Pine Cliff Energy Q4 2025 Earnings Report

Pine Cliff Energy EPS Results

• Actual EPS: C$0.02
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Pine Cliff Energy Revenue Results

• Actual Revenue: $41.35 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Pine Cliff Energy Announcement Details

• Quarter: Q4 2025
• Date: 3/5/2026
• Time: Before Market Opens
• Conference Call Date: Thursday, March 5, 2026
• Conference Call Time: 11:00AM ET

Pine Cliff is a natural gas and crude oil company with a long-term view of creating shareholder value.

Pine Cliff Energy Q4 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Glauconite well (4-23) was drilled ahead of schedule and is on production (~2 weeks) with encouraging early cleanup results, costs and site infrastructure came in on budget and can support additional wells planned for Q3–Q4.
• Neutral Sentiment: Pine Cliff is the designated gas provider for a proposed data center project but the developer's financing is not yet finalized and no construction has started; the company says multiple other inquiries could yield premium pricing if projects proceed.
• Positive Sentiment: The company has hedged ~37% of gross natural gas at an average of CAD 3.19/MMcf for 2026 and ~31% of crude at US$63.45, which management says protects near-term cash flow against volatility.
• Positive Sentiment: Pine Cliff plans to prioritize lowering debt and funding its drill program while maintaining the dividend track record (over CAD 100 million paid since 2022), citing capital allocation flexibility as a priority.
• Negative Sentiment: Management notes AECO volatility and constrained LNG export capacity limit North American ability to benefit from higher European gas prices now, and geopolitics add upside/downside risk to commodity-driven cash flow (management estimates ~CAD 1.4M annual cash flow per US$1 move in WTI).

Presentation

[Operator]

Good morning, thank you for joining the Pine Cliff Energy fourth quarter and year-end results conference call. Today, we will open with remarks from President and CEO, Phil Hodge. Mr. Hodge is joined today by Terry McNeill, Chief Operating Officer, Kristopher Zak, Chief Financial Officer, Austin Nieuwdorp, Vice President of Finance, and Dan Keenan, Vice President Exploitation. Questions for the management team can be registered on the webcast. Prior to starting, we'd like to remind participants that this call may contain comments on or discussion of forward-looking information. We refer participants to the cautionary statements on forward-looking information included in the presentation on our website, www.pinecliffenergy.com. We'll turn the call to Mr. Phil Hodge, President and CEO.

[Phil Hodge, President and CEO at Pine Cliff Energy]

Thanks, Chris. Thanks for those joining in and for those who will be listening on the replay that'll be on our website. As we've been doing on these webcasts in the past, our intent is not to reread the President's message or the press release that you've already got access to. Many of you already received my quarterly email also that went out last night, which focuses a bit more on the macro, how we see the environment. We received several questions last night. I think we'll work through those. If you've got any other questions, please send them along and as we're speaking, and we'll be happy to address them.

[Phil Hodge, President and CEO at Pine Cliff Energy]

One of the probably the most questions I got last night and this morning have been looking for a little bit more clarity on our Glauconite well that we drilled. We totally understand the curiosity around that because we haven't done any drilling for a couple of years. Everybody's well aware of how much we think of that area, and that we're very positive, and that we've actually increased the number of Glauconite locations that we have in that area to now be in 22 net locations. For a company of our size, that's significant, because these locations are highly valued.

[Phil Hodge, President and CEO at Pine Cliff Energy]

That being said, anyone who's been following Pine Cliff or has been a shareholder of ours for some time, knows that we're not a neon lights type of company, as I sometimes refer to it. We're not gonna be out there with, you know the market, a very clear picture of the wealth or kill on the well. Again, it's, we're not intending to give a lot of production information until we know that we'll have a more consistent production history.

[Terry McNeill, COO at Pine Cliff Energy]

Thanks, Phil. Good morning, folks. With regards to the well itself, execution went well, drilled ahead of schedule. Overall costs came in consistent with our expectation. The well's been on production for almost two weeks now, and it's still in very, very early cleanup, so really hasn't reached a stabilized rate. We're quite encouraged by the early results, but it's really too soon to draw any firm conclusions on any long-term productivity or performance. We keep an eye on it regularly, and that's probably the best update we can give at this time.

[Phil Hodge, President and CEO at Pine Cliff Energy]

Thanks, Terry. Yeah, our intent will be to once we do have a consistent longer-term production history to be able to update the market at that time. As Terry said, we're quite encouraged by it. We, you know, we just don't wanna be in a case where we're giving out information that's either positive or negative on the results that. It's just too early. It's too early to say. One question we did get last night was around the infrastructure spend that we in Q4 around that well. The 4-23 well is the Glauconite well that we drilled in December and brought on in mid-February.

