Cardinal Energy (CJ) Q1 2025 earnings summary

Executive summary

• Q1 2025 production averaged 22,005 boe/d, up 1% year-over-year, with crude oil and NGL volumes rising 3% and natural gas down 10%, resulting in 90% liquids weighting, a 2% increase.

• Adjusted funds flow rose 18% to $62.2 million ($0.39/share), driven by higher realized oil prices and lower operating costs; free cash flow surged 141% to $49.1 million.

• Net operating expenses per boe fell 7% to $24.33, reflecting lower power and workover costs.

• Major progress on the Reford SAGD thermal project, now over 80% complete and on budget, with $68 million invested in Q1.

• Maintained monthly dividend of $0.06/share, returning $28.7 million to shareholders and reducing payout ratio to 67% from 116% year-over-year.

Financial highlights

• Petroleum and natural gas revenue increased 7% to $149.8 million year-over-year.

• Cash flow from operating activities rose 63% to $64.2 million; adjusted funds flow per share up 18% to $0.39.

• Netback per boe improved 14% to $34.97; realized oil prices increased 6% for light oil and 7% for WCS oil despite a 7% drop in WTI benchmark.

• Development capital expenditures decreased 60% to $13.1 million as focus shifted to thermal project completion.

• Net debt increased to $191.4 million, with a net debt to adjusted funds flow ratio of 0.7x.

Outlook and guidance

• Reford thermal project expected to reach full production in 2026, with 85% completion as of Q1 2025.

• Once operational, 35% of production will have a flat or inclining profile for 20+ years with minimal sustaining capital.

• Capital plans remain flexible for H2 2025, with only modest thermal expenditures forecast and potential to defer conventional spending if needed.

• Long-term strategy focuses on thermal development growth and maintaining a conservative balance sheet to support sustainable dividends.