Saturn Oil & Gas Inc. Announces Second Quarter 2025 Results Highlighted by $119MM Net Debt Reduction Over Q1/25 and Record Free Funds Flow

Rhea-AI Summary

Saturn Oil & Gas (OTCQX:OILSF) reported strong Q2 2025 results, with production of 40,417 boe/d exceeding guidance. The company achieved significant debt reduction of $119 million compared to Q1 2025, bringing net debt to $695 million. Financial performance was robust with adjusted funds flow of $109 million ($0.56/share) and record free funds flow of $93 million ($0.48/share).

Key operational highlights include net operating expenses of $18.28/boe, beating guidance, and strong well performance with several top-ranking wells in Saskatchewan. The company enhanced shareholder returns through its share buyback program, contributing to total shareholder returns of ~$24 million since August 2024.

Looking ahead, Saturn plans Q3 2025 capital expenditures of $80-90 million for drilling approximately 21 wells, with Q3 production guidance of 37,000-38,000 boe/d. The company is also initiating its first Viewfield waterflood project to enhance oil recovery.

Positive

• Net debt reduced by $119.1 million (15%) to $694.8 million in Q2 2025
• Record free funds flow of $93 million ($0.48/share)
• Production exceeded guidance at 40,417 boe/d
• Operating costs of $18.28/boe beat guidance
• Enhanced liquidity up to $300 million with undrawn credit facility
• Strong adjusted funds flow of $108.9 million ($0.56/share), up 23% year-over-year

Negative

• Production expected to decline to 37,000-38,000 boe/d in Q3 2025
• Operating costs anticipated to increase in second half of year
• Limited participation in Substantial Issuer Bid with only 1.6 million shares tendered

• Production of 40,417 boe/d exceeded high end of guidance
• Net debt⁽¹⁾ reduced to $695 million, a decline of $119 million versus Q1/25
• Adjusted funds flow⁽¹⁾ of $109 million ($0.56/share) was supported by net opex⁽¹⁾ of $18.28/boe that beat guidance
• Record free funds flow⁽¹⁾ of $93 million ($0.48/share) supports Saturn's ongoing financial flexibility
• Continued to enhance per share metrics via share buybacks during and after the quarter end, contributing to Saturn's total return to shareholders of ~$24 million since Aug/24

Calgary, Alberta--(Newsfile Corp. - July 30, 2025) - 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 financial results for the three and six months ended June 30, 2025, highlighted by net debt⁽¹⁾ reduction of over $119 million, strong adjusted funds flow ("AFF")⁽¹⁾ of $109 million and record free funds flow⁽¹⁾ of $93 million. Saturn's financial statements ("Financial Statements"), as well as Management's Discussion and Analysis ("MD&A") for the three and six months ended June 30, 2025, are available on our website and filed on SEDAR+ at sedarplus.ca. A conference call and webcast to discuss the Q2/25 results has been scheduled for Thursday, July 31, 2025 at 8:00 am Mountain Time (10:00 am Eastern Time). Access details for the conference call and webcast are provided below.

"Saturn has continued to deliver results from our blueprint strategy, with net debt⁽¹⁾ reduction of nearly $120 million between Q1/25 and Q2/25 exceeding the original expectations mentioned during our Q1/25 earnings conference call. This outperformance was achieved through scheduled quarterly principal repayments, an opportunistic open-market purchase of our bonds below par, and the benefit of foreign exchange rates. This debt reduction, combined with our steady return of capital through Saturn's share buybacks, represents accretion for equity holders while also enhancing our per share metrics," said John Jeffrey, Chief Executive Officer. "Our strong operational performance is evidenced by quarterly production exceeding the high end of our guidance range for another consecutive quarter; operating costs coming in below the low end of guidance; and several Saturn wells being ranked among the highest performers in Saskatchewan, all of which supports our long-term sustainability."

Q2 2025 HIGHLIGHTS

• Production of 40,417 boe/d, reflecting continued asset outperformance from Q1/25 with minimal capital spending in the quarter.

