/NOT FOR DISSEMINATION IN THE U.S. OR THROUGH U.S. NEWSWIRES/
CALGARY, AB, Aug. 20, 2026 /CNW/ -- Highwood Asset Management Ltd. ("Highwood" or the "Company") (TSXV: HAM) is pleased to announce its financial and operating results for the three and six months ended June 30, 2026 and to provide an operational update. The Company also announces that its unaudited interim consolidated financial statements and associated Management's Discussion and Analysis ("MD&A") for the period ended June 30, 2026, are available on Highwood's website at www.highwoodmgmt.com and on SEDAR+ at www.sedarplus.ca.
Highlights
-- Average corporate production of 5,079 boe/d in Q2 2026, including
approximately 2,900 boe/d from Highwood's assets that remain after
closing the Wilson Creek disposition.
-- For the second quarter of 2026, Highwood delivered EBITDA of $11.8
million ($0.78 per share) and adjusted funds flow of $9.9 million ($0.65
per share).(1)(2)
-- During the second quarter of 2026, Highwood closed the disposition of its
Wilson Creek oil and natural gas properties (the "Wilson Creek
Disposition") for total consideration of up to $112 million.
Consideration was made up of cash proceeds of $105 million, as well as up
to an aggregate of $7 million in contingent consideration. The Wilson
Creek Disposition resulted in a pre-tax return on invested capital of
>200% since they were acquired in August 2023. Highwood acquired the
assets for approximately $35 million and generated approximately $26
million in Asset Level Free Cash Flow up to the effective date of April
1, 2026. The net proceeds from the Wilson Creek Disposition were used to
reduce Highwood's Net Debt and provide Highwood with a stronger financial
position. Net Debt was reduced from $114 million at March 31, 2026 to
$16.4 million at June 30, 2026. As a result of the stronger financial
position, Highwood has increased flexibility to enhance shareholder
returns through accelerated growth in Brazeau, further development of
early-stage opportunities in Highwood's portfolio, strategic acquisitions,
and/or returns of capital.(1)
-- Highwood plans to advance a balanced capital program focused on continued
drilling activity, enhanced recovery initiatives and the delineation of
longer-dated growth opportunities. In the near term, the Company expects
to continue drilling conventional opportunities in Western Alberta with
2-3 wells planned in the coming months. At the same time, Highwood will
continue progressing waterflood implementation to reduce base declines,
improve recovery factors and extend reserve life. Furthermore, Highwood
intends to further evaluate its lands in eastern Alberta and western
Saskatchewan, including the potential application of steam assisted
gravity drainage ("SAGD") development, and expects to pursue delineation
work, strategic financing and partnership discussions over the coming
months to advance these opportunities in a disciplined manner.
-- Subsequent to June 30, 2026, Highwood implemented its inaugural normal
course issuer bid (the "NCIB") and to July 31, 2026, has purchased and
cancelled 28,638 common shares since the initial NCIB purchase was made
on July 14, 2026. The Company believes the NCIB may benefit continuing
shareholders by increasing their proportionate equity interest in
Highwood when such repurchased Shares are cancelled or reserved as
treasury shares.
-- Highwood's hedging program helps mitigate volatility in commodity pricing
with approximately 1,100 bbls/day and 1,500 bbls/day of oil hedged
throughout 2026 and 2027, respectively, at an average contract price of
approximately $93.60CAD/bbl and $94.40CAD/bbl (WTI-NYMEX). In addition,
the Company has approximately 3,000GJ/day of natural gas hedged in 2026
at an average contract price of approximately $3.17/GJ (AECO).
-- The Company is focused on maintaining a strong financial position to
maintain flexibility to provide returns to shareholders. At June 30,
2026, Highwood had approximately $230 million in tax pools, including
roughly $100 million in non-capital losses. Highwood does not anticipate
being cash taxable for approximately three years or more.
Notes to Highlights:
(1) See "Caution Respecting Reserves Information" and
"Non-GAAP and other Specified Financial Measures"
.
(2) Basic common shares at June 30, 2026 is 15,198,818
which includes shares held in trust.
