The following is a summary of the Topaz Energy Corp. (TPZEF) Q4 2023 Earnings Call Transcript:

Financial Performance:

• Topaz's Q4 averaged 19,600 BOE per day in royalty production, a 10% YoY increase and 4% higher than its previous record.

• Q4 royalty revenue stood at $64.3 million, representing 78% of total revenue and a 99% operating margin.

• The total realized royalty price for Q4 was $35.72 per BOE, with a full-year figure of $36.4 per barrel before hedging.

• The company recognized a hedging gain of $300,000 in Q4 and $9.3 million for the year.

• Net debt was reduced by 16% to $342.7 million or 1.1x debt-to-EBITDA.

• Cash flow of $72.4 million was generated in Q4, with 62% going to shareholders via dividends.

• The company reported $105 million in excess free cash flow for the year.

Business Progress:

• A 2% increase was noted in the number of gross wells spud on Topaz's acreage in 2023.

• Topaz has hedged 18% of its estimated natural gas production for 2024 at a fixed price of $3.17 per Mcf.

• A floor price of CAD 103.25 per barrel has been set for about 30% of estimated oil and liquid production in 2024.

• The dividend per share was increased to $0.32, a growth of 60% since Q1 2020.

• 2024 guidance expects 18,800 to 19,600 BOE per day in royalty and $69 million to $71 million in infrastructure processing revenue.

• Operations are set to begin soon on two major infrastructure projects, TMX and LNG Canada.

• The company anticipates higher activity on Keystone Royalty and Reserve Royalty lands. However, future projections are conservative due to uncertainties around drilling activity timings and volumes.

More details: TOPAZ ENERGY CORP IR

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