[Phil Hodge, President and CEO at Pine Cliff Energy]

At the time, we also put in a sales pipeline and other infrastructure that not only assisted getting the production from that well alone, but also will be able to be utilized for other wells in the area. You know, we're pretty happy with where the costs came in at. We're essentially on budget for what we expected to do in that area for both the well and the infrastructure, and are well set up for, you know, as we look at the back half of this year. I mean, our intent would be to go back to drilling in the Central Alberta area in the Glauconite wells later this year. Like we say, the flexibility that we have is something that's, I think, an advantage.

[Phil Hodge, President and CEO at Pine Cliff Energy]

Pricing is, and AECO has started to strengthen here over the last couple of weeks. That's a good thing. We'll see how that plays out through the summer. Our plan would be, you know, if we are gonna drill, and that's our intent, we would be looking at kinda Q3, Q4 as to when we would back to the Sundre area. One of the questions I got, you know, we've had several questions around the data center update. Again, those of you that follow the Pine Cliff story know that we announced we're, I think, the first natural gas producer to announce an arrangement with a data center in our Central Alberta. That has not... I mean, Let me back up.

[Phil Hodge, President and CEO at Pine Cliff Energy]

We are a gas provider for on all of these types of projects. In that situation, that group that we're dealing with seems to be very close to finishing their financing, it is not within our control as to for them to get the final financing put in place so that they can launch construction on the site. There to date has been no construction started on the site, we're still encouraged that that's gonna happen here in the next two quarters. That's still something that we're working very closely on. In the meantime, we've had a lot of interest on other sites that we've got in Province of Alberta and even in Saskatchewan about data centers and about power generation in general for various uses.

[Phil Hodge, President and CEO at Pine Cliff Energy]

We continue to talk to all groups about this. I mean, our goal is really to try to get a premium price for the molecules that we produce. How we do that and where it gets used and how it gets used, that's all part of these discussions 'cause it kind of varies among the parties. Our, our goal would be to for the same production that we have today, to be able to get a more premium pricing on it. Those we will, you know, as project get put in place, we'll update the market.

[Phil Hodge, President and CEO at Pine Cliff Energy]

The fact that we've got as many groups interested in some of the sites that we have, which are, we think, are very conducive to these types of projects, where they've got good natural gas, they've got fiber availability, in several of the sites we own the land. Therefore, it could be co-located with our existing industrial facilities.

[Phil Hodge, President and CEO at Pine Cliff Energy]

There's a lot of reasons why we think that, you know, this is an area that has got potential for Birchcliff. It's, you know, it's a slow, everybody's figuring out the regulatory process. Everybody's again, you know, a lot of these groups are getting their financing put in place. The province of Alberta has announced that they wanna attract CAD 100 billion of data center development to the province, which is great.

[Phil Hodge, President and CEO at Pine Cliff Energy]

There's been a lot of announcements. I referred to a lot of them in my email that you would've received last night if you're on the email list. The, you know, there's only so many projects that actually have started construction. Again, that's not surprising. These are, in many cases, multi-billion dollar type projects. So there's a lot of steps that need to be done before they're actually gonna break ground. That said, it's quite encouraging on how much activity there is in this area. Another question receives. Got a couple people asking about kind of what's the impact of the European situation and the with the Iran war. Right now, all of the natural gas that can come out of North America really is already allocated.

[Phil Hodge, President and CEO at Pine Cliff Energy]

In other words, the LNG capacity, that's what prohibits us from sending more gas over to Europe when, you know, there's clearly a strong demand right now for gas in Europe. Pricing's gone back over CAD 12 an Mcf, whereas here in Canada, it's at CAD 2 an Mcf. That arbitrage really can't get closed without more LNG export capacity. There's lots of, as, you know, many of you know, Canada, the LNG Canada is now well on its way to getting its phase one, reaching its capacity of 2 Bcf a day. That's great. Hopefully, we'll see a positive investment decision on phase two sometime in 2026. That'll take it to, hopefully, it's 4 Bcf a day. There's other projects underway.

