Kiwetinohk Energy (KEC) Q4 2024 earnings summary

Executive summary

• Achieved 19% annual production growth to 26,875 BOE/d in 2024, exceeding guidance and reaching over 30,000 BOE/d exit rate; January 2025 production averaged nearly 32,500 BOE/d.

• Completed record capital program in 2024 with CAD 336.7 million in expenditures, bringing multiple new Duvernay and Montney wells online.

• Increased 2P reserves by 10% to 246.4 MMboe and added a 20-well development wedge in Simonette Montney.

• Closed CAD 21 million sale of Opal Power Project in Q1 2025; Homestead Solar project fully permitted and positioned for sale.

• Considering engaging advisors to evaluate strategic alternatives, including potential asset sales or acquisitions, to address funding constraints.

Financial highlights

• Commodity sales from production reached $454.6 million in 2024, up from $411.8 million in 2023.

• Adjusted funds flow from operations hit a record $272.1 million ($6.23/share), up from $241.3 million ($5.49/share) year-over-year.

• Net loss for 2024 was $64.6 million, compared to net income of $1.1 million in 2023, reflecting non-cash and one-time items.

• Annual operating costs improved 17% year-over-year to CAD 7.04/BOE, lowest since asset acquisition.

• Net debt increased to $272.8 million from $186.5 million year-over-year; net debt to annualized adjusted funds flow from operations at 1.00x.

Outlook and guidance

• Projected 2025 production growth of 21% and free cash flow inflection of CAD 80 million.

• 2025 adjusted funds flow from operations guidance raised to $335–$375 million at US$60/bbl WTI and $405–$450 million at US$70/bbl WTI.

• Projected 2025 net debt to adjusted funds flow from operations ratio expected to improve to 0.5x–0.7x at base case pricing.

• 2025 CapEx guidance set at CAD 290–315 million, with manageable exposure to U.S. tariffs.

• Operating cost guidance for 2025 slightly higher due to plant expansion and planned outages.