• Net debt⁽¹⁾ declined $119.1 million to $694.8 million, or 15%, compared to Q1/25, reflecting our scheduled 2.5% quarterly debt repayment, an opportunistic open market purchase below par and the strengthening of the Canadian dollar impacting our USD denominated Senior Notes.

• Repurchased an incremental $19.8 million (US$16.3 million) principal amount of our Senior Notes in April 2025 at a discount to par, cost-effectively reducing total liabilities while lowering future interest obligations.

• Adjusted EBITDA⁽¹⁾ totaled $131.7 million in the quarter, a 24% increase over Q2/24, resulting in net debt to annualized quarterly adjusted EBITDA⁽¹⁾ of 1.3x, down from 1.4x at year end 2024.

• AFF⁽¹⁾ totaled $108.9 million ($0.56/share basic), up 23% on an absolute basis and 8% on a per share basis over Q2/24.

• Capital expenditures⁽¹⁾⁽³⁾ of $15.8 million directed primarily to turnaround and facilities investments, with the drilling of one gross (0.2 net) non-operated well in southeast ("SE") Saskatchewan.

• Record free funds flow⁽¹⁾ of $93.0 million ($0.48/share basic) contributed to the reduction of net debt.

• Enhanced liquidity up to $300 million following our Revolving Credit Facility (the "Credit Facility") renewal inclusive of $49.3 million in cash, an undrawn $150 million Credit Facility plus an uncommitted accordion feature which allows for a $100 million expansion up to $250 million in total, subject to certain conditions.

• Returned an additional $3.3 million to shareholders during the quarter with the repurchase of 2.0 million common shares ("Shares") at a weighted average price of $1.65 per Share under our normal course issuer bid ("NCIB").

• Announced our inaugural Substantial Issuer Bid ("SIB") on June 11, 2025, offering to purchase 7.0 million Shares at $2.15 per Share.

EVENTS SUBSEQUENT TO QUARTER END

• Closed the SIB on July 16, 2025. With the significant increase in the market price of our Shares following the announcement of the SIB, only 1.6 million Shares (or approximately 0.8% of the shares outstanding on the date the SIB was announced) were tendered to the SIB, resulting in the return of another $3.5 million to shareholders.

• Continuing return of capital to shareholders has totaled approximately $24 million from August, 2024 to July 30, 2025, through the repurchase of 11.2 million Shares between the NCIB and SIB, reducing current Shares outstanding to approximately 193 million.

