Strathcona Sources Ltd. Pronounces Closing of Acquisition of Vawn Thermal Venture and Undeveloped Thermal Lands and Offers Up to date 2026 Steerage and Lengthy-Vary Plan

 Strathcona Sources Ltd. (“Strathcona”) immediately confirmed the closing of its beforehand introduced acquisition of the Vawn thermal venture and sure undeveloped thermal lands (collectively, the “Acquired Belongings”).

Consideration for the Acquired Belongings is comprised of $75 million in money paid on closing and contingent consideration of as much as $75 million. The contingent consideration is the same as $1 million for every greenback per barrel the Western Canada Choose index averages above C$70 per barrel in a given quarter, payable quarterly over the following 14 quarters following closing, as much as a most of $75 million in combination.

Vawn Abstract

Manufacturing at Vawn has averaged roughly 5 Mbbls / d yr to this point (100% heavy oil), relative to nameplate capability of roughly 10 Mbbls / d and peak manufacturing of roughly 12 Mbbls / d.  Strathcona estimates roughly 48 MMbbls of remaining recoverable useful resource within the Lloydminster and Waseca formations, equating to 26 years of useful resource life primarily based on year-to-date manufacturing charges.

Vawn’s third quarter 2025 subject working netback of $43.87 / bbl was in keeping with Strathcona’s current Lloydminster Thermal enterprise ($43.62 / bbl within the third quarter of 2025). 12 months-end 2024 proved reserves have been 25 MMbbls, with an related before-tax tax PV-10 of $511 million.

Vawn is immediately offset to Strathcona’s current thermal venture at Edam, with the 2 tasks sharing the identical Lloydminster reservoir and having central processing services situated solely two kilometers aside. Strathcona intends to attach the Edam and Vawn services right into a single built-in complicated by way of a brief pipeline starting in 2027 and expects to understand value synergies of roughly $10 million per yr as a consequence of service consolidation and lowered treating prices, whereas offering extra advertising optionality.

Undeveloped Lands Abstract

Along with Vawn, the Acquired Belongings embody roughly 43 internet sections of undeveloped land at Glenbogie, Plover Lake and Lindbergh, in every case immediately offset to Strathcona’s current operations in every space.

• Glenbogie: 16 internet sections, rising Glenbogie’s whole estimated oil initially-in-place to roughly 370 MMbbls and unlocking nearly all of Strathcona’s current acreage which was beforehand stranded as a consequence of being “checkerboarded”. Strathcona expects to develop Glenbogie in a number of phases to roughly 35 Mbbls / d (roughly 22 Mbbls / d better than Strathcona’s expectations previous to the acquisition) equating to a 20-year useful resource life at a 70% restoration issue.
• Plover Lake: 22 internet sections, rising Plover Lake’s whole estimated oil initially-in-place to roughly 500 MMbbls. Strathcona’s current plans for Plover Lake name for an growth to 17 Mbbls / d in 2028, adopted by a 14 Mbbls / d growth at Plover Lake West longer-term. The acquired lands are anticipated so as to add an extra part of development at Plover Lake South, equal to an extra roughly 13 Mbbls / d (roughly 44 Mbbls / d cumulative, equating to a better than 20-year useful resource life at a 70% restoration issue).
• Lindbergh: 5 internet sections, ideally fitted to multi-lateral typical improvement, profiting from Strathcona’s current services on the Lindbergh thermal venture.

On a mixed foundation the acquired lands, excluding Vawn, are anticipated to extend Strathcona’s long-term manufacturing capability by roughly 35 Mbbls / d versus Strathcona’s earlier plan. Capital efficiencies to realize this development are anticipated to common lower than $30,000 / bbl / d, in-line with the capital efficiencies of Strathcona’s current deliberate Lloydminster Thermal expansions in its 5-year plan.

