BTQ Appoints Dr. Sean Kwak, Korea's Foremost Expert in Applied Quantum Technology, as Strategic Advisor to Accelerate Global Commercialization
Dr. Sean Kwak is among Korea's most recognized leaders in applied quantum technology. In 2011, he established Korea's first private quantum research lab at SK Telecom, Korea's largest mobile operator, marking a pivotal milestone in the country's quantum technology development. During his time at SK Telecom, Kwak scaled the quantum research lab into the country's premier telco quantum-security programme. In 2016 his team switched on the world's first operator-grade QKD-protected LTE backbone, later extending quantum encryption across 330 kilometers of 5G fibre routes linking Seoul, Daejon and Daegu. Over the past decade, he has led the development and commercialization of SK Telecom's portfolio of quantum products — spanning quantum random-number generators (QRNG) and high-assurance cryptographic hardware — which continues to generate solid seven-figure annual revenue.
Kwak previously served as Executive Vice President at ID Quantique (Switzerland), where he helped expand the company's global footprint, and as a former member of the Presidential Advisory Council on Science and Technology in Korea. He is currently the CEO of Genesis Quantum Inc., a Korean startup focused on commercializing quantum key distribution (QKD) technologies for secure communications. He also received personal commendations from Korea's Ministry of Science and ICT and Ministry of National Defense for his contributions to national quantum infrastructure and cybersecurity readiness.
As BTQ accelerates its efforts to bring post-quantum cryptography (PQC) and quantum communications to real-world deployments, Kwak's appointment reinforces the Company's commercial credibility and strategic depth globally. Kwak's mandate at BTQ will include:
"We are grateful and excited to welcome Dr. Kwak to the BTQ team," said Olivier Roussy Newton, CEO of BTQ Technologies. "His unique expertise in quantum R&D and commercialization strengthens our ability to scale both current and future products. As we push forward globally, his addition reinforces our mission to accelerate quantum advantage."
"With over a decade of experience since 2011 in developing and commercializing quantum technologies, I look forward to supporting BTQ's real-world deployments and contributing to their strategic growth globally," said Dr. Sean Kwak.
About BTQ
BTQ Technologies Corp. (Cboe CA: BTQ | FSE: NG3 | OTCQX: BTQQF) is a vertically integrated quantum company accelerating the transition from classical networks to the quantum internet. Backed by a broad patent portfolio, BTQ pioneered the industry's first commercially significant quantum advantage and now delivers a full-stack, neutral-atom quantum computing platform with end-to-end hardware, middleware, and post-quantum security solutions for finance, telecommunications, logistics, life sciences, and defense.
Connect with BTQ: Website | LinkedIn | X/Twitter
ON BEHALF OF THE BOARD OF DIRECTORS
Olivier Roussy Newton
CEO, Chairman
Neither Cboe Canada nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.
Forward Looking Information
Certain statements herein contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. Such forward-looking statements or information include but are not limited to statements or information with respect to the business plans of the Company, including with respect to its research partnerships, and anticipated markets in which the Company may be listing its common shares. Forward-looking statements or information often can be identified by the use of words such as "anticipate", "intend", "expect", "plan" or "may" and the variations of these words are intended to identify forward-looking statements and information.
The Company has made numerous assumptions including among other things, assumptions about general business and economic conditions, the development of post-quantum algorithms and quantum vulnerabilities, and the quantum computing industry generally. The foregoing list of assumptions is not exhaustive.
Although management of the Company believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that forward-looking statements or information herein will prove to be accurate. Forward-looking statements and information are based on assumptions and involve known and unknown risks which may cause actual results to be materially different from any future results, expressed or implied, by such forward-looking statements or information. These factors include risks relating to: the availability of financing for the Company; business and economic conditions in the post-quantum and encryption computing industries generally; the speculative nature of the Company's research and development programs; the supply and demand for labour and technological post-quantum and encryption technology; unanticipated events related to regulatory and licensing matters and environmental matters; changes in general economic conditions or conditions in the financial markets; changes in laws (including regulations respecting blockchains); risks related to the direct and indirect impact of COVID-19 including, but not limited to, its impact on general economic conditions, the ability to obtain financing as required, and causing potential delays to research and development activities; and other risk factors as detailed from time to time. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
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Air Canada Reports Second Quarter 2025 Financial Results Français
Operating revenues of $5.632 billion, an increase of 2% versus last year. Operating income of $418 million with operating margin of 7.4% and adjusted EBITDA* of $909 million with adjusted EBITDA margin* of 16.1%. Premium revenues up 5% from the second quarter of 2024. Cash flow from operating activities of $895 million and free cash flow* of $183 million. Completion of $500 million substantial issuer bid, with approximately 296 million total issued and outstanding shares at June 30 2025. Leverage ratio* of 1.4 at June 30, 2025. MONTREAL, July 28, 2025 /CNW/ - Air Canada today reported its second quarter 2025 financial results. "Air Canada's second quarter 2025 results showcase the airline's many strengths in the face of a challenging environment. We generated operating revenues exceeding $5.6 billion, up $113 million from the previous year. Operating income was $418 million, with an operating margin of 7.4%, and adjusted EBITDA was $909 million, with an adjusted EBITDA margin of 16.1%. Operationally, we had an excellent spring, leading all major North American carriers in on-time performance for both May and June, which corresponded with strong gains in customer service scores. We remained disciplined and consistent in executing on a long-term plan that is rooted in Air Canada's proven commercial strategy, while navigating macroeconomic uncertainty and geopolitical tensions. We have strategically redirected capacity to high-demand markets and captured demand for premium services, leveraging the breadth and strength of our global network. Our results were further lifted by strong performances by Air Canada Cargo, Air Canada Vacations, and Aeroplan—each a key pillar of our diversified business," said Michael Rousseau, President and Chief Executive Officer of Air Canada. "Our distinctive product offerings and the unwavering dedication of our employees were recognized at the Skytrax World Airline Awards. We are proud to have been recognized as the Best Airline in North America and as the sole North American carrier ranked among the global top 20. Additionally, we have received additional accolades, including Best Cabin Crew in both Canada and North America. I extend my heartfelt thanks to our employees for their commitment to excellence and professionalism in safely transporting our 11.6 million customers this quarter with care and class." "A key pillar of our strategy is delivering value to our shareholders through effective capital allocation programs. Building on the successful reinstatement in 2024 of our normal course share purchase program, we completed a $500 million substantial issuer bid during the quarter, purchasing 26.6 million shares for cancellation. Since then, we have also fully repaid our convertible notes in cash upon maturity in July. As we look ahead, we are excited about our upcoming fleet additions and the opportunities they will unlock. Our confidence in our business outlook remains solid and we are reaffirming our financial guidance for the full year 2025." * Adjusted CASM, adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization), adjusted EBITDA margin, leverage ratio, net debt, adjusted pre-tax income (loss), adjusted net income (loss), adjusted earnings (loss) per share, and free cash flow are referred to in this news release. Such measures are non-GAAP financial measures, non-GAAP ratios, or supplementary financial measures, are not recognized measures for financial statement presentation under GAAP, do not have standardized meanings, may not be comparable to similar measures presented by other entities and should not be considered a substitute for or superior to GAAP results. Refer to the "Non-GAAP Financial Measures" section of this news release for descriptions of these measures, and for a reconciliation of Air Canada non-GAAP measures used in this news release to the most comparable GAAP financial measure. Leverage ratio of 1.0 at June 30, 2024. Adjusted EBITDA and operating income for the trailing 12-month periods ended June 30, 2025 were $3.515 billion and $1.096 billion, respectively ($3.718 billion and $1.971 billion, respectively for the trailing 12-month periods ended June 30, 2024). Second Quarter 