Cavvy Energy provides 2026 guidance and capital program

Not For Distribution to United States News Wire Services or Dissemination in United States CALGARY, Alberta, Dec. 08, 2025 (GLOBE NEWSWIRE) -- Cavvy Energy Ltd. (“Cavvy” or the “Company”) (TSX:CVVY) is pleased to release 2026 guidance, highlighted by accelerated debt reduction targeting $50 million and an increase in net operating income of over 25% versus mid-point 2025 guidance. Cavvy has delivered a one-year total shareholder return of approximately 333% as of December 4, 2025. Successful execution of the business plan achieved material reductions in long-term debt and lower operating costs, providing strong free cash flow supported by significant hedging gains from the Company’s risk management program.

The risk management program is a key component of the Company’s strategic plan, mitigating the impacts of commodity price volatility on cash flow to protect the 2026 capital program and debt reduction objectives for the long-term benefit of shareholders. “We will build on our 2025 success and expect to continue delivering strong shareholder returns moving forward,” said Darcy Reding, President and CEO. “The majority of Cavvy’s growing 2026 free cash flow will be directed towards aggressively paying down long-term debt, supporting a 2026 year-end debt target of $110-$125 million, a decrease of up to $50 million from an estimated $160 million at year end 2025.

With even higher 2026 cash flow and a rapidly improving balance sheet, we believe Cavvy will soon be positioned to pursue accretive growth opportunities, resulting in additional value for our shareholders.” 2026 Guidance (1) Production guidance assumes persistence of previously announced shut-ins in Central AB and Northern AB, while production in Northeast BC is assumed to be on-production through 2026 (2) Refer to the “Net Operating Income” section of the Company’s MD&A for reference to non-GAAP measures (3) Assumes unhedged average 2026 AECO price of $3.15/GJ, average unhedged 2026 WTI price of US$60.90/bbl and average unhedged 2026 Vancouver FOB Sulphur price of US$237.50/mt (4) Includes the impact of hedge contracts and the 2026 structured sulphur price agreement (5) Excludes asset retirement and decommissioning expenditures (6) Assumes USD/CAD exchange rate of 0.7210 Maintaining momentum from key milestones achieved in 2025 including operating cost structure reduction, third party processing volume and revenue growth, and sustaining our risk management initiatives, is expected to contribute to strong cash flow and material debt reduction in 2026. This further supports management’s increasing focus on identifying accretive growth opportunities in 2026, consistent with the Company’s long-term objective to replenish and grow its production base and enhance its inventory of investment opportunities. Specific priorities for 2026 are: Sustain a safe and regulatory compliant business Capture additional opportunities to grow third-party gathering and processing business value Minimize facility outages to maximize sales and processing revenue Reduce long-term debt to improve financial flexibility and position the Company to refinance its 2027 debt maturities Identify and high-grade both organic and acquisition opportunities that replenish Cavvy’s resource base and increase development upside Production Production guidance of 22,000 to 24,500 boe/d assumes the continued shut-in of uneconomic dry gas production in Central AB and Northern AB for the entire calendar year, accounting for approximately 8,900 boe/d.

This production is tied-in to high cost, non-operated, non-owned gas processing facilities where Cavvy is fully exposed to operating and maintenance turnaround costs on a ‘flow-through’ basis. Previously shut-in Northeast BC production of approximately 800 boe/d was restarted in Q4 2025 and is expected to remain on production through all of 2026. Production guidance also includes a planned six-week maintenance turnaround at the Caroline gas plant scheduled for Q3 2026, and two weeks of unavoidable downtime at the Waterton gas plant related to a maintenance outage on the non-operated sales gas transportation system anticipated for Q2 2026.

With sulphur production and sales revenue providing a more important impact to business results in 2026, Cavvy is providing sulphur production guidance of 1,000 to 1,150 mt/d. Third Party Processing Cavvy has delivered tremendous growth in third-party processing volumes and revenue at the Caroline and Jumping Pound facilities over the last two years, achieving a record high of 136.1 MMcf/d in raw gas volumes processed in Q3 2025. The Company recently entered a multi-year take-or-pay agreement with an anchor processing customer at the Caroline gas plant and has successfully contracted additional third-party volumes at Jumping Pound as the result of the shutdown of a nearby third-party gas processing facility.

Additionally, Cavvy continues to re-melt and process third-party sulphur at the Central AB Shantz sulphur facility, which further contributes to the stable fee-based revenue stream. Risk Management Cavvy has hedged approximately 71,140 GJ/d of its 2026 natural gas production at a weighted average hedge price of $3.36/GJ, and 1,465 bbl/d of its 2026 condensate production with a weighted average floor price of CAD$84.75/bbl and a weighted average ceiling price of CAD$91.49/bbl. The Company’s aggregate hedge position for 2026 totals 12,702 boe/d or approximately 55% of the above production guidance range.

