Saturn Oil & Gas (SOIL) Q1 2026 earnings summary

Executive summary

• Q1 2026 production volumes exceeded 43,100 BOE/D, surpassing guidance by over 1,600 BOE/D and marking the seventh consecutive quarter above analyst expectations, with volumes reaching 43,116 BOE/D.

• Adjusted funds flow and free funds flow both exceeded analyst consensus, with adjusted funds flow at CAD 107 million (CAD 0.59 per basic share) and free funds flow at CAD 62 million, despite only one month of higher oil prices in March.

• Net debt declined 5% from year-end 2025, ending Q1 at approximately CAD 725 million, reflecting ongoing debt repayment.

• Share buybacks continued, nearing the maximum allowable under the NCIB, with equity-based compensation settled via open market purchases to minimize dilution.

• Realized oil prices surged to nearly $115/bbl in March due to geopolitical events, significantly boosting financial results.

Financial highlights

• Petroleum and natural gas sales were $270.2 million, up from $233.6 million in Q4 2025 but down from $278.1 million in Q1 2025.

• Adjusted EBITDA was $126.5 million, and operating netback, net of derivatives, was $132.7 million.

• Net income was a loss of $97.3 million, compared to a profit of $31.2 million in Q4 2025 and $37.8 million in Q1 2025.

• Operating costs were CAD 20.49 per BOE, at midpoint of guidance but higher than the previous quarter due to seasonality.

• Realized hedging loss of CAD 21 million (CAD 5.45/BOE) due to March oil price spike; large non-cash unrealized hedging loss impacted net income.

Outlook and guidance

• Capital program remains flexible, with plans to accelerate capital from H2 into Q2 to capitalize on higher oil prices.

• Q2 2026 capital spending expected between CAD 35 million and CAD 40 million, with volumes averaging 40,000–41,000 BOE/D.

• Potential to increase full-year 2026 capital budget by up to 50% if oil prices stabilize in the high $70s to $80s.

• Plans to add a fifth rig in West Central Saskatchewan to target high-impact, short cycle-time wells.

• No cash taxes anticipated until 2028 or later due to over CAD 1.6 billion in tax pools.