Up to date 2026 Steerage, 5-12 months Plan, and Lengthy-Time period Manufacturing Potential 

• 2026 Steerage: 2026 manufacturing steerage is elevated to 120 to 130 Mbbls / d (from 115 to 125 Mbbls / d beforehand). Strathcona’s 2026 capital price range is unchanged at $1.0 billion, with roughly $20 million of extra sustaining capital at Vawn being offset by capital efficiencies elsewhere.
• 5-12 months Plan: Manufacturing steerage underneath Strathcona’s 5-year plan is elevated by 5 Mbbls / d annually from 2027 to 2031, with manufacturing now reaching 200 Mbbls / d on the mid-point in 2031. Capital steerage is unchanged from 2027 to 2031, with extra sustaining capital at Vawn being offset by capital efficiencies elsewhere.
• Lengthy-Time period Manufacturing Potential: Previous to the acquisition of the Acquired Belongings Strathcona’s portfolio contained roughly 65 Mbbls / d of longer-term development tasks not included in its 5-year plan, together with Glenbogie, Plover Lake West, Taiga and Bellis. As detailed above, the Acquired Belongings add an additional 35 Mbbls / d of manufacturing capability (100 Mbbls / d on a cumulative foundation). Sanction and on-stream timing of those tasks will likely be evaluated over time, with a present expectation of growing all tasks by as quickly as 2035.

Taken collectively, Strathcona now expects to develop manufacturing at a ten% CAGR from a mid-point of 125 Mbbls / d in 2026 to 200 Mbbls / d in 2031, adopted by development to as much as 300 Mbbls / d by 2035 (additionally a ten% CAGR vs. 2026).

Strathcona will stay nimble in allocating capital and can replace its plans over time primarily based on its view of risk-adjusted returns, making an allowance for commodity costs, capital market dynamics and acquisition alternatives. A full reconciliation of Strathcona’s present vs. earlier 2026 steerage, 5-year plan, and long-term manufacturing potential is proven beneath.

Hedging Replace

In November 2025, Strathcona restructured its 50 Mbbls / d of 2026 WCS differential swaps to scale back the swap value from US$14.40 / bbl to US$12.00 / bbl, in return for an upfront money cost of $60 million, equal to the current worth of the distinction in swap values discounted at Strathcona’s borrowing charge. Strathcona has additionally hedged roughly 50% (on a internet after royalty foundation) of its 2026 pure gasoline purchases at a median value of $2.73 / GJ.

Advisors

Mizuho Securities USA acted as monetary advisor to Strathcona in reference to the transaction. Blake, Cassels & Graydon LLP acted as authorized counsel in reference to the transaction.

About Strathcona

Strathcona is considered one of North America’s quickest rising pure play heavy oil producers with operations centered on thermal oil and enhanced oil restoration. Strathcona is constructed on an revolutionary strategy to development achieved by means of the consolidation and improvement of long-life belongings. Strathcona’s widespread shares (image SCR) are listed on the Toronto Inventory Alternate (TSX).

For extra details about Strathcona, go to www.strathconaresources.com.

Web site addresses are offered for informational functions solely and no info contained on, or accessible from, such web sites is included by reference on this information launch except expressly included by reference.

Non-GAAP Monetary Measures and Ratios

Non-GAAP monetary measures and ratios are used internally by administration to evaluate the efficiency of the Firm. In addition they present traders with significant metrics to evaluate the Firm’s efficiency in comparison with different corporations in the identical business. Nevertheless, the Firm’s use of those phrases might not be corresponding to equally outlined measures introduced by different corporations. Traders are cautioned that these measures shouldn’t be construed as an alternative choice to monetary measures decided in accordance with GAAP and these measures shouldn’t be thought-about to be extra significant than GAAP measures in evaluating the Firm’s efficiency.

The time period “Oil and pure gasoline gross sales, internet of mixing” is calculated by deducting bought product and mixing prices from oil and pure gasoline gross sales and sale of bought product. Administration makes use of this metric to isolate the income related to the Firm’s operations after accounting for the unavoidable value of mixing. A quantitative reconciliation of Oil and pure gasoline gross sales, internet of mixing, to probably the most immediately comparable GAAP monetary measure, Oil and pure gasoline gross sales, is introduced beneath.

“Area Working Earnings” and “Area Working Netback” are widespread metrics used within the oil and pure gasoline business to evaluate the profitability and effectivity of subject operations. Area Working Netback is calculated as Area Working Earnings divided by the respective gross sales volumes for the related interval. A quantitative reconciliation of Area Working Earnings to probably the most immediately comparable GAAP monetary measure, Oil and pure gasoline gross sales, is introduced beneath.

