Tenaz Energy Corp. Announces Q1 2026 Results
Rhea-AI Summary
Tenaz Energy (OTC:ATUUF / TSX:TNZ) reported Q1 2026 results on May 7, 2026. Production averaged 16,183 boe/d (up 4% QoQ), driven by Netherlands activity and recent acquisitions. Q1 operating netback was $57.48/boe. FFO was $64.6M; capital spend was $92.0M. Net debt ended at $389.4M and RBL capacity was increased to $250M.
AI-generated analysis. Not financial advice.
Positive
- Production 16,183 boe/d (Q1 2026)
- Operating netback $57.48/boe (Q1 2026)
- Funds flow $64.6M (Q1 2026)
- RBL upsized to $250M with Macquarie added
- Net deliverability added >4,500 boe/d in Netherlands
Negative
- Net loss $(111.1)M reported for Q1 2026
- Capital spend $92.0M in quarter increased net debt
- Net debt $389.4M (~1.0x forecasted 2026 FFO)
- Exposure >85% production weighted to European gas
News Market Reaction – ATUUF
On the day this news was published, ATUUF declined 5.99%, reflecting a notable negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
Calgary, Alberta--(Newsfile Corp. - May 6, 2026) - Tenaz Energy Corp. (TSX: TNZ) ("Tenaz", "We", "Our", "Us" or the "Company") is pleased to announce financial and operating results for the first quarter of 2026.
The related unaudited interim condensed consolidated financial statements and management's discussion and analysis ("MD&A") are available on SEDAR+ at www.sedarplus.ca and on Tenaz's website at www.tenazenergy.com.
HIGHLIGHTS
- Production volumes averaged 16,183 boe/d(1) in Q1 2026, up
4% from Q4 2025, with higher Netherlands production more than offsetting natural decline in Canada. Q1 2026 production was almost five times higher than Q1 2025, reflecting the two major acquisitions completed in 2025.
- During the quarter, we successfully operated or participated in three Dutch North Sea ("DNS") wells, an offshore workover campaign, and our three-well Canadian drilling program. Five of the six wells are currently on production with the sixth well in the process of being tied-in. Subsequent to the quarter, we spudded our second operated DNS well and the third GEMS non-operated well in the DNS.
- At our non-operated GEMS asset, production from the N05-A-01 well continued at a choked rate of 74 MMcf/d (24.6 MMcf/d net) after a full year of production. Operator ONE-Dyas completed the N05-A-03 development well (the second well in the N05-A pool). Subsequent to the end of the quarter, this well was brought on production at a stabilized gas rate of 40 MMcf/d (13.3 MMcf/d net).
- Operating netback(2) for Q1 2026 was
$57.48 /boe, representing a19% increase from Q4 2025 and a67% increase over Q1 2025. This improvement is due to our increasing exposure to European gas which comprises over85% of our current production base, compared to33% in Q1 2025. We expect operating netbacks to further improve in Q2 2026 due to higher pricing based on the current commodity strip, increasing European gas weighting and decreasing unit costs.
- Funds flow from operations(2) ("FFO") for the first quarter was
$64.6 million as compared to$62.1 million in Q4 2025, with higher production and pricing in the Netherlands partially offset by higher income tax and hedging losses.
- Capital investment(2) for the first quarter was
$92 million , representing approximately30% of our capital expenditure program for 2026. With expected free cash flows increasing due to higher pricing, we are increasing our capital investment plan for 2026 to a new investment target of$300 million . Given our large inventory of high return organic projects, we believe that our highest and best use of a portion of the additional free cash flow is an increased capital program.
- Tenaz has a strong liquidity position, with additional Reserve Based Loan ("RBL") capacity secured subsequent to the end of the quarter, including the addition of Macquarie Bank Limited as a new institution to the lending syndicate. The new two-year RBL has an overall limit of
$250 million , of which$35 million was drawn at the end of the quarter.
