Q4 2025 Pine Cliff Energy Ltd Earnings Call
Speaker #1: Good morning, and thank you for joining the PINE CLIFF ENERGY fourth quarter and year-end results conference call. Today we will open with remarks from President and CEO Phil Hodge, Mr. Hodge is joined today by Terry McNeil, Chief Operating Officer Christopher Zack, Chief Financial Officer Austin Newdorp, Vice President of Finance, and Dan Keenan, Vice President of Exploitation.
Operator: Good morning, and thank you for joining the Pine Cliff Energy Q4 and Year-End Results Conference Call. Today, we will open with remarks from President and CEO, Phil Hodge. Mr. Hodge is joined today by Terry McNeill, Chief Operating Officer, Kristopher Zack, Chief Financial Officer, Austin Nieuwdorp, Vice President Finance, and Dan Keenan, Vice President Exploitation. Questions for the management team can be registered on the webcast. Prior to starting, we'd like to remind participants that this call may contain comments on or discussion of forward-looking information. As such, we refer participants to the cautionary statements on forward-looking information included in the presentation on our website, www.pinecliffenergy.com. We'll turn the call to Mr. Phil Hodge, President and CEO.
Operator: Good morning, and thank you for joining the Pine Cliff Energy Q4 and Year-End Results Conference Call. Today, we will open with remarks from President and CEO, Phil Hodge. Mr. Hodge is joined by Terry McNeill, Chief Operating Officer; Kristopher Zack, Chief Financial Officer; Austin Nieuwdorp, Vice President Finance; and Dan Keenan, Vice President Exploitation. Questions for the management team can be submitted via the webcast. Please note that this call may contain forward-looking statements. For cautionary details, refer to the presentation on our website, www.pinecliffenergy.com I will now turn the call over to Mr. Phil Hodge, President and CEO.
Speaker #1: Questions for the management team can be registered on the webcast. Prior to starting, we'd like to remind participants that this call may contain comments on or discussion of, forward-looking information.
Speaker #1: As such, we refer participants to the cautionary statements on forward-looking information included in the web, the presentation on our website, www.pinecliffenergy.com. With that, we'll turn the call to Mr. Phil Hodge, President and CEO.
Speaker #2: Thanks, Chris. Thanks for those joining in and for those who will be listening on the replay that'll be on our website. As we've been doing on these webcasts in the past, our intent is not to reread the President's message or the press release that you've already got access to.
Phil Hodge: Thanks, Chris. Thanks for those joining in and for those who will be listening on the replay that'll be on our website. As we've been doing on these webcasts in the past, our intent is not to reread the president's message or the press release that you've already got access to. Many of you already received my quarterly email also that went out last night, which focuses a bit more on the macro, how we see the environment. We received several questions last night, I think we'll work through those. If you've got any other questions, please send them along as we're speaking, and we'll be happy to address them.
Phil B. Hodge: Thanks, Chris. Thanks for those joining in and for those who will be listening on the replay that'll be on our website. As we've been doing on these webcasts in the past, our intent is not to reread the president's message or the press release that you've already got access to. Many of you already received my quarterly email also that went out last night, which focuses a bit more on the macro, how we see the environment. We received several questions last night, I think we'll work through those. If you've got any other questions, please send them along as we're speaking, and we'll be happy to address them.
Speaker #2: Many of you already received my quarterly email, also that went out last night, which focuses a bit more on the macro—how we see the environment.
Speaker #2: We received several questions last night, and so I think we'll work through those. But if you've got any other questions, please send them along as we're speaking, and we'll be happy to address them.
Phil Hodge: One of the probably the most questions I got last night and this morning have been looking for a little bit more clarity on our Glauconite well that we drilled. We totally understand the curiosity around that because we haven't done any drilling for a couple of years. Everybody's well aware of how much we think of that area, and that we're very positive and that we've actually increased the number of Glauconite locations that we have in that area to now being 22 net locations. For a company of our size, that's significant because these locations are highly valued.
Speaker #2: One of the probably the most questions I got last night and this morning have been just looking for a little bit more clarity on our Glockwell that we drilled.
