Saturn Oil & Gas Inc. press release

Saturn Oil & Gas Inc. Announces 2025 Results and Reserves, With $110 Million of Debt Repayment, Record Q4 Production Ahead of Guidance and 50% Free Funds Flow Yield

2026-03-11

TSX - Toronto Stock Exchange · Oil · Natural Gas · Natural Gas Liquids · Canada · Corporate Finance

Saturn Oil & Gas Inc. Announces 2025 Results and Reserves, With $110 Million of Debt Repayment, Record Q4 Production Ahead of Guidance and 50% Free Funds Flow Yield

43,657 boe/d production in Q4/25 exceeded guidance by over 1,100 boe/d(2) and was 6% higher than Q3/25

Repaid $110 million of debt to exit 2025 with $761.5 million of net debt(1)

Adjusted funds flow(1) ("AFF") of $464 million ($2.40/share) in 2025 increased 22% year-over-year

Record $223 million ($1.15/share) of annual free funds flow(1) drove 50% free funds flow yield(1) at year-end, with over $33 million returned to shareholders in 2025 via ongoing share buybacks

$5.47/share of PDP net asset value with 31% expansion in PDP reserves per debt-adjusted share(1)(14)

Calgary, Alberta--(Newsfile Corp. - March 11, 2026) - Saturn Oil & Gas Inc. (TSX: SOIL) (OTCQX: OILSF) ("Saturn" or the "Company"), a light oil-weighted producer focused on unlocking value through the development of assets in Saskatchewan and Alberta, is pleased to report our operating and audited financial results for the three and twelve months ended December 31, 2025, highlighted by quarterly production above guidance, record free funds flow and free funds flow yield, continued debt repayment and return of capital to shareholders, along with a summary of the Company's 2025 year-end independent reserves evaluation. Saturn's financial statements ("Financial Statements"), Management's Discussion and Analysis ("MD&A") and Annual Information Form ("AIF") will be available on our website and filed on SEDAR+ at sedarplus.ca. A conference call and webcast to discuss our results is scheduled for Thursday, March 12, 2026 at 8:00 am Mountain Time (10:00 am Eastern Time). Access details for the conference call and webcast are provided below.

"Through 2025, we continued to execute our blueprint and remained focused on optimizing and developing our low-decline, light oil-weighted asset base while improving our per share metrics year-over-year. As a result, we beat expectations, repaid $110 million on our Senior Notes, exceeded Q4 production guidance by 1,100 boe/d and generated record free funds flow(1) of $223 million. We bought back $33 million of our shares in 2025, and since we view every dollar of debt repayment as a dollar back to shareholders, Saturn returned over $143 million to our shareholders last year. If we include the share buybacks to date in 2026, that figure increases to $155 million, or about a quarter of our current market cap," said John Jeffrey, Saturn's Chief Executive Officer.

In commenting on Saturn's year end reserves, Mr. Jeffrey continued, "We recorded the largest positive proved developed producing ("PDP") technical revisions in our history, increased booked drilling locations(15) by 8% over 2024, giving us a booked and unbooked identified inventory(15) that management estimates could sustain 20 years of drilling at our current pace. Our reserves per debt adjusted share(1)(13) grew by 31 to 32% across all categories, and we maintained our PDP net asset value per share at just under $5.50(1)(3), despite a 19% decline in the evaluators' oil price forecasts. Our 2025 results and reserves further highlight the upside opportunity in Saturn given the disconnect between our current market value and underlying reserves value."

Q4 & FULL YEAR 2025 HIGHLIGHTS

Production of 43,657 boe/d in Q4/25 was 6% higher than the prior quarter, as volumes continue to exceed both analysts' expectations and Saturn's guidance, while 2025 volumes averaged 41,728 boe/d, and contributed to 46% growth in production per debt-adjusted share(13) versus 2024.

$110 million of Senior Notes repayment to exit 2025 with net debt(1) of $761.5 million, achieved during a period of substantially lower oil prices, and resulting in a net debt to adjusted EBITDA(1) ratio of 1.35x.

