

• Net operating income for Q2 2025 was $26.5 million, with $17.5 million in commodity hedging gains.

• Net income for Q2 2025 was $4.1 million, or $0.01 per share, compared to a net loss of $19.2 million in Q2 2024.

• Third-party processing revenue increased by $5.4 million year-over-year, with over 120% growth in volumes and 129% growth in revenue.

• Operating expenses fell 24% year-over-year to $40.4 million, with per BOE expense at $17.04 and adjusted at $11.59.

• Realized natural gas price after hedging was $3.23/mcf, significantly above the benchmark of $1.72/mcf.

Outlook and guidance

• 2025 guidance unchanged: production 23,000–25,000 BOE/day, NOI $75–95 million, capital expenditures $25–30 million.

• Expects to be at or above the high end of net operating income guidance for 2025.

• Anticipates significant new net revenue from sulfur sales at market prices starting January 2026, potentially exceeding $60 million in additional net cash flow.

• No resumption of drilling planned in 2025 due to weak natural gas prices; selective participation in liquids-rich prospects possible.

• Will consider additional gas hedges for 2026-2027 if pricing improves.