Phil B. Hodge: One of the probably the most questions I got last night and this morning have been looking for a little bit more clarity on our Glauconite well that we drilled. We totally understand the curiosity around that because we haven't done any drilling for a couple of years. Everybody's well aware of how much we think of that area, and that we're very positive and that we've actually increased the number of Glauconite locations that we have in that area to now being 22 net locations. For a company of our size, that's significant because these locations are highly valued.
Speaker #2: And we totally understand the curiosity around that because we haven't done any drilling for a couple of years. Everybody's well aware of how much we think of that area and that we're very positive, and that we've actually increased the number of Glock locations that we have in that area to now be in 22 net locations.
Speaker #2: And for a company of our size, that's significant. Because these locations are highly valued. That being said, anyone who's been following PINE CLIFF or has been a shareholder of ours for some time knows that we're not a neon lights type of company as I sometimes refer to it.
Phil Hodge: That being said, anyone who's been following Pine Cliff or been a shareholder of ours for some time knows that we're not a neon lights type of company, as I sometimes refer to it. We're not gonna be out there with, you know. The market, a very clear picture of the wealthkill on the well. Again, it's, we're not intending to give a lot of production information until we know that, you know, have a more consistent production history.
Phil B. Hodge: That being said, anyone who's been following Pine Cliff or been a shareholder of ours for some time knows that we're not a neon lights type of company, as I sometimes refer to it. We're not gonna be out there with, you know. The market, a very clear picture of the wealthkill on the well. Again, it's, we're not intending to give a lot of production information until we know that, you know, have a more consistent production history.
Speaker #2: We're not going to be out there with the market giving a very clear picture of the well. On the well—but again, we're not intending to give a lot of production information until we know that we have a more consistent production history.
Speaker #1: Thanks, Phil. Good morning, folks. Yeah, with regards to the well itself, execution went well. Drilled ahead of schedule. Overall costs came in consistent with our expectation.
Terry McNeill: Thanks, Phil. Good morning, folks. Yeah, with regards to the well itself, execution went well, drilled ahead of schedule. Overall costs came in consistent with our expectation. The well's been on production for almost two weeks now, and it's still in very, very early cleanup. Really hasn't reached a stabilized rate. We're quite encouraged by the early results, but it's really too soon to draw any firm conclusions on any long-term productivity or performance. We keep an eye on it regularly, and that's probably the best update we can give at this time.
Terry L. McNeill: Thanks, Phil. Good morning, folks. Yeah, with regards to the well itself, execution went well, drilled ahead of schedule. Overall costs came in consistent with our expectation. The well's been on production for almost two weeks now, and it's still in very, very early cleanup. Really hasn't reached a stabilized rate. We're quite encouraged by the early results, but it's really too soon to draw any firm conclusions on any long-term productivity or performance. We keep an eye on it regularly, and that's probably the best update we can give at this time.
Speaker #1: The well has been on production for almost two weeks now, and it's still in very, very early cleanup. So really hasn't reached a stabilized rate.
Speaker #1: We're quite encouraged by the early results, but it's really too soon to draw any firm conclusions on any long-term productivity or performance. So we keep an eye on it regularly and that's probably the best update we can give at this time.
Phil Hodge: Thanks, Terry McNeill. Yeah, our intent will be to, once we do have a consistent longer-term production history to be able to update the market at that time. As Terry McNeill said, we're quite encouraged by it. But we, you know, we just don't wanna be in a case where we're giving out information that's either positive or negative on the results that. It's just too early. It's too early to say. One question we did get last night was around the infrastructure spend that we in Q4 around that well, so the 4-23 well is the Glauconite well that we drilled in December 2025 and brought on in mid-February 2026.
Phil B. Hodge: Thanks, Terry McNeill. Yeah, our intent will be to, once we do have a consistent longer-term production history to be able to update the market at that time. As Terry McNeill said, we're quite encouraged by it. But we, you know, we just don't wanna be in a case where we're giving out information that's either positive or negative on the results that. It's just too early. It's too early to say. One question we did get last night was around the infrastructure spend that we in Q4 around that well, so the 4-23 well is the Glauconite well that we drilled in December 2025 and brought on in mid-February 2026.
