2026-03-12
Strathcona Resources Ltd. Reports Fourth Quarter and Full Year 2025 Financial and Operating Results, Year End Reserves, Announces Quarterly Dividend and Board Approval to Commence Normal Course Issuer Bid
CALGARY, AB , March 11, 2026 /CNW/ - Strathcona Resources Ltd. (" Strathcona " or the " Company ") (TSX: SCR ) today reported its fourth quarter and full year 2025 financial and operating results as well as its year-end 2025 reserves. The Board of Directors also declared a quarterly dividend of $0.30 per common share and approved a share repurchase program for up to 5% of its outstanding shares, subject to customary TSX approvals. Q4 2025 Highlights Production of 117,715 boe/d (100% liquids) (1)(2) Operating Earnings of $146 million ($0.68 / share) (1)(3) Free Cash Flow of $53 million ($0.25 / share) (1)(3) FY 2025 Highlights Production of 152,163 boe/d (86% liquids) (1)(2) Operating Earnings of $930 million ($4.34 / share) (1)(3) Free Cash Flow of $364 million ($1.70 / share) (1)(3) YE 2025 Reserves Highlights Proved Developed Producing (" PDP "), Proved (" 1P ") and Proved Plus Probable (" 2P ") reserves of 241 MMboe, 1,226 MMboe and 2,166 MMboe, reflecting growth from continuing operations of 2%, 5%, and 7% respectively PDP finding and development costs (" PDP F&D ") (4) , including changes in future development costs (" PDP FDC "), of $21.24 / boe, equating to a 2025 PDP Recycle Ratio (4) of 1.8x; excluding approximately $400 million in capital spending on Meota Central and Cold Lake facility expansions which did not contribute to YE 2025 PDP bookings, PDP F&D was approximately $12.25 / boe, equating to a recycle ratio of 3.1x 297% organic 2P reserves replacement (4) ; 51 Year 2P Reserves Life Index (4) (29 Years 1P) 1P and 2P after-tax PV-10 net of debt (4) of $32.05 / share and $49.46 / share respectively Three Months Ended (1) Year Ended (1) ($ millions, unless otherwise indicated) December 31, 2025 December 31, 2024 September 30, 2025 December 31, 2025 December 31, 2024 WTI (US$/bbl) 59.14 70.27 64.93 64.81 75.72 WCS Hardisty (C$/bbl) 66.89 80.75 75.10 75.06 83.53 AECO 5A (C$/gj) 2.11 1.40 0.60 1.59 1.38 Bitumen (bbls/d) 62,538 59,732 61,157 61,327 59,516 Heavy oil (bbls/d) 54,660 50,997 53,943 52,658 51,107 Condensate and light oil (bbls/d) 65 20,763 250 10,339 19,922 Total oil production (bbls/d) 117,263 131,492 115,350 124,324 130,545 Other NGLs (bbls/d) 26 12,980 234 6,051 11,958 Natural gas (mcf/d) 2,558 256,386 3,701 130,729 243,456 Production (boe/d) 117,715 187,203 116,201 152,163 183,080 Sales (boe/d) 116,355 184,120 115,852 152,407 182,794 % Liquids (2) 99.7 % 77.2 % 99.6 % 85.7 % 77.8 % Oil and natural gas sales, net of blending and other income (3) 710 1,025 807 3,622 4,255 Royalties 99 209 128 470 663 Production and operating – Energy 65 59 37 237 248 Production and operating – Non-energy 90 139 104 511 564 Transportation and processing 95 144 92 479 577 General and administrative 24 28 22 98 101 Depletion, depreciation and amortization 152 196 151 697 874 Interest and finance costs (4) 39 60 37 200 258 Operating Earnings (3) 146 190 236 930 970 Other items (4) 245 102 (337) 19 366 (Loss) income and comprehensive (loss) Income (99) 88 573 911 604 Operating Earnings (3) 146 190 236 930 970 Non-cash items (4) 167 217 165 766 1,074 Loss on risk management and foreign exchange contracts – realized, operating (75) (2) (18) (102) (107) Funds from Operations (3) 238 405 383 1,594 1,937 Capital expenditures (176) (393) (281) (1,186) (1,296) Decommissioning costs (9) (13) (8) (44) (36) Free Cash Flow (3) 53 (1) 94 364 605 Debt, net of cash and marketable securities (4) 2,095 2,462 (81) 2,095 2,462 Common shares (millions) 214 214 214 214 214 (1) During the year ended December 31, 2025 the Company entered into three separate asset purchase and sale agreements to dispose of its Montney assets which has been presented in the Company's consolidated financial statements and management's discussion and analysis for the three