Commodities
Topaz Energy Beats Q2 Production Estimates, Lifts FY2026 Volume Guidance, TPH Says
Topaz Energy raised its fiscal 2026 production outlook after second-quarter output reached 24,200 barrels of oil equivalent per day, exceeding estimates, according to TPH Energy Research in a Tuesday note.The company delivered stronger operating performance as production exceeded expectations and drilling activity accelerated across its royalty acreage, prompting management to increase its full-year production forecast.Total production reached 24,200 boe/d, above TPH's 23,300 boe/d estimate and the Street's 23,600 boe/d forecast.Natural gas production totaled 102.3 million cubic feet per day, topping TPH's 98.9 MMcf/d estimate, while liquids production reached 7,200 boe/d, above TPH's 6,800 boe/d estimate and the Street's 7,100 boe/d forecast.Operators spudded 160 gross wells on Topaz's royalty acreage during the quarter, up from 138 in Q1 and 125 in Q2 of 2025. TPH said activity strengthened despite the seasonal breakup period.Topaz also raised its drilling outlook and now expects 26 to 31 rigs to remain active through Q3, compared with its previous expectation of 22 to 27 rigs during the back half of the second quarter.The company completed a CA$38.7 million ($27.5 million) tuck-in royalty acquisition covering about 300,000 gross acres in its Northeast British Columbia Montney and Deep Basin core areas, including royalty interests in more than 500 gross locations.Topaz increased its fiscal 2026 production guidance to 23,900 boe/d to 24,300 boe/d, with a midpoint of 24,100 boe/d, up from the previous midpoint of 23,900 boe/d and the initial outlook of 23,700 boe/d. The revised midpoint sits slightly above the Street's 24,000 boe/d estimate.The company generated CA$0.57 in cash flow per share, compared with TPH's CA$0.59 estimate and the Street's CA$0.56 forecast. Higher production and stronger commodity realizations offset part of the impact from cash taxes, hedging and lower infrastructure revenue.Infrastructure and other revenue totaled CA$22.3 million, below TPH's CA$24.2 million estimate. Cash taxes exceeded expectations because of tax timing, while hedging also weighed on quarterly results.Topaz spent CA$1.8 million on capital expenditures excluding acquisitions, compared with TPH's CA$1.5 million estimate and the Street's CA$1.3 million forecast.The company maintained its quarterly dividend at CA$0.35 per share, or CA$1.40 annually, representing a 4.3% trailing annualized yield. TPH said the payout keeps Topaz on track to achieve a payout ratio in the mid-60% range for fiscal 2026.