Meren Energy (MER) Q1 2025 earnings summary

Executive summary

• Completed Prime amalgamation and rebranding as Meren, doubling reserves and production, and taking direct control of Prime's balance sheet.

• Q1 2025 average daily production reached 33,400 boepd (W.I.), with strong netback production, robust cash flow, and premium Brent pricing.

• Declared two quarterly dividends of $25 million each, with a new policy targeting at least $100 million in annual base dividends.

• Maintained a strong balance sheet, ending Q1 with $428.4 million in cash and net debt to EBITDAX of 0.3x.

• Streamlined business structure and enhanced payout policy support long-term shareholder value.

Financial highlights

• Q1 2025 EBITDAX of $141.6 million, cash flow from operations before working capital of $99.8 million, and free cash flow of $121.6 million.

• Q1 2025 revenue (pro forma) was $399.9 million; gross profit $79.9 million; net income $50.9 million.

• Cash balance rose to $428.4 million from $61 million at end-2024, mainly due to Prime amalgamation.

• Proactive RBL debt repayment: $130 million in Q1, $80 million post-Q1, reducing outstanding balance to $540 million.

• Five cargoes sold in Q1 2025 at $79.5/bbl, outperforming Dated Brent by $3.8/bbl.

Outlook and guidance

• Full-year 2025 production guidance unchanged: 28,000–33,000 boepd (W.I.), with Q1 production at the high end.

• FY 2025 EBITDAX guidance: $500–600 million; cash flow from operations: $320–370 million; capex: $150–190 million.

• Oil price risk for 2025 materially reduced by front-loaded cargo sales and hedging; average realized price expected at $67/bbl even if Brent drops to $50/bbl for remainder of year.

• Minimum liquidity of $150 million and net debt to EBITDA below 1x remain key financial discipline metrics.

• Committed to $100 million annual base dividend; supplementary dividends and buybacks considered based on free cash flow and board discretion.