“Capital Effectivity” is calculated as capital expenditures associated to a particular subject or venture, divided by the incremental manufacturing ensuing from these expenditures. Administration makes use of capital effectivity to judge which capital tasks yield the best use of funds.

Presentation of Oil and Gasoline Info

All manufacturing volumes introduced on this information launch are proven in barrels (bbl), together with these derived from pure gasoline. Pure gasoline equivalency volumes for functions of reporting manufacturing or “boe” (barrels of oil equal) have been derived utilizing the ratio of six thousand cubic toes of gasoline to 1 barrel of oil (6 Mcf: 1 bbl). Such figures could also be deceptive, significantly if utilized in isolation. The foregoing conversion ratio relies on an power equivalency conversion technique primarily relevant on the burner tip and don’t symbolize a worth equivalency on the wellhead. On condition that the worth ratio of oil in comparison with pure gasoline primarily based on at present prevailing costs is considerably totally different than the power equivalency ratio of 1 bbl : 6 mcf, using a conversion ratio of 1 bbl : 6 mcf could also be deceptive as a sign of worth.

References on this information launch to preliminary manufacturing charges and different short-term manufacturing charges and take a look at outcomes are helpful in confirming the presence of hydrocarbons, nonetheless, such charges will not be determinative of the charges at which such wells will begin manufacturing and decline thereafter and will not be indicative of long-term efficiency or of final restoration. Whereas encouraging, readers are cautioned to not place reliance on such charges in calculating combination manufacturing for Strathcona or the belongings for which such charges are offered. A strain transient evaluation or well-test interpretation has not been carried out in respect of all wells. Accordingly, the take a look at outcomes must be thought-about to be preliminary.

References to “liquids” on this information launch confer with, collectively, bitumen, heavy oil, condensate and light-weight oil (comprised of condensate and light-weight oil) and different pure gasoline liquids (“NGL“) (comprised of ethane, propane and butane solely). References to “oil and condensate” on this information launch confer with, collectively, gentle and medium crude oil, heavy crude oil, bitumen and pure gasoline liquids. References to “pure gasoline” on this information launch refer to standard pure gasoline.

Reserves and Useful resource Estimates

Sure reserves and useful resource info in respect of Vawn has been obtained from the general public disclosure of third events and has not been independently verified. Whereas Strathcona doesn’t have any data that such info might not be correct, there might be no assurance that such third-party info is full or correct. Strathcona makes no illustration or guarantee, expressed or implied, as to the accuracy or completeness of such info.

Sources don’t represent, and shouldn’t be confused with, reserves. Precise reserves and assets will differ from the reserves and assets estimates, and people variations could possibly be materials. The estimates of assets offered on this information launch are estimates solely and there’s no assure that the estimated assets will likely be recovered. Uncertainties and danger elements as described in Strathcona’s annual info type for the yr ended December 31, 2024 and different paperwork filed by Strathcona with the relevant Canadian securities regulatory authorities (out there underneath Strathcona’s profile on SEDAR+ at www.sedarplus.ca) are additionally relevant to assets.

“Complete Oil Initially-in-Place” is that amount of oil that’s estimated to exist initially in naturally occurring accumulations. It consists of that amount of oil that’s estimated, as of a given date, to be contained in recognized accumulations, previous to manufacturing, plus these estimated portions in accumulations but to be found. There isn’t any certainty that any portion of the assets will likely be found. If found, there isn’t a certainty that will probably be commercially viable to provide any portion of the assets.

“Remaining recoverable useful resource” is the sum of proved and possible reserves and contingent assets, in every case as estimated by Strathcona in accordance with the Canadian Oil and Gasoline Analysis Handbook. In respect of Vawn, remaining recoverable useful resource is calculated as 32 MMbbls of proved and possible reserves and 16 MMbbls of contingent useful resource.

