Earnings release
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1 TOPAZ ANNOUNCES THIRD QUARTER 2025 FINANCIAL RESULTS INCLUDING 15% ROYALTY PRODUCTION GROWTH AND NEW RECORD CLEARWATER PRODUCTION November 3, 2025 Calgary, Alberta – Topaz Energy Corp. (TSX:TPZ) (“Topaz” or the “Company”) is pleased to provide third quarter 2025 financial results. Select financial information is outlined below and should be read in conjunction with T opaz's interim condensed consolidated financial statements (“Financial Statements”) and related management's discussion and analysis ("MD&A") as at and for the three and nine months ended September 30, 2025, which are available on SEDAR + at www.sedarplus.ca and on Topaz's website at www.topazenergy.ca. Highlights • Generated Q3 2025 cash flow of $74.8 million ($0.49 per share (2)) and free cash flow (FCF) (1) of $73.0 million ($0.47 per share(2)), both of which increased 7% per share(2) from the prior year. • Q3 2025 royalty production of 21,596 boe/d(4) increased 15% from the prior year, which includes new record heavy oil royalty production of 3,386 bbl/d, 17% higher natural gas (primarily attributed to acquisitions) and 11% higher total oil and liquids royalty production. • Topaz estimates that operators invested $0.5 billion to $0.6 billion of development capital across the Company’s royalty acreage in Q3 2025 ($2.0 billion to $2.1 billion YTD 2025)(3). During Q3 2025, 161 gross wells (6.3 net)(7) were drilled and 12 gross wells were reactivated across Topaz’s royalty acreage, with 52% of the drilling activity in the Montney and Clearwater operating areas. • Processing revenue of $21.2 million from Topaz’s infrastructure assets increased 16% from the prior year and 5% from the prior quarter. • Paid the third quarter dividend of $0.34 per share (70% payout ratio(1)) and approved the fourth quarter dividend of $0.34 per share which represents a 5.5% annualized yield to Topaz’s current share price.(9) • Topaz completed the previously announced NEBC Montney tuck -in royalty acquisition from Tourmaline on September 30, 2025 which fully aligns Topaz to each of Tourmaline’s future growth projects under their multi-year NEBC Montney build-out plan. Third Quarter 2025 Update Financial Overview • Topaz generated total revenue and other income of $76.4 million, 49% from crude and heavy oil royalties, 20% from natural gas and NGL royalties, and 31% from the infrastructure portfolio. • C ash flow of $74.8 million was 12% higher than Q3 2024 attributed to 16% higher processing revenue and other income and a 13% overall reduction in operating and interest costs. • Topaz’s Q3 2025 FCF Margin of 95% realized a meaningful increase from Q3 2024 (88%) attributed to 30% lower operating expense, a 24% reduction in Topaz’s effective borrowing rate under the Company’s credit facility and an $8.7 million hedging gain ($0.06 per share(2)) realized during the third quarter. • P aid $52.3 million in dividends ($0.3 4 per share and 70 % payout ratio (1)) which represents a 5. 3% trailing annualized yield to the Q3 2025 average share price.(8) • Topaz exited Q3 2025 with $535.4 million of net debt(1) (1.6x net debt to Q3 2025 annualized EBITDA(1)). As at November 3, 2025, Topaz has over $0.4 billion of available capacity under the facility.(6) Royalty A ctivity, Commodity Pricing & Hedging
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2 • Q3 2025 average royalty production of 21,596 boe/d(4) includes natural gas production of 89.6 mmcf/d and 6,661 bbl/d of oil and liquids production which increased 17% and 11%, respectively from Q3 2024. • During the quarter, Topaz generated $52.3 million total royalty revenue (99% operating margin(1)) and an average realized price of $26.32 per boe (before hedging). Topaz’s $8.7 million Q3 2025 realized hedging gain includes a $7.1 million gain attributed to natural gas contracts which represents a 144% premium relative to Topaz’s Q3 2025 realized natural gas price. The third quarter natural gas price volatility is largely attributable to third-party maintenance activity that restricted natural gas transmission line flow and WCSB export, particularly during the month of September . The maintenance activity and physical egress restrictions are expected to be alleviated during the fourth quarter. For the fourth quarter of 2025, approximately 31% of natural gas is hedged at a weighted average fixed price of C$3.06 per mcf, and approximately 30% of oil and total liquids is hedged at a weighted average floor price of C$97.64 per barrel.