[Phil Hodge, President and CEO at Pine Cliff Energy]

In the really short term, there's really nothing that the North American producers or the North American LNG can do to send more gas to Europe. I think the issue that the Europeans are having is right now with the Strait of Hormuz shut in, a lot of LNG that's coming out of Qatar, a lot of other, you know, the supply chain for LNG has been disrupted. Therefore, there's a concern that they're not gonna be able to put gas into storage, not so much for this winter, 'cause we're already kind of through this winter. It's about getting ready for next winter because they had a fairly cold winter, and so their storage was depleted.

[Phil Hodge, President and CEO at Pine Cliff Energy]

Now if they aren't able to fill it, there's gonna be a real panic on for natural gas in Europe for next year. You can see it that already there were some headlines this morning about Putin threatening that he could cut off natural gas to Europe if they don't allow oil and natural gas exports if there's any kind of embargo put on Russia. That's a significant threat because European nations still use a lot of Russian gas. They don't use as much as they did before, but they still use a lot of Russian gas. There's a lot of dynamics. What it does do is that. There was a piece that came out this morning, just looked at the chart about how many new LNG projects have been announced.

[Phil Hodge, President and CEO at Pine Cliff Energy]

You know, you'll see in our presentation all the LNG projects that are that are currently in operation and those ones under construction. Well, there's another wedge on top of that, which is new announced, which is new announced production or/and future capacity builds on LNG. That would take it to well beyond 40 Bcf a day coming out of North America, which is a massive number. Today, that number is around 20 Bcf a day. That's been a huge increase from where it's at. There's, you know, I think all of this global dynamic pricing really does have an impact on the future viability of more LNG projects coming on because you're getting, you know, this is why our prime minister is traveling around the globe right now.

[Phil Hodge, President and CEO at Pine Cliff Energy]

It's also, you know, why we're seeing more and more requests for Canadian energy around the LNG. The one thing I would say about the impact of the war, I mean, when we saw oil prices, the swap price was $78-$79 this morning, you'll see in our financial statements that about every dollar increase in WTI equates to about a $1.4 million increase in annual cash flow to us. We are ranked left even though we are, you know, 80% gas. Those that move in WTI, move in oil prices does have an impact on our cash flow statements of a pretty material nature.

[Phil Hodge, President and CEO at Pine Cliff Energy]

I think the only other question that kinda got from last night was just on our hedging. I think our hedging is pretty well set out. Chris has done a good job of. It's in our press release. You can see that we're fairly well hedged going into 2026, protecting the summer prices, but also, like I say, locking in some prices that we're pretty comfortable going forward. I don't know, Kris, if you wanna comment just generally on how we kinda look at hedging going forward.

[Kristopher Zack, CFO at Pine Cliff Energy]

I would just only add that we'll continue to hedge where possible to continue to protect our cash flow against near term volatility. Again, just to reiterate what's in the press release, 37% of our gross natural gas production is hedged an average price around CAD 3.19 for 2026, and around 31% of our crude oil production at around $63.45.

[Phil Hodge, President and CEO at Pine Cliff Energy]

Thanks, Kris. I think that covered all the major questions that we've received either this morning or last night. I mean, you've always got access to us if anybody wants to talk further. you know, it's been a challenging quarter because it's Q4, as you saw in the numbers, was actually pretty good. AECO was moving up nicely. That has a big impact. We're obviously highly correlated to AECO price moves. Q1 AECO was, you know, it came down, the reasons for that was primarily because of the warm weather in Western Canada, but also the LNG Canada delays because there were some technical issues.

[Phil Hodge, President and CEO at Pine Cliff Energy]

As that ramps back up, whereas we head into the back half of this year, where we're going to hopefully see LNG Canada back to kind of, you know, get to their capacity around 2 Bcf a day, you know, there's a, there's a lot of reasons for us to be positive. You know, our goal will be continue to kind of allocate capital to the best we can to both continue to lower our debt, which is something that, you know, we think that just makes us more flexible going forward for potential opportunities, but also to continue to finance the drill program. Because we think having that, you know, such strong locations that can deliver such, you know, positive returns, that's something we should be allocating capital towards.

[Phil Hodge, President and CEO at Pine Cliff Energy]

And all in the backdrop of all of that, we continue to keep the dividend rolling. I mean, very proud of the fact that a company of Pine Cliff's size has been able to pay over CAD 100 million of dividends, which is almost CAD 0.30 a share, since we started the program in summer of 2022. Okay. If there's no further questions, we won't take any other time away from you. Thank you very much for your attention and for your ongoing interest in Pine Cliff. Have a good day.

Participants

Executives

• Kristopher Zack, CFO
• Phil Hodge, President and CEO
• Terry McNeill, COO