“contingent assets” are outlined as these portions of petroleum estimated, as of a given date, to be doubtlessly recoverable from recognized accumulations utilizing established know-how or know-how underneath improvement, however which aren’t at present thought-about to be commercially recoverable as a consequence of a number of contingencies. Contingencies might embody elements akin to financial, authorized, environmental, political and regulatory issues or a scarcity of markets. Additionally it is applicable to categorise as “contingent assets” the estimated found recoverable portions related to a venture within the early venture stage. Contingent assets are additional categorized in accordance with the extent of certainty related to the estimates and could also be sub-classified primarily based on venture maturity and/or characterised by their financial standing.

Oil and Gasoline Metrics

This information launch incorporates metrics generally used within the crude oil and pure gasoline business, together with “assets life index”. These phrases would not have a standardized which means and might not be corresponding to comparable measures introduced by different corporations, and subsequently shouldn’t be used to make such comparisons. Readers are cautioned as to the reliability of oil and gasoline metrics used on this information launch. Administration of Strathcona makes use of these oil and gasoline metrics for its personal efficiency measurements and to offer traders with measures to check Strathcona’s projected efficiency over time; nonetheless, such measures will not be dependable indicators of Strathcona’s future efficiency, which can not evaluate to Strathcona’s efficiency in earlier durations, and subsequently shouldn’t be unduly relied upon.

“Sources life index” is calculated by dividing the relevant contingent assets by anticipated manufacturing.

Ahead-Wanting Info

This information launch incorporates sure “forward-looking info” throughout the which means of relevant Canadian securities legal guidelines and are potential in nature. Ahead-looking info just isn’t primarily based on historic information, however reasonably on present expectations and projections about future occasions, and is subsequently topic to dangers and uncertainties that might trigger precise outcomes to vary materially from the long run outcomes expressed or implied by the forward-looking info. Typically, however not at all times, forward-looking info might be recognized by means of forward-looking phrases akin to “believes”, “plans”, “expects”, “intends” and “anticipates”, or variations of such phrases, and phrases or statements that sure actions, occasions or outcomes “might”, “may”, “ought to”, “would”, “would possibly” or “will” be taken, happen or be achieved. Ahead-looking info contained on this information launch consists of, however just isn’t restricted to, Strathcona’s intention to attach the Edam and Vawn services right into a single built-in complicated by way of a brief pipeline starting in 2027; anticipated value synergies of roughly $10 million per yr; the anticipated influence and advantages of the acquisition of 43 internet sections of undeveloped land at Glenbogie, Plover and Lindbergh, together with improvement expectations, timelines, will increase to manufacturing and capital efficiencies; Strathcona’s manufacturing and capital spending steerage for 2026 and long-range development plans, together with our expectation of growing all longer-term tasks by as quickly as 2035; and our intention to stay nimble in allocating capital and our expectation to replace our plans over time primarily based on sure elements.

Though Strathcona believes that the expectations mirrored by the forward-looking info introduced on this information launch are affordable, the forward-looking info relies on assumptions and elements regarding future occasions that will show to be inaccurate. These assumptions and elements are primarily based on info at present out there to Strathcona about itself and the enterprise by which it operates. Info utilized in growing forward-looking info has been acquired from varied sources, together with third celebration consultants, suppliers and regulators, amongst others. The fabric assumptions used to develop the forward-looking info herein embody, however will not be restricted to: the success of Strathcona’s operations and development and growth tasks; expectations concerning manufacturing development, future nicely manufacturing charges and reserve volumes; expectations concerning Strathcona’s capital program, together with the outlook for normal financial tendencies, business tendencies, prevailing and future commodity costs, overseas trade charges and rates of interest; the provision of third celebration providers; prevailing and future royalty regimes and tax legal guidelines; future nicely manufacturing charges and reserve volumes; fluctuations in power costs primarily based on worldwide demand and geopolitical occasions; expectations concerning the influence of tariffs on Strathcona’s operations and its means to successfully mitigate the influence thereof; the influence of inflation; the integrity and reliability of Strathcona’s belongings; decommissioning obligations; Strathcona’s means to adjust to its monetary covenants; and the governmental, regulatory and authorized surroundings. Though Strathcona believes that the assumptions made and the expectations represented by such info are affordable, there might be no assurance that the forward-looking info herein will show to be correct.