FINANCIAL AND OPERATING HIGHLIGHTS

		Three months ended								Six months ended
($000s, except per share amounts)		June 30, 2025			March 31, 2025			June 30, 2024			June 30, 2025				June 30, 2024
FINANCIAL HIGHLIGHTS
Petroleum and natural gas sales		236,712			278,081			208,853			514,793				377,072
Cash flow from operating activities		89,865			165,372			50,545			255,237				120,767
Operating netback, net of derivatives(1)		131,833			157,567			109,359			289,400				201,070
Adjusted EBITDA(1)		131,712			153,185			106,034			284,897				194,187
Adjusted funds flow(1)		108,854			131,121			88,643			239,975				156,821
per share - Basic(1)		0.56			0.66			0.52			1.22				0.99
- Diluted(1)		0.53			0.65			0.51			1.16				0.95
Free funds flow(1)		93,012			57,826			66,094			150,838				100,306
per share - Basic(1)		0.48			0.29			0.39			0.77				0.63
- Diluted(1)		0.45			0.29			0.38			0.73				0.61
Net income (loss)		95,054			37,819			41,805			132,873				(21,177	)
per share - Basic		0.49			0.19			0.25			0.67				(0.13	)
- Diluted		0.46			0.19			0.24			0.64				(0.13	)
Acquisitions, net of cash acquired		5,132			-			543,145			5,132				543,145
Proceeds from dispositions		-			-			(25,708	)		-				(25,708	)
Capital expenditures(1)(3)		15,842			73,295			22,549			89,137				56,515
Total assets		2,103,571			2,188,307			2,024,432			2,103,571				2,024,432
Net debt(1), end of period		694,835			813,893			792,193			694,835				792,193
Shareholders' equity		929,573			837,958			737,064			929,573				737,064
Common shares outstanding, end of period		194,809			196,212			204,041			194,809				204,041
Weighted average, basic		195,644			198,113			169,267			196,872				158,780
Weighted average, diluted		206,040			202,727			174,723			207,268				164,215
OPERATING HIGHLIGHTS
Average production volumes
Crude oil (bbls/d)		30,150			31,142			21,010			30,643				19,996
NGLs (bbls/d)		3,310			3,318			2,673			3,314				2,509
Natural gas (mcf/d)		41,740			43,319			38,664			42,526				34,540
Total boe/d		40,417			41,680			30,127			41,045				28,262
% Oil and NGLs		83%			83%			79%			83%				80%
Average realized prices
Crude oil ($/bbl)		79.72			90.48			101.54			85.15				95.41
NGLs ($/bbl)		40.24			52.95			44.33			46.57				44.29
Natural gas ($/mcf)		1.80			2.48			1.37			2.14				1.84
Processing expenses ($/boe)		(0.26	)		(0.26	)		(0.33	)		(0.26		)		(0.38	)
Petroleum and natural gas sales ($/boe)		64.36			74.13			76.18			69.29				73.31
Operating netback ($/boe)
Petroleum and natural gas sales		64.36			74.13			76.18			69.29				73.31
Royalties		(7.68	)		(9.04	)		(9.48	)		(8.36		)		(9.17	)
Net operating expenses(1)		(18.28	)		(19.58	)		(18.12	)		(18.93		)		(18.91	)
Transportation expenses		(1.65	)		(1.56	)		(1.47	)		(1.60		)		(1.40	)
Operating netback(1)		36.75			43.95			47.11			40.40				43.83
Realized loss on derivatives		(0.91	)		(1.96	)		(7.21	)		(1.44		)		(4.74	)
Operating netback, net of derivatives(1)		35.84			41.99			39.90			38.96				39.09

 

SATURN'S BLUEPRINT IN ACTION

The ongoing execution of Saturn's blueprint strategy proved effective in Q2/25 as our results showcase the strength of the underlying asset base that we have assembled, along with our technical team's ability to optimize production with minimal capital spending in the quarter leading to record Free Funds Flow. Our quarterly results further demonstrate our commitment to debt reduction and continuous per unit cost improvement which supports our robust cash flow. Consistent with Saturn's opportunistic approach to managing the business, during Q2/25, we elected to terminate certain 2026 and 2027 punitive WTI swap contracts that had an average Canadian dollar price of $81.35/bbl (equivalent to WTI prices under US$60/bbl) for $2.3 million.

The Saskatchewan Government's recent decision to eliminate carbon tax in the province underpins Saturn's ability to generate incremental AFF. The Company stands to realize substantial savings across several cost centres within our business – including electricity, services, transportation and fuel. As a result of the carbon tax elimination, we are forecasting annual operating cost savings of up to $20 million, which can be reinvested back into Saskatchewan through capital expenditures, production optimization or tuck-in acquisitions, all of which support future AFF generation. This represents another example of the many benefits of operating in Saskatchewan.

Upon closing of our SIB on July 16, 2025, the Company automatically restarted Common Share repurchases under our NCIB, which had been paused during the duration of the SIB. We intend to continue maximizing our daily purchase limits under the NCIB, with a view to maximizing the 11.3 million Shares available to be purchased under the NCIB by August 26, 2025 (as at the date of this release, we have repurchased 9.6 million), as we believe it offers an efficient means to enhance per share metrics while supporting equity value.