- We ended Q1 2026 with a net debt(2) position of
$389.4 million , an increase of$44.3 million over the previous quarter. The increase in net debt resulted primarily from the capital investment program we are undertaking in 2026, which is expected to result in significant production growth, and an increase in the estimated earn-out payment attributable to 2027. This debt level is approximately 1.0 times forecasted 2026 FFO at the current commodity strip.
- Year-to-date, Tenaz shares have appreciated
131% . On a longer term basis, since the recapitalization in Q3 2021 Tenaz has returned 3,306% , in the top percentile of all TSX corporate issuers.
(1) The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. Per boe amounts have been calculated by using the conversion ratio of six thousand cubic feet (6 Mcf) of natural gas to one barrel (1 bbl) of crude oil. Refer to "Barrels of Oil Equivalent" included in the "Advisories" section.
(2) This is a non-GAAP and other financial measure. Refer to "Non-GAAP and Other Financial Measures".
FINANCIAL AND OPERATING SUMMARY
| Three months ended | |||||||||
| Mar 31 | Dec 31 | Mar 31 | |||||||
| ( | 2026 | 2025 | 2025 | ||||||
| FINANCIAL | |||||||||
| Petroleum and natural gas sales | 133,291 | 117,600 | 17,692 | ||||||
| Cash flow from (used in) operating activities | 55,656 | 30,242 | (3,811 | ) | |||||
| Funds flow from operations(1) | 64,574 | 62,063 | 953 | ||||||
| Per share - basic(1) | 2.02 | 2.12 | 0.03 | ||||||
| Per share - diluted(1) | 1.89 | 1.92 | 0.03 | ||||||
| Net (loss) income | (111,084 | ) | 107,555 | (5,308 | ) | ||||
| Per share - basic | (3.48 | ) | 3.67 | (0.19 | ) | ||||
| Per share - diluted | (3.48 | ) | 3.32 | (0.19 | ) | ||||
| Capital expenditures(1) | 92,007 | 84,180 | 9,320 | ||||||
| Net debt(1) | 389,404 | 345,150 | (497 | ) | |||||
| Net debt to quarterly annualized funds flow from operations(1) | 1.5 | 1.4 | (0.1 | ) | |||||
| Common shares outstanding (000) | |||||||||
| End of period - basic | 32,209 | 31,789 | 27,550 | ||||||
| Weighted average for the period - basic | 31,900 | 29,271 | 27,595 | ||||||
| Weighted average for the period - diluted | 34,083 | 32,383 | 32,715 | ||||||
| OPERATING | |||||||||
| Average daily production | |||||||||
| Heavy crude oil (bbls/d) | 1,042 | 1,176 | 951 | ||||||
| Natural gas liquids (bbls/d) | 330 | 375 | 71 | ||||||
| Natural gas (Mcf/d) | 88,863 | 84,026 | 11,225 | ||||||
| Total (boe/d)(2) | 16,183 | 15,556 | 2,893 | ||||||
| Netbacks ($/boe) | |||||||||
| Petroleum and natural gas sales | 91.52 | 82.17 | 67.95 | ||||||
| Royalties | (1.46 | ) | (1.36 | ) | (5.38 | ) | |||
| Transportation expenses | (2.51 | ) | (2.05 | ) | (3.09 | ) | |||
| Operating expenses | (31.38 | ) | (31.50 | ) | (28.45 | ) | |||
| Midstream income(1) | 1.31 | 1.17 | 3.48 | ||||||
| Operating netback(1) | 57.48 | 48.43 | 34.51 | ||||||
| BENCHMARK COMMODITY PRICES | |||||||||
| WTI crude oil (US$/bbl)(3) | 71.93 | 59.14 | 71.42 | ||||||
| WCS ($/bbl)(4) | 79.23 | 66.87 | 84.43 | ||||||
| AECO ($/Mcf)(5) | 2.01 | 2.34 | 2.13 | ||||||
| TTF ($/Mcf)(6) | 18.54 | 14.28 | 20.65 | ||||||
(1) This is a non-GAAP measure. Refer to "Non-GAAP and Other Financial Measures".
