Topaz Energy (TPZ) Sidoti September Small-Cap Virtual Conference summary

Company overview and strategy

• Founded in 2019, IPO in 2020 during a challenging market, focusing on a hybrid infrastructure and royalty business model.

• Grown to CAD 3.6 billion market cap and CAD 4 billion enterprise value, with over CAD 2.3 billion in acquisitions since IPO.

• 70% of revenue from royalties, 25% from infrastructure, with infrastructure covering 50% of the dividend.

• Eight dividend increases since IPO, totaling a 65% increase.

• Largest royalty holder in Northeast BC and Clearwater, with significant land base and growth potential.

Asset base and operational highlights

• 1.1 million acres in Northeast BC, 6 million acres total exposure, and 21,000 drilling locations.

• 60% of royalty land is undeveloped, providing decades of inventory.

• 30%-40% organic production growth expected over five years, equating to CAD 100 million new EBITDA.

• Infrastructure assets are under long-term take-or-pay contracts with 99% utilization.

• Major partners include Tourmaline, Whitecap, Tamarack Valley, Headwater, NuVista, Advantage, and Strathcona.

Financial performance and risk management

• Maintains a healthy balance sheet with 1.1x debt to cash flow and a CAD 1 billion credit facility.

• 80% cash flow margin on infrastructure, compared to 25% for peers.

• 20% of natural gas hedged to 2026, 30% of oil hedged to 2025, supporting dividend stability.

• Dividend coverage maintained even at low commodity prices, with a payout ratio of 65%-80%.

• 19% average return on invested capital since inception, driven by countercyclical acquisitions.