Speaker #2: Thanks, Terry. Yeah, our intent will be to once we do have a consistent longer-term production history to be able to update the market at that time.
Speaker #2: But as Terry said, we're quite encouraged by it. And so we just don't want to be in a case where we're giving out information that's either positive or negative on the results that is just too early.
Speaker #2: It's too early to say. One question we did get last night was around the infrastructure spend that we had in Q4 around that well. So the 423 well is the Glock well that we drilled in December and brought on in mid-February.
Phil Hodge: At the time, we also put in a sales pipeline and other infrastructure that not only assisted getting the production from that well on, but also will be able to be utilized for other wells in the area. You know, we're pretty happy with where the costs came in at. We're essentially on budget for what we expected to do in that area for both the well and the infrastructure and are well set up for, you know, as we look at the back half of this year. I mean, we've got Our intent would be to go back to drilling in the Central Alberta area in the Glauconite wells later this year. Like we say, we'll. The flexibility that we have is, I think, an advantage.
Phil B. Hodge: At the time, we also put in a sales pipeline and other infrastructure that not only assisted getting the production from that well on, but also will be able to be utilized for other wells in the area. You know, we're pretty happy with where the costs came in at. We're essentially on budget for what we expected to do in that area for both the well and the infrastructure and are well set up for, you know, as we look at the back half of this year. I mean, we've got Our intent would be to go back to drilling in the Central Alberta area in the Glauconite wells later this year. Like we say, we'll. The flexibility that we have is, I think, an advantage.
Speaker #2: At the time, we also put in a sales pipeline and other infrastructure that not only assisted getting the production from that well on, but also we'll be able to utilize for other wells in the area.
Speaker #2: So we're pretty happy with where the costs came in at. We're essentially on budget for what we expected to do in that area for both the well and the infrastructure.
Speaker #2: And our well set up for as we look at the back half of this year, I mean, we've got right our intent would be to go back to drilling in the central Alberta area and the Glockenite wells later this year.
Speaker #2: But we haven't—like we say, the flexibility that we have is something that's, I think, an advantage. Pricing in ACO has started to strengthen here.
Phil Hodge: Pricing is, and AECO has started to strengthen here over the last couple weeks. That's a good thing. We'll see how that plays out through the summer. Our plan would be, you know, if we are gonna drill, and that's our intent, we would be looking at kinda Q3, Q4 as to when we'd go back to the Sundre area. One of the questions I got that, you know, we've had several questions around the data center update. Again, those of you that have followed the Pine Cliff story know that we announced we're, I think, the first natural gas producer to announce an arrangement with a data center in our Central Alberta. That has not... I mean, let me back up.
Phil B. Hodge: Pricing is, and AECO has started to strengthen here over the last couple weeks. That's a good thing. We'll see how that plays out through the summer. Our plan would be, you know, if we are gonna drill, and that's our intent, we would be looking at kinda Q3, Q4 as to when we'd go back to the Sundre area. One of the questions I got that, you know, we've had several questions around the data center update. Again, those of you that have followed the Pine Cliff story know that we announced we're, I think, the first natural gas producer to announce an arrangement with a data center in our Central Alberta. That has not... I mean, let me back up.
Speaker #2: Over the last couple of weeks, that's a good thing. We'll see how that plays out through the summer. Our plan would be if we are going to drill and that's our intent, we would be looking at kind of Q3, Q4 as to when we would go to the back to the sundry area.
Speaker #2: One of the questions I got that we've had several questions around the data center update. And so again, those of you that follow the PINE CLIFF story know that we announced we're, I think, the first natural gas producer to announce a an arrangement with a data center in our central Alberta.
Speaker #2: That has not I mean, we're let me back up. When we are a gas provider for all of these types of projects. And so in that situation, that group that we're dealing with, it seems to be very close to finishing their financing.
Phil Hodge: We are a gas provider for on all of these types of projects. In that situation, that group that we're dealing with seems to be very close to finishing their financing, but it is not within our control as to for them to get the final financing put in place so that they can launch construction on the site. There, to date, has been no construction started on the site, but we're still encouraged that that's gonna happen here in the next couple quarters. That's still something that we're working very closely on.