(2) The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. Per boe amounts have been calculated by using the conversion ratio of six thousand cubic feet (6 Mcf) of natural gas to one barrel (1 bbl) of crude oil. Refer to "Barrels of Oil Equivalent" included in the "Advisories" section.
(3) WTI represents posting price of West Texas Intermediate ("WTI") crude oil.
(4) WCS represents posting price of Western Canadian Select ("WCS") crude oil.
(5) AECO is the natural gas price index for Alberta.
(6) TTF is the price for natural gas in the Netherlands.
PRESIDENT'S MESSAGE
We ramped-up our capital investment program in Q1 2026 to initiate what we believe will be a long-term progression of organic growth. We generated a production increase during Q1 and expect additional growth in Q2 2026. Following the facility turnaround period of Q2, we expect more rapidly increasing production during the second half of this year. We are applying a portion of the higher free cash flow resulting from commodity price increases into a larger capital program for 2026, which should yield additional growth in 2027. We believe the highest and best use of this additional free cash is further investment into our workover and drilling program.
We embarked on our capital program in the context of a Middle East war which has led to higher near-term product prices. The war has caused widespread interruption of oil and gas infrastructure in the Persian Gulf region. Impacts to crude supply are unprecedented, with approximately
Tenaz's operations in the DNS have not been affected by the war in the Middle East. This situation has, however, reaffirmed our commitment to do everything we can to increase the domestic supply of natural gas in Europe. In the Netherlands, subsequent to the end of Q1 2026, we have tied-in two (0.8 net) new gas wells in our operated and non-operated licences, await tie-in on another (0.2 net) gas well, and commenced drilling on two (0.9 net) additional wells in our operated and non-operated GEMS campaigns.
In addition, we executed a workover campaign on our operated K15-A platform (
In light of the current market environment and our strong operational and financial results to date, we have elected to increase our capital budget to a target of approximately
Netherlands Activity
In the Netherlands, we had three drilling rigs active during the quarter including an operated program on our operated assets and non-operated drilling rigs at GEMS and Eni. During the quarter, we completed drilling the K07-FB-103 (
The Shelf Drilling Winner rig moved to the K17 platform and commenced drilling our second operated well in the Netherlands, K17-FA-103 (
In addition to the drilling activity, we completed additional workover activity on the K15-A platform (
At our non-operated GEMS asset (
At our non-operated L10 license (
In aggregate, our Q1 2026 capital activity has added more than 4,500 boe/d of net deliverability in the Netherlands. We will typically utilize this new deliverability at restricted rates for various operational reasons, including back out and sand control. Netherlands production averaged 14,045 boe/d in the first quarter of 2026, which was on budget and reflects a quarter-over-quarter increase of
Canadian Activity
In Canada, we completed two multi-lateral Ellerslie wells (1.8 net) during the first quarter, with production commencing late in Q1 2026. The Ellerslie wells are currently producing at a combined rate of 450 boe/d (395 boe/d net,
Production for Q1 2026 in Canada was down
Financial Review
Funds flow from operations(3) ("FFO") for the first quarter was
We exited Q1 2026 with a net debt(3) position of
Net debt is primarily comprised of our outstanding Senior Unsecured Notes, with a total principal outstanding of
Cash generated during 2026 will primarily target capital investment and debt reduction. We continue to allocate a relatively small portion of our free cash flow to our NCIB program while we execute our organic growth strategy. As free cash flow increases, we expect the NCIB program will comprise a larger component of deployment of the excess cash generated. During Q1 2026, Tenaz repurchased a total of 47,000 shares at a weighted-average price of
We recorded a net loss of
Tenaz maintains commodity hedges to provide a significant degree of cash flow certainty and protect expected investment returns on future production, while retaining meaningful exposure to potentially higher commodity prices. Our 2026 and 2027 hedge positions were largely executed in support of the NOBV and GEMS acquisitions completed in 2025. When realized, hedge gains and losses are included in the computation of current taxes and contingent consideration.