(11) • Topaz estimates that operators invested $0.5 billion to $0.6 billion of development capital across the Company’s royalty acreage in Q3 2025 ($2.0 billion to $2.1 billion YTD 2025)(3), with drilling activity (161 gross wells spud(7)) diversified as follows: 61 Clearwater, 23 NEBC & Alberta Montney, 38 Deep Basin, 12 Peace River 12 , SE Saskatchewan, 9 Central AB, and 6 Manitoba. • During Q3 2025, 184 total gross wells were brought on production (7) and at September 30, 2025, 94 gross wells were drilled but not yet completed (representing 58% of Q3 2025 new wells drilled). • Topaz estimates that over 30% of its Clearwater royalty production is currently stabilized under waterflood. Waterflood application over the past four years has contributed to a significant decrease in the base decline rate attributed to the developed Clearwater reserves, increased the oil recovery rates, and together, reduced operator maintenance capital required to sustain production. Through 2025, this operator capital has been re-allocated and resulted in the identificati on of incremental zones and increased waterflood application across Topaz’s acreage. Topaz’s Clearwater royalty production achieved a new record of 3,555 boe/d(13) (92% oil) during Q3 2025, representing a 12% increase from Q3 2024. • Based on planned operator drilling activity, Topaz expects between 27 and 31 active drilling rigs on the Company’s royalty acreage through the fourth quarter of 2025.(3) Infrastructure Activity • During Q3 2025, Topaz generated $24.2 million in processing revenue and other income which increased 16% from the prior year . The infrastructure assets generated 9 9% utilization and Topaz incurred $1.5 million in operating expenses, providing a 94 % operating margi n.(1) Topaz incurred $1.1 million in maintenance-related capital expenditures (before capitalized G&A). Acquisition Activity • Topaz completed the previously announced NEBC Montney tuck -in royalty acquisition from Tourmaline on September 30, 2025 for $71.7 million. The acquisition provides a new royalty interest over approximately 134,000 gross acres (over 65% undeveloped with 410 tier one future Montney drilling locations identified), multi-zone upside optionality, and fully aligns Topaz to each of Tourmaline’s future growth projects under their multi -year NEBC Montney build -out plan. YTD 2025, Topaz has completed $115.2 million of royalty and infrastructure acquisitions in the Montney, $72.5 million of which was funded through YTD 2025 Excess FCF and $42.7 million using the Company’s existing credit facilities. Dividend
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3 • Topaz’s Board approved the Company’s fourth quarter 2025 dividend of $0.34 per share(10) which is expected to be paid on December 31, 2025, to shareholders of record on December 15, 2025. The quarterly cash dividend is designated as an “eligible dividend” for Canadian income tax purposes. • Topaz’s 2025e dividend remains sustainable down to $0.01 per mcf natural gas and US$55.00 per bbl crude oil(3) attributable to: (i) the Company’s high-margin, stable infrastructure revenue which represents 43 % of the 2025e dividend(3); (ii) hedging strategy and financial derivative contracts in place (11); (iii) the stab ilized production supported by secondary recovery in Topaz’s Clearwater and Weyburn royalty areas; and (iv) the quality and financial strength of Topaz’s asset portfolio and strategic partners’ planned development activity. Guidance Outlook 2025e Guidance Estimates Reconfirmed • Topaz reconfirms the Company’s 2025 e guidance estimates(3)(14) of average annual royalty production between 21,000 boe/d and 23,000 boe/d(3)(4) and processing revenue and other income between $88.0 and $92.0 million.