Nuvista Energy announces 2025 budget

The company said, “With well outperformance continuing to drive strong capital efficiencies, and with commodity prices retreating from the highs of 2022, we have taken this as a market signal to moderate capital spending and production growth in order to increase the priority of at least triple-digit return of cash to shareholders via share buybacks. We are fortunate that our business has the flexibility and superior asset quality to afford this. We have set our 2025 capital expenditure guidance at approximately $450 million to grow production volumes by 7% to a 2025 annual average of approximately 90,000 Boe/d. This includes a planned six-week turnaround for maintenance and expansion of major third party facilities in Wapiti which will impact the second and third quarters. Production volumes are expected to approach 100,000 Boe/d in the second half of the year. Our budget is based on commodity price assumptions of $65/Bbl WTI oil and $3/MMBtu Nymex natural gas. In this base scenario we would expect to generate approximately $175 million of free adjusted funds flow, of which we will target at least 75% for return to shareholders. This capital budget is approximately $125 million lower than our previous outlook with only a modest tempering of our production growth from 10% to 7%. Superior ongoing execution and new well performance are the main drivers that provide us the flexibility to exercise this discipline and reduce capital substantially with only a modest growth impact. Substantially all of our production growth in 2025 will come from the Pipestone North area, beginning with the startup of the CSV Midstream Albright gas plant which is anticipated to be commissioned during the first quarter. 14 wells will be completed in Pipestone to ramp into this additional capacity of 8,000 to 10,000 Boe/d by the second quarter. Looking further ahead, Gold Creek area production growth will be a high focus for 2026 and 2027. We will monitor the economic environment, and if commodity prices are averaging higher than our base assumptions, we have the ability and intention to increase returns to shareholders and 2025 capital expenditures for future growth concurrently to maximize long term value per share. If in an environment where commodity prices soften, we have the flexibility to further moderate production growth and reduce 2025 capital expenditures to act counter-cyclically and ensure our return of capital to shareholders remains intact. Underlying our commitment to shareholder returns is a pristine balance sheet. We expect to enter 2025 with approximately $250 million of net debt. We intend to continue our track record of carefully directing free adjusted funds flow towards a prudent balance of capital return to shareholders and debt reduction, while investing in high return growth projects. NuVista’s top quality asset base, deep inventory, and management’s relentless focus on value maximization supports our medium-term plans for value-adding growth to the plateau level of 125,000 Boe/d. We will continue to closely monitor and adjust to the environment in order to maximize the value of our asset base and ensure the long-term sustainability of our business. We would like to thank our staff, contractors, and suppliers for their continued dedication and delivery, and we thank our Board of Directors and our shareholders for their continued guidance and support.”