Kelt Exploration Ltd. ("Kelt" or the "Company") is providing financial and operating guidance for 2026. The Company expects to incur $355.0 million in capital expenditures during the year and is forecasting to generate $355.0 million in adjusted funds from operations in 2026.
Kelt's Board of Directors has approved a capital expenditure program of $355.0 million in 2026. The Company expects to spend $252.0 million (71%) drilling 33.2 net wells and completing 37.2 net wells during the year. An estimated $96.0 million (27%) is expected to be incurred equipping new wells and on other related infrastructure such as facilities and pipelines. The remaining budget of $7.0 million (2%) is expected to be spent on land purchases and other miscellaneous.
Production in 2026 is expected to average between 50,000 and 52,000 BOE per day, up 26% from average production forecasted for 2025. The product mix for 2026 average production is expected to be 38% oil and NGLs and 62% gas.
Adjusted funds from operations ("AFFO") for 2026 is forecasted to be $355.0 million, 27% higher than the Company's 2025 forecast of $280.0 million. On December 31, 2026, the Company expects to have net debt of $170.0 million, or 0.5 times forecasted AFFO for 2026.
In its Oak/Flatrock Division, Kelt expects to drill nine development wells and one exploratory/delineation well during 2026. The Company expects to complete 12 wells in 2026, including two DUCs from 2025's drilling program.
In its Pouce Coupe/Progress/Spirit River Division, during 2026, Kelt expects to drill seven wells and complete eight wells, including a DUC from 2025.
In its Wembley/Pipestone Division, Kelt expects to continue to be active during 2026. The Company expects to drill 16 Montney wells and complete 17 wells during the year.
Kelt continues to maintain financial flexibility with an anticipated net debt to AFFO ratio of 0.5 times, forecasted at December 31, 2026. Commodity price sensitivities to estimated AFFO for 2026 are as follows:
A 10% change in Kelt's forecasted annual average net realized price for oil and NGL sales of $74.62/bbl and $32.49/bbl respectively, would affect AFFO by $25.3 million; and
A 10% change in Kelt's forecasted annual average net realized price for gas sales of $3.63/Mcf, would affect AFFO by $19.4 million.
Changes in forecasted commodity prices and variances in production estimates can have a significant impact on estimated funds from operations and earnings. Please refer to the advisories regarding forward-looking statements and to the cautionary statement below.
The information set out herein is "financial outlook" within the meaning of applicable securities laws. The purpose of this financial outlook is to provide readers with disclosure regarding Kelt's reasonable expectations as to the anticipated results of its proposed business activities for the calendar years 2025 and 2026. Readers are cautioned that this financial outlook may not be appropriate for other purposes.