Phil B. Hodge: We are a gas provider for on all of these types of projects. In that situation, that group that we're dealing with seems to be very close to finishing their financing, but it is not within our control as to for them to get the final financing put in place so that they can launch construction on the site. There, to date, has been no construction started on the site, but we're still encouraged that that's gonna happen here in the next couple quarters. That's still something that we're working very closely on.
Speaker #2: But it is not within our control for them to get the final financing put in place, so that they can launch construction on the site.
Speaker #2: To date, it has been no construction started on the site. But we're still encouraged that that's going to happen here in the next couple of quarters.
Speaker #2: And so that's still something that we're working very closely on. In the meantime, we've had a lot of interest on other sites that we've got in the province of Alberta, and even in Saskatchewan, about data centers.
Phil Hodge: In the meantime, we've had a lot of interest on other sites that we've got in the Province of Alberta and even in Saskatchewan about data centers and about power generation in general for various uses. We continue to talk to all groups about this. I mean, our goal is really to try to get a premium price for the molecules that we produce. How that gets, how we do that, and where it gets used, and how it gets used, that's all part of these discussions 'cause it kind of varies among the parties. Our goal would be to for the same production that we have today, to be able to get a more premium pricing on it.
Phil B. Hodge: In the meantime, we've had a lot of interest on other sites that we've got in the Province of Alberta and even in Saskatchewan about data centers and about power generation in general for various uses. We continue to talk to all groups about this. I mean, our goal is really to try to get a premium price for the molecules that we produce. How that gets, how we do that, and where it gets used, and how it gets used, that's all part of these discussions 'cause it kind of varies among the parties. Our goal would be to for the same production that we have today, to be able to get a more premium pricing on it.
Speaker #2: And about power generation, in general, for various uses. We continue to talk to all groups about this. I mean, our goal is really to try to get a premium price for the molecules that we produce.
Speaker #2: And how that gets, how we do that, and where it gets used and how it gets used, that's all part of these discussions because it kind of varies among the parties.
Speaker #2: But it's our goal would be to for the same production that we have today to be able to get a more premium pricing on it.
Phil Hodge: Those we will, you know, as projects get put in place, we'll update the market. The fact that we've got as many groups interested in some of the sites that we have, which are, we think are very conducive to these types of projects, where they've got good natural gas, they've got fiber availability. In several of the sites we own the land, so therefore it could be co-located with our existing industrial facilities. There's a lot of reasons why we think that, you know, this is an area that has got potential for Pine Cliff. It's, you know, it's a slow, everybody's figuring out the regulatory process. Everybody's again, you know, a lot of these groups are getting their financing put in place.
Phil B. Hodge: Those we will, you know, as projects get put in place, we'll update the market. The fact that we've got as many groups interested in some of the sites that we have, which are, we think are very conducive to these types of projects, where they've got good natural gas, they've got fiber availability. In several of the sites we own the land, so therefore it could be co-located with our existing industrial facilities. There's a lot of reasons why we think that, you know, this is an area that has got potential for Pine Cliff. It's, you know, it's a slow, everybody's figuring out the regulatory process. Everybody's again, you know, a lot of these groups are getting their financing put in place.
Speaker #2: And so those, as we will, as projects get put in place, we'll update the market. The fact that we've got as many groups interested in some of the sites that we have, which we think are very conducive to these types of projects, where they've got good natural gas, they've got fiber availability, in several of the sites, we own the land.
Speaker #2: And so, therefore, it could be co-located with our existing industrial facilities. So, there's a lot of reasons why we think that this is an area that has got potential for Pine Cliff.
Speaker #2: But it's a slow everybody's figuring out the regulatory process. Everybody's, again, a lot of these groups are getting their financing put in place. The province of Alberta has announced that they want to attract $100 billion of data center development to the province, which is great.