ASSET OUTPERFORMANCE

Saturn continues to benefit from the underlying strength of our asset base, our team's technical expertise and operational acumen, enabling the Company to extend our track record of effective and efficient capital deployment. Average production volumes of 40,417 boe/d for the second quarter exceeded both previous guidance and analyst consensus.

This outperformance is highlighted by the Company's 15-21 Viewfield Bakken open-hole multi-lateral ("OHML") well ranking among the top four best-performing liquids wells in Saskatchewan in June, according to third-party reports, and by having three of our extended reach horizontal wells in the top 15 best-performing wells in the Alberta Cardium. Since being fully cleaned up, each of these Cardium wells have demonstrated reverse declines, with volumes increasing after the initial 30-day production rate, which is not common with well declines. In addition, we have continued to keep Saturn's per boe net operating expenses⁽¹⁾ well under our guidance range of $20.00 to $20.60 per boe to date in 2025, although we anticipate trending closer to guidance in the second half of the year as capital expenditure⁽¹⁾⁽³⁾ activities increase.

OUTLOOK

Saturn returned to the field in the latter half of July to commence our high return, OHML Bakken and Mississippian drilling programs. For Q3/25, the Company's capital expenditures⁽¹⁾⁽³⁾ are anticipated to range between $80 and $90 million, assuming WTI prices remain within expectations, with activities directed to the planned drilling of approximately 21 wells, production optimization initiatives, and further development at our Creelman Bakken field to initiate Saturn's first Viewfield waterflood project by the end of July. The project includes a new water source well, infrastructure, and five successful injector conversions to date, which will provide pressure support to increase ultimate oil recovery to current producers, and re-pressurize multiple 2026 development wells. This is the first stage of a larger multi-year waterflood program over the greater Viewfield area, which we expect to reduce declines and translate into material future booked reserves.

Production in Q3/25 is expected to average between 37,000 to 38,000 boe/d⁽²⁾, reflecting the impact of minimal capital spending during Q2/25 and in line with our original 2025 annual guidance.

CONFERENCE CALL AND WEBCAST

The Company plans to host a conference call on Thursday, July 31, 2025, at 8:00 am Mountain Time (10:00 am Eastern Time), which will include a discussion with Saturn's leadership team, who will provide an overview of our Q2 2025 results, followed by a question-and-answer session with attendees.

• Date: Thursday, July 31, 2025
• Time: 8:00 am MT (10:00 am ET)
• Live Webcast Link: https://www.gowebcasting.com/14063
• North America (Toll Free) Dial In: 1-833-752-3741
•  International Dial In: 1-647-846-8678

An audio replay of the webcast will be available one hour after the end of the call at the link above and will remain accessible for 12 months. The replay link will also be posted on Saturn's website.

NOTES

⁽¹⁾ See reader advisory: Non-GAAP and Other Financial Measures.
⁽²⁾ See reader advisory: Supplemental Information Regarding Product Types.
⁽³⁾ Includes capitalized G&A.

ABOUT SATURN

Saturn is a returns-driven Canadian energy company focused on the efficient and innovative development of high-quality, light oil weighted assets, supported by an acquisition strategy targeting accretive and complementary opportunities. The Company's portfolio of free-cash flowing, low-decline operated assets in Saskatchewan and Alberta provide a deep inventory of long-term economic drilling opportunities across multiple zones. With an unwavering commitment to building an entrepreneurial and ESG-focused culture, Saturn's goal is to increase per Share reserves, production and cash flow at an attractive return on invested capital. The Company's Shares are listed for trading on the TSX under ticker 'SOIL' and on the OTCQX under the ticker 'OILSF'. Further information and our corporate presentation are available on Saturn's website at www.saturnoil.com.