2025 Financial Results Operating revenues of $5.632 billion Operating expenses of $5.214 billion Operating income of $418 million with an operating margin of 7.4% and adjusted EBITDA of $909 million with an adjusted EBITDA margin of 16.1% Adjusted pre-tax income of $300 million Net income of $186 million and diluted earnings per share of $0.51 Adjusted net income of $207 million and adjusted earnings per diluted share of $0.60 Adjusted CASM* of 14.4 cents Net cash flows from operating activities of $895 million and free cash flow of $183 million Outlook For the third quarter of 2025, Air Canada plans to increase its ASM capacity between 3.25% and 3.75% from the same quarter in 2024. For the full year 2025, Air Canada is reiterating its guidance previously provided on May 8, 2025 and updating certain major assumptions. Full year 2025 guidance is as follows: Major Assumptions Air Canada made assumptions in providing its guidance—including a marginal Canadian GDP growth for 2025. Air Canada now assumes that the Canadian dollar will trade, on average, at C$1.39 per U.S. dollar for the full year 2025 (previously $1.40) and that the price of jet fuel will average C$0.92 (previously C$0.88) per litre for the full year 2025. Air Canada's guidance constitutes forward-looking information within the meaning of applicable securities laws and is subject to important risks and uncertainties, including in relation to statements or actions by governments and uncertainty relating to the imposition of (or threats to impose) tariffs on Canadian exports or imports and their resulting impacts on the Canadian, North American and global economies and travel demand. Please see the discussion below under Caution Regarding Forward-looking Information. 2028 Targets On December 17, 2024, Air Canada announced its long-term 2028 financial targets and 2030 aspirations described below: * Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization), adjusted EBITDA margin, net cash flows from operating activities as a percentage of adjusted EBITDA, additions to property, equipment and intangible assets as a percentage of operating revenues, free cash flow margin and return on invested capital are referred to in this news release. Such measures are non-GAAP financial measures, non-GAAP ratios, or supplementary financial measures, are not recognized measures for financial statement presentation under GAAP, do not have standardized meanings, may not be comparable to similar measures presented by other entities and should not be considered a substitute for or superior to GAAP results. The 2028 long-term targets and 2030 aspirations provided in this news release do not constitute guidance or outlook but rather are provided for the purpose of assisting the reader in measuring progress toward Air Canada's objectives. The reader is cautioned that using this information for other purposes may be inappropriate. Air Canada may review and revise these targets and aspirations including as economic, geopolitical, market and regulatory environments change. These targets and aspirations are used as goals as Air Canada executes on its strategic priorities, and they assume a normal business environment. Air Canada's ability to achieve these targets and aspirations is also dependent on its success in achieving initiatives and business objectives that are described in Air Canada's 2024 Investor Day presentations, which are available at including those relating to increasing revenues, growing fleet and network capacity, and successfully executing on other key investments and initiatives, as well as other major assumptions, including those described in this news release, and are subject to a number of risks and uncertainties. Non-GAAP Financial Measures Below is a description of certain non-GAAP financial measures and ratios used by Air Canada to provide readers with additional information on its financial and operating performance. Such measures are not recognized measures for financial statement presentation under GAAP, do not have standardized meanings, may not be comparable to similar measures presented by other entities and should not be considered a substitute for or superior to GAAP results. The non-GAAP financial measures or ratios described in this section typically have exclusions or adjustments that include one or more of the following characteristics, such as being highly variable, difficult to project, unusual in nature, significant to the results of a particular period or not indicative of past or future operating results. These items are excluded because the company believes these may distort the analysis of certain business trends and render comparative analysis across periods less meaningful and their exclusion generally allows for a more meaningful analysis of Air Canada's operating expense performance and may allow for a more meaningful comparison to other airlines. Air Canada excludes the effect of impairment of assets, if any, when calculating adjusted CASM, adjusted EBITDA, adjusted EBITDA margin, adjusted pre-tax income (loss) and adjusted net income (loss) as it may distort the analysis of certain business trends and render comparative analysis across periods or to other airlines less meaningful. Adjusted CASM Air Canada uses adjusted CASM to assess the operating and cost performance of its ongoing airline business without the effects of aircraft fuel expense, the cost of ground packages at Air Canada Vacations, freighter costs and other items discussed above. These items may distort the analysis of certain business trends and render comparative analysis across periods less meaningful and their exclusion generally allows for a more meaningful analysis of Air Canada's operating expense performance and may allow for a more meaningful comparison to that of other airlines. In calculating adjusted CASM, aircraft fuel expense is excluded from operating expense results as it fluctuates widely depending on many factors, including international market conditions, geopolitical events, jet fuel refining costs and Canada/U.S. currency exchange rates. Air Canada also incurs expenses related to ground packages at Air Canada Vacations which some airlines, without comparable tour operator businesses, may not incur. In addition, these costs do not generate ASMs and therefore excluding these costs from operating expense results provides for a more meaningful comparison across periods when such costs may vary. Air Canada also incurs expenses related to the operation of freighter aircraft which some airlines, without comparable cargo businesses, may not incur. Air Canada had six Boeing 767 dedicated freighter aircraft in service as at June 30, 2025, and at June 30, 2024. These costs do not generate ASMs and therefore excluding these costs from operating expense results provides for a more meaningful comparison of the passenger airline business across periods. The following tables provide the adjusted CASM reconciliation to GAAP operating expense for the periods indicated. (Canadian dollars in millions, except where indicated) Full Year 2024 2023 Operating expense – GAAP $ 20,992 $ 19,554 Adjusted for: Aircraft fuel (5,118) (5,318) Ground package costs (782) (720) Freighter costs (excluding fuel) (163) (157) Provision for contractual lease obligations (34) - Pension plan amendments (490) - Operating expense, adjusted for the above-noted items 14,405 13,359 ASMs (millions) 104,381 99,012 Adjusted CASM (cents) ¢ 13.80 ¢ 13.49 Adjusted EBITDA and Adjusted EBITDA Margin Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization and impairment) and adjusted EBITDA margin (adjusted EBITDA as a percentage of operating revenues) are commonly used in the airline industry and are used by Air Canada as a means to view operating results and the related margin before interest, taxes, depreciation, amortization and impairment and other items discussed above. These items can vary significantly among airlines due to differences in the way airlines finance their aircraft and other assets. Adjusted EBITDA and adjusted EBITDA margin are reconciled to GAAP operating income (loss) as follows: Second Quarter First Six Months (Canadian dollars in millions, except where indicated) 2025 2024 Change 2025 2024 Change Operating income – GAAP $ 418 $ 466 $ (48) $ 310 $ 477 $ (167) Add back: Depreciation, amortization and impairment 491 448 43 986 890 96 Adjusted EBITDA $ 909 $ 914 $ (5) $ 1,296 $ 1,367 $ (71) Operating revenues $ 5,632 $ 5,519 $ 113 $ 10,828 $ 10,745 $ 83 Operating margin (%) 7.4 8.4 (1.0) pp 2.9 4.4 (1.5) pp Adjusted EBITDA margin (%) 16.1 16.6 (0.5) pp 12.0 12.7 (0.7) pp Adjusted Pre-tax Income (Loss) Adjusted pre-tax income (loss) is used by Air Canada to assess the overall pre-tax financial performance of its business without the effects of foreign exchange gains or losses, net interest relating to employee benefits, gains or losses on financial instruments recorded at fair value, gains or losses on sale and leaseback of assets, gains or losses on disposal of assets, gains or losses on debt settlements and modifications and other items discussed above. These items may distort the analysis of certain business trends and render comparative analysis across periods or to other airlines less meaningful. A corporate charge for the settlement of tax matters related to the 2019 acquisition of Aeroplan was recorded in the second quarter of 2025. As this item is non-recurring and cash-neutral to Air Canada, since it recorded a related tax refund, it has been excluded from adjusted pre-tax income. Adjusted pre-tax income is reconciled to GAAP income (loss) before income taxes as follows: Adjusted Net Income (Loss) and Adjusted Earnings (Loss) Per Share – Diluted Air Canada uses adjusted net income (loss) and adjusted