(3) Based on estimated commodity pricing(5), Topaz expects to exit 2025 with net debt between $500.0 and $510.0 million(3)(12) (net debt to EBITDA 1.5x(1)(3)), before consideration of incremental acquisitions, and generate a modest payout ratio at the lower end of the 60% - 90% long-term targeted payout range. Q3 2025 CONFERENCE CALL Topaz will host a conference call tomorrow, Tuesday, November 4, 2025 starting at 9:00 a.m. MST (11:00 a.m. EST). To join the conference call without operator assistance, participants can register and enter their phone number at https://emportal.ink/47FNQDK to receive an instant automated call back. Alternatively, participants can join by calling a live operator at 1-888-510-2154 (North American toll free). The conference call ID is 04114. ABOUT THE COMPANY Topaz is a unique royalty and infrastructure energy company focused on generating free cash flow growth and paying reliable and sustainable dividends to its shareholders, through its strategic relationship with Canada's largest and most active natural gas producer, Tourmaline Oil Corp. (“Tourmaline”), an investment-grade senior Canadian E&P company, and leveraging industry relationships to execute complementary acquisitions from other high- quality energy companies. Topaz focuses on top- quartile energy resources and assets best positioned to attract capital in order to generate sustainable long-term growth and profitability. Topaz’s common shares are listed and posted for trading on the TSX under the trading symbol "TPZ" and it is included in the S&P/TSX Composite Index. This is the headline index for Canada and is the principal benchmark measure for the Canadian equity markets, represented by the largest companies on the TSX. Additional information Additional information about Topaz, including the Financial Statements and MD&A as at and for the three and nine months ended September 30, 2025 are available on SEDAR+ at www.sedarplus.ca under the Company's profile, and on Topaz's website at www.topazenergy.ca.
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4 Selected Financial Information For the periods ended ($000s) except per share YTD 2025 YTD 2024 Q3 2025 Q2 2025 Q1 2025 Q4 2024 Q3 2024 Royalty production revenue 179,342 173,192 52,291 58,368 68,683 60,234 52,692 Processing revenue 60,977 47,539 21,221 20,167 19,589 18,838 18,279 Other income(4) 9,467 9,488 2,931 2,653 3,883 3,107 2,626 Total 249,786 230,219 76,443 81,188 92,155 82,179 73,597 Cash expenses: Operating (5,503) (5,749) (1,545) (2,199) (1,759) (1,600) (2,209) Marketing (1,122) (1,004) (307) (370) (445) (356) (279) General and administrative (5,936) (5,326) (1,864) (1,893) (2,179) (2,894) (1,730) Realized gain on financial instruments 14,724 7,852 8,737 5,166 821 3,464 4,716 Interest expense (19,741) (20,526) (6,620) (6,267) (6,854) (6,940) (7,123) Cash flow 232,208 205,466 74,844 75,625 81,739 73,853 66,972 Per basic share(1)(2) $1.51 $1.42 $0.49 $0.49 $0.53 $0.49 $0.46 Per diluted share(1)(2) $1.50 $1.41 $0.49 $0.49 $0.53 $0.49 $0.46 Cash from operating activities 239,617 211,341 78,147 80,731 80,739 64,930 71,253 Per basic share(1)(2) $1.56 $1.46 $0.51 $0.52 $0.53 $0.43 $0.49 Per diluted share(1)(2) $1.55 $1.45 $0.51 $0.52 $0.52 $0.43 $0.49 Net income 51,804 41,960 11,357 28,161 12,286 4,426 18,040 Adjusted net income(1) 50,080 37,071 16,121 11,734 22,225 17,581 8,252 Adjusted, per diluted share(1)(8) $0.32 $0.26 $0.10 $0.08 $0.14 $0.12 $0.06 EBITDA(7) 251,728 225,523 81,412 81,801 88,515 80,504 73,984 Per basic share(1)(2) $1.64 $1.56 $0.53 $0.53 $0.58 $0.53 $0.51 Per diluted share(1)(2) $1.63 $1.55 $0.53 $0.53 $0.57 $0.53 $0.51 FCF(1) 227,834 200,554 72,980 74,017 80,837 71,435 64,789 Per basic share(1)(2) $1.48 $1.38 $0.47 $0.48 $0.53 $0.47 $0.45 Per diluted share(1)(2) $1.48 $1.38 $0.47 $0.48 $0.52 $0.47 $0.44 FCF Margin(1) 91% 87% 95% 91% 88% 87% 88% Dividends paid 155,331 140,550 52,303 52,283 50,745 50,617 47,827 Per share(1)(6) $1.01 $0.97 $0.34 $0.34 $0.33 $0.33 $0.33 Payout ratio(1) 67% 68% 70% 69% 62% 69% 71% Excess FCF(1) 72,503 60,004 20,677 21,734 30,092 20,818 16,962 Capital expenditures 4,374 4,912 1,864 1,608 902 2,418 2,183 Work in progress capital costs ─ 21,295 ─ ─ ─ (21,295) 5,585 Acquisitions, excl. decommissioning obligations(1) 115,204 99,189 71,733 26,001 17,470 331,380 ─ Weighted average shares – basic(3) 153,779 144,875 