During the quarter, our hedge contracts shifted from a net asset position of
Our exposure to spot prices remains at nearly
Commodity Environment
During Q1 2026, TTF natural gas prices averaged €39.47/MWh (
Europe is highly dependent on LNG imports to meet its annual natural gas demand. This supply disruption comes at a time when European natural gas storage levels are at the lowest levels since 2022. Given this backdrop, we expect European natural gas prices to remain elevated through the balance of the year, which is reflected in the forward curve. At present, the prompt TTF marker price is approximately €43.90/MWh (
Crude oil prices also surged due to the closure of the Strait of Hormuz and damage to oil infrastructure in the region. WTI oil prices averaged US
AECO natural gas prices averaged
Updated 2026 Corporate Guidance
We are updating our guidance to reflect incremental capital from the addition of a long-term workover barge and more drilling and completion activity in the second half of 2026. D&D capital expenditure guidance is revised to a target of
While we emphasize capital investment and growth, we will continue our financial discipline, maintaining low debt ratios and pursuing deleveraging while we grow. Finally, our NCIB program continues to return capital to shareholders, and we are committed to continued share repurchases in 2026 and beyond.
Year-to-date, Tenaz shares have appreciated
/s/ Anthony Marino
President and Chief Executive Officer
May 6, 2026
(1) Production test of the Slochteren formation conducted over 16 hours. The peak rate was part of a step rate test and pressure build-up and may differ from stabilized daily production rates. We expect to produce the well at lower production rates relative to the reported test rate.
(2) Production test of the Slochteren formation conducted over 7 hours. The test rate was part of a step rate test and pressure build-up and may differ from stabilized daily production rates. The well is expected to produce at lower production rates relative to the reported test rate.
(3) This is a non-GAAP measure. Refer to "Non-GAAP and Other Financial Measures".
About Tenaz Energy Corp.
Tenaz is an energy company focused on the acquisition and sustainable development of international oil and gas assets. Tenaz is the largest gas producer in the Dutch sector of the North Sea and develops crude oil and natural gas at Leduc-Woodbend in Alberta. Additional information regarding Tenaz is available on SEDAR+ and at www.tenazenergy.com. Tenaz's Common Shares are listed for trading on the Toronto Stock Exchange under the symbol "TNZ".
ADVISORIES
Non‐GAAP and Other Financial Measures
This press release contains the terms funds flow from operations and capital expenditures which are considered "non-GAAP financial measures" and operating netback which is considered a "non-GAAP financial ratio". These terms do not have a standardized meaning prescribed by GAAP. In addition, this press release contains the term net debt, which is considered a "capital management measure". Accordingly, the Company's use of these terms may not be comparable to similarly defined measures presented by other companies. Investors are cautioned that these measures should not be construed as an alternative to net income (loss) determined in accordance with GAAP and these measures should not be considered to be more meaningful than GAAP measures in evaluating the Company's performance.
