Tenaz Energy (TNZ) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition expands the Netherlands cornerstone asset base, increasing exposure to the high-value TTF gas market and providing high growth and high return potential.

• Adds non-operated interests in five highly prospective licenses, including producing and development assets in the Dutch North Sea and Germany, enhancing international portfolio diversification.

• Strengthens position as a leading independent producer in the Netherlands, with significant growth potential and the highest producing well in the country.

• Asset is powered by renewable energy, supporting low-emission hydrocarbon production and ESG objectives.

• Enhances infrastructure utilization and leverages existing state-of-the-art automated platforms.

Financial terms and conditions

• Purchase price of US$244 million (C$339 million): US$232 million in cash and US$12 million in equity, with shares priced on a 20-day VWAP.

• Additional contingent consideration up to US$60 million (C$81 million) based on qualifying discoveries within 10 years, triggered by at least 50 Bcf gross 2P reserves, up to three discoveries by 2035.

• Debt increases to over CAD 400 million, with new senior secured notes issued at a 12% coupon and 8.4% premium to par; cash funded by on-hand resources and private placement of senior unsecured notes.

• Undrawn CAD 115 million revolving credit facility secured from a syndicate of Canadian banks.

• Share component equals about 2.9% of current shares, with conditional listing approval from the Toronto Stock Exchange and a four-month hold.

Synergies and expected cost savings

• High-margin production with low OpEx (approx. CAD 5/BOE), industry-leading operating costs, and minimal royalties.

• Utilization of existing infrastructure and automated platforms reduces development and decommissioning costs.

• Hedging program locks in significant revenue, protecting cash flow through 2027.

• Consolidated unit operating costs and G&A projected to decrease by approximately 23% in 2026.

• Cash flow profile supported by high-rate wells and a payout period of less than three years.