earnings (loss) per share – diluted as a means to assess the overall financial performance of its business without the after-tax effects of foreign exchange gains or losses, net financing expense relating to employee benefits, gains or losses on financial instruments recorded at fair value, gains or losses on sale and leaseback of assets, gains or losses on debt settlements and modifications, gains or losses on disposal of assets and other items discussed above. These items may distort the analysis of certain business trends and render comparative analysis to other airlines less meaningful. A corporate charge for the settlement of tax matters related to the 2019 acquisition of Aeroplan was recorded in the second quarter of 2025. As this item is non-recurring and cash-neutral to Air Canada, since it recorded a related tax refund, it has been excluded from adjusted net income. Adjusted net income and adjusted earnings per share are reconciled to GAAP net income as follows: The table below reflects the share amounts used in the computation of basic and diluted earnings per share on an adjusted earnings per share basis: Free Cash Flow Air Canada uses free cash flow as an indicator of the financial strength and performance of its business, indicating the amount of cash Air Canada can generate from operations and after capital expenditures. Free cash flow is calculated as net cash flows from operating activities minus additions to property, equipment, and intangible assets, and is net of proceeds from sale and leaseback transactions. The table below reconciles free cash flow to net cash flows from (used in) operating activities for the periods indicated. Net Debt Net debt is a capital management measure and a key component of the capital managed by Air Canada and provides management with a measure of its net indebtedness. Net Debt to Trailing 12-Month Adjusted EBITDA (Leverage Ratio) Net debt to trailing 12-month adjusted EBITDA ratio (also referred to as "leverage ratio") is commonly used in the airline industry and is used by Air Canada as a means to measure financial leverage. Leverage ratio is calculated by dividing net debt by trailing 12-month adjusted EBITDA. The table below reconciles leverage ratio to Air Canada's net debt balances as at the dates indicated. The tables below present comparative figures for the twelve-month periods ending December 31, 2023 and 2024, in reference to Air Canada's full-year 2025 guidance, 2028 financial targets, and 2030 aspirations. (Canadian dollars in millions, except where indicated) 2024 1 2023 1 Operating revenues $22.255 billion $21.833 billion Adjusted EBITDA margin 16 % 18 % Operating margin 6 % 10 % Net cash flows from operating activities as a percentage of adjusted EBITDA 110 % 108 % Additions to property, equipment and intangible assets as a percentage of operating revenues 12 % 7 % Free cash flow margin 6 % 13 % Return on invested capital 14 % 18 % Income before income taxes $515 million $2.212 billion Fully diluted share count Approximately 376 million shares Approximately 376 million shares 1 Percentage amounts in the table above may not calculate exactly due to rounding. The 2028 long-term targets and 2030 aspirations provided in this news release do not constitute guidance or outlook but rather are provided for the purpose of assisting the reader in measuring progress toward Air Canada's objectives. The reader is cautioned that using this information for other purposes may be inappropriate. Air Canada may review and revise these targets and aspirations including as economic, geopolitical, market and regulatory environments change. These targets and aspirations are used as goals as Air Canada executes on its strategic priorities, and they assume a normal business environment. Air Canada's ability to achieve these targets and aspirations is also dependent on its success in achieving initiatives and business objectives that are described in Air Canada's 2024 Investor Day presentations, which are available at including those relating to increasing revenues, growing fleet and network capacity, and successfully executing on other key investments and initiatives, as well as other major assumptions, including those described in this news release, and are subject to a number of risks and uncertainties. Net cash flows from operating activities as a percentage of adjusted EBITDA Air Canada uses net cash flows from operating activities as a percentage of adjusted EBITDA to measure cash conversion from adjusted EBITDA. This measure is defined as the ratio of net cash flows from operating activities to adjusted EBITDA. Additions to property, equipment and intangible assets as a percentage of operating revenues Air Canada uses additions to property, equipment and intangible assets as a percentage of operating revenues to measure the proportion of operating revenues that are reinvested as capital expenditures. This measure is defined as the ratio of additions to property, equipment and intangible assets to operating revenues. Free cash flow margin Air Canada uses free cash flow margin to measure the amount its free cash flow represents as a percentage of operating revenues. This measure is defined as the ratio of free cash flow to operating revenues. The table below presents the quantitative reconciliation for adjusted EBITDA, adjusted EBITDA margin, net cash flows from operating activities as a percentage of adjusted EBITDA, additions to property, equipment and intangible assets as a percentage of operating revenues, free cash flow and free cash flow margin, in each case for the financial years ended December 31, 2024 and 2023. (in millions, except where indicated) 2024 2023 Total operating revenues – GAAP $ 22,255 $ 21,833 Operating income – GAAP $ 1,263 $ 2,279 Add back: Depreciation and amortization 1,799 1,703 EBITDA 3,062 3,982 Add back: Provision for contractual lease obligations 34 - Pension plan amendments 490 - Adjusted EBITDA $ 3,586 $ 3,982 Net cash flows from operating activities $ 3,930 $ 4,320 Additions to property, equipment and intangible assets (2,636) (1,564) Free cash flow $ 1,294 $ 2,756 Operating margin 6 % 10 % Adjusted EBITDA margin 16 % 18 % Net cash flows from operating activities as a percentage of adjusted EBITDA 110 % 108 % Additions to property, equipment and intangible assets as a percentage of operating revenues 12 % 7 % Free cash flow margin 6 % 13 % Return on invested capital Air Canada uses return on invested capital (ROIC) to assess the efficiency with which it allocates its capital to generate returns. ROIC is calculated as the ratio of adjusted pre-tax income (loss), excluding interest expense, to invested capital. Invested capital includes average year-over-year long-term debt and lease obligations, average year-over-year shareholders' equity, and the embedded derivative on Air Canada's convertible notes. In 2020, Air Canada issued convertible unsecured notes. Air Canada had the option to deliver cash or a combination of cash and shares on the conversion date in lieu of shares, giving rise to an embedded derivative that was included as part of the definition of capital. Air Canada calculates invested capital on a book value-based method when calculating ROIC. Return on invested capital is reconciled to GAAP income (loss) before income taxes as follows: (in millions, except where indicated) 2024 2023 Income before income taxes – GAAP $ 515 $ 2,212 Adjusted for: Provision for contractual lease obligations 34 - Pension plan amendments 490 - Foreign exchange (gain) loss 400 (389) Net interest relating to employee benefits (22) (25) (Gain) on financial instruments recorded at fair value (28) (115) Loss on debt settlements and modifications 8 10 Adjusted pre-tax income $ 1,397 $ 1,693 Add back: Interest expense 763 944 Adjusted pre-tax income before interest expense $ 2,160 $ 2,637 Invested capital: Average long-term debt and lease liabilities (including current portion) 13,266 15,084 Embedded derivative on convertible notes 45 56 Average shareholders' equity (deficiency) 1,592 (380) Invested capital $ 14,903 $ 14,761 Return on invested capital (%) 14 % 18 % Second Quarter 2025 Conference Call Air Canada will host its quarterly analysts' call on Tuesday, July 29, 2025, at 8:00 a.m. ET. Michael Rousseau, President and Chief Executive Officer, John Di Bert, Executive Vice President and Chief Financial Officer, and Mark Galardo, Executive Vice President and Chief Commercial Officer and President, Cargo, will present the results and be available for analysts' questions. Immediately following the analysts' Q&A session, Mr. Di Bert and Pierre Houle, Vice President and Treasurer, will be available to answer questions from term loan B lenders and holders of Air Canada bonds. Media and the public may access this call on a listen-in basis. Details are as follows: CAUTION REGARDING FORWARD-LOOKING INFORMATION This news release includes forward-looking statements within the meaning of applicable securities laws. Forward-looking statements relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These statements may involve, but are not limited to, comments relating to guidance, strategies, expectations, planned operations or future actions. Forward-looking statements are identified using terms and phrases such as "preliminary"; "anticipate"; "believe"; "could"; "estimate"; "expect"; "intend"; "may"; "plan"; "predict"; "project"; "will"; "would"; and similar terms and phrases, including references to assumptions. Forward-looking statements, by their nature, are based on assumptions including those described herein and are subject to important risks and uncertainties, which are amplified in the current environment. Forward-looking statements cannot be relied upon due to, among other things, changing