Record $464 million of AFF(1) ($2.40/share basic) generated in 2025 against a backdrop of 13% lower realized oil prices than the previous year, and $121 million ($0.64/share basic) of AFF(1) in Q4/25. Record AFF was supported by an average 23% outperformance of type curve(14) across all of our assets, an ongoing focus on operating cost reductions and our robust hedging strategy.

Highest free funds flow(1) in Saturn's history, totaling $223 million ($1.15/share basic) in 2025, was allocated to debt repayment, our ongoing return of capital framework and tuck-in acquisitions, with free funds flow(1) of $56 million ($0.30/share basic) generated in Q4/25.

Over $33 million returned to shareholders in 2025 by purchasing and cancelling 14.4 million common shares ("Shares") through our normal course issuer bid ("NCIB") and substantial issuer bid, including $12 million returned in Q4/25 via the purchase and cancellation of 4.8 million Shares.

Opex (net operating expenses(1)) averaged $19.09/boe in 2025 and $19.24/boe in Q4/25, both coming in below Saturn's guidance range of $19.50 - $20.00/boe, reflecting our disciplined approach to cost reduction and efficiency capture, with the lower opex also supporting positive year end reserves bookings.

Capital expenditures(1)(4) totaled $241 million in 2025, resulting in the drilling of 93 gross (71.4 net) wells, with Q4/25 capital of $65 million directed to drill 30 gross (22.1 net) wells, including 20 in southeast Saskatchewan; six in southwest Saskatchewan; and four in Central Alberta.

Core-up strategy continued with $94 million of tuck-in acquisitions during 2025, meaningfully expanding our open hole multi-lateral ("OHML") development potential in southeast Saskatchewan. At year-end 2025, our drilling location inventory included over 380 gross (318.0 net)(15) identified OHML Bakken, Spearfish, Midale and Torquay locations, having an internally estimated net present value approaching $450 million that was previously unrecognized and represents significant future value creation potential.

Net income of $168 million ($0.87/share basic) was generated in 2025, and $31 million ($0.17 per share basic) in Q4/25, primarily reflecting continued operational performance, along with an unrealized gain on derivatives and unrealized foreign exchange gain on our Senior Notes compared to unrealized losses in 2024.

EVENTS SUBSEQUENT TO YEAR END

Returned an additional $10.0 million to shareholders through the acquisition of 3.2 million Shares on the open market via our NCIB subsequent to the end of the quarter. This brings Saturn's total return to shareholders since the initial NCIB launch in August 2024 to $53.6 million, with the purchase and cancellation of over 22 million Shares.

Added further price protection with incremental oil hedges through 2026 and into 2027, using wide Canadian dollar collars as well as differential swaps through 2026. Saturn layered on new foreign exchange rate contracts to lock in the principal and interest payments on our US denominated debt through mid-2027, replacing the previous contracts that were monetized for a gain of approximately $9 million in Q4/25. The Company remains active and will continue to opportunistically enhance our hedge book when market conditions are optimal.

FINANCIAL AND OPERATING HIGHLIGHTS

Three months endedYear ended

($000s, except per share amounts)December 31,

2025September 30,

2025December 31,

2024December 31,

2025December 31,

2024

FINANCIAL HIGHLIGHTS

Petroleum and natural gas sales 233,554 235,344 268,845 983,691 908,296

Cash flow from operating activities 76,065 126,097 91,157 457,399 311,937

Operating netback, net of derivatives(1) 136,600 128,565 152,616 554,565 472,236

Adjusted EBITDA(1) 140,854 123,571 152,823 549,322 482,997

Adjusted funds flow(1) 120,697 103,282 129,205 463,954 380,091

per share - Basic(1) 0.64 0.54 0.64 2.40 2.10

per share - Diluted(1) 0.61 0.51 0.63 2.28 2.05

Free funds flow(1) 55,933 15,943 23,785 222,714 133,775

per share - Basic(1) 0.30 0.08 0.12 1.15 0.74

per share - Diluted(1) 0.28 0.08 0.12 1.09 0.72

Net income (loss) 31,230 3,466 (26,318) 167,569 54,106

per share - Basic 0.17 0.02 (0.13) 0.87 0.30

- Diluted 0.16 0.02 (0.13) 0.82 0.29

Acquisitions, net of cash acquired 23,469 65,212 26,011 93,813 564,407

Proceeds from dispositions - - 576 - (25,132)