The unrealized, discounted gain on the hydrocarbon hedge portfolio, which extends to mid-2028, is approximately $18.6 million using the forward strip as of December 4, 2025. In Q4 2025, a structured sulphur pricing agreement for 2026 sulphur production was executed with a third-party sulphur buyer, as previously disclosed in the Company’s November 6, 2025 press release. This agreement provides revenue protection from potentially volatile sulphur pricing, while still retaining the ability to meaningfully participate in the spot sulphur market.

Capital Program Cavvy’s $40-$45 million capital guidance includes $15-$20 million allocated for the scheduled maintenance turnaround at the Caroline gas plant in Q3 2026 and long lead procurement for future facility turnarounds. Additionally, $8 million is allocated for asset retirement and reclamation obligations, $5 million for IT and plant control system upgrades, and the remainder for capital maintenance and discretionary well and facility optimization projects. Net Operating Income The growth of the third-party processing business, hedged 2026 hydrocarbon and sulphur revenue, and continued reliable operation of major gas processing facilities underpins management’s 2026 NOI guidance of $125-$140 million.

The 2026 NOI guidance assumes an unhedged Vancouver FOB sulphur price averaging US$250/mt for the first half of 2026 and US$225/mt for the second half of 2026, an average unhedged 2026 AECO price of $3.15/GJ, and an average unhedged 2026 WTI price of US$60.90/bbl. ABOUT CAVVY ENERGY Cavvy Energy is a Canadian energy company headquartered in Calgary, Alberta. The Company is a significant upstream producer and midstream custom processor of natural gas, NGLs, condensate, and sulphur from Western Canada.

Cavvy’s vision is to provide responsible, affordable natural gas and derived products to meet society’s energy security needs. For further information, visit www.cavvyenergy.com , or please contact: Forward-Looking Statements Certain of the statements contained herein including, without limitation, management plans and assessments of future plans and operations, Cavvy’s outlook, strategy and vision, statements about 2026 guidance and capital program; hydrocarbon and sulphur production and third‑party processing volumes; net operating income and total debt targets (including debt reduction plans and refinancing objectives); planned maintenance turnaround and asset retirement and reclamation spending; risk management and hedging strategy; operational efficiency and cost‑reduction initiatives; growth of Cavvy’s third‑party gathering and processing business; potential impacts of third‑party pipeline outages and other infrastructure availability; and assumptions and sensitivities relating to commodity prices, foreign exchange and interest rates, and regulatory and industry conditions, may constitute “forward-looking statements” or “forward-looking information” within the meaning of applicable securities laws (collectively “ forward-looking statements ”). Words such as “may”, “will”, “should”, “could”, “anticipate”, “believe”, “expect”, “intend”, “plan”, “continue”, “project”, “predict”, “opportunities”, “strategy”, “objective”, “potential”, “forecast”, “estimate”, “goal”, “target”, “outlook”, “future”, and similar expressions may be used to identify these forward-looking statements.

These statements reflect management's current beliefs and are based on information currently available to management. Forward-looking statements are based on a number of factors and assumptions which have been used to develop such forward-looking statements, but which may prove to be incorrect. Although Cavvy believes that the expectations reflected in such forward-looking statements are reasonable, undue reliance should not be placed on forward-looking statements because Cavvy can give no assurance that such expectations will prove to be correct.

In making forward-looking statements, Cavvy has made assumptions regarding the impact of increasing competition; the general stability of the economic and political environment in which Cavvy operates; the timely receipt of any required regulatory approvals; the ability of Cavvy to obtain and retain qualified staff, equipment and services in a timely and cost efficient manner; the ability of Cavvy and the operator of the projects in which Cavvy has an interest to operate the assets in a safe, efficient and effective manner; future oil and natural gas prices; currency, foreign exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which Cavvy operates; timing and amount of capital projects and associated expenditures; future sources of funding; production levels; weather conditions; access to gathering, processing, storage and pipeline systems; advancing technologies; and the ability of Cavvy to successfully market its oil and natural gas products. Cavvy disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise except as required by law. Forward-looking statements involve significant risk and uncertainties.

A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements including, but not limited to, the risks associated with oil and gas exploration, development, exploitation, production, processing, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, environmental risks, competition from other producers, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals, and the ability to access sufficient capital from internal and external sources, and the risk factors outlined under “Risk Factors” and elsewhere herein. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect Cavvy's operations and financial results is included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR+ website (www.sedarplus.ca), and at Cavvy's website (www.cavvyenergy.com).

Additional Reader Advisories Barrels of oil equivalent (“boe”) may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1 boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Abbreviations Neither the TSX nor its Regulation Services Provider (as that term is defined in policies of the TSX) accepts responsibility for the adequacy or accuracy of this release