Topaz Energy (TPZ) investor relations material

Executive summary

• Q2 2025 delivered strong performance with 19% royalty production growth to 22,300 boe/d, driven by acquisitions and operator-funded development, and significant increases in infrastructure processing revenue.

• Market capitalization reached $3.9 billion and enterprise value $4.4 billion as of July 2025, with 153.8 million shares outstanding and 26% insider ownership.

• Revenue streams are diversified across royalties, infrastructure, and undeveloped land, underpinned by operator-funded capital and strategic partnerships.

• Dividend growth of 70% since inception, with a current yield of 5.3–5.5% and a 2025 payout ratio of 66–69%.

• Record 21% share of total WCSB drilling activity, up from 15% in Q2 last year, with diversified drilling across key plays.

Financial highlights

• Q2 2025 total revenue was $81.2 million: 46% from crude/heavy oil royalties, 26% from natural gas/NGL royalties, 28% from infrastructure.

• Cash flow for Q2 2025 was $75.6 million ($0.49/share), free cash flow was $74 million, with a 91% margin.

• Net income for Q2 2025 was $28.2 million ($0.18/share), a 50% increase year-over-year.

• Q2 2025 payout ratio was 69%; trailing annualized dividend yield was 5.5%.

• Net debt at quarter-end was $485.2 million, with 1.5x net debt to annualized EBITDA.

Outlook and guidance

• 2025 guidance reconfirmed: average annual royalty production of 21,000–23,000 boe/d and processing revenue/other income of $88–$92 million.

• Expected year-end 2025 net debt of $430–$435 million and net debt/EBITDA of 1.2x.

• Dividend sustainability maintained even at $0 AECO and $55 WTI, supported by high-margin infrastructure and hedging.

• 30%+ of H2 2025 natural gas production hedged at $2.88/Mcf; opportunistic hedging strategy continues.

• Five-year outlook targets 3–5% annual growth, with upside from new exploration plays and 50–107% CFPS growth depending on commodity prices and acquisitions.