CORRECTED-Canada's Topaz Energy raises 2026 production outlook after royalty revenue jumps

Removes reference to acquisition impact from result drivers

Overview

• Canada royalty and infrastructure energy firm's Q2 adjusted EPS met analyst expectations

• Q2 royalty production revenue rose 52% yr/yr, driven by higher production and liquids pricing

• Company completed C$38.7 mln tuck-in royalty acquisition, raised annual production guidance

Outlook

• Topaz raises 2026 annual average royalty production guidance to 23,900–24,300 boe/d

• Company maintains 2026 infrastructure processing revenue and income guidance at C$93 mln

• Topaz expects 2026 exit net debt between C$435 mln and C$440 mln

Result Drivers

• RECORD ROYALTY PRODUCTION - Q2 royalty production averaged 24,233 boe/d, up 9% yr/yr, with record liquids output and highest-ever share of WCSB drilling activity

• HIGH INFRASTRUCTURE UTILIZATION - Infrastructure assets operated at 96% utilization, generating C$20.4 mln of operating margin at 92%

Company press release: ID:nCNWGJrlFa

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 11 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the oil gas exploration and production peer group is "buy"

• Wall Street's median 12-month price target for Topaz Energy Corp is C$35.75, about 9.4% above its July 24 closing price of C$32.68

• The stock recently traded at 31 times the next 12-month earnings vs. a P/E of 50 three months ago

Reuters Recommended Reads

• July 27 - Canada's Gibson Energy Q2 net income rises on record Infrastructure segment EBITDA

• July 27 - Alliance Resource Partners Q2 revenue beats on higher oil gas royalties

• July 27 - Baker Hughes posts smaller-than-expected Q2 revenue drop, tops profit estimates

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)