Capital expenditures(1)(4) 64,764 87,339 105,420 241,240 246,316

Total assets 2,190,825 2,214,611 2,161,578 2,190,825 2,161,578

Net debt(1), end of period 761,476 782,514 860,155 761,476 860,155

Shareholders' equity 946,591 924,514 803,972 946,591 803,972

Common shares outstanding, end of period 184,084 190,020 199,555 184,084 199,555

Weighted average, basic 187,135 192,520 201,484 193,402 180,864

Weighted average, diluted 197,604 202,785 206,205 203,842 185,607

OPERATING HIGHLIGHTS

Average production volumes

Crude oil (bbls/d)31,28729,15230,44930,43024,885

NGLs (bbls/d)4,0524,1803,3813,7182,954

Natural gas (mcf/d)49,90646,86043,32845,47838,093

Total boe/d43,65741,14241,05141,72834,188

% Oil and NGLs 81% 81% 82% 82% 81%

Average realized prices

Crude oil ($/bbl) 72.52 81.71 89.13 81.05 92.63

NGLs ($/bbl) 38.72 37.49 46.74 41.84 44.89

Natural gas ($/mcf) 2.44 0.67 1.41 1.84 1.43

Processing expenses ($/boe) (0.21) (0.30) (0.27) (0.25) (0.31)

Petroleum and natural gas sales ($/boe) 58.15 62.18 71.18 64.59 72.59

Operating netback ($/boe)

Petroleum and natural gas sales 58.15 62.18 71.18 64.59 72.59

Royalties (6.65) (7.70) (8.71) (7.75) (9.12)

Net operating expenses(1) (19.24) (19.24) (18.35) (19.09) (19.01)

Transportation expenses (1.57) (1.49) (1.07) (1.57) (1.39)

Operating netback(1) 30.69 33.75 43.05 36.18 43.07

Realized gain (loss) on derivatives 3.32 0.22 (2.64) 0.23 (5.33)

Operating netback, net of derivatives(1) 34.01 33.97 40.41 36.41 37.74

2025 RESERVES HIGHLIGHTS

The 2025 year end reserves evaluation of Saturn's crude oil and natural gas assets in Saskatchewan and Alberta was effective December 31, 2025, dated February 20, 2026, and prepared by independent reserves evaluators Ryder Scott Company-Canada ("Ryder Scott") in accordance with the Canadian Oil and Gas Evaluation Handbook and in compliance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101") (the "2025 Reserve Report").

Our 2025 Reserve Report reflects our drilling and development success realized during the year, Saturn's extensive inventory of highly economic drilling locations, and the impact of tuck-in acquisitions. Our fulsome reserves disclosure is included in the Company's AIF for the year ended December 31, 2025, which is available on SEDAR+ at www.sedarplus.com and on our website.

Reserves growth across all categories which more than offset the approximately 19% decline in Ryder Scott's 2026 oil price forecasts year-over-year:

CategoryReserves

(million boe(3))Year / Year

IncreaseReserve Life

Index (RLI)

Proved Developed Producing ("PDP")94.4 MMboe+9%6 years

Total Proved ("1P")144.1 MMboe+9%9 years

Total Proved + Probable ("2P")219.6 MMboe+10%14 years

Reserves per debt-adjusted share(13) expanded versus 2024, including growth of 31% on PDP, 31% on 1P and 32% on 2P, reflecting robust reserves additions and Saturn's focus on continuous improvement in per share metrics.

Net asset value ("NAV") per share(1)(3) remained relatively constant at $5.47 for PDP, $7.75 for 1P, and $12.98 for 2P, showcasing the opportunity presented by a disconnect between the Company's underlying value and current market value.