153,794 153,774 153,770 151,423 144,909 Weighted average shares – diluted(3) 154,413 145,462 154,442 154,401 154,430 152,149 145,622 Average Royalty Production(5) Natural gas (mcf/d) 92,620 77,386 89,596 93,129 95,195 83,923 76,366 Light and medium crude oil (bbl/d) 1,990 1,829 1,910 2,133 1,925 1,678 1,834 Heavy crude oil (bbl/d) 3,285 3,021 3,386 3,314 3,154 3,266 3,093 Natural gas liquids (bbl/d) 1,373 1,125 1,365 1,320 1,434 1,346 1,057 Total (boe/d) 22,086 18,874 21,596 22,290 22,380 20,279 18,712 Total royalty production (% total liquids) 30% 32% 31% 30% 29% 31% 32% Natural gas liquids (% condensate) 70% 72% 71% 70% 70% 68% 75% Realized Commodity Prices(5) Natural gas ($/mcf) $1.36 $1.43 $0.61 $1.38 $2.06 $1.41 $0.63 Light and medium crude oil ($/bbl) $83.96 $93.14 $81.64 $79.45 $91.39 $90.73 $94.14 Heavy crude oil ($/bbl) $75.96 $82.61 $73.43 $72.31 $82.61 $80.81 $83.17 Natural gas liquids ($/bbl) $83.44 $90.52 $80.18 $78.97 $90.78 $89.10 $89.73 Total ($/boe) $29.75 $33.49 $26.32 $28.78 $34.10 $32.29 $30.61 Benchmark Pricing Natural Gas AECO 5A (CAD$/mcf) $1.50 $1.45 $0.63 $1.69 $2.16 $1.48 $0.69 AECO 7A (CAD$/mcf) $1.69 $1.43 $1.00 $2.07 $2.02 $1.46 $0.81 Westcoast station 2 (CAD$/mcf) $0.74 $1.28 $0.47 $0.46 $1.27 $0.90 $0.50 Crude Oil, Heavy Oil and Natural Gas Liquids NYMEX WTI (USD$/bbl) $66.70 $77.54 $64.95 $63.71 $71.42 $70.27 $75.16 Edmonton Par (CAD$/bbl) $88.81 $98.68 $86.52 $84.32 $95.60 $95.14 $98.13 WCS differential (USD$/bbl) $11.18 $15.45 $10.36 $10.50 $12.66 $12.55 $13.49 Edmonton Condensate (CAD$/bbl) $90.90 $93.41 $86.36 $86.85 $99.49 $97.90 $93.95 CAD$/USD$ $0.7152 $0.7352 $0.7261 $0.7226 $0.6969 $0.7149 $0.7333 Selected statement of financial position results ($000s) except share amounts At Sept. 30, 2025 At Jun. 30, 2025 At Mar. 31, 2025 At Dec. 31, 2024 At Sept. 30, 2024 Total assets 1,847,360 1,834,377 1,857,438 1,894,614 1,623,841 Working capital (26,633) 50,640 46,694 51,758 27,520 Adjusted working capital (deficit)(1) (30,773) 40,319 49,448 48,372 38,434 Net debt (cash)(1) 535,412 485,166 480,730 492,024 381,084 Common shares outstanding(3) 153,831 153,774 153,774 153,457 144,928 (1) Refer to “Non-GAAP and Other Financial Measures”. (2) Calculated using basic or diluted weighted average shares outstanding during the period. (3) Shown in thousand shares outstanding. (4) Includes interest income ($mm): Q3 2025 - $0.05, Q2 2025: $0.09, Q1 2025: $0.08, Q4 2024: $0.3, Q3 2024: $0.1; YTD 2025: $0.2, YTD 2024: $0.5. (5) Refer to “Supplemental Information Regarding Product Types.” (6) Cumulative dividend paid as per the number of outstanding shares on the respective quarterly dividend dates. (7) Defined term under the Company's Syndicated Credit Facility. (8) Adjusted to exclude the impact of non-cash, unrealized gains or losses on financial instruments. NOTE REFERENCES
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5 This news release refers to financial reporting periods in abbreviated form as follows: “Q 3 2025” refers to the three months ended September 30, 2025; “YTD 2025” refers to the nine months ended September 30, 202 5; “Q3 2024” refers to the three months ended September 30, 2024; and “YTD 2024” refers to the nine months ended September 30, 2024. In addition, “2025 e” refers to estimated amounts or results for the year ending December 31, 2025. 1. See “Non-GAAP and Other Financial Measures”. 2. Calculated using the weighted average number of diluted common shares outstanding during the respective period. 3. See “Forward-Looking Statements”. 4. See “Supplemental Information Regarding Product Types”. 5. Estimated based on C$2.55 per mcf natural gas (AECO) and US$65.00 per bbl crude oil (NYMEX WTI). 6. Topaz’s $700.0 million credit facility includes a $300.0 million accordion feature (for a total $1.0 billion facility) that may be advanced by Topaz but remains subject to agent consent. As at November 3, 2025 Topaz had $553.5 million net borrowings against the Company’s credit facility, providing approximately $446.5 million available, subject to agent consent. Refer to Note 8 of the Financial Statements for Topaz’s Q3 2025 covenant calculations. 7. May include non-producing injection wells. 