external events and general uncertainties of the business of Air Canada. Actual results may differ materially from results indicated in forward-looking statements due to a number of factors, including those discussed below. Factors that may cause results to differ materially from results indicated in forward-looking statements include economic conditions, statements or actions by governments and uncertainty relating to the imposition of (or threats to impose) tariffs on Canadian exports or imports and their resulting impacts on the Canadian, North American and global economies and travel demand, geopolitical conditions such as the military conflicts in the Middle East and between Russia and Ukraine, Air Canada's ability to successfully achieve or sustain positive net profitability, industry and market conditions and the demand environment, competition, Air Canada's dependence on technology, cybersecurity risks, interruptions of service, climate change and environmental factors (including weather systems and other natural phenomena and factors arising from anthropogenic sources), Air Canada's dependence on key suppliers (including government agencies and other stakeholders supporting airport and airline operations), employee and labour relations and costs, Air Canada's ability to successfully implement appropriate strategic and other important initiatives (including Air Canada's ability to manage operating costs), energy prices, Air Canada's ability to pay its indebtedness and maintain or increase liquidity, Air Canada's dependence on regional and other carriers, Air Canada's ability to attract and retain required personnel, epidemic diseases, changes in laws, regulatory developments or proceedings, terrorist acts, war, Air Canada's ability to successfully operate its loyalty program, casualty losses, Air Canada's dependence on Star Alliance® and joint ventures, Air Canada's ability to preserve and grow its brand, pending and future litigation and actions by third parties, currency exchange fluctuations, limitations due to restrictive covenants, insurance issues and costs, and pension plan obligations as well as the factors identified in Air Canada's public disclosure file available at and, in particular, those identified in section 18 "Risk Factors" of Air Canada's 2024 MD&A and in section 14 "Risk Factors" of Air Canada's Second Quarter 2025 MD&A. Air Canada has and continues to establish targets, make commitments and assess the impact regarding climate change, and related initiatives, plans and proposals that Air Canada and other stakeholders (including government, regulatory and other bodies) are pursuing in relation to climate change and carbon emissions. The achievement of our commitments and targets depends on many factors, including the combined actions of governments, industry, suppliers and other stakeholders and actors, as well as the development and implementation of new technologies. In particular, our 2030 carbon emission-related targets and our related 2050 aspiration are ambitious and heavily dependent on new technologies, renewable energies and the availability of a sufficient supply of sustainable aviation fuels (SAF), which continues to present serious challenges. In addition, Air Canada has incurred, and expects to continue to incur, costs to achieve its goal of net-zero carbon emissions and to comply with environmental sustainability legislation and regulation and other standards and accords. The precise nature of future binding or non-binding legislation, regulation, standards and accords, on which local and international stakeholders are increasingly focusing, cannot be predicted with any degree of certainty, nor can their financial, operational or other impact. There can be no assurance of the extent to which any of our climate goals will be achieved or that any future investments that we make in furtherance of achieving our climate goals will produce the expected results or meet increasing stakeholder environmental, social and governance expectations. Moreover, future events could lead Air Canada to prioritize other nearer-term interests over progressing toward our current climate goals based on business strategy, economic, regulatory and social factors, and potential pressure from investors, activist groups or other stakeholders. If we are unable to meet or properly report on our progress toward achieving our climate change goals and commitments, we could face adverse publicity and reactions from investors, customers, advocacy groups or other stakeholders, which could result in reputational harm or other adverse effects to Air Canada. The forward-looking statements contained or incorporated by reference in this news release represent Air Canada's expectations as of the date of this news release (or as of the date they are otherwise stated to be made) and are subject to change after such date. However, Air Canada disclaims any intention or obligation to update or revise any forward-looking statements whether because of new information, future events or otherwise, except as required under applicable securities regulations. Selected Financial Metrics and Statistics The financial and operating highlights for Air Canada for the periods indicated are as follows: Second Quarter First Six Months Financial Performance Metrics 2025 2024 $ Change 2025 2024 $ Change Operating revenues 5,632 5,519 113 10,828 10,745 83 Operating income 418 466 (48) 310 477 (167) Operating margin (1) (%) 7.4 8.4 (1.0) pp (8) 2.9 4.4 (1.5) pp Adjusted EBITDA (2) 909 914 (5) 1,296 1,367 (71) Adjusted EBITDA margin (2) (%) 16.1 16.6 (0.5) pp 12.0 12.7 (0.7) pp Income (loss) before income taxes 103 404 (301) (64) 339 (403) Net income 186 410 (224) 84 329 (245) Adjusted pre-tax income (2) 300 371 (71) 85 277 (192) Adjusted net income (2) 207 369 (162) 57 273 (216) Total liquidity (3) 8,364 10,203 (1,839) 8,364 10,203 (1,839) Net cash flows from operating activities 895 924 (29) 2,421 2,516 (95) Free cash flow (2) 183 451 (268) 1,014 1,507 (493) Net debt (2) 4,757 3,608 1,149 4,757 3,608 1,149 Long-term debt and lease liabilities 11,794 12,477 (683) 11,794 12,477 (683) Diluted earnings per share 0.51 1.04 (0.53) 0.10 0.87 (0.77) Adjusted earnings per share – diluted (2) 0.60 0.98 (0.38) 0.16 0.73 (0.57) Operating Statistics (4) 2025 2024 % Change 2025 2024 % Change Revenue passenger miles (RPMs) (millions) 22,796 22,449 1.5 42,683 42,969 (0.7) Available seat miles (ASMs) (millions) 26,860 26,203 2.5 51,100 50,540 1.1 Passenger load factor % 84.9 % 85.7 % (0.8) pp 83.5 % 85.0 % (1.5) pp Passenger revenue per RPM (Yield) (cents) 22.1 22.2 (0.7) 21.9 22.0 (0.1) Passenger revenue per ASM (PRASM) (cents) 18.7 19.0 (1.7) 18.3 18.7 (1.8) Operating revenue per ASM (TRASM) (cents) 21.0 21.1 (0.5) 21.2 21.3 (0.3) Operating expense per ASM (CASM) (cents) 19.4 19.3 0.6 20.6 20.3 1.3 Adjusted CASM (cents) (2) 14.4 13.5 6.4 14.8 14.1 4.9 Average number of full-time-equivalent (FTE) employees (thousands) (5) 37.3 37.2 0.2 37.2 37.1 0.5 Aircraft in operating fleet at period-end 364 356 2.2 364 356 2.2 Seats dispatched (thousands) 14,478 14,213 1.9 27,817 27,692 0.4 Aircraft frequencies (thousands) 98.5 97.9 0.6 189.9 188.9 0.5 Average stage length (miles) (6) 1,855 1,844 0.6 1,837 1,825 0.7 Fuel cost per litre (cents) 88.0 104.3 (15.7) 92.9 104.9 (11.4) Fuel litres (thousands) 1,271,963 1,273,467 (0.1) 2,463,407 2,458,185 0.2 Revenue passengers carried (thousands) (7) 11,551 11,588 (0.3) 21,934 22,339 (1.8) (1) Operating margin is a supplementary financial measure and is defined as operating income (loss) as a percentage of operating revenues. (2) Adjusted pre-tax income (loss), adjusted net income (loss), adjusted earnings (loss) per share, adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization), adjusted EBITDA margin, free cash flow, net debt and adjusted CASM are non-GAAP financial measures, capital management measures, non-GAAP ratios or supplementary financial measures. Such measures are not recognized measures for financial statement presentation under GAAP, do not have standardized meanings, may not be comparable to similar measures presented by other entities and should not be considered a substitute for or superior to GAAP results. Refer to section "Non-GAAP Financial Measures" of this release for descriptions of Air Canada's non-GAAP financial measures and for a quantitative reconciliation of Air Canada's non-GAAP financial measures to the most comparable GAAP measure. (3) Total liquidity refers to the sum of cash, cash equivalents, short and long-term investments, and the amounts available under Air Canada's credit facilities. Total liquidity, as at June 30, 2025, of $8,364 million consisted of $7,037 million in cash, cash equivalents, short- and long-term investments and $1,327 million available under undrawn credit facilities. As at June 30, 2024, total liquidity of $10,203 million consisted of $8,869 million in cash, cash equivalents, short- and long-term investments and $1,334 million available under undrawn credit facilities. These amounts also include funds ($168 million as at June 30, 2025, and $181 million as at June 30, 2024) held in trust by Air Canada Vacations in accordance with regulatory requirements governing advance sales for tour operators. (4) Except for the reference to average number of full-time equivalent (FTE) employees, operating statistics in this table include third party carriers operating under capacity purchase agreements with Air Canada. (5) Reflects FTE employees at Air Canada and its subsidiaries. Excludes FTE employees at third-party carriers operating under capacity purchase agreements with Air Canada. (6) Average stage length is calculated by dividing the total number of available seat miles by the total number of seats dispatched.