Largest PDP positive technical revisions in Saturn's history, totaling 11.4MMboe, driven by base well outperformance, year-over-year opex reductions, waterflood impact and PDP conversions, with new reserves added in each category from the combination of extensions, improved recovery, infill drilling, technical revisions and discoveries:

PDP additions of 22.9 MMboe = 44% of 2024 PDP reserves;

1P additions of 26.8 MMboe = 32% of 2024 1P reserves; and

2P additions of 34.8 MMboe = 25% of 2024 2P reserves.

Expanded inventory of future drilling opportunities, with over 1,200 booked drilling locations(3)(15), 8% higher than in 2024. An additional approximately 1,400 locations(3)(15) have been internally identified, positioning Saturn with an inventory that could potentially maintain flat production for an estimated 20 years of drilling.

Replaced production(3) by 150% on a PDP basis, 176% on 1P and 229% on 2P.

Robust capital efficiencies on finding, development and acquisition costs ("FD&A")(3)(9)(10)(12) and recycle ratios(3)(11), including changes in future development capital ("FDC")(3):

1P FD&A was $16.26/boe with a 2.2x recycle ratio(3)(11) and 2P FD&A was $16.79/boe with a 2.2x recycle ratio(3)(11)

OPERATIONS UPDATE

Saturn's fourth quarter production averaged 43,657 boe/d, again exceeding analyst consensus estimates and our previous guidance by over 1,000 boe/d, driving full year 2025 average production of 41,728 boe/d. These strong 2025 volumes reflect our continued type curve outperformance across each of our core operating areas. In southeast Saskatchewan, we outperformed type curve(14) by an average of 32% due to our continued Bakken, Spearfish and Frobisher development, while we exceeded type curves by 16%(14) in Central Alberta and 13%(14) in West Central Saskatchewan on the year. As a result of this outperformance, we produced higher volumes than originally anticipated without needing to spend more capital, which improves our efficiency and long-term sustainability. In Q4/25, we invested $64.8 million, with 81% directed to production-adding activities, including the drilling of 30 gross (22.1 net) wells, of which 20 were drilled in Southeast Saskatchewan, six in Southwest Saskatchewan, and four in Central Alberta.

Our Q4 and full year 2025 results demonstrate the capabilities of our team and the strength of our Saturn blueprint. The Company continued to enhance performance across our low decline, mid-life cycle assets, while ongoing cost reductions extended the economic life of our assets, enabling higher sustained production and incremental reserves bookings. Net operating expenses(1) in the fourth quarter averaged $19.24/boe, remaining below the revised guidance range of $19.50 - $20.00/boe, with full-year operating costs averaging $19.09/boe.

Momentum continues to build in our OHML program which provides a clear example of Saturn's ability to create value. The assets now being developed using OHML had zero value ascribed when acquired, with no locations nor reserves booked on those lands. Today, those same assets have more than 380 gross (318.0 net) OHML locations(15) identified, with only 100 gross / 85.0 net booked(15) at year-end 2025. Based on a US$60 WTI price deck (consistent with our 2026 guidance), Saturn has modeled over $190 million of value(1)(3) yet to be unlocked from the OHML Bakken locations alone, with an estimated $240 million of potential value(1)(3) on all of the other OHML locations in our inventory. This represents potential for over $430 million of previously unrecognized value(1)(3) from Saturn's OHML program alone.

We are currently drilling our fourth Spearfish OHML well on a recently acquired, undeveloped land package in southeast Saskatchewan. The well is a six-leg design located near our recent 16-05 Spearfish well, which came on production at more than three times type curve expectations(14). We anticipate providing production performance updates on this new well with the release of our Q1/26 results in May.

Saturn also drilled two OHML Midale re-entry wells late in Q4/25, and as we continue to drill in Q1/26, the team is focused on improving drilling efficiencies and increasing metres drilled per day. Through these re-entries, we can increase the length of the original leg and drill new additional legs, enabling the Company to benefit from certain royalty incentives on Crown land that boost economics and accelerate payouts.