Phil Hodge: The province of Alberta has announced that they wanna attract CAD 100 billion of data center development to the province, which is great. There's been a lot of announcements. I referred to a lot of them in my email that you would've received last night if you're on the email list. You know, there's only so many projects that actually have started construction. Again, that's not surprising. These are, in many cases, multi-billion dollar type projects, and so there's a lot of steps that need to be done before they're actually gonna break ground. That said, it's quite encouraging on how much activity there is in this area. Another question received, got a couple people asking about kind of what's the impact of the European situation and with the Iran war.
Phil B. Hodge: The province of Alberta has announced that they wanna attract CAD 100 billion of data center development to the province, which is great. There's been a lot of announcements. I referred to a lot of them in my email that you would've received last night if you're on the email list. You know, there's only so many projects that actually have started construction. Again, that's not surprising. These are, in many cases, multi-billion dollar type projects, and so there's a lot of steps that need to be done before they're actually gonna break ground. That said, it's quite encouraging on how much activity there is in this area. Another question received, got a couple people asking about kind of what's the impact of the European situation and with the Iran war.
Speaker #2: And there's been a lot of announcements I referred to a lot of them in my email that you would have received last night if you're on the email list.
Speaker #2: But there's only so many projects that actually have started construction. And again, it's that's not surprising. These are in many cases multi-billion dollar type projects.
Speaker #2: And so, there's a lot of steps that need to be done before they're actually going to break ground. That said, it's quite encouraging how much activity there is in this area.
Speaker #2: Another question receives got a couple of people asking me about kind of what's the impact of the European situation and the with the Iran war.
Phil Hodge: Right now, all of the natural gas that can come out of North America really is already allocated. In other words, the LNG capacity. That's what prohibits us from sending more gas over to Europe when, you know, there's clearly a strong demand right now for gas in Europe. Pricing's gone back over CAD 12 an Mcf, whereas here in Canada, it's at CAD 2 an Mcf. That arbitrage really can't get closed without more LNG export capacity. There's lots of, as you know, many of you know, LNG Canada is now well on its way to getting its phase one, reaching its capacity of 2 Bcf a day. That's great. Hopefully, we'll see a positive investment decision on phase two sometime in 2026.
Phil B. Hodge: Right now, all of the natural gas that can come out of North America really is already allocated. In other words, the LNG capacity. That's what prohibits us from sending more gas over to Europe when, you know, there's clearly a strong demand right now for gas in Europe. Pricing's gone back over CAD 12 an Mcf, whereas here in Canada, it's at CAD 2 an Mcf. That arbitrage really can't get closed without more LNG export capacity. There's lots of, as you know, many of you know, LNG Canada is now well on its way to getting its phase one, reaching its capacity of 2 Bcf a day. That's great. Hopefully, we'll see a positive investment decision on phase two sometime in 2026.
Speaker #2: Right now, all of the natural gas that can come out of North America really is already allocated. In other words, the LNG capacity—that's what prohibits us from sending more gas over to Europe, when there's clearly a strong demand right now for gas in Europe.
Speaker #2: Pricing's gone back over $12 an MCF, whereas here in Canada it's at $2 an MCF. The arbitrage really can't get closed without more LNG export capacity.
Speaker #2: And there's lots of, as many of you know, Canada—the LNG Canada is now well on its way to getting its phase one, reaching its capacity of 2 Bcf a day.
Speaker #2: That's great. Hopefully, we'll see a positive investment decision on phase two. Sometime in '26. That will take it to hopefully a four BCF a day.
Phil Hodge: will take it to, hopefully, it's 4 Bcf a day. There's other projects underway. In the really short term, there's really nothing that the North American producers or the North American LNG can do to send more gas to Europe. I think the issue that the Europeans are having is right now with the Strait of Hormuz shut in, a lot of LNG that's coming out of Qatar, a lot of other, you know, the supply chain for LNG has been disrupted. Therefore, there's a concern that they're not going to be able to put gas into storage, not so much for this winter because we're already kind of through this winter. It's about getting ready for next winter because they had a fairly cold winter, their storage was depleted.
