Topaz Energy Corp.

Topaz reported Q2 2026 revenue and other income of $111.2 million. Royalty production was 24,233 BOE/d, up 9% year over year, including record total liquids production of 7,178 bbl/d, up 6% year over year. Cash flow was $88.4 million, or $0.57 per share, up 9%, and free cash flow was $86.6 million, or $0.56 per share, up 17%. Processing revenue was $20.7 million, up 3% from Q2 2025, and total processing revenue and other income was $22.3 million; infrastructure assets ran at 96% utilization and a 92% operating margin. The company raised its 2026 annual average royalty production guidance to 23,900-24,300 BOE/d. It also said 2026 exit net debt is now estimated at $435 million-$440 million before any incremental acquisition, after ending Q2 with $497.4 million of net debt, or 1.2x annualized EBITDA.

CEO Marty Staples described the quarter as strong, pointing to record quarterly drilling activity, record liquids production, and the ability to deploy capital countercyclically. He emphasized that the newly acquired acreage fits Topaz's strategy in liquids-weighted natural gas and oil-focused areas, and said the company continues to see attractive development momentum in Clearwater, Northeast BC Montney, and parts of the Deep Basin. His tone was constructive and confident, while still framing the business as dependent on operator capital allocation rather than direct control.

CFO Cheree Stephenson highlighted that Q2 cash flow was $88.4 million and free cash flow was $86.6 million, with $54.2 million of dividends paid at $0.35 per share and $32.4 million of excess free cash flow allocated to the acquisition. She said the guidance increase reflected both outperformance and stronger-than-expected activity in noncore areas and Clearwater, while also noting some conservatism because the company does not control operator capital. On leverage, the company ended the quarter at $497.4 million of net debt, equal to 1.2x annualized EBITDA, and expects exit net debt of $435 million-$440 million before additional acquisitions.

Analysts focused on how much of the higher guidance came from year-to-date outperformance versus a change in the underlying growth outlook, and management said it was a mix of both, with Clearwater and some noncore areas outperforming expectations. Questions also centered on acquisition strategy in a volatile commodity environment; management said it remains proactive and countercyclical, and that the recent acquisition fits that approach. On second-half caution, management pointed to near-term gas seasonality in some noncore dry-gas areas but said it is confident in the higher guide and expects to be at the high end of the range.