Highlights 

  • Cavvy produces 23,956 boe/d and posts CAD 30.6M net operating income in Q3 2025. 
  • Company enters forward pricing agreement for 2026 sulphur sales to manage price risk. 
  • Net debt decreases by CAD 3.2M, while third-party processing volumes rise 105% year-over-year. 

Cavvy Energy Ltd. (TSX:CVVY) released its financial and operating results for the third quarter of 2025. The company produced 23,956 boe/d, 80% of which was natural gas, and reported net operating income of CAD 30.6M (CAD 0.11 per basic and diluted share). Funds Flow from Operations reached CAD 12.9M (CAD 0.04 per share). Third-party raw gas processing totaled 136.1 MMcf/d, up 105% from Q3 2024, contributing to a CAD 4.8M increase in third-party processing and marketing revenue. Operating expenses declined by CAD 1.8M (5%) to CAD 36.7M compared to Q3 2024. 

Net debt decreased by CAD 3.2M from Q2 2025 to CAD 163.7M. Cavvy also produced 1,120 mt/d of sulphur in Q3, with 85% sold under a contract expiring December 31, 2025. 

Management Commentary 

Darcy Reding, President and CEO of Cavvy, stated: 
“Cavvy delivered another very strong quarter. We generated over CAD30 million of net operating income, supported by 14% growth in third-party processing volumes compared to Q2, while hedging gains helped to offset a very challenging summer AECO market. We are also very pleased to announce the execution of a structured forward pricing agreement for our 2026 sulphur sales which provides downside revenue protection while preserving meaningful upside participation in the market if the current strong spot sulphur price persists into 2026.” 

Forward Sulphur Pricing Agreement 

Cavvy finalized a structured sulphur pricing agreement for 2026 with a third-party buyer. Under the terms, one-third of sulphur sales will receive a fixed price of USD 225/mt, one-third will use a collar with a floor of USD 205/mt and a cap of USD 250/mt, and one-third will be priced at the spot FOB Vancouver market rate. The agreement covers 100% of marketed sulphur with no minimum volume commitment. 

Outlook and 2025 Guidance 

Cavvy’s immediate priorities include maintaining safe operations, controlling operating costs, optimizing infrastructure, and divesting non-core assets. The company updated its 2025 guidance, projecting total production of 23,000–25,000 boe/d, NOI of CAD 100–110M, and operating netback of CAD 11.50–12.50/boe. Capital expenditures are expected to range between CAD 25–30M. Production guidance incorporates previously announced shut-ins in Central AB and periodic output from shut-in volumes in Northern AB and Northeast BC. 

Hedging Program 

Cavvy maintains hedges to mitigate commodity price, interest rate, and foreign exchange risks. For the remainder of 2025, 110,000 GJ/d of natural gas is hedged at a weighted average fixed price of CAD 3.32/GJ, while 1,641 bbl/d of condensate is hedged with a weighted average floor of CAD84.67/bbl and ceiling of CAD92.05/bbl. Combined, these hedges cover approximately 80% of the remaining 2025 production guidance. 

About Cavvy Energy 

Cavvy Energy is a Calgary-based Canadian energy company involved in upstream production and midstream processing of natural gas, NGLs, condensate, and sulphur from Western Canada. The company focuses on providing reliable energy products while managing operational and financial risks.