8. Calculated based on Topaz’s average share price on the TSX during Q3 2025 of $25.47 per share. 9. Calculated based on Topaz’s closing share price on the TSX on October 31, 2025 of $24.90. 10. Topaz’s future dividends remain subject to board of director approval. 11. Refer to the MD&A for a complete listing of financial derivative contracts in place. Coverage estimates are calculated based on Topaz’s YTD 2025 average royalty production. 12. Estimate is based on Topaz’s previously announced 2025 guidance estimates (average royalty production of 21,000 – 2 3,000 boe/d(3)(4), before consideration of any incremental acquisitions, and processing revenue and other income between $88.0 and $92.0 million(3)), which guidance remains unchanged other than the Company's 2025e exit net debt (net debt to EBITDA) as disclosed herein which has changed primarily due to an increase in the amount drawn under the Company's credit facility in connection the NEBC Montney tuck-in royalty acquisition from Tourmaline on September 30, 2025. 13. Clearwater Q3 2025 average royalty production of 3,555 boe/d is comprised of 3,261 bbl/d oil, 1,604 mcf/d natural gas and 25 bbl/d natural gas liquids). 14. Management’s assumptions underlying the Company’s 2025e guidance estimates include: i. Being subject to any significant, potential changes to the Company’s key operators’ 2025 capital budgets and/or operational, weather or wildfire-related issues that may impact the 2025 estimated production range; ii. Topaz’s internal estimates regarding development pace and production performance including estimates of operators’ 2025 capital development plans including capital allocated to waterflood and other long-term value - enhancing projects and excluding exploration spending; all of which being subject to key operators’ revisions to 2025 capital budgets and/or operational, weather or wildfire-related issues that may impact 2025 production; iii. Management’s estimates for fixed and variable processing fees based on 95% utilization, third party income, and infrastructure utilization and cost estimates based on historic information and adjusted for inflation; iv. No incremental, (i.e. not previously announced) acquisition activity; v. Estimated 2025e expenses and expenditures of $7.0-$9.0mm of cash G&A; $7.0-$9.0mm of operating expenses; $5.0-$7.0mm capital expenditures (excluding acquisitions); 1% marketing fee on certain royalty production; estimated annual borrowing and standby interest costs at a rate of 5.5%; and no estimated corporate income tax attributed to the Company’s year-end 2024 tax pools (refer to page 25 “Tax Horizon” within Topaz’s 2024 Annual Information Form available through the SEDAR+ website ( www.sedarplus.ca) or Topaz's website (www.topazenergy.ca). vi. 2025 estimated total dividends of approximately $208.0 million based on 153.8 million shares outstanding at November 3, 2025 ($1.35 per share); vii. Topaz’s outstanding financial derivative contracts included in its most recently filed MD&A; and viii. The assumptions contained under the heading "Financial Outlook". FORWARD-LOOKING STATEMENTS
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6 This news release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") that relate to the Company's current expectations and views of future events. These forward-looking statements relate to future events or the Company's future performance. Any statements that express, or involve discussions as to, expectations, beliefs, plans, object ives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as "will likely result", "are expected to", "expects", "will continue", "is anticipated", "anticipates", "believes", "estimated", "intends", "plans", "forecast", "projection", "strategy", "objective" and "outlook") are not historical facts and may be forward- looking statements and may involve estimates, assumptions and uncertainties which could cause actual results or outcomes to differ materially from those expressed in such forward- looking statements. No assurance can be given that these expectations will prove to be correct and such forward- looking statements included in this news release should not be unduly relied upon. These statements speak only as of the date of this