months and year ended December 31, 2025 and 2024 as discontinued operations. The financial and operating results for these periods have been presented throughout this press release based on the aggregation of continuing and discontinued operations. The aggregation of continuing and discontinued financial results are non-GAAP measures and do not have a standardized meaning under IFRS ® Accounting Standards (the " Accounting Standards "); see "Non-GAAP Measures and Ratios" section of this press release. (2) See "Product Type Production Information" section of this press release. (3) A non-GAAP financial measure which does not have a standardized meaning under the Accounting Standards; see "Non-GAAP Measures and Ratios" section of this press release. (4) See "Supplementary Financial Measures" Section of this press release. Three Months Ended (1) Year Ended (1) ($/boe, unless otherwise indicated) December 31, 2025 December 31, 2024 September 30, 2025 December 31, 2025 December 31, 2024 Oil and natural gas sales, net of blending costs and other income (2) 66.38 60.49 75.74 65.12 63.60 Royalties 9.24 12.31 12.02 8.45 9.91 Production and operating – Energy 6.23 3.46 3.51 4.28 3.71 Production and operating – Non-energy 8.30 8.18 9.79 9.18 8.42 Transportation and processing 8.80 8.51 8.63 8.61 8.62 General and administrative 2.23 1.68 2.06 1.76 1.51 Depletion, depreciation and amortization 14.23 11.59 14.20 12.52 13.06 Interest and finance costs 3.58 3.54 3.44 3.59 3.86 Operating Earnings (2) 13.77 11.22 22.09 16.73 14.51 Effective royalty rate (%) (2) 13.9 % 20.3 % 15.9 % 13.0 % 15.6 % (1) During the year ended December 31, 2025 the Company entered into three separate asset purchase and sale agreements to dispose of its Montney assets which has been presented in the Company's consolidated financial statements and management's discussion and analysis for the three months and year ended December 31, 2025 and 2024 as discontinued operations. The financial and operating results for these periods have been presented throughout this press release based on the aggregation of continuing and discontinued operations. The aggregation of continuing and discontinued financial results are non-GAAP measures and do not have a standardized meaning under the Accounting Standards; see "Non-GAAP Measures and Ratios" section of this press release. (2) A non-GAAP financial measure which does not have a standardized meaning under the Accounting Standards; see "Non-GAAP Measures and Ratios" section of this press release. Annual Letter to Strathcona Shareholders Strathcona has posted a letter to shareholders providing an in-depth review of the Company's 2025 financial and operating performance and year-end reserves, which has been posted on Strathcona's website at strathconaresources.com/investors/reports. Strathcona shareholders are encouraged to review the letter, which provides details regarding the Company's strategy going forward. Quarter Review and Near-Term Priorities Strathcona's fourth quarter production of 118 Mboe / d, up 1% quarter-over-quarter, was in-line with expectations, with full year capital expenditures of $1,186 million lower than the Company's 2025 capital budget of $1,200 million. Fourth quarter non-energy production and operating costs of $8.30 / boe reflected a decrease of 15% versus the third quarter, reflecting savings achieved across the portfolio following successful execution of cost improvement initiatives undertaken mid-year. Free cash flow of $53 million for the fourth quarter was impacted by $75 million of realized hedging losses, following the restructuring of the Company's WCS differential swaps at the end of 2025, as previously disclosed. Strathcona's WTI exposure remains unhedged for 2026, with approximately 50% of its WCS Hardisty differential exposure hedged at US$12.00 / bbl, and approximately 80% of its natural gas purchase exposure hedged at C$2.00 / GJ AECO. In Cold Lake, production increased 2% quarter-over-quarter driven by the