Our team is excited about new development at Roncott within our Flat Lake field; an area that has remained undrilled since 2021. We drilled three new wells at Roncott in late 2025, including a multi-lateral re-entry and two open-hole single lateral new drills. All three of these wells are performing above type curve expectations(14), increasing the potential for follow-up drilling in close proximity to this initial development and opening up an additional 10 to 15 locations. We also initiated a waterflood at Roncott, as the reservoir appears highly receptive, and implementing a waterflood eliminates the costs associated with transporting and handling produced water off-site, capturing operational synergies and driving down operating costs. Roncott is just one example of Saturn's application of OHML learnings across our portfolio to improve recoveries, reduce costs and find innovative ways to enhance asset profitability.

Safety continues to be at the heart of Saturn's operations. In 2025, we proudly achieved a second consecutive year with zero lost time injuries, a notable achievement given the 18% increase in person-hours worked in 2025 over 2024, following the 38% increase in 2024 versus 2023. This success is showcased by a 196% increase in hazard identifications from 2023 to 2025, and is a direct result of our team's proactive risk identification and mitigation approach to preventing incidents before they occur. Saturn's embedded safety culture is dedicated to protecting our people first and foremost, while also minimizing potential liabilities and supporting our financial performance.

OUTLOOK

The recent strike on Iran has increased volatility across global oil markets due to supply disruption concerns and the security of key shipping routes. Saturn remains well positioned to navigate this volatility given our disciplined risk management strategy, strong leverage to oil prices, and flexible capital allocation framework. In addition, we continue to seek opportunities to enhance and optimize Saturn's hedge book, and can quickly layer in further hedges as prices escalate. Our strong torque to oil prices is a key differentiator relative to peers, as each US$5 per barrel movement in WTI from our guidance pricing assumption of US$60 per barrel is expected to drive an estimated $45 to 50 million impact to our AFF(1), further supporting robust free funds flow(1) generation and financial sustainability.

In Q1/26, we forecast capital expenditures(1)(4) to range between $40 and $50 million, with average production anticipated between 41,000 and 42,000 boe/d(2). Approximately 70% of our 2026 capital program is expected to be deployed in the second half of the year, affording the Company time and the flexibility to adjust capital spending should pricing and market conditions remain supportive through the back half of 2026. Saturn continues to prioritize free funds flow(1) generation, further net debt(1) reduction and a disciplined capital allocation framework that includes ongoing share buybacks, tuck-in acquisitions and other measures to support shareholder value creation and long-term resilience.

2025 RESERVES DETAIL

Summary of Crude Oil, Natural Gas and Natural Gas Liquids Reserves and Before Tax Net Present Values(3)(5)

The following tables are a summary of the Ryder Scott estimated Company reserves (Company share gross volumes) and NPVs of future net revenue, before tax, based on forecast price and costs as contained in the Reserve Report. The Reserve Report encompasses 100% of the Company's oil and gas properties as of December 31, 2025.

Reserves CategoryLight and Medium Crude Oil

(Mbbl)Heavy

Crude Oil

(Mbbl)Conventional

Natural Gas

(MMscf)Natural

Gas Liquids

(Mbbl)Total MBOE

(Mboe)

GrossNetGrossNetGrossNetGrossNetGrossNet

Proved

Developed Producing58,26353,78610,3128,785104,63195,2768,3877,63094,40086,081

Developed

Non-Producing366350991491443231431414

Undeveloped34,18531,5411,1001,05861,63155,2063,6653,30749,22145,107

Total Proved92,81385,67611,4219,853166,411150,62612,08410,968144,053131,602

Probable49,39445,4394,9514,21991,49181,7925,9855,29075,57968,580

Total Proved Plus Probable142,207131,11516,37214,071257,902232,41818,06816,259219,631200,182

NPVs Before Tax(3)(5)(6)(7)

Reserves Category(3)Before Income Tax (MM$)(2)

0%5%10%15%20%

Proved:

Developed Producing 2,179.52,074.81,768.01,517.41,327.5