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Media advisory - Minister Solomon to give remarks at groundbreaking ceremony for new Carbon Upcycling facility
MISSISSAUGA, ON, July 28, 2025 /CNW/ - The Honourable Evan Solomon, Minister of Artificial Intelligence and Digital Innovation and Minister responsible for the Federal Economic Development Agency for Southern Ontario, will give remarks at a groundbreaking ceremony for Carbon Upcycling's new facility. He will speak on behalf on the Honourable Melanie Joly, Minister of Minister of Industry and Minister responsible for Canada Economic Development for Quebec Regions. Following the ceremony, Minister Solomon will host a brief media scrum. Date: Tuesday, July 29, 2025 Time: 10AM ET Location: Mississauga, Ontario Members of the media are asked to contact ISED Media Relations at [email protected] to receive event location details and confirm their attendance. Stay connected Find more services and information on the Innovation, Science and Economic Development Canada website. Follow Innovation, Science and Economic Development Canada on social media. X (Twitter): @ISED_CA | Facebook: Canadian Innovation | Instagram: @cdninnovation | SOURCE Innovation, Science and Economic Development Canada Contacts: Sofia Ouslis, Press Secretary l Office of the Minister of Artificial Intelligence, Digital Innovation and Federal Economic Development Agency of Southern Ontario, Attachée de presse l Ministre de l'IA, de l'Innovation numérique et de l'Agence fédérale de développement économique pour le Sud de l'Ontario, 343-542-0152 l [email protected]; Media Relations, Innovation, Science and Economic Development Canada, [email protected]
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SURGE ENERGY INC. ANNOUNCES SECOND QUARTER FINANCIAL & OPERATING RESULTS; INCREASED 2025 PRODUCTION GUIDANCE AND A LOWER CAPITAL BUDGET
CALGARY, AB, July 28, 2025 /CNW/ - Surge Energy Inc. ("Surge" or the "Company") (TSX: SGY) is pleased to announce financial and operating results for the quarter ended June 30, 2025, as well as an update on the Company's latest operational achievements. View PDF As a result of continued, successful drilling results in Surge's two core areas, the Company is revising its 2025 operating and capital budget guidance. Average 2025 production guidance has now been increased from 22,500 boepd to 23,000 boepd, while budgeted capital expenditures for 2025 are now estimated to be $155 million, $15 million lower than Surge's original capital guidance of $170 million. Select financial and operating information is outlined below and should be read in conjunction with the Company's unaudited condensed interim financial statements and management's discussion and analysis for the three and six months ended June 30, 2025, available at and on Surge's website at Q2/25 MESSAGE TO SHAREHOLDERS During Q2/25, WTI crude oil prices averaged US$63.88 per barrel, and Surge generated adjusted funds flow ("AFF") 1 of $72.8 million, with cash flow from operating activities of $56.3 million. Strong drilling results in the Company's Sparky and SE Saskatchewan core areas continue to drive production outperformance, as compared to Surge's 2025 budget guidance press released on December 19, 2024. In the 1H/25, Surge's average production was 23,579 boepd (89 percent liquids), more than 1,000 boepd ahead of the Company's 22,500 boepd production guidance for 2025. In Q2/25, Surge's production averaged 23,589 boepd (89 percent liquids), also above the Company's budgeted average 2025 production estimate. This consistent production outperformance is primarily due to continued, successful drilling results in Surge's two core operating areas. At Hope Valley in the Company's Sparky core area, Management is encouraged by the lower decline production profile of the initial wells drilled in the play. Notably, the key discovery well at Hope Valley (09-30-046-4W4) has now been on production for 17 months, with cumulative production of more than 73,000 bbl. This well is currently producing significantly above Surge's internal type curve expectations 2. Based on these consistent core area drilling results, Surge is now upwardly revising the Company's 2025 average production guidance from 22,500 boepd to 23,000 boepd. Additionally, with the improved capital efficiencies experienced in its Sparky and SE Saskatchewan core areas, Surge is also reducing its capital expenditure budget guidance for the year. The Company now anticipates spending $155 million on property, plant, and equipment in 2025, a decrease of $15 million from Surge's previous capital guidance of $170 million. On this basis, the Company's capital efficiencies are now projected to have improved by more than 20 percent year-over-year, with annual capital expenditures dropping by over $40 million, from $195.1 million in 2024 to an estimated $155 million in 2025. In Q2/25, net operating expenses 1 were $17.08 per boe, a decrease of $3.23 per boe (16 percent) as compared to $20.31 per boe in Q2/24. This decrease in operating expenses is due to the Company's continued drilling and operational success in the Sparky and SE Saskatchewan core areas, which now represent over 92 percent of Surge's production. The combination of increased 2025 production guidance levels, together with lower than budgeted exploration and development expenditures and net operating expenses, has resulted in an increase to the Company's estimated 2025 free cash flow ("FCF") 1. Surge's 2025 annualized FCF is now forecasted to increase to $105 million from the previously budgeted $85 million 3. Surge's proactive hedging program continues to work as designed, reducing the impact of recent crude oil pricing volatility on the Company's cash flow from operating activities and FCF. In this regard, Surge has hedged 8,750 bbl/d of its Q3/25 oil production with an average floor price of approximately US$71WTI per barrel, representing approximately 50 percent of the Company's forecasted net after royalty production over this period. Q2/25 FINANCIAL AND OPERATIONAL HIGHLIGHTS In Q2/25, Surge's production averaged 23,589 boepd (89 percent liquids), above the Company's budgeted average 2025 production estimate of 22,500 boepd. During the quarter, WTI crude oil prices averaged US$63.88 per barrel, and Surge generated AFF of $72.8 million, with cash flow from operating activities of $56.3 million. During Q2/25, the Company spent $30.8 million on property, plant, and equipment, resulting in FCF of $41.9 million for the quarter. On this basis, FCF represented 58 percent of the AFF generated in the quarter. In Q2/25, Surge distributed $12.9 million in dividends to shareholders, representing only 18 percent of AFF generated during the period. In addition, Surge reduced net debt 1 by $16.9 million in Q2/25, decreasing from $246.0 million as at March 31, 2025 to $229.1 million as at June 30, 2025. Furthermore, Surge returned an additional $2.2 million to shareholders in Q2/25 through its ongoing share buyback program, repurchasing 431,100 shares under the Company's normal course issuer bid ("NCIB"). In total, Surge returned $32.0 million to shareholders during Q2/25 through its monthly base dividend, net debt reduction, and share buybacks. These shareholder returns represent 44 percent of Q2/25 AFF. Highlights from the Company's Q2/25 financial and operating results include: Higher than budgeted average daily production of 23,589 boepd (89 percent liquids); Generated $72.8 million of AFF, with WTI crude oil prices averaging US$63.88 per barrel; Decreased net operating expenses by 16 percent over the past year, from $20.31 per boe in Q2/24 to $17.08 per boe in Q2/25; Drilled 5 gross (5.0 net) wells in the quarter; Distributed $12.9 million to Surge's shareholders by way of the Company's $0.52 per share per annum base dividend (paid monthly); Decreased net debt by $16.9 million, from $246.0 million in Q1/25, to $229.1 million; Returned an additional $2.2 million to shareholders by way of the Company's NCIB; On an annualized basis, Q2/25 AFF represented 0.79 times Q2/25 net debt of $229.1 million; and The Company's $250 million first lien credit facility remained undrawn as at June 30, 2025, providing Surge with substantial available liquidity. FINANCIAL AND OPERATING HIGHLIGHTS FINANCIAL AND OPERATING HIGHLIGHTS Three Months Ended June 30, Six Months Ended June 30, ($000s except per share and per boe) 2025 2024 % Change 2025 2024 % Change Financial highlights Oil sales 137,145 168,034 (18) % 294,351 318,750 (8) % NGL sales 2,182 3,572 (39) % 3,311 7,507 (56) % Natural gas sales 1,888 1,567 20 % 4,275 5,083 (16) % Total oil, natural gas, and NGL revenue 141,215 173,173 (18) % 301,937 331,340 (9) % Cash flow from operating activities 56,344 73,604 (23) % 139,814 140,389 — % Per share - basic ($) 0.57 0.73 (22) % 1.40 1.40 — % Per share diluted ($) 0.56 0.72 (22) % 1.39 1.37 1 % Adjusted funds flow a 72,756 82,805 (12) % 152,863 145,292 5 % Per share - basic ($) a 0.73 0.82 (11) % 1.53 1.44 6 % Per share - diluted ($) a 0.73 0.81 (10) % 1.52 1.42 7 % Net income (loss) c 31,907 (64,693) nm b 40,153 (68,323) nm Per share basic ($) 0.32 (0.64) nm 0.40 (0.68) nm Per share diluted ($) d 0.32 (0.64) nm 0.40 (0.68) nm Expenditures on property, plant and equipment 30,830 36,065 (15) % 85,229 85,465 — % Net acquisitions and dispositions (60) (33,493) (100) % (16) (33,501) (100) % Net capital expenditures 30,770 2,572 nm 85,213 51,964 64 % Net debt a, end of period 229,139 234,707 (2) % 229,139 234,707 (2) % Operating highlights Production: Oil (bbls per day) 20,332 