continued ramp up of Lower Drainage Wells (" LDWs ") on the 105 and 108 pads at Orion. Subsequent to year-end, seven LDWs on the C-East pad were brought online at Tucker, which have exceeded expectations thus far with an average rate of over 750 bbls / d per well. Current activity is focused on the 8 well pair D01 West pad at Lindbergh, which began steaming in early 2026 and is expected to ramp to a peak rate of approximately 6,500 bbls / d. In Lloydminster Thermal, in December Strathcona closed on its acquisition of the Vawn thermal project ( "Vawn" ) and undeveloped thermal lands at Plover Lake and Glenbogie. Vawn has since been fully incorporated into Strathcona's existing operations at Edam (located directly adjacent to Vawn, sharing the same reservoir), with both assets now benefiting from shared services and integrated reservoir management. Strathcona expects to be able to meaningfully increase Vawn's production above historical levels of approximately 5 Mbbls / d by year-end 2026 and will provide further details in coming quarters. Current capital activity remains focused on the Meota Central project, which is targeting first oil in the fourth quarter of 2026 and is expected to deliver a peak oil rate of approximately 13 Mbbls / d at a total installed cost of approximately $360 million. The project is currently 85% complete, on time and on budget. In Lloydminster Conventional, production of 21 Mbbls / d reflected a 7% decrease quarter-over-quarter, driven by flood conformance challenges at Strathcona's Cactus Lake and Bodo-Cosine polymer floods. Production has since stabilized following successful conformance work completed over the previous quarter. Current capital activity is concentrated on the Company's annual drilling programs in Winter and Druid, which include a mixture of single and multi-lateral horizontal wells. Selina Project Acquisition Today Strathcona signed and closed the acquisition of a 50% operated working interest in the Selina Project (" Selina ") in Cold Lake for total consideration of $23 million in cash. Strathcona previously held a 50% non-operated working interest in Selina, increasing its working interest to 100% and taking over operatorship. Selina is located near Strathcona's existing Lindbergh thermal project, with approvals from the Alberta Energy Regulatory (" AER ") in place for 12,500 bbls / d of production. Strathcona expects to develop Selina over time in a capital-efficient manner by leveraging its existing central processing facility at Lindbergh. Strathcona estimates approximately 160 MMbbls of recoverable oil at Selina, none of which was booked in its reserves or contingent resources at year-end 2025 due to Strathcona previously not holding operatorship. Normal Course Issuer Bid Strathcona's Board has approved the filing of a notice with the Toronto Stock Exchange (" TSX ") to commence a normal course issuer bid ( "NCIB" ). Once approved by the TSX, Strathcona may repurchase up to 5% of its issued and outstanding shares (up to a maximum of approximately 10.7 million common shares) over a twelve-month period. Strathcona intends to act opportunistically from time to time to repurchase its shares at what it views as a discount to its intrinsic value, conservatively determined and after applying a margin of safety. For further details regarding the Company's rationale and strategy regarding the NCIB, shareholders are encouraged to review the Company's year-end shareholder letter posted on its website. Outlook Strathcona's 2026 production guidance of 120 to 130 Mbbls/d and capital budget of $1.0 billion is unchanged. Strathcona expects production of 115 to 120 Mbbls / d in the first half of 2026, ramping to an exit rate of approximately 135 Mbbls / d by 2026 year-end. Following the Selina acquisition, Strathcona holds an estimated 3.0 billion of recoverable resources, equating to over 65 years relative to its 2026 production. Strathcona's long-range plan remains to grow production from 125 Mbbls / d in 2026 to 200 Mbbls / d by 2031 and 300 Mbbls / d by 2035 (in each case a 10% compound annual growth rate). Quarterly Dividend Strathcona's Board of Directors has declared a quarterly dividend of $0.30 per share to be paid on March 27, 2026 to shareholders of record on March 20, 2026. Payments to shareholders who are not residents of Canada will be net of any Canadian withholding taxes that may be applicable. Dividends paid by Strathcona are considered "eligible dividends" for Canadian tax purposes. 