news release. In particular and without limitation, this news release contains forward-looking statements pertaining to the following: Topaz's future growth outlook, guidance and strategic plans; estimated annual average royalty production for 2025; estimated processing revenue and other income for 2025; anticipated exit 2025 net debt levels and 2025 net debt to EBITDA levels; dividend amounts, dividend increases (including the intention to increase dividends) and the estimated payout ratio; the sustainability of the dividend and the rationale for such sustainability; the anticipated capital expenditure and drilling plans; the estimated amount of development capital invested by operators across the Company's royalty acreage and their drilling activity; the number of drilling rigs to be active on Topaz's royalty acreage during the fourth quarter of 2025; the future declaration and payment of dividends and the timing and amount thereof; the forecasts described under the headings “Third Quarter 2025 Update” (including under the sub-heading “Dividend”) and the assumptions and estimates described under the heading "Guidance Outlook" and “Note References” above and under the heading "Financial Outlook" below; and the Company's business as described under the heading "About the Company" above. Forward‐looking statements are based on a number of assumptions including those highlighted in this news release including future commodity prices, capital expenditures, infrastructure ownership capacity utilization and operator development plans, and is subject to a number of risks and uncertainties, many of which are beyond the Company's control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward‐looking statements. Such risks and uncertainties include, but are not limited to, potential political, geopolitical and economic instability; trade policy, barriers, disputes or wars (including new tariffs or changes to existing international trade arrangements); the failure to complete acquisitions on the terms or on the timing announced or at all and the failure to realize some or all of the anticipated benefits of acquisit ions including estimated royalty production, royalty production revenue and FCF per share growth, and the factors discussed in the Company's most recently filed Management's Discussion and Analysis (See "Forward-Looking Statements" therein), 2024 Annual Information Form (See "Risk Factors" and "Forward-Looking Statements" therein) and other reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR+ website (www.sedarplus.ca) or Topaz's website (www.topazenergy.ca). Statements relating to "reserves" are also deemed to be forward looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated and that the reserves can be profitably produced in the future. Without limitation of the foregoing, future dividend payments, if any, and the level thereof is uncertain, as the Company's dividend policy and the funds available for the payment of dividends from time to time is dependent upon, among other things, FCF, financial requirements for the Company's operations and the execution of its growth strategy, fluctuations in working capital and the timing and amount of capital expenditures, debt service requirements and other factors beyond the Company's control. Further, the ability of Topaz to pay dividends will be subject to applicable laws (including the satisfaction of the solvency test contained in applicable corporate legislation) and contractual restrictions contained in the instruments governing its indebtedness, including its credit facility. Topaz does not undertake any obligation to update such forward‐looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable law. FINANCIAL OUTLOOK Also included in this news release are estimates of the average royalty production range and processing revenue and other income range for the year ending December 31, 2025 and estimated year-end exit net debt and net debt to EBITDA for 2025 based on YTD 2025 average royalty production and YTD 2025 annualized processing revenue and other income, which are based on, among other things, the various assumptions as to production levels and capital expenditures and other assumptions disclosed