Phil B. Hodge: will take it to, hopefully, it's 4 Bcf a day. There's other projects underway. In the really short term, there's really nothing that the North American producers or the North American LNG can do to send more gas to Europe. I think the issue that the Europeans are having is right now with the Strait of Hormuz shut in, a lot of LNG that's coming out of Qatar, a lot of other, you know, the supply chain for LNG has been disrupted. Therefore, there's a concern that they're not going to be able to put gas into storage, not so much for this winter because we're already kind of through this winter. It's about getting ready for next winter because they had a fairly cold winter, their storage was depleted.
Speaker #2: There are other projects underway. But in the really short term, there's really nothing that the North American producers or the North American LNG can do to send more gas to Europe.
Speaker #2: So I think the issue that the Europeans are having is right now with the Strait of Hormuz shut in, a lot of LNG that's coming out of Qatar, a lot of other the supply chain for LNG has been disrupted.
Speaker #2: And therefore, there's a concern that they're not going to be able to put gas into storage not so much for this winter because we're already kind of through this winter.
Speaker #2: It's about getting ready for next winter because they had a fairly cold winter. And so their storage got was depleted. And now if they aren't able to fill it, there's going to be a real panic on for natural gas in Europe for next year.
Phil Hodge: Now, if they aren't able to fill it, there's gonna be a real panic on for natural gas in Europe for next year. You can see that already. There were some headlines this morning about Putin has threatening that he could cut off natural gas to Europe if they don't allow oil and natural gas exports, if there's any kind of embargo put on Russia. That's a significant threat because the European nations still use a lot of Russian gas. They don't use as much as they did before, but they still use a lot of Russian gas. There's a lot of dynamics. What it does do is that. There was a piece that came out this morning, just looked at the chart about how many new LNG projects have been announced.
Phil B. Hodge: Now, if they aren't able to fill it, there's gonna be a real panic on for natural gas in Europe for next year. You can see that already. There were some headlines this morning about Putin has threatening that he could cut off natural gas to Europe if they don't allow oil and natural gas exports, if there's any kind of embargo put on Russia. That's a significant threat because the European nations still use a lot of Russian gas. They don't use as much as they did before, but they still use a lot of Russian gas. There's a lot of dynamics. What it does do is that. There was a piece that came out this morning, just looked at the chart about how many new LNG projects have been announced.
Speaker #2: And you can see that already. There were some headlines this morning about Putin threatening that he could cut off natural gas to Europe. If they don't allow oil and natural gas exports, if there's any kind of embargo put on Russia, that's a significant threat because the European nations still use a lot of Russian gas.
Speaker #2: They don't use as much as they did before, but they still use a lot of Russian gas. So there's a lot of dynamics. What it does do is that and there was a piece that came out this morning just looked at the chart about how many new LNG
Speaker #1: You projects have been announced . You know , you'll see in our presentation all the LNG projects that are under that are currently in operation , and those ones that construction .
Phil Hodge: You know, you'll see in our presentation all the LNG projects that are currently in operation and those ones under construction. Well, there's another wedge on top of that, which is new announced, which is new announced production and future capacity builds on LNG. That would take it to well beyond 40 Bcf a day coming out of North America, which is a massive number. Today, that number is around 20 Bcf a day, and that's been a huge increase from where it's at. You know, I think all of this global dynamic pricing really does have an impact on the future viability of more LNG projects coming on because you're getting. You know, this is why our prime minister is traveling around the globe right now.
Phil B. Hodge: You know, you'll see in our presentation all the LNG projects that are currently in operation and those ones under construction. Well, there's another wedge on top of that, which is new announced, which is new announced production and future capacity builds on LNG. That would take it to well beyond 40 Bcf a day coming out of North America, which is a massive number. Today, that number is around 20 Bcf a day, and that's been a huge increase from where it's at. You know, I think all of this global dynamic pricing really does have an impact on the future viability of more LNG projects coming on because you're getting. You know, this is why our prime minister is traveling around the globe right now.
Speaker #1: Well , there's another wedge on top of that which is new announced , which is new announced production or and future capacity builds on LNG that would take it to , well beyond 40 BCF a day coming out of North America , which is a massive number Today , that number is around 20 BCF a day , and that's been a huge increase from where it's at .