2025 Year End Reserves Details The tables below summarize Strathcona's Year End 2025 reserves which were prepared by McDaniel & Associates Consultants Ltd. (" McDaniel "). A complete filing of our oil and gas reserves and other oil and gas information presented in accordance with National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities is included in Strathcona's Annual Information Form for the year ended December 31, 2025, which can be found at www.sedarplus.ca and www.strathconaresources.com . Summary of Oil and Gas Reserves (Forecast Prices and Costs) as of December 31, 2025 Reserves Category Light & Medium Crude Oil Heavy Crude Oil Bitumen Gross (Mbbl) Net (Mbbl) Gross (Mbbl) Net (Mbbl) Gross (Mbbl) Net (Mbbl) Proved Developed Producing -- 2 101,464 93,159 139,440 103,453 Developed Non-Producing -- -- 580 540 -- -- Undeveloped -- -- 415,399 373,398 568,041 392,449 Total Proved (1) -- 2 517,443 467,097 707,481 495,903 Total Probable -- 1 219,899 193,777 720,159 467,720 Total Proved Plus Probable (1) -- 3 737,343 660,874 1,427,640 963,623 Reserves Category Conventional Natural Gas Natural Gas Liquids Oil Equivalent Gross (MMcf) Net (MMcf) Gross (Mbbl) Net (Mbbl) Gross (Mboe) Net (Mboe) Proved Developed Producing 2,438 2,146 1 1 241,312 196,974 Developed Non-Producing 3 3 -- -- 581 540 Undeveloped 2,466 2,195 -- -- 983,851 766,213 Total Proved (1) 4,907 4,343 1 1 1,225,743 963,727 Total Probable 2,283 2,027 1 -- 940,440 661,837 Total Proved Plus Probable (1) 7,190 6,371 2 2 2,166,183 1,625,564 (1) Figures may not add due to rounding. Summary of Net Present Value of Future Net Revenue Attributable to Oil and Gas Reserves (Forecast Prices and Costs) as of December 31, 2025 Reserves Category Before Deducting Income Taxes After Deducting Income Taxes 0 % 5 % 10 % 15 % 20 % Unit Value (2) 0 % 5 % 10 % 15 % 20 % Unit Value (3) (in $ millions) (1) $/boe (in $ millions) (1) $/boe Proved Developed Producing 5,221 4,928 4,342 3,844 3,447 22.04 4,396 4,250 3,773 3,359 3,027 19.16 Developed Non‐Producing 16 14 12 10 9 21.65 12 10 9 8 7 15.97 Undeveloped 22,941 12,546 7,402 4,579 2,903 9.66 17,225 9,131 5,178 3,037 1,781 6.76 Total Proved (4) 28,178 17,487 11,755 8,434 6,359 12.20 21,633 13,391 8,960 6,404 4,815 9.30 Total Probable 26,602 10,424 5,122 2,939 1,876 7.74 20,202 7,748 3,732 2,101 1,317 5.64 Total Proved plus Probable (4) 54,780 27,912 16,877 11,373 8,235 10.38 41,835 21,138 12,692 8,505 6,132 7.81 (1) Net present value of future net revenue includes all resource income, including the sale of oil, gas, by-product reserves, processing third party reserves and other income. (2) Calculated using net present value of future net revenue before deducting income taxes, discounted at 10% per year, and net reserves. The unit values are based on net reserves volumes. (3) Calculated using net present value of future net revenue after deducting income taxes, discounted at 10% per year, and net reserves. The unit values are based on net reserves volumes. (4) Figures may not add due to rounding. Forecast Prices and Costs as of December 31, 2025 Year (1) Inflation (%) (2) Exchange Rate (Cdn$/US$) (3) Crude Oil Natural Gas Natural Gas Liquids WTI Cushing Oklahoma 40 API ($US/bbl) Canadian Light Sweet Crude 40 API ($Cdn/bbl) Western Canadian Select 20.5 API ($Cdn/bbl) Alberta AECO-C Spot ($Cdn/ mmbtu) Edmonton Pentanes Plus ($Cdn/bbl) Edmonton Butane ($Cdn/bbl) Edmonton Propane ($Cdn/bbl) Ethane Plant Gate ($Cdn/bbl) Full story available on Benzinga.com
