Kelt Exploration Ltd. (“Kelt” or the “Company”) is providing financial and operating guidance for 2025. The Company expects to incur $328.0 million in capital expenditures during the year and is forecasting to generate $345.0 million in adjusted funds from operations in 2025.
Kelt’s Board of Directors has approved a capital expenditure program of $328.0 million in 2025. The Company expects to spend $209.0 million (64%) drilling 30.5 net wells and completing 33.5 net wells during the year. An estimated $97.0 million (30%) is expected to be incurred equipping new wells and on other related infrastructure such as facilities and pipelines. The remaining budget of $22.0 million (6%) is expected to be spent on land purchases and a $14.0 million 3-D seismic shoot at Oak in British Columbia covering approximately 286 square kilometres (110 sections of land).
Production in 2025 is expected to average between 44,000 and 48,000 BOE per day, up 40% from average production forecasted for 2024. The product mix for 2025 average production is expected to be 37% oil and NGLs and 63% gas. Production during the first quarter of 2025 is expected to average between 37,500 and 39,500 BOE per day, ramping up significantly in the second quarter with the start-up of the CSV Albright Gas Plant in the Company’s Wembley/Pipestone Division where Kelt currently has shut-in production from wells already drilled and completed.
Adjusted funds from operations (“AFFO”) for 2025 is forecasted to be $345.0 million, 56% higher than the Company’s 2024 forecast of $221.5 million. On December 31, 2025, the Company expects to have net debt of $100.0 million, or 0.3 times forecasted AFFO for 2025.
In its Oak/Flatrock Division, Kelt expects to drill three development wells and one exploratory/delineation well, in the second half of 2025.
In its Pouce Coupe/Progress/Spirit River Division, Kelt expects to drill four Montney wells and eight (6.0 net) Charlie Lake wells during 2025.
In its Wembley/Pipestone Division, Kelt expects to be the most active during 2025. The Company expects to drill 15 Montney wells and two (1.2 net) Charlie Lake wells during the year. In addition, the Company will also complete three wells drilled off a pad in the fourth quarter of 2024.
Kelt continues to maintain financial flexibility with an anticipated net debt to AFFO ratio of 0.3 times forecasted at December 31, 2025. In the event that commodity prices are substantially higher than the Company’s forecasts, Kelt does have the ability to increase its capital expenditure program in the second half of 2025. Commodity price sensitivities to estimated AFFO for 2025 are as follows:
A 10% change in Kelt’s forecasted average net realized price for oil sales of $87.33/bbl, would affect AFFO by $27.6 million.
A 10% change in Kelt’s forecasted average net realized price for NGL sales of $47.64/bbl, would affect AFFO by $7.4 million; and
A 10% change in Kelt’s forecasted average net realized price for gas sales of $3.00/Mcf, would affect AFFO by $18.3 million.
Changes in forecasted commodity prices and variances in production estimates can have a significant impact on estimated funds from operations and profit. 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 2024 and 2025. Readers are cautioned that this financial outlook may not be appropriate for other purposes.