CALGARY, AB, Nov. 2, 2026 /CNW/ -- Topaz Energy Corp. (TSX:TPZ) ("Topaz" or the "Company") is pleased to provide third quarter 2026 financial results. Select financial information is outlined below and should be read in conjunction with Topaz's interim condensed consolidated financial statements ("Financial Statements") and related management's discussion and analysis ("MD&A") as at and for the three and nine months ended September 30, 2026, which are available on SEDAR+ at www.sedarplus.ca and on Topaz's website at www.topazenergy.ca.
Highlights
-- Q3 and YTD 2026 average royalty production of 23,507 boe/d(4) and 24,112
boe/d(4) each increased 9% from the prior year, highlighted by 13% higher
heavy oil royalty production (3,825 bbl/d).
-- Tourmaline's ownership in Topaz reduced from 12.9% to 5.4% on October 8,
2026(9) as part of Tourmaline's long-term plan to reduce its equity
position and enhance financial flexibility and expand Topaz's
free-trading share liquidity. Topaz holds royalty interests across
virtually all of Tourmaline's acreage, providing significant long-term
growth exposure to the systematic development of Tourmaline's most
profitable, liquids-rich undeveloped Montney inventory in NEBC.
-- During Q3 2026, 175 gross wells (6.3 net)(5) were drilled on Topaz's
royalty acreage, representing a 9% increase from the prior year. To date
in 2026, a total of 587 gross wells(6) were brought on production or
drilled uncompleted, with over 50% oil-focused development activity,
demonstrating the diversification within Topaz's royalty portfolio.
-- Q3 2026 cash flow and net income of $0.56 and $0.21 per share(2),
increased 14% and 24%, respectively, from the prior year, driven by 42%
higher realized commodity pricing and 13% lower cash expenses(10).
-- Q3 2026 FCF per share of $0.55 increased 16% from Q3 2025, providing a 3%
higher dividend and $0.20 per share (50%) higher excess FCF from Q3 2025.
-- Q3 2026 exit net debt of $463.5 million decreased $71.9 million (13%)
from the prior year.
-- Declared the fourth quarter dividend of $0.35 per share ($1.40 per share
annualized)(8) representing a 4.5% trailing annualized yield to Topaz's
current share price(7).
Third Quarter 2026 Update
Financial Overview
-- Topaz generated total revenue and other income of $104.3 million, 78%
from the royalty portfolio and 22% from infrastructure and other income.
-- Cash flow of $0.56 per share(2) ($87.0 million) was 14% higher than the
prior year driven by 9% higher royalty production and 42% higher realized
commodity pricing.
-- Free cash flow of $0.55 per share(2) ($85.4 million) increased 17% from
the prior year. Topaz paid $54.3 million in dividends during the quarter
($0.35 per share and 62% payout ratio(1)) and generated $31.1 million of
Excess FCF(1).
-- Topaz exited Q3 2026 with $463.5 million of net debt(1) (1.1x net debt to
Q3 2026 annualized EBITDA(1)). As at November 2, 2026, Topaz has
approximately $0.5 billion of available credit capacity which provides
financial flexibility for strategic growth opportunities.
Royalty and Infrastructure Activity
-- Q3 2026 average royalty production of 23,507 boe/d(4) (30% total liquids)
increased 9% from Q3 2025 (21,596 boe/d and 31% total liquids). Oil and
heavy oil royalty production increased 8% and natural gas and NGL
production increased 9% despite certain natural gas volume curtailments
during the third quarter attributed to maintenance activity and natural
gas price volatility.
-- During Q3 2026, 175 gross wells (6.3 net)(5) were drilled on Topaz's
royalty acreage, of which 64% were drilled uncompleted (Q3 2025 -- 161
gross wells and 58%, respectively).
-- During Q3 2026, Topaz generated $81.5 million royalty production revenue,
84% from total liquids royalty production and 16% from natural gas
royalty production.
-- During Q3 2026, Topaz generated $22.9 million in processing revenue and
other income. The infrastructure assets generated 98% utilization and
$22.0 million of operating margin (96%)(1).
-- Topaz estimates that operators invested $0.6 billion to $0.7 billion of
development capital across the Company's royalty acreage in Q3 2026, with
drilling activity (175 gross wells spud(5)) diversified as follows: 65
Clearwater, 34 NEBC & Alberta Montney, 38 Deep Basin, 8 Peace River, 11
SE Saskatchewan, and 19 in Central AB.