in this news release including under the heading "Guidance Outlook" and “Note References” above and are based on the following key assumptions: Topaz's estimated capital expenditures (excluding acquisitions) of $5.0 to $7.0 million in 2025; the Company’s tax pool balances at year-end 2024 and the resulting future tax horizon; the working interest owners’ anticipated 2025 capital plans attributable to Topaz’s undeveloped royalty lands; estimated average annual royalty production range of 21,000 to 23,000 boe/d in 2025; 2025 average infrastructure ownership capacity utilization of 95%; December 31, 2025 exit net debt (midpoint) range between $500.0 and $510.0 million, recent commodity price and exchange rate forecast for October to December 2025 of: C$2.55/mcf (AECO 5A), US$65.00/bbl (NYMEX WTI), US$12.00/bbl (WCS oil differential), US$3.50/bbl (MSW oil differential) and US$/CAD$ foreign exchange 0.73. To the extent such estimates constitute financial outlooks, they are included to provide readers with an understanding of the estimated revenue, net debt and the other metrics described above for the year ending December 31, 2025 based on the assumptions described herein and readers are cautioned that the information may not be appropriate for other purposes. NON-GAAP AND OTHER FINANCIAL MEASURES
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7 Certain financial terms and measures contained in this news release are "specified financial measures" (as such term is defined in National Instrument 52-112 - Non-GAAP and Other Financial Measures Disclosure ("NI 52-112")). The specified financial measures referred to in this news release are comprised of "non-GAAP financial measures", "capital management measures" and "supplementary financial measures" (as such terms are defined in NI 52-112). These measures are defined, qualified, and where required, reconciled with the nearest GAAP measure below. Non-GAAP Measures and Ratios The non-GAAP financial measure used herein does not have a standardized meaning prescribed by GAAP. Accordingly, the Company’s use of this term may not be comparable to similarly defined measures presented by other companies. Investors are cautioned that the non-GAAP financial measure should not be considered in isolation nor as an alternative to net income (loss) or other financial information determined in accordance with GAAP, as an indication of the Company’s performance. Non-GAAP Financial Measures This news release makes reference to the terms “adjusted net income”, “acquisitions, excluding decommissioning obligations” a nd “operating margin”, which are considered non-GAAP financial measures under NI 52-112; defined as a financial measure disclosed by an issuer that depicts the historical or expected future financial performance, financial position, or cash flow of an entity , and is not disclosed in the financial statements of the issuer. Other Financial Measures Capital management measures Capital management measures are defined as financial measures disclosed by an issuer that are intended to enable an individual to evaluate the entity’s objectives, policies and processes for managing the entity’s capital, are not a component of a line item or a line item on the primary financial statements, and which are disclosed in the notes to the financial statements. The Company’s capital management measures disclosed in the Company’s interim condensed consolidated financial statements as at and for th e three and nine months ended September 30, 2025 include adjusted working capital, net debt (cash), free cash flow (FCF) and Excess FCF. Supplementary financial measures This news release makes reference to the terms “adjusted net income per basic or diluted share”, “cash flow per basic or diluted share”, “FCF per basic or diluted share”, “EBITDA per basic or diluted share”, “FCF margin”, “operating margin percentage” and “payout ratio” which are all considered supplementary financial measures under NI 52-112; defined as a financial measure disclosed by an issuer that is, or is intended to be, disclosed on a periodic basis to depict the historical or expected future financial performance, financial position or cash flow of an entity, is not