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, significantly strengthening cash flow and liquidity profile.

• Q1 2025 average daily production reached 33,400 boepd (W.I.), 37,700 boepd (entitlement), with net income of $50.9 million and strong cash flow from operations.

• Declared and paid first two quarterly dividends of $25 million each, with a new policy targeting at least $100 million in annual base dividends, tripling dividend per share.

• Maintained a strong balance sheet with $428 million in cash and net debt to EBITDAX of 0.3x at quarter-end.

• Streamlined business structure, refreshed board, and clear long-term strategy focused on sustainable shareholder returns.

Financial highlights

• Q1 2025 EBITDAX of $142 million, cash flow from operations before working capital of $100 million, and capital expenditures of $28 million.

• Q1 2025 revenue (pro forma) was $399.9 million; gross profit $79.9 million; free cash flow before debt service and shareholder returns was $122 million, including $32 million from Impact.

• Five oil cargoes lifted in Q1 at an average realized price of $79.5/bbl, above Brent average; seven cargoes remain for the year, with four hedged at $64.5/bbl.

• Cash balance increased to $428 million from $61 million at 2024 year-end, mainly due to Prime amalgamation.

• Net debt at Q1 2025: $191.6 million; RBL outstanding: $620 million; $180 million borrowing base headroom.

Outlook and guidance

• Full-year 2025 production guidance unchanged: WI production 28,000–33,000 boepd; Q1 production of 33,400 boe/d exceeded upper end of guidance.

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

• Cash flow guidance robust even if Brent averages $50/bbl for the rest of the year, due to hedging and strong Q1 pricing.

• Minimum liquidity target of $150 million and net debt to EBITDA below 1x maintained.

• Committed to $100 million annual base dividend, with potential for supplementary distributions subject to board approval.