Advantage Energy Ltd.

Adjusted funds flow was $88.8 million, or $0.53 per share. Net capital expenditures were $88.1 million, and the company has now completed over 70% of its 2026 capital program. Production averaged 70,611 BOE/d in Q2, down from Q1 due to the planned 21-day Glacier turnaround; liquids averaged 12,650 barrels/d, up 4% from Q1, and represented 18% of production and 67% of total sales. Net debt was $560.2 million at quarter-end. Management said operating costs should be approximately $5 per BOE in the second half of 2026, with full-year costs trending toward the low end of guidance. Looking ahead, the company expects to hold production around 90,000 BOE/d through at least the end of 2027, maintain about 48% gas hedged and 43% crude oil/NGL hedged for 2H26, and 34% gas / 26% crude oil and NGL hedged for 2027. It also expects to reach net debt of $400 million to $500 million in 2H26 and repurchase up to 5% of shares outstanding.

Interim CEO John Festival framed the quarter as a milestone period where Advantage finished its biggest near-term infrastructure work and moved into a more flexible capital-allocation phase. He emphasized that with Glacier turnaround and Progress plant commissioning complete, the company is shifting toward maximizing free cash flow and returning capital to shareholders, primarily through buybacks while the stock trades below intrinsic value. He also said the board has started a formal CEO search and described the organization as disciplined, technically strong, and well positioned for the next stage.

CFO Craig Blackwood focused on the financial bridge from a heavy first half to a lighter second half. He highlighted adjusted funds flow of $88.8 million, net capital expenditures of $88.1 million, and net debt of $560.2 million, noting balance sheet resilience despite weak gas prices, Glacier downtime, and a large capital program. He said operating costs should be around $5 per BOE in 2H26, that the company is trending to the low end of its full-year guidance, and that the new 3-year covenant-based credit facility keeps borrowing capacity at $650 million through June 2029 with lower borrowing costs.

Analysts focused on the repeatability of the strong liquids results, the flexibility created by the Progress gas plant, and the longer-term production path beyond 2027. Management said about 60% of remaining capital for the year is oil-weighted, that the Progress plant and interconnected infrastructure give them flexibility to move Charlie Lake and Montney volumes, and that they believe liquids can be maintained through the second half. On 2028 growth and Northeast B.C. development, management said the current three-year plan only runs through 2027, they are just beginning to evaluate the next three years, and any restart in Conroy/Northeast B.C. would require prices somewhat higher than the current forward strip.