Cardinal Energy Ltd. (TSX: CJ) ("Cardinal" or the "Company") is pleased to announce the 2025 budget.
2025 BUDGET HIGHLIGHTS
- Generate adjusted funds flow(1) of $217 million(2) ($1.30 per diluted share) at US$70 WTI;
- Average annual production of 21,300 to 21,700 boe/d for 2025 with exit 2025 production in excess of 24,500 boe/d as the Reford project begins to contribute volumes in the fourth quarter of 2025;
- Executing a conventional capital budget of $71 million and a thermal oil budget of $120 million to complete the Reford project and to de-risk our second thermal project at Kelfield;
- Drilling and completion of six (6.0 net) thermal well pairs at Reford and seven (5.2 net) wells throughout our conventional asset base to maintain production volumes in our conventional assets;
- Investment of $10 million for abandonment and reclamation activities;
- At budget pricing, forecasted maximum draw of approximately 55% of our $275 million credit facility; and
- Dividend level maintained at $0.06 per share per month.
(1) See non-GAAP and other financial measures
(2) See budget summary for assumptions
Cardinal's 2025 capital budget takes advantage of our low corporate decline rate and focuses on optimizing our long life asset base. At budgeted prices, we expect to generate approximately $146 million of free cash flow(1), after conventional capital expenditures, from our existing assets which will assist in funding our monthly dividend, abandonment and reclamation expenditures and the 2025 thermal expenditures required to complete the Reford Steam Assisted Gravity Drainage ("SAGD") project.
In 2025, Cardinal's focus will be on completing the Company's Reford SAGD project with first steam expected in the third quarter, initial production in the fourth quarter of 2025 and full production, of approximately 6,000 bbl/d of heavy oil, to follow in the first quarter of 2026. To date the Reford project remains on time and on budget as originally projected. The drilling of the initial SAGD well pairs has commenced in January. Fuel gas and water source pipeline construction has begun and the facility site is being prepared for modular deliveries which will start next week and continue through March. We anticipate approximately 70% of the 2025 total corporate capital expenditure budget will be undertaken in the first half of 2025, as the construction phase of the Reford SAGD project reaches its busiest, and most cost intensive period. Included in the Company's thermal budget are funds to de-risk and prepare for our planned second SAGD project at Kelfield, Saskatchewan.
With our recently completed $60 million term debt financing, Cardinal's budget anticipates a maximum draw of approximately 55% on our $275 million credit facility in 2025. The Company expects to exit the year with a net debt to adjusted funds flow ratio(1) at or below 1.0x as our bank debt is paid down in the fourth quarter from additional adjusted funds flow.