(3) CAD amounts include USD denominated commodity contracts
converted into CAD at a rate of approximately 1.40
USD/CAD
Summary of Financial & Operating Results
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 % 2026 2025 %
Financial
(expressed in
thousands)
Petroleum and
natural gas
sales $ 34,586 $ 24,973 38 $ 64,560 $ 52,953 22
Transportation
pipeline
revenues 345 577 (40) 710 1,176 (40)
Total revenues,
net of royalties
and commodity
contracts
(1) 34,675 37,125 (7) 35,626 58,135 (39)
Income (loss) 30,718 13,385 129 16,215 15,740 3
Funds flow from
operating
activities (5) 9,867 13,395 (26) 24,121 25,299 (5)
EBITDA (5) 11,813 15,163 (22) 28,041 28,933 (3)
Capital
expenditures,
net of
dispositions ($88,869) 9,016 (1,086) (78,455) 42,188 (286)
Net Debt (2) 16,354 117,936 (86)
Shareholders'
equity (end of
period) 170,718 147,906 15
Shares
outstanding (end
of period) (6) 13,946 14,461 (4)
Weighted-average
basic shares
outstanding 14,064 14,564 (3)
Operations (3)
Production
Crude oil
(bbls/d) 2,554 2,861 (11) 2,869 2,843 1
NGLs (boe/d) 840 915 (8) 920 907 1
Natural gas
(mcf/d) 10,109 11,134 (9) 10,507 10,197 3
Total (boe/d) 5,079 5,632 (10) 5,540 5,449 2
Average realized
prices (4)
Crude oil
(Cdn$/bbl) 128.86 79.58 62 106.36 85.63 24
NGL (Cdn$/boe) 41.80 28.26 48 34.93 30.82 13
Natural gas
(Cdn$/mcf) 1.56 1.87 (17) 1.85 2.08 (11)
Operating netback
(per BOE) (5) 42.33 26.52 60 37.21 28.60 30
(1) Includes realized and unrealized gain and losses on
commodity contracts.
(2) Net Debt consists of bank debt and working capital
deficit excluding commodity contract assets and/or
liabilities, current portion of decommissioning liabilities
and lease liabilities.
(3) For a description of the boe conversion ratio, see
"Basis of Barrel of Oil Equivalent".
(4) Before hedging.
(5) See "Non-GAAP and Other Specified Financial Measures".
(6) Shares outstanding are adjusted for treasury shares
purchased and held in trust.
Operational Update
Upon closing of the disposition, Highwood's focus is continued drilling success in the Basal Belly River at Brazeau, which is analogous to the Belly River at Wilson Creek, the implementation of waterflood which will continue to lower base declines and increase reserve lives, and further development of early-stage opportunities in Highwood's portfolio.
Given the recent industry success in close proximity to Highwood's Mannville stack lands in eastern Alberta using horizontal technology, Highwood plans to deploy capital to the assets before the end of the year. Further, the Company continues to add to its portfolio in the area through multiple Crown land acquisitions. These lands provide multiple opportunities, including potential SAGD projects. The Company plans to delineate and commence strategic financing and partnership discussions over the coming several months to advance these opportunities. During the third quarter of 2026, Highwood anticipates drilling 2-3 gross wells (2-3 net), with the next drill planned for late in the third quarter in Eastern Alberta.
In addition, the Company continues to explore strategic options for its lithium, critical mineral and rare earth element assets. Highwood has seen interest from potential strategic partners and believes there is strong potential to access government funding support.
In the third quarter of 2026, Highwood's production will be materially impacted by planned internal and third-party turnarounds in Brazeau. Highwood will be conducting a turnaround at its Brazeau 6-27 facility in September, and at the same time a third-party will be conducting a workover on the gas plant that services the Brazeau area. As a result, Highwood expects oil production to be shut in for 8-10 days and gas and NGLs to be shut in and/or re-injected for approximately 18 days. Both of these turnarounds occur approximately once every five years and there is no major planned maintenance for the remainder of 2026. Separately, during the second quarter Highwood's production was again impacted in the Wilson Creek area due to multiple third-party unplanned outages. This issue is expected to be mitigated going forward as Highwood controls the majority of the in-field infrastructure in the Brazeau area that makes up the majority of the Company's production after the Wilson Creek Disposition.
Outlook
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