INVESTOR & MEDIA CONTACTS

John Jeffrey, MBA - Chief Executive Officer
Tel: +1 (587) 392-7900
www.saturnoil.com

Cindy Gray, MBA - VP Investor Relations
Tel: +1 (587) 392-7900
info@saturnoil.com

READER ADVISORIES

Non-GAAP and Other Financial Measures

Throughout this news release and in other materials disclosed by the Company, Saturn employs certain measures to analyze financial performance, financial position and cash flow. These non-GAAP and other financial measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other entities. The non-GAAP and other financial measures should not be considered to be more meaningful than GAAP measures which are determined in accordance with IFRS, such as net income (loss), cash flow from operating activities, and cash flow used in investing activities, as indicators of Saturn's performance.

The disclosure under the section "Non-GAAP and Other Financial Measures" in our MD&A, including non-GAAP financial measures and ratios, capital management measures and supplementary financial measures in the Company's Financial Statements and MD&A are incorporated by reference into this news release.

This news release may use the terms "Adjusted EBITDA", "Adjusted Funds Flow", "Net Debt", "Free Funds Flow", "Net Debt to Annualized Adjusted EBITDA" and "Net Debt to Annualized AFF" which are capital management financial measures. See the disclosure under "Capital Management" in our Financial Statements for the three and six months ended June 30, 2025, for an explanation and composition of these measures, how these measures provide useful information to an investor, the additional purposes, if any, for which management uses these measures, and, where applicable, a reconciliation of the Company's historical non-GAAP financial measures to the most directly comparable measure calculated in accordance with GAAP for the applicable period then ended.

Capital Expenditures

Saturn uses capital expenditures to monitor its capital investments relative to those budgeted by the Company on an annual basis. Saturn's capital budget excludes acquisition and disposition ("A&D") activities as well as the accounting impact of any accrual changes or payments under certain lease arrangements. The most directly comparable GAAP measure for capital expenditures is cash flow used in investing activities. The following table reconciles capital expenditures and capital expenditures, net A&D to the nearest GAAP measure, cash flow used in investing activities.

		Three months ended									Six months ended
($000s)		June 30, 2025			March 31, 2025			June 30, 2024			June 30, 2025			June 30, 2024
Cash flow used in investing activities		67,934			99,520			552,357			167,454			602,049
Change in non-cash working capital		(46,960	)		(26,225	)		(12,371	)		(73,185	)		(28,097	)
Capital expenditures(1)(3), net A&D		20,974			73,295			539,986			94,269			573,952
Acquisitions, net of cash acquired		(5,132	)		-			(543,145	)		(5,132	)		(543,145	)
Proceeds from disposition		-			-			25,708			-			25,708
Capital expenditures(1)(3)		15,842			73,295			22,549			89,137			56,515

 

Free Funds Flow and Free Funds Flow per Share

Saturn uses free funds flow as an indicator of the efficiency and liquidity of its business, measuring its funds after capital investment available to manage debt levels, pursue acquisitions and gauge optionality to pay dividends and/or and return capital to shareholders through activities such as share repurchases. Saturn calculates free funds flow as adjusted funds flow in the period less capital expenditures. By removing the impact of current period capital expenditures from adjusted funds flow, management monitors its free funds flow to inform its capital allocation decisions. Free funds flow is also presented on a per share basis as a non-GAAP financial ratio. The following table reconciles adjusted funds flow to free funds flow.

		Three months ended									Six months ended
($000s)		June 30, 2025			March 31, 2025			June 30, 2024			June 30, 2025			June 30, 2024
Adjusted funds flow		108,854			131,121			88,643			239,975			156,821
Capital expenditures(1)(3)		(15,842	)		(73,295	)		(22,549	)		(89,137	)		(56,515	)
Free funds flow		93,012			57,826			66,094			150,838			100,306

 

Adjusted Funds Flow per Share

Adjusted funds flow per share is a non-GAAP ratio by management to better analyze the Company's performance against prior periods on a more comparable basis. Adjusted funds flow per share is calculated as adjusted funds flow from operations divided by weighted average shares outstanding during the applicable period on a basic or diluted basis.