Speaker #1: So there's , you know , I think all of this global dynamic really does have an impact on on the future viability of more LNG projects coming on , because you're getting this is why our Prime Minister is traveling around the globe right now .
Phil Hodge: It's also, you know, why we're seeing more and more requests for Canadian energy around the LNG. The one thing I would say about the impact of the war, I mean, when we saw oil prices, the swap price was $78, $79 this morning, you'll see in our financial statements that about every dollar increase in WTI equates to about a CAD 1.4 million increase in annual cash flow to us. We are price left even though we are, you know, 80% gas. The move in WTI, move in oil prices does have an impact on our cash flow statements of a pretty material nature.
Phil B. Hodge: It's also, you know, why we're seeing more and more requests for Canadian energy around the LNG. The one thing I would say about the impact of the war, I mean, when we saw oil prices, the swap price was $78, $79 this morning, you'll see in our financial statements that about every dollar increase in WTI equates to about a CAD 1.4 million increase in annual cash flow to us. We are price left even though we are, you know, 80% gas. The move in WTI, move in oil prices does have an impact on our cash flow statements of a pretty material nature.
Speaker #1: It's also , you know , why we're seeing more and more requests for Canadian energy around LNG . So the the one thing I would say about the impact of the war .
Speaker #1: I mean , when we saw oil prices , the spot prices , $7,879 this morning You'll see in our in our financial statements that about every dollar increase in WTI equals equates to about a $1.4 million increase in annual cash flow tax .
Speaker #1: So we are left even though we are , you know , 80% gas . Those that move in WTI move in oil prices does have an impact on our cash flow .
Speaker #1: Statements of a pretty material nature I think the . The only other question that kind of got from last night was just on , on on our hedging , I think there are hedging is pretty well set out .
Phil Hodge: I think the only other question that kinda got from last night was just on our hedging. I think our hedging is pretty well set out. Chris has done a good job. It's in our press release. You can see that we're fairly well hedged going into 2026, protecting the summer prices, but also, like I say, locking in some prices that we're pretty comfortable going forward. I don't know, Chris, if you wanna comment just generally on how we kinda look at hedging going forward.
Phil B. Hodge: I think the only other question that kinda got from last night was just on our hedging. I think our hedging is pretty well set out. Chris has done a good job. It's in our press release. You can see that we're fairly well hedged going into 2026, protecting the summer prices, but also, like I say, locking in some prices that we're pretty comfortable going forward. I don't know, Chris, if you wanna comment just generally on how we kinda look at hedging going forward.
Speaker #1: Chris has done a good job of and it's in our press release , you can see that we're we're fairly well hedged going into 26 , protecting the summer prices , but also , like I say , locking in some some pretty some prices that we're pretty comfortable going forward .
Speaker #1: I don't know , Chris , if you want to comment , just generally on our on how we kind of look at hedging going forward .
Kristopher Zack: I would just only add that we'll continue to hedge where possible to continue to protect our cash flow against near-term volatility. Again, just to reiterate what's in the press release, 37% of our gross natural gas production is hedged at an average price around CAD 3.19 for 2026 and around 31% of our crude oil production at around $63.45 US dollars.
Kristopher B. Zack: I would just only add that we'll continue to hedge where possible to continue to protect our cash flow against near-term volatility. Again, just to reiterate what's in the press release, 37% of our gross natural gas production is hedged at an average price around CAD 3.19 for 2026 and around 31% of our crude oil production at around $63.45 US dollars.
Speaker #2: I would , I would just only add that we'll continue to hedge where , where , where possible to continue to protect our cash flow against near-term volatility .
Speaker #2: So again, just to reiterate what's in the press release, 37% of our gross natural gas production is hedged at an average price of around $3.19 for 2026.
Speaker #2: And around 31% of our crude oil production at around 6,345 USD .
Phil Hodge: Thanks, Chris. I think that covered all the major questions that we've received either this morning or last night. I mean, you've always got access to us if anybody wants to talk further. You know, it's been a challenging quarter because it's Q4, as you saw in the numbers, was actually pretty good. AECO was moving up nicely. That has a big impact. We're obviously highly correlated to AECO price moves. Q1 AECO was, you know, it came down. The reasons for that was primarily because of warm weather in Western Canada, but also the LNG Canada delays because there were some technical issues.