19,628 4 % 20,502 20,124 2 % NGLs (bbls per day) 554 856 (35) % 402 858 (53) % Natural gas (mcf per day) 16,217 18,805 (14) % 16,048 19,672 (18) % Total (boe per day) (6:1) 23,589 23,618 — % 23,579 24,261 (3) % Average realized price (excluding hedges): Oil ($ per bbl) 74.12 94.07 (21) % 79.32 87.03 (9) % NGL ($ per bbl) 43.29 45.85 (6) % 45.51 48.06 (5) % Natural gas ($ per mcf) 1.28 0.92 39 % 1.47 1.42 4 % Netback ($ per boe) Petroleum and natural gas revenue 65.79 80.57 (18) % 70.75 75.04 (6) % Realized gain (loss) on commodity and FX contracts 2.83 (1.47) nm 1.76 (0.68) nm Royalties (11.25) (12.80) (12) % (12.32) (13.06) (6) % Net operating expenses a (17.08) (20.31) (16) % (17.93) (21.08) (15) % Transportation expenses (1.00) (1.22) (18) % (1.08) (1.20) (10) % Operating netback a 39.29 44.77 (12) % 41.18 39.02 6 % G&A expense (2.61) (2.40) 9 % (2.62) (2.33) 12 % Interest expense (2.78) (3.86) (28) % (2.73) (3.79) (28) % Adjusted funds flow a 33.90 38.51 (12) % 35.83 32.90 9 % Common shares outstanding, end of period 99,092 100,460 (1) % 99,092 100,460 (1) % Weighted average basic shares outstanding 99,320 100,582 (1) % 99,647 100,556 (1) % Stock based compensation dilution d 854 2,155 (60) % 1,005 1,899 (47) % Weighted average diluted shares outstanding 100,174 102,737 (2) % 100,652 102,455 (2) % a This is a non-GAAP and other financial measure which is defined in Non-GAAP and Other Financial Measures. b The Company views this change calculation as not meaningful, or "nm". c The three and six months ended June 30, 2024 include a non-cash impairment charge of $96.5 million. d Dilution is not reflected in the calculation of net loss for the three and six months ended June 30, 2024. OPERATIONS UPDATE: CONTINUED DRILLING SUCCESS IN SPARKY AND SE SASKATCHEWAN CORE AREAS DRIVES PRODUCTION OUTPERFORMANCE Surge's Q2/25 production averaged 23,589 boepd (89 percent liquids), more than 1,000 boepd ahead of the Company's budgeted average 2025 production estimate of 22,500 boepd. This continued production outperformance is primarily due to the ongoing, successful drilling results in Surge's two core areas, highlighted by consistent open hole multi-lateral drilling success at the Company's recent Sparky discovery at Hope Valley. Surge's Q2/25 drilling program was executed with one rig drilling in the Sparky core area, and consisted of a total of 5 gross (5.0 net) wells drilled in the quarter. Development and delineation at Surge's Hope Valley discovery continued through Q2/25, with the drilling of 3.0 gross (3.0 net) additional open hole multi-lateral horizontal wells. These three wells were drilled with 12 lateral legs each, accessing an average of 15,936 meters of shallow, conventional Sparky sandstone reservoir per well. Additionally, drilling and production operations for all three wells were completed during spring breakup, utilizing a single surface multi-well pad site. Surge has now drilled 12 multi-lateral wells at Hope Valley that have more than three months of production data since development of the area began in early 2024. These 12 wells have produced at an average IP90 rate of 215 bopd, exceeding Management's IP90 rate type curve expectations of 168 bopd by more than 25 percent 4. Surge has now assembled 36 net sections of land at Hope Valley. Management is encouraged by the continued outperformance and consistency of the key discovery well drilled at Hope Valley. The 09-30-046-4W4 Sparky well at Hope Valley was drilled using the 12-leg design and has already produced over 73,000 barrels of oil over the past 17 months. The 09-30 well has generated more than $4.6 million of net operating income 5, paid out in nine months, and has paid out nearly two times in 17 months 6. In Surge's SE Saskatchewan core area, the Company completed its 1H/25 drilling program on March 13, 2025 prior to shutting down drilling operations due to seasonal spring breakup conditions and associated road bans. Following Q1/25 drilling operations, Surge has experienced lower than anticipated decline rates and higher than budgeted production in its SE Saskatchewan core area. Based on this production outperformance, the Company was able to defer capital and delay its post breakup drilling program in SE Saskatchewan into Q3/25, with drilling resuming in mid-July. Currently there is one drilling rig operating in SE Saskatchewan, primarily focused on developing the Frobisher formation at Surge's light oil Steelman asset. To date in 2025, Surge has drilled a total of 26.0 net wells, while adding 78.0 net drilling locations to its inventory in the Company's Sparky and SE Saskatchewan core areas through organic Crown land sales and strategic land acquisitions. This adds to Surge's lower risk development drilling inventory of more than 900 net internally identified locations (as of January 1, 2025), providing an inventory of more than 12 years of drilling 4. As a result of continued, successful drilling results, Surge's Board and Management have upwardly revised the Company's 2025 annual production guidance from 22,500 boepd to 23,000 boepd, while also reducing capital expenditure estimates for 2025 by $15 million. Surge's revised 2025 capital and operating budget guidance is now as follows: GUIDANCE 2025 Guidance from December 19, 2024 @ US $70 WTI a New 2025 Guidance @ US $70 WTI a,b Average 2025 production 22,500 boepd (91% liquids) 23,000 boepd (90% liquids) Average 2H 2025 production 22,500 boepd (90% liquids) 22,500 boepd (90% liquids) 2025(e) property, plant, and equipment expenditures $170 million $155 million 2025(e) Adjusted funds flow c $275 million $280 million Per share $2.71 per share $2.82 per share 2025(e) Cash flow from operating activities d $255 million $260 million Per share $2.51 per share $2.62 per share 2025(e) Free cash flow c $85 million $105 million Per share $0.84 per share $1.06 per share 2025(e) Base dividend $53 million $52 million Per share $0.52 per share $0.52 per share 2025(e) Royalties as a % of petroleum and natural gas revenue 19.25 % 18.50 % 2025(e) Net operating expenses c $19.05 - $19.55 per boe $18.25 - $18.75 per boe 2025(e) Transportation expenses $1.40 - $1.60 per boe $1.30 - $1.50 per boe 2025(e) General & administrative expenses $2.45 - $2.65 per boe $2.45 - $2.65 per boe 2025(e) Interest expenses $2.50 - $2.75 per boe $2.50 - $2.75 per boe $1.2 billion in tax pools (providing an estimated 4-year tax horizon) a - Pricing assumptions: US$70 WTI, US$13.50 WCS differential, US$3.50 EDM differential, $0.725 CAD/USD FX and $2.50 AECO. b - New 2025 Guidance is inclusive of actual results for Q1/25 and Q2/25. c - This is a non-GAAP and other financial measure which is defined under Non-GAAP and Other Financial Measures. d - Assumes nil change in non-cash working capital. Surge's premium crude oil asset base is now more than 90 percent focused in two of the top four crude oil plays in Canada 7 based on per well payout economics in its Sparky (+13,500 boepd; 88 percent medium gravity oil and liquids) and SE Saskatchewan (~8,000 boepd; 90 percent light oil and liquids) core areas. Surge expects to deliver attractive shareholder returns in 2025 and beyond based on the key corporate fundamentals set forth below: Increased average 2025 production guidance of 23,000 boepd (90 percent liquids); Estimated 2025 AFF of $280 million 8; Estimated 2025 cash flow from operating activities of $260 million 8; A $52 million annual base cash dividend ($0.52 per share annual dividend, paid monthly), which represents less than 19 percent of the Company's forecasted 2025 AFF of $280 million; An estimated 25 percent annual corporate decline 9; An undrawn $250 million first lien credit facility; Approximately 900 (net) internally estimated drilling locations, providing a 12 year drilling inventory4; and $1.2 billion in tax pools (representing an estimated 4 year tax horizon) 8. FORWARD LOOKING STATEMENTS This press release contains forward-looking statements. The use of any of the words "anticipate", "continue", "could", "estimate", "expect", "may", "will", "project", "should", "believe", "potential" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. More particularly, this press release contains statements concerning: Surge's declared focus and primary goals; Management's 2025 operating and capital budget guidance, average and annual production guidance, capital expenditure budget guidance and FCF forecast; expectations with respect to the Company's spend on property, plant and equipment in 2025; projections with respect to the Company's capital efficiencies; crude oil fixed price hedges protecting the Company's 2025 free cash flow profile; share repurchases under the Company's NCIB; the repeatability and consistency of drilling results at Hope Valley and moving this asset the full development phase; estimated Sparky drilling locations remaining on the Company's Hope Valley land and the future development of such land; Surge's planned 2025 drilling program and focus, including expectations regarding the number of wells to be drilled and the types thereof; Surge's 2025 capital program and focus; the resumption of drilling in SE Saskatchewan to mid-July; estimates with respect to its drilling inventory of more than 12 years; expectations with respect to Surge's shareholder returns in 2025 and beyond and the key corporate fundamentals underlining such expectations; and management's expectations regarding Surge's 2025 average production, AFF, cash flow from operating activities, dividends, drilling inventory and locations, annual corporate decline rates, tax pools and tax horizon. The