The forward-looking info included on this information launch just isn’t a assure of future efficiency. As a result of precise outcomes or outcomes may differ materially from these expressed in any forward-looking info, readers shouldn’t place undue reliance on any such forward-looking info. By its nature, forward-looking info relies on assumptions and includes recognized and unknown dangers, uncertainties and different elements that will trigger precise outcomes, efficiency or achievements to be materially totally different from future outcomes, efficiency or achievements expressed or implied by such forward-looking info. Components that might trigger precise occasions to vary materially from these contemplated or implied by the forward- wanting info on this information launch embody, however will not be restricted to, modifications in commodity costs; modifications within the demand for or provide of Strathcona’s merchandise; the continued influence, or additional deterioration, in international financial and market situations, together with from inflation and/or sure geopolitical conflicts, akin to the continuing Russia/Ukraine battle and the battle within the Center East, and different heightened geopolitical dangers, together with the imposition of tariffs or different commerce boundaries, and the flexibility of Strathcona to hold on operations as contemplated in gentle of the foregoing; determinations by the Group of the Petroleum Exporting Nations and different international locations as to manufacturing ranges; unanticipated working outcomes or manufacturing declines; modifications in tax or environmental legal guidelines, local weather change, royalty charges or different regulatory issues; modifications in Strathcona’s improvement plans or by third celebration operators of Strathcona’s properties; competitors from different producers; incapability to retain drilling rigs and different providers; failure to understand the anticipated advantages of Strathcona’s acquisitions; incorrect evaluation of the worth of acquisitions; delays ensuing from or incapability to acquire required regulatory approvals; elevated debt ranges or debt service necessities; inflation; modifications in overseas trade charges; inaccurate estimation of Strathcona’s oil and gasoline reserve and contingent useful resource volumes; restricted, unfavourable or a scarcity of entry to capital markets or different sources of capital; elevated prices; a scarcity of enough insurance coverage protection; the influence of opponents; and the opposite dangers described in Strathcona’s annual info type for the yr ended December 31, 2024 and different paperwork filed by Strathcona with the relevant Canadian securities regulatory authorities (out there underneath Strathcona’s profile on SEDAR+ at www.sedarplus.ca).

Administration authorized the capital price range and manufacturing steerage contained herein as of the date of this information launch. The aim of the capital price range and manufacturing steerage is to help readers in understanding Strathcona’s anticipated and focused monetary place and efficiency, and this info might not be applicable for different functions.

This information launch incorporates info that will represent future-oriented monetary info or monetary outlook info (collectively, “FOFI“) about Strathcona’s potential monetary efficiency, monetary place or money flows, all of which is topic to the identical assumptions, danger elements, limitations and {qualifications} as set forth above. Readers are cautioned that the assumptions used within the preparation of such info, though thought-about affordable on the time of preparation, might show to be imprecise or inaccurate and, as such, undue reliance shouldn’t be positioned on FOFI. Strathcona’s precise outcomes, efficiency and achievements may differ materially from these expressed in, or implied by, FOFI. Strathcona has included FOFI with a view to present readers with a extra full perspective on Strathcona’s future operations and administration’s present expectations referring to Strathcona’s future efficiency. Readers are cautioned that such info might not be applicable for different functions.

The foregoing dangers shouldn’t be construed as exhaustive. The forward-looking info contained on this information launch is offered as of the date hereof and Strathcona doesn’t undertake any obligation to publicly replace or to revise any of the forward-looking info included herein to replicate new circumstances or occasions, besides as required by relevant securities legal guidelines. The forward-looking info contained on this information launch is expressly certified by this cautionary assertion.

View authentic content material to obtain multimedia:https://www.prnewswire.com/news-releases/strathcona-resources-ltd-announces-closing-of-acquisition-of-vawn-thermal-project-and-undeveloped-thermal-lands-and-provides-updated-2026-guidance-and-long-range-plan-302629878.html

SOURCE Strathcona Sources Ltd.

View authentic content material to obtain multimedia: http://www.newswire.ca/en/releases/archive/December2025/01/c6138.html