Funds flow from operations ("FFO")
Tenaz considers funds flow from operations to be a key measure of performance as it demonstrates the Company's ability to generate the necessary funds for sustaining capital, future growth through capital investment, and settling liabilities. Funds flow from operations is calculated as cash flow from operating activities plus midstream income and before changes in non-cash operating working capital, decommissioning liabilities settled, and the amortization of deferred financing costs and premium. Funds flow from operations is not intended to represent cash flows from operating activities. A summary of the reconciliation of cash flow from operating activities to funds flow from operations is set forth below:
| ( | Q1 2026 | Q4 2025 | Q1 2025 | |||||||
| Cash flow from (used in) operating activities | 55,656 | 30,242 | (3,811 | ) | ||||||
| Change in non-cash operating working capital | 6,254 | 28,919 | 2,895 | |||||||
| Decommissioning liabilities settled | 404 | 766 | 585 | |||||||
| Midstream income | 1,916 | 1,673 | 1,381 | |||||||
| Amortization of deferred financing costs and premium | 344 | 463 | (97 | ) | ||||||
| Funds flow from operations(1) | 64,574 | 62,063 | 953 |
(1) FFO per share (basic) is calculated as FFO divided by the weighted average common shares outstanding. Diluted FFO per share adjusts for the impact of potentially dilutive securities using the treasury stock method. For the periods presented, FFO per share was as follows: Q1 2026:
Capital Expenditures
Tenaz considers capital expenditures to be a useful measure of the Company's investment in its existing asset base calculated as the sum of exploration and evaluation asset expenditures and property, plant and equipment expenditures from the consolidated statements of cash flows that is most directly comparable to cash flows used in investing activities. The reconciliation to primary financial statement measures is set forth below:
| ( | Q1 2026 | Q4 2025 | Q1 2025 | |||||||
| Exploration and evaluation | 19,044 | 49,390 | 311 | |||||||
| Property, plant and equipment | 72,963 | 34,790 | 9,009 | |||||||
| Capital expenditures | 92,007 | 84,180 | 9,320 |
Free Cash Flow ("FCF")
Tenaz considers free cash flow to be a key measure of performance as it demonstrates the Company's excess funds generated after capital expenditures for potential shareholder returns, acquisitions, or growth in available liquidity. FCF is a non-GAAP financial measure and is comprised of funds flow from operations less capital expenditures. A summary of the reconciliation of the measure is set forth below
| ( | Q1 2026 | Q4 2025 | Q1 2025 | |||||||
| Funds flow from operations | 64,574 | 62,063 | 953 | |||||||
| Less: Capital expenditures | (92,007 | ) | (84,180 | ) | (9,320 | ) | ||||
| Free cash flow | (27,433 | ) | (22,117 | ) | (8,367 | ) |
Midstream Income
Tenaz considers midstream income an integral part of determining operating netbacks. Operating netbacks assists management and investors with evaluating operating performance. Tenaz's midstream income consists of the income from its associate, Noordtgastransport B.V. ("NGT"), and excludes the amortization of fair value increment of NGT that is included in the equity investment on the balance sheet. Under IFRS Accounting Standards, investments in associates are accounted for using the equity method of accounting. Income from associate is Tenaz's share of the investee's net income and comprehensive income:
| ( | Q1 2026 | Q4 2025 | Q1 2025 | |||||||
| Income from associate | 1,673 | 1,426 | 1,144 | |||||||
| Plus: Amortization of fair value increment of NGT | 243 | 247 | 237 | |||||||
| Midstream income | 1,916 | 1,673 | 1,381 |
Net debt
Management views net debt as a key industry benchmark and measure to assess the Company's financial position and liquidity. Net debt is calculated as current assets less current liabilities, non-current portion of contingent consideration, and long-term debt, excluding the fair value of derivative instruments. If negative, the amount is referred to as adjusted working capital.
Net debt to fund flows from operations is a ratio calculated as net debt divided by funds flow from operations. Net debt to quarterly annualized funds flow from operations ratio is calculated as net debt divided by funds flow from operations for the respective quarter, annualized by multiplying by four. Management views these ratios as measures to assess the Company's financial leverage. Funds flow from operations is a non-GAAP measure. Refer to "Funds flow from operations" included in this "Advisories" section.