forward-looking statements are based on certain key expectations and assumptions made by Surge, including expectations and assumptions concerning the performance of existing wells and success obtained in drilling new wells; anticipated expenses; cash flow and capital expenditures; compliance with and application of regulatory and royalty regimes; prevailing commodity prices and economic conditions; the Company's expectations regarding well production rates, production decline of existing wells and performance and geographic location of new wells drilled; the ability of the Company to achieve its objectives and goals; the application of regulatory and royalty regimes; the financial assumptions used by Surge's reserve evaluators in assessing potential impairment of Surge assets; Surge's belief that the majority of cash flow's associated with its proved and probable reserves will be realized prior to the elimination of carbon based energy; the Company's belief in the uncertainty regarding the ultimate period in which global energy markets can transition from carbon based sources to alternative energy; management's expectations as to the cause of fluctuation in corporate royalty rates; management's beliefs regarding the estimates of the future values for certain assets and liabilities of the Company; underlying causes of the fluctuations in Surge's revenue and net income (loss) from quarter to quarter; the Company's estimates with respect to incremental borrowing rates and lease terms; development and completion activities and the costs relating thereto; the performance of new wells and the ability of the Company to bring new wells on stream; the successful implementation of waterflood programs; the availability of and performance of facilities and pipelines; the geological characteristics of Surge's properties; and any acquired assets; the successful application of drilling, completion and seismic technology; the determination of decommissioning obligations; the ability to obtain approval from the syndicate to increase or maintain its credit facilities; the ability to continue borrowing under the Company's credit facilities and the syndicate's interpretation of the Company's obligations thereunder; ability of the Company to obtain alternative form of debt and equity financing on terms acceptable to the Company to meet its capital requirements; prevailing weather conditions; exchange rates; licensing requirements; the impact of completed facilities on operating costs; that prevailing regulatory, tax and environmental laws and regulations apply or are introduced as expected, and the timing of such introduction; and the availability of costs of capital, labour and services; and the creditworthiness of industry partners. Although Surge believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Surge can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the condition of the global economy, including trade, public health and other geopolitical risks; risks associated with the oil and gas industry in general (e.g. operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks); commodity price and exchange rate fluctuations and constraint in the availability of services, adverse weather or break-up conditions; the imposition or expansion of tariffs imposed by domestic and foreign governments or the imposition of other restrictive trade measures, retaliatory or countermeasures implemented by such governments, including the introduction of regulatory barriers to trade and the potential effect on the demand and/or market price for Surge's products and/or otherwise adversely affects Surge; uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures; and failure to obtain the continued support of the lenders under Surge's bank line. Certain of these risks are set out in more detail in Surge's AIF dated March 5, 2025 and in Surge's MD&A for the year ended December 31, 2024, both of which have been filed on SEDAR+ and can be accessed at The forward-looking statements contained in this press release are made as of the date hereof and Surge undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws. Oil and Gas Advisories Barrel of Oil Equivalency The term "boe" means barrel of oil equivalent on the basis of 1 boe to 6,000 cubic feet of natural gas. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 1 boe for 6,000 cubic feet of natural gas is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. "Boe/d" and "boepd" mean barrel of oil equivalent per day. Bbl means barrel of oil and "bopd" means barrels of oil per day. NGLs means natural gas liquids. Oil and Gas Metrics This press release contains certain oil and gas metrics and defined terms which do not have standardized meanings or standard methods of calculation and therefore such measures may not be comparable to similar metrics/terms presented by other issuers and may differ by definition and application. All oil and gas metrics/terms used in this document are defined below: " Capital payout" or "payout per well", is the time period for the operating netback of a well to equate to the individual cost of drilling, completing and equipping the well. Management uses capital payout and payout per well as a measure of capital efficiency of a well to make capital allocation decisions. " Decline" is the amount existing production decreases year over year, without new drilling. Sproule's 2024 year end reserves have a Proved Developed Producing ("PDP") decline of 27 percent and a Proven Plus Probable Developed Producing ("P+PDP") decline of 25 percent. Management uses these oil and gas metrics for its own performance measurements and to provide shareholders with measures to compare our operations over time. Readers are cautioned that the information provided by these metrics, or that can be derived from the metrics presented in this press release, should not be relied upon for investment or other purposes. Drilling Inventory This press release discloses drilling locations in two categories: (i) booked locations; and (ii) unbooked locations. Booked locations are proved locations and probable locations derived from an external evaluation using standard practices as prescribed in the Canadian Oil and Gas Evaluations Handbook and account for drilling locations that have associated proved and/or probable reserves, as applicable. Unbooked locations are internal estimates based on prospective acreage and assumptions as to the number of wells that can be drilled per section based on industry practice and internal review. Unbooked locations do not have attributed reserves or resources. Unbooked locations have been identified by Surge's internal certified Engineers and Geologists (who are also Qualified Reserve Evaluators ("QRE")) as an estimation of our multi-year drilling activities based on evaluation of applicable geologic, seismic, engineering, production and reserves information. There is no certainty that the Company will drill all unbooked drilling locations and if drilled there is no certainty that such locations will result in additional oil and gas reserves, resources or production. The drilling locations on which the Company actually drills wells will ultimately depend upon the availability of capital, regulatory approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results, additional reservoir information that is obtained and other factors. While certain of the unbooked drilling locations have been de-risked by drilling existing wells in relative close proximity to such unbooked drilling locations, the majority of other unbooked drilling locations are farther away from existing wells where Management has less information about the characteristics of the reservoir and therefore there is more uncertainty whether wells will be drilled in such locations and if drilled there is more uncertainty that such wells will result in additional oil and gas reserves, resources or production. Assuming a January 1, 2025 reference date, the Company will have over >975 gross (>900 net) drilling locations identified herein; of these >575 gross (>525 net) are unbooked locations. Of the 367 net booked locations identified herein, 284 net are Proved locations and 83 net are Probable locations based on Sproule's 2024 year end reserves. Assuming an average number of net wells drilled per year of 75, Surge's >900 net locations provide 12 years of drilling. Assuming a January 1, 2025 reference date, the Company will have over >500 gross (>475 net) Sparky Core area drilling locations identified herein; of these >300 gross (>300 net) are unbooked locations. Of the 196 net booked locations identified herein, 143 net are Proved locations and 53 net are Probable locations based on Sproule's 2024 year end reserves. Assuming an average number of wells drilled per year of 40, Surge's >475 net locations provide >12 years of drilling. Assuming a January 1, 2025 reference date, the Company will have over >80 gross (>80 net) Sparky Hope Valley area drilling locations identified herein; of these >60 gross (>60 net) are unbooked locations. Of the 22 net booked locations identified herein, 17 net are Proved locations and 5 net are Probable locations based on Sproule's 2024 year end reserves. Surge's internally used type curves were constructed using a representative, factual and balanced analog data set, as of January 1, 2024. All locations were risked appropriately, and Estimated Ultimate Recovery ("EUR") was measured against Discovered Petroleum Initially In Place ("DPIIP") estimates to ensure a reasonable recovery factor was being achieved based on the respective spacing