Kiwetinohk Energy (KEC) Q2 2025 earnings summary

Executive summary

• Achieved record quarterly production of 33,217 BOE/d in Q2 2025, with strong operational and financial results, and free cash flow generation ahead of plan.

• Top-tier well performance in Duvernay and Montney, with 8 of the top 10 and 40 of the top 100 producing Duvernay wells in Western Canada.

• Infrastructure ownership and premium Chicago market access supported high netbacks and a 33% reduction in per unit operating expenses since 2022.

• Launched a formal business strategy review, including an orderly exit from the power business.

• Received Level Five (gold standard) reporting from the UN Environment Programme’s Oil and Gas Methane Partnership, a year ahead of schedule.

Financial highlights

• Q2 2025 production averaged 33,217 BOE/d, with 45% liquids; production up over 20% year-over-year.

• Generated $88.4 million in funds flow from operations and $37.2 million in free cash flow in Q2 2025.

• Operating costs reduced to $6.02/BOE, with full-year guidance lowered to $6.25–$6.75/BOE.

• Net debt reduced by $67.6 million since year-end 2024, with a net debt to trailing 12-month adjusted funds flow ratio of 0.60x.

• Realized natural gas price of $5.08/MCF for H1 2025, 164% higher than ACO daily pricing.

Outlook and guidance

• Annual production guidance raised to 32.0–34.0 Mboe/d, with oil & liquids at 45–49%.

• Operating and transportation cost guidance lowered; upstream capital guidance high end reduced to $305 million.

• 2025E free funds flow forecasted at $95 million, with positive FFF at $50 WTI/$2.00 HH after maintenance and growth capex.

• Net debt to adjusted funds flow from operations projected at 0.4x–0.5x for 2025.

• Setting up for a 20% growth profile in 2026, assuming similar commodity conditions.