Advantage Energy (AAV) Q1 2025 earnings summary

Executive summary

• Q1 2025 delivered record production of 83,773 BOEs per day, up 27% year-over-year, driven by Charlie Lake and Montney asset integration and organic growth.

• Adjusted funds flow reached CAD 121.1 million (CAD 0.73/share), exceeding expectations due to asset outperformance and cost reductions.

• Net debt reduced by CAD 22.3 million to CAD 603 million, ahead of the year-end target of CAD 450 million.

• Net loss attributable to shareholders was CAD 29 million, primarily due to an CAD 89.9 million unrealized loss on derivatives.

• Operational execution exceeded budget, especially in Montney and Charlie Lake assets, with operating costs dropping to CAD 4.76/BOE, down 8% sequentially.

Financial highlights

• Natural gas and liquids sales increased 63% to CAD 221.8 million compared to Q1 2024, with liquids sales up 115% and natural gas sales up 36%.

• Adjusted funds flow was CAD 121.1 million, or CAD 0.73 per share, for Q1 2025, up 82% year-over-year.

• Net capital expenditures were CAD 94.2 million, with CAD 98.2 million in exploration and development and CAD 19.8 million by Entropy for carbon capture projects.

• Operating netback improved 36% to CAD 18.80/BOE, driven by higher sales and increased liquids production.

• Operating expense per BOE was CAD 4.76, down 8% sequentially from Q4 2024 due to integration synergies.

Outlook and guidance

• 2025 production guidance maintained at 80,000–83,000 BOE/d, with 84–85% natural gas and 11–12% crude oil/condensate.

• No further production growth planned for the remainder of 2025 due to anticipated NGTL pipeline maintenance.

• Annual guidance remains unchanged despite strong Q1, with operating costs expected to settle in the lower half of the guidance range.

• Over CAD 500 million in free cash flow expected over the next three years, supporting 5–10% annual production growth.

• Approximately 43% of 2025 forecasted natural gas and crude oil/condensate production hedged.