assumption. Other assumptions, such as capital, operating expenses, wellhead offsets, land encumbrances, working interests and NGL yields were all reviewed, updated and accounted for on a well-by-well basis by Surge's QRE's. All type curves fully comply with Part 5.8 of the Companion Policy 51 – 101CP. Surge's internal Hope Valley type curve profile of 172 bopd (IP30), 168 bopd (IP90) and 175 mbbl (175 mboe) EUR reserves per well, with assumed $2.66 MM per well capital, has a payout of approximately 10 months at US$65/bbl WTI (C$83.33/bbl LSB) and an approximate 150 percent IRR. Non-GAAP and Other Financial Measures This press release includes references to non-GAAP and other financial measures used by the Company to evaluate its financial performance, financial position or cash flow. These specified financial measures include non-GAAP financial measures and non-GAAP ratios and are not defined by IFRS Accounting Standards ("IFRS") as issued by the International Accounting Standards Board and therefore are referred to as non-GAAP and other financial measures. These non-GAAP and other financial measures are included because Management uses the information to analyze business performance, cash flow generated from the business, leverage and liquidity, resulting from the Company's principal business activities and it may be useful to investors on the same basis. None of these measures are used to enhance the Company's reported financial performance or position. The non-GAAP and other financial measures do not have a standardized meaning prescribed by IFRS and therefore are unlikely to be comparable to similar measures presented by other issuers. They are common in the reports of other companies but may differ by definition and application. All non-GAAP and other financial measures used in this document are defined below, and as applicable, reconciliations to the most directly comparable GAAP measure for the period ended June 30, 2025, have been provided to demonstrate the calculation of these measures: Adjusted Funds Flow & Adjusted Funds Flow Per Share Adjusted funds flow is a non-GAAP financial measure. The Company adjusts cash flow from operating activities in calculating adjusted funds flow for changes in non-cash working capital, decommissioning expenditures, and cash settled transaction and other costs (income). Management believes the timing of collection, payment or incurrence of these items involves a high degree of discretion and as such, may not be useful for evaluating Surge's cash flows. Changes in non-cash working capital are a result of the timing of cash flows related to accounts receivable and accounts payable, which Management believes reduces comparability between periods. Management views decommissioning expenditures predominately as a discretionary allocation of capital, with flexibility to determine the size and timing of decommissioning programs to achieve greater capital efficiencies and as such, costs may vary between periods. Transaction and other costs (income) represent expenditures associated with property acquisitions and dispositions, debt restructuring and employee severance costs as well as other income, which Management believes do not reflect the ongoing cash flows of the business, and as such, reduces comparability. Each of these expenditures, due to their nature, are not considered principal business activities and vary between periods, which Management believes reduces comparability. Adjusted funds flow per share is a non-GAAP ratio, calculated using the same weighted average basic and diluted shares used in calculating income (loss) per share. The following table reconciles cash flow from operating activities to adjusted funds flow and adjusted funds flow per share: Three Months Ended June 30, Six Months Ended June 30, ($000s except per share) 2025 2024 2025 2024 Cash flow from operating activities 56,344 73,604 139,814 140,389 Change in non-cash working capital 15,317 6,816 7,599 (2,137) Decommissioning expenditures 1,086 1,696 5,611 5,624 Cash settled transaction and other costs (income) 9 689 (161) 1,416 Adjusted funds flow 72,756 82,805 152,863 145,292 Per share - basic ($) 0.73 0.82 1.53 1.44 Per share - diluted ($) 0.73 0.81 1.52 1.42 Free Cash Flow Free cash flow is a non-GAAP financial measure. Free cash flow is calculated as cash flow from operating activities, adjusted for changes in non-cash working capital, decommissioning expenditures, and cash settled transaction and other costs (income), less expenditures on property, plant and equipment. Management uses free cash flow to determine the amount of funds available to the Company for future capital allocation decisions. Free cash flow per share is a non-GAAP ratio, calculated using the same weighted average basic and diluted shares used in calculating income (loss) per share. Three Months Ended June 30, Six Months Ended June 30, ($000s) 2025 2024 2025 2024 Cash flow from operating activities 56,344 73,604 139,814 140,389 Change in non-cash working capital 15,317 6,816 7,599 (2,137) Decommissioning expenditures 1,086 1,696 5,611 5,624 Cash settled transaction and other costs (income) 9 689 (161) 1,416 Adjusted funds flow 72,756 82,805 152,863 145,292 Less: expenditures on property, plant and equipment (30,830) (36,065) (85,229) (85,465) Free cash flow 41,926 46,740 67,634 59,827 Net Debt Net debt is a non-GAAP financial measure, calculated as bank debt, senior unsecured notes, term debt, plus the liability component of the convertible debentures plus current assets, less current liabilities, however, excluding the fair value of financial contracts, decommissioning obligations, and lease and other obligations. There is no comparable measure in accordance with IFRS for net debt. This metric is used by Management to analyze the level of debt in the Company including the impact of working capital, which varies with the timing of settlement of these balances. ($000s) As at June 30, 2025 As at March 31, 2025 As at June 30, 2024 Cash 8,434 11,736 — Accounts receivable 49,569 55,506 56,960 Prepaid expenses and deposits 5,349 2,363 5,803 Accounts payable and accrued liabilities (70,883) (94,749) (90,791) Dividends payable (4,294) (4,313) (4,018) Bank debt — — (33,010) Senior unsecured notes (171,308) (171,090) — Term debt (5,753) (5,637) (131,044) Convertible debentures (40,253) (39,819) (38,607) Net Debt (229,139) (246,003) (234,707) Net Operating Expenses & Net Operating Expenses per boe Net operating expenses is a non-GAAP financial measure, determined by deducting processing income, primarily generated by processing third party volumes at processing facilities where the Company has an ownership interest. It is common in the industry to earn third party processing revenue on facilities where the entity has a working interest in the infrastructure asset. Under IFRS, this source of funds is required to be reported as revenue. However, the Company's principal business is not that of a midstream entity whose activities are dedicated to earning processing and other infrastructure payments. Where the Company has excess capacity at one of its facilities, it will look to process third party volumes as a means to reduce the cost of operating/owning the facility. As such, third party processing revenue is netted against operating costs when analyzed by Management. Net operating expenses per boe is a non-GAAP ratio, calculated as net operating expenses divided by total barrels of oil equivalent produced during a specific period of time. Operating Netback, Operating Netback per boe & Adjusted Funds Flow per boe Operating netback is a non-GAAP financial measure, calculated as petroleum and natural gas revenue and processing and other income, less royalties, realized gain (loss) on commodity and FX contracts, operating expenses, and transportation expenses. Operating netback per boe is a non-GAAP ratio, calculated as operating netback divided by total barrels of oil equivalent produced during a specific period of time. There is no comparable measure in accordance with IFRS. This metric is used by Management to evaluate the Company's ability to generate cash margin on a unit of production basis. Adjusted funds flow per boe is a non-GAAP ratio, calculated as adjusted funds flow divided by total barrels of oil equivalent produced during a specific period of time. Operating netback & adjusted funds flow are calculated on a per unit basis as follows: For more information about Surge, please visit our website at Neither the TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility of the accuracy of this release. ______________________________ 1 This is a non-GAAP and other financial measure which is defined under Non-GAAP and Other Financial Measures. 2 Surge's 09-30-046-4W4 open hole multilateral Sparky well produced at a rate of 110 boepd for June 2025, as compared to the Company's 2024 budget expectations of 70 boepd and 63,000 bbls after 17 months. 3 Pricing assumptions: US$70 WTI, US$13.50 WCS differential, US$3.50 EDM differential, $0.725 CAD/USD FX and $2.50 AECO. 4 See Drilling Inventory. 5 Revenue at the wellhead less directly associated royalties, transportation, and operating expenses. 6 Average WTI over this 17-month period was US$74/bbl. 7 Peters & Co. (January 8, 2025 North American Crude Oil and Natural Gas Plays). Pricing assumptions: US$69 WTI, US$13.00 WCS differential, US$3.60 NYMEX, and C$2.75 AECO. 8 Pricing Assumptions: US$70 WTI, US$13.50 WCS differential, US$3.50 EDM differential, $0.725 CAD/USD FX and $2.50 AECO. 9 See Oil and Gas Advisories. SOURCE Surge Energy Inc.