| March 31 | December 31 | ||||||
| ( | 2026 | 2025 | |||||
| Current assets | 298,414 | 287,048 | |||||
| Current liabilities | 431,790 | 305,301 | |||||
| Net working capital | 133,376 | 18,253 | |||||
| Fair value of net derivative instruments | (111,040 | ) | 8,375 | ||||
| Long-term debt | 347,451 | 312,957 | |||||
| Contingent consideration, non-current portion | 19,617 | 5,565 | |||||
| Net debt | 389,404 | 345,150 | |||||
| Funds flow from operations | 64,574 | 120,426 | |||||
| Net debt to quarterly annualized funds flow from operations (ratio) | 1.5 | 1.4 |
Operating Netback
Tenaz calculates operating netback on a dollar or per boe basis, as petroleum and natural gas sales less royalties, operating costs and transportation costs, plus midstream income. Operating netback is a key industry benchmark and a measure of performance for Tenaz that provides investors with information that is commonly used by other crude oil and natural gas producers. The measurement on a per boe basis assists management and investors with evaluating operating performance on a comparable basis.
Per Share Ratios
FFO per share (basic) is calculated as FFO divided by the weighted average number of common shares outstanding. Diluted FFO per share adjusts for the impact of potentially dilutive securities using the treasury stock method.
Barrels of Oil Equivalent
The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. Per boe amounts have been calculated by using the conversion ratio of six thousand cubic feet (6 Mcf) of natural gas to one barrel (1 bbl) of crude oil. The boe conversion ratio of 6 Mcf to 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalent of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.
Forward‐looking Information
This press release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "budget", "forecast", "guidance", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "potential", "intends", "strategy" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, this press release contains forward-looking information and statements pertaining to: expected free cash flow and uses thereof; liquidity; our commitment to increase the supply of natural gas to Europe; Tenaz's inventory of opportunities and projects; capital plans, activities and budget including workover and drilling opportunities and activities; our anticipated operational and financial performance including well performance and production growth; our 2026 production and capital guidance; share buybacks; commodity prices; hedging; and the Company's strategy including our organic growth and potential to expand our asset portfolio.
The forward-looking information and statements contained in this press release reflect several material factors and expectations and assumptions of Tenaz including, without limitation: the continued performance of Tenaz's oil and gas properties in a manner consistent with its past experiences; that Tenaz will continue to conduct its operations in a manner consistent with past operations; expectations regarding future development; the general continuance of current industry conditions; the continuance of existing (and in certain circumstances, the implementation of proposed) tax, royalty, tariff and regulatory regimes; expectations regarding future acquisition opportunities; the accuracy of the estimates of the Company's reserves, resources and future net revenue; certain commodity price, interest rate, tariffs, inflation and other cost assumptions; the continued availability of oilfield services; and the continued availability of adequate debt and equity financing and cash flow from operations to fund its planned expenditures.
Tenaz believes the material factors, expectations and assumptions reflected in the forward-looking information and statements are reasonable, but no assurance can be given that these factors, expectations, and assumptions will prove to be correct.
The forward-looking information and statements included in this press release are not guarantees of future performance and should not be unduly relied upon. Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information or statements including, without limitation: changes in commodity prices; changes in the demand for or supply of Tenaz's products; unanticipated operating results or production declines; changes in tax or environmental laws, tariffs, royalty rates or other regulatory matters; changes in development plans of Tenaz or by third party operators of Tenaz's interests; increased debt levels or debt service requirements; inaccurate estimation of Tenaz's oil and gas reserve volumes or resources; limited, unfavorable or a lack of access to capital markets; increased costs; a lack of adequate insurance coverage; the impact of competitors; a failure to obtain necessary approvals as proposed or at all and certain other risks detailed from time to time in Tenaz's public documents.
The forward-looking information and statements contained in this press release speak only as of the date of this press release and, except as may be required pursuant to applicable laws, Tenaz does not assume any obligation to publicly update or revise them to reflect new events or circumstances.
For further information, contact:
Tenaz Energy Corp.
| Anthony Marino | Bradley Bennett |
| President and Chief Executive Officer | Chief Financial Officer |
| Direct: 587 330 1983 | Direct: 587 330 1714 |
/NOT FOR DISSEMINATION IN THE UNITED STATES. FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAW/
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/296379