Phil B. Hodge: Thanks, Chris. I think that covered all the major questions that we've received either this morning or last night. I mean, you've always got access to us if anybody wants to talk further. You know, it's been a challenging quarter because it's Q4, as you saw in the numbers, was actually pretty good. AECO was moving up nicely. That has a big impact. We're obviously highly correlated to AECO price moves. Q1 AECO was, you know, it came down. The reasons for that was primarily because of warm weather in Western Canada, but also the LNG Canada delays because there were some technical issues.
Speaker #1: Thanks , Chris So I think that covered all the the major questions that we've received . Either this morning or last night . The I mean , you've always got access to us .
Speaker #1: If anybody wants to to talk further , you know , it is a it's been a challenging quarter because it's Q4 , as you saw in the numbers , was actually a pretty good Aiko was moving up nicely .
Speaker #1: That has a big impact . We're obviously highly correlated to ACO price moves . Q1 ACO was that was you know , it came down and the reasons for that was primarily because the warm weather in western Canada , but also the LNG Canada delays because there were some technical issues .
Phil Hodge: As that ramps back up, whereas we head into the back half of this year, where we're gonna hopefully see LNG Canada back to kind of, you know, get to their capacity around 2 Bcf a day, you know, there's a lot of reasons for us to be positive. You know, our goal will be to continue to kinda allocate capital to the best we can to both continue to lower our debt, which is something that, you know, we think that just makes us more flexible going forward for potential opportunities, but also to continue to finance the drill program. Because we think having that, you know, such strong locations that can deliver such positive returns, that's something we should be allocating capital towards.
Phil B. Hodge: As that ramps back up, whereas we head into the back half of this year, where we're gonna hopefully see LNG Canada back to kind of, you know, get to their capacity around 2 Bcf a day, you know, there's a lot of reasons for us to be positive. You know, our goal will be to continue to kinda allocate capital to the best we can to both continue to lower our debt, which is something that, you know, we think that just makes us more flexible going forward for potential opportunities, but also to continue to finance the drill program. Because we think having that, you know, such strong locations that can deliver such positive returns, that's something we should be allocating capital towards.
Speaker #1: But as that ramps back up , as we head into the back half of this year where we're going to hopefully see LNG Canada back to kind of , you know , get to their capacity of around two BCF a day .
Speaker #1: You know , there's a there's a lot of reasons for us to be positive . And , you know , the our goal will be to continue to kind of allocate capital to the best we can to both continue to lower our debt , which is something that , you know , we think that just makes us more flexible going forward for potential opportunities , but also to continue to finance the the drill program , because we think having that , you know , such a strong locations that can deliver such , you positive returns , that's something we should be allocating capital towards .
Phil Hodge: And all in the backdrop of all of that, we continue to keep the dividend rolling. I mean, we're very proud of the fact that a company of Pine Cliff's size has been able to pay over CAD 100 million of dividends, which is almost CAD 0.30 a share, since we started the program in summer of 2022. Okay. Well, if there's no further questions, we won't take any other time away from you. Thank you very much for your attention and for your ongoing interest in Pine Cliff. Have a good day.
Phil B. Hodge: And all in the backdrop of all of that, we continue to keep the dividend rolling. I mean, we're very proud of the fact that a company of Pine Cliff's size has been able to pay over CAD 100 million of dividends, which is almost CAD 0.30 a share, since we started the program in summer of 2022. Okay. Well, if there's no further questions, we won't take any other time away from you. Thank you very much for your attention and for your ongoing interest in Pine Cliff. Have a good day.
Speaker #1: So and all in the backdrop of all of that , we continue to keep the dividend rolling . I mean , a very proud of the fact that the company of Franklin's size has been able to pay over $100 million of dividends , which is a almost $0.30 a share since we started the program in in summer of 20 .
Speaker #1: Sorry , the summer of 22 . So okay , well , if there's no further questions , we won't take any other time away from you .