Gross Petroleum and Natural Gas Sales

Gross petroleum and natural gas sales is calculated by adding oil, natural gas and NGLs revenue, before deducting certain gas processing expenses in arriving at petroleum and natural gas revenue as required under IFRS-15. These processing expenses associated with the processing of natural gas and NGLs revenue are a result of the Company transferring custody of the product at the terminal inlet and, therefore, receiving net prices. This metric is used by management to quantify and analyze the realized price received before required processing deductions, against benchmark prices. The calculation of the Company's gross petroleum and natural gas sales is shown within the petroleum and natural gas sales section of the MD&A.

Royalties as a Percentage of Gross Petroleum and Natural Gas Sales

Royalties as a percentage of gross petroleum and natural gas sales is calculated as royalties divided by gross petroleum and natural gas sales. This metric is used by management to quantify the Company's royalty costs as they relate to revenue before deducting certain processing expenses and to better analyze how royalty rates change over time and compare to prior periods.

Net Operating Expenses

Net operating expense is calculated by deducting processing income primarily generated by processing third party production at processing facilities where the Company has an ownership interest, from operating expenses presented on the statement of income (loss). Where the Company has excess capacity at one of its facilities, it will process third-party volumes to reduce the cost of ownership in the facility. The Company's primary business activities are not that of a midstream entity whose activities are focused on earning processing and other infrastructure-based revenues, and as such third-party processing revenue is netted against operating expenses in the MD&A. This metric is used by management to evaluate the Company's net operating expenses on a unit of production basis. Net operating expense per boe is a non-GAAP financial ratio and is calculated as net operating expense divided by total barrels of oil equivalent produced over a specific period of time. The calculation of the Company's net operating expenses is shown within the net operating expenses section of the MD&A.

Operating Netback and Operating Netback, Net of Derivatives

The Company's operating netback is determined by deducting royalties, net operating expenses and transportation expenses from petroleum and natural gas sales. The Company's operating netback, net of derivatives, is calculated by adding or deducting realized financial derivative commodity contract gains or losses from the operating netback. The Company's operating netback and operating netback, net of derivatives are used in operational and capital allocation decisions. Presenting operating netback and operating netback, net of derivatives on a per boe basis is a non-GAAP financial ratio and allows management to better analyze performance against prior periods on a per unit of production basis. The calculation of the Company's operating netbacks and operating netback, net of derivatives are summarized as follows.

		Three months ended									Six months ended
($000s)		June 30, 2025			March 31, 2025			June 30, 2024				June 30, 2025			June 30, 2024
Petroleum and natural gas sales		236,712			278,081			208,853				514,793			377,072
Royalties		(28,239	)		(33,893	)		(26,002		)		(62,132	)		(47,191	)
Net operating expenses		(67,226	)		(73,441	)		(49,692		)		(140,667	)		(97,255	)
Transportation expenses		(6,077	)		(5,845	)		(4,035		)		(11,922	)		(7,190	)
Operating netback		135,170			164,902			129,124				300,072			225,436
Realized loss on financial derivatives(1)		(3,337	)		(7,335	)		(19,765		)		(10,672	)		(24,366	)
Operating netback, net of derivatives		131,833			157,567			109,359				289,400			201,070
($ per boe amounts)
Petroleum and natural gas sales		64.36			74.13			76.18				69.29			73.31
Royalties		(7.68	)		(9.04	)		(9.48		)		(8.36	)		(9.17	)
Net operating expenses		(18.28	)		(19.58	)		(18.12		)		(18.93	)		(18.91	)
Transportation expenses		(1.65	)		(1.56	)		(1.47		)		(1.60	)		(1.40	)
Operating netback		36.75			43.95			47.11				40.40			43.83
Realized loss on financial derivatives		(0.91	)		(1.96	)		(7.21		)		(1.44	)		(4.74	)
Operating netback, net of derivatives		35.84			41.99			39.90				38.96			39.09

 

⁽¹⁾ Includes early termination payment on certain WTI oil derivative contracts for the three and six months ended June 30, 2025 of $2.3 million.