-- During Q3 2026, 178 gross wells were brought on production(5) and based
on planned operator drilling activity, Topaz expects 24 to 29 drilling
rigs to be active across its royalty acreage through the fourth quarter
of 2026(3).
Dividend
-- Topaz's Board declared the fourth quarter 2026 dividend at $0.35 per
share(8) which is expected to be paid on December 31, 2026, to
shareholders of record on December 15, 2026. The quarterly cash dividend
is designated as an "eligible dividend" for Canadian income tax purposes.
2026 Guidance Reconfirmed
-- Topaz reconfirms the Company's 2026e guidance estimates of average annual
royalty production between 23,900 boe/d and 24,300 boe/d, and
infrastructure processing revenue and other income of approximately $93.0
million(3)(11). Topaz expects to exit 2026 with net debt(1) between
$425.0 and $430.0 million(3)(11).
Q3 2026 CONFERENCE CALL
Topaz will host a conference call tomorrow, Tuesday, November 3, 2026 starting at 9:00 a.m. ABT (10:00 a.m. EST). To join the conference call without operator assistance, participants can register and enter their phone number at https://emportal.ink/4dPR5Mc to receive an instant automated call back. Alternatively, participants can join by calling a live operator at 1-888-510-2154 (North American toll free). The conference call ID is 11522.
ABOUT THE COMPANY
Topaz is a unique royalty and infrastructure energy company focused on generating free cash flow growth and paying reliable and sustainable dividends to its shareholders, through its strategic relationship with Canada's largest and most active natural gas producer, Tourmaline Oil Corp. ("Tourmaline"), an investment-grade senior Canadian E&P company, and leveraging industry relationships to execute complementary acquisitions from other high-quality energy companies. Topaz focuses on top-quartile energy resources and assets best positioned to attract capital in order to generate sustainable long-term growth and profitability.
Topaz's common shares are listed and posted for trading on the TSX under the trading symbol "TPZ" and it is included in the S&P/TSX Composite Index. This is the headline index for Canada and is the principal benchmark measure for the Canadian equity markets, represented by the largest companies on the TSX.
Additional information
Additional information about Topaz, including the Financial Statements and MD&A as at and for the three and nine months ended September 30, 2026 are available on SEDAR+ at www.sedarplus.ca under the Company's profile, and on Topaz's website at www.topazenergy.ca.
Selected Financial Information
For the periods ended YTD 2026 YTD 2025 Q3 2026 Q2 2026 Q1 2026 Q4 2025 Q3 2025
($000s) except per share
Royalty production revenue 241,605 179,342 81,458 88,932 71,215 62,468 52,291
Processing revenue 62,830 60,977 21,051 20,742 21,037 21,930 21,221
Other income(4) 5,686 9,467 1,825 1,540 2,321 2,320 2,931
Total 310,121 249,786 104,334 111,214 94,573 86,718 76,443
Cash expenses:
Operating (4,498) (5,503) (866) (1,877) (1,755) (1,027) (1,545)
Marketing (1,397) (1,122) (393) (532) (472) (415) (307)
General and administrative (6,014) (5,936) (1,936) (1,880) (2,198) (3,338) (1,864)
Realized gain (loss) on financial instruments (3,138) 14,724 1,170 (2,522) (1,786) 5,102 8,737
Current income tax expense(8) (22,209) -- (9,523) (10,186) (2,500) -- --
Interest expense (17,344) (19,741) (5,791) (5,828) (5,725) (6,486) (6,620)
Cash flow 255,521 232,208 86,995 88,389 80,137 80,554 74,844
Per basic share(1)(2) $1.65 $1.51 $0.56 $0.57 $0.52 $0.52 $0.49
Per diluted share(1)(2) $1.65 $1.50 $0.56 $0.57 $0.52 $0.52 $0.49
Cash from operating activities 274,000 239,617 100,066 90,530 83,404 69,143 78,147
Per basic share(1)(2) $1.77 $1.56 $0.65 $0.58 $0.54 $0.45 $0.51
Per diluted share(1)(2) $1.77 $1.55 $0.64 $0.58 $0.54 $0.45 $0.51
Net income 118,543 96,047 32,021 52,483 34,039 32,694 25,573
Per basic share(2) $0.77 $0.62 $0.21 $0.34 $0.22 $0.21 $0.17
Per diluted share(2) $0.76 $0.62 $0.21 $0.34 $0.22 $0.21 $0.17
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