Capital Management Measures

National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure ("NI 52-110") defines a capital management measure as a financial measure that: (i) is intended to enable an individual to evaluate an entity's objectives, policies and processes for managing the entity's capital; (ii) is not a component of a line item disclosed in the primary financial statements of the entity; (iii) is disclosed in the notes to the financial statements of the entity; and (iv) is not disclosed in the primary financial statements of the entity. Please refer to note 13 "Capital Management" in Saturn's Financial Statements for the three and six months ended June 30, 2025, for additional disclosure on: adjusted working capital, net debt, adjusted EBITDA, adjusted funds flow, free funds flow, annualized quarterly adjusted funds flow and net debt to annualized quarterly adjusted funds flow each of which are capital management measures used by the Company in this news release.

Supplementary Financial Measures

NI 52‐112 defines a supplementary financial measure as a financial measure that: (i) is, or is intended to be, disclosed on a periodic basis to depict the historical or expected future financial performance, financial position or cash flow of an entity; (ii) is not disclosed in the financial statements of the entity; (iii) is not a non‐GAAP financial measure; and (iv) is not a non‐GAAP ratio. The supplementary financial measures used in this news release are either a per unit disclosure of a corresponding GAAP measure, or a component of a corresponding GAAP measure, presented in the financial statements. Supplementary financial measures that are disclosed on a per unit basis are calculated by dividing the aggregate GAAP measure (or component thereof) by the applicable unit for the period. Supplementary financial measures that are disclosed on a component basis of a corresponding GAAP measure are a granular representation of a financial statement line item and are determined in accordance with GAAP.

Supplemental Information Regarding Product Types

References to gas or natural gas and NGLs in this press release refer to conventional natural gas and natural gas liquids product types, respectively, as defined in National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities, except where specifically noted otherwise. The Company's aggregate average production for the past eight quarters and the references to "crude oil", "NGLs", and "natural gas" reported herein consist of the following product types, as defined in NI 51-101 and using a conversion ratio of 1 Bbl : 6 Mcf where applicable:

		2025						2024												2023
		Q2			Q1			Q4			Q3			Q2			Q1			Q4			Q3
Average daily production
Light & medium crude oil (bbls/d)		26,712			27,697			27,330			24,992			18,346			18,981			19,407			19,132
Heavy crude oil (bbls/d)		3,438			3,445			3,119			4,002			2,664			-			-			-
NGLs (bbls/d)		3,310			3,318			3,381			3,407			2,673			2,344			2,533			2,287
Conventional natural gas (mcf/d)		41,740			43,319			43,328			39,885			38,664			30,416			29,704			29,077
Total (boe/d)		40,417			41,680			41,051			39,049			30,127			26,394			26,891			26,265

 

• Q3 2025 average production, at the midpoint of the guidance range, is anticipated to be comprised of approximately 66% light and medium crude oil, 9% heavy crude oil, 8% NGLs and 17% natural gas.

•  2025 annual average production, at the midpoint of the guidance range, is anticipated to be comprised of approximately 66% light and medium crude oil, 9% heavy crude oil, 8% NGLs and 17% natural gas.

Initial Production Rates

References in this press release to initial production rates relating to wells are useful in confirming the presence of hydrocarbons, however such rates are not determinative of the rates at which such wells will maintain production or decline thereafter, and are not indicative of long-term performance or ultimate recovery. Readers are cautioned not to place reliance on such rates in calculating the aggregate production for the Company.

Boe Presentation

Boe means barrel of oil equivalent. All boe conversions in this press release are derived by converting gas to oil at the ratio of six thousand cubic feet ("Mcf") of natural gas to one barrel ("Bbl") of oil. Boe may be misleading, particularly if used in isolation. A boe conversion rate of 1 Bbl : 6 Mcf 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 of oil compared to natural gas based on currently prevailing prices is significantly different than the energy equivalency ratio of 1 Bbl : 6 Mcf, utilizing a conversion ratio of 1 Bbl : 6 Mcf may be misleading as an indication of value.

Forward-Looking Information and Statements

Certain information included in this press release constitutes forward-looking information under applicable securities legislation. Forward-looking information typically contains statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project", "scheduled", "will" or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information in this press release may include, but is not limited to, the Company's drilling, completion and development plans, the planned multi-year waterflood project and the anticipated operational and reserve based benefits, the strength and sustainability of the Company's asset base and expertise of its personnel, expectations concerning the Q3 capital program, expected returns from OHML drilling programs, the liquidity of the Company and available credit, expectations regarding netbacks, hedging strategy, operating costs, return of capital, Share buyback and debt reduction strategies, the Company's intent to maximize purchases under the NCIB and the expected benefits to shareholders, the effect the Company's capital strategy on per share metrics and equity accretion, the business plan, cost model and strategy of the Company, changes in legislation and the associated benefits the Company expects, including operational cost savings and deployment of funds to support AFF generation, the benefits of operating in certain jurisdictions, per boe operating costs, anticipated production levels and related product types, and expectations regarding anticipated pricing trends, growth opportunities and market conditions.

The forward-looking statements contained in this press release are based on certain key expectations and assumptions made by Saturn which may prove to be incorrect. Although Saturn believes that the expectations reflected in its forward-looking information are reasonable, undue reliance should not be placed on forward-looking information because Saturn can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this press release, assumptions have been made regarding and are implicit in, among other things, expectations and assumptions concerning: the timing of and success of future drilling, commodity prices, development and completion activities, the performance of existing wells, the performance of new wells, the availability and performance of facilities and pipelines, the ability to allocate capital to pay down debt and grow or maintain production, debt repayment plans, capital return strategies and future growth plans, the impact of our hedging strategy, the geological characteristics of Saturn's properties, drilling inventory and booked locations, production and revenue guidance, the application of regulatory and licensing requirements, the availability of capital, labour and services, the creditworthiness of industry partners and the ability to integrate acquisitions.

Although Saturn believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Saturn can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), constraints in the availability of services, commodity price and exchange rate fluctuations, actions of OPEC and OPEC+ members, changes in legislation impacting the oil and gas industry, adverse weather or break-up conditions and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. These and other risks are set out in more detail in Saturn's Annual Information Form for the year ended December 31, 2024, available on SEDAR+ at sedarplus.ca.

The forward-looking information in this news release reflects the Company's current expectations, assumptions and/or beliefs based on information currently available to the Company. The forward-looking information contained in this press release is made as of the date hereof and Saturn undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws. The forward-looking information contained in this press release is expressly qualified by this cautionary statement.

All dollar figures included herein are presented in Canadian dollars, unless otherwise noted.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/260724

FAQ

What were Saturn Oil & Gas (OILSF) Q2 2025 production levels?

Saturn Oil & Gas achieved production of 40,417 boe/d in Q2 2025, exceeding guidance with 83% oil and NGLs.

How much did Saturn Oil & Gas reduce its debt in Q2 2025?

Saturn reduced its net debt by $119.1 million (15%) to $694.8 million in Q2 2025 compared to Q1 2025.

What was Saturn Oil & Gas (OILSF) free funds flow in Q2 2025?

Saturn achieved record free funds flow of $93 million ($0.48 per share) in Q2 2025.

What is Saturn Oil & Gas Q3 2025 production guidance?

Saturn expects Q3 2025 production to average between 37,000 to 38,000 boe/d.

How much capital expenditure is Saturn Oil & Gas planning for Q3 2025?

Saturn plans Q3 2025 capital expenditures between $80-90 million for drilling approximately 21 wells and other initiatives.

How much has Saturn Oil & Gas returned to shareholders since August 2024?

Saturn has returned approximately $24 million to shareholders through share repurchases since August 2024.