disclosed in the financial statements of the issuer, and is not a non-GAAP financial measure or non-GAAP financial ratio. The following terms are financial measures as defined under the Company’s Syndicated Credit Facility, presented in the Compan y’s interim condensed consolidated financial statements as at and for the three and nine months ended September 30, 2025: (i) consolidated senior debt, (ii) total debt, (iii) EBITDA and (iv) capitalization. Cash flow, FCF, FCF margin, and Excess FCF Management uses cash flow, FCF, FCF margin and Excess FCF for its own performance measures and to provide investors with a measurement of the Company’s efficiency and its ability to generate the cash necessary to fund or increase dividends, fund future growth opportunities and/or to repay debt; and furthermore, uses per share metrics to provide investors with a measure of the proportion attributable to the basic or diluted weighted average common shares outstanding. Cash flow is a GAAP measure which is derived of cash from operating activities excluding the change in non-cash working capital and is presented in the consolidated statements of cash flows. FCF is a capital management measure presented in the notes to the consolidated financial statements and is defined as cash flow, less capital expenditures. The supplementary financial measure “FCF margin ”, is defined as FCF divided by total revenue and other income (expressed as a percentage of total revenue and other income). The capital management measure “Excess FCF”, is defined as FCF less dividends paid. The supplementary financial measures “cash flow per basic or diluted share” and “FCF per basic or diluted share” are calculated by dividing cash flow and FCF, respectively, by the basic or diluted weighted average common shares outstanding during the period. A summary of the reconciliation from cash from operating activities (per the consolidated statements of cash flows) to cash flow (per the consolidated statements of cash flows), cash flow per basic or diluted share, FCF, Excess FCF, FCF per basic or diluted share and FCF margin is set forth below:
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8 Three months ended Nine months ended ($000s) Sept.30, 2025 Sept.30, 2024 Sept.30, 2025 Sept.30, 2024 Cash from operating activities 78,147 71,253 239,617 211,341 Exclude net change in non-cash working capital 3,303 4,281 7,409 5,875 Cash flow 74,844 66,972 232,208 205,466 Less: Capital expenditures 1,864 2,183 4,374 4,912 FCF 72,980 64,789 227,834 200,554 Less: dividends paid 52,303 47,827 155,331 140,550 Excess FCF 20,677 16,962 72,503 60,004 Cash flow per basic share(1) $0.49 $0.46 $1.51 $1.42 Cash flow per diluted share(1) $0.49 $0.46 $1.50 $1.41 FCF per basic share(1) $0.47 $0.45 $1.48 $1.38 FCF per diluted share(1) $0.47 $0.44 $1.48 $1.38 FCF 72,980 64,789 227,834 200,554 Total Revenue and other income 76,443 73,597 249,786 230,219 FCF Margin 95% 88% 91% 87% (1) As noted, calculated using the basic or diluted weighted average number of shares outstanding during the respective periods. Adjusted net income Management uses adjusted net income for its own performance measure and to provide investors with a measurement of the Company’s net income prior to the non-cash effects of unrealized gains and losses on financial instruments. Adjusted net income is calculated as net inc ome per the consolidated statement of net income and comprehensive income, less unrealized gains (losses) on financial instruments. The supplementary financial measures “adjusted net income per basic or diluted share” is calculated by dividing adjusted net income by the basic or diluted weighted average common shares outstanding during the period. A summary of the reconciliation from net income to adjusted net income and adjusted net income per basic and diluted share is set forth below: Three months ended Nine months ended ($000s) Sept.30, 2025 Sept.30, 2024 Sept.30, 2025 Sept.30, 2024 Net Income 11,357 18,040 51,804 41,960 Unrealized gains (losses) on financial derivatives (4,764) 9,788 1,724 4,889 Adjusted net income 16,121 8,252 50,080 37,071 Adjusted net income per basic share(1) $0.10 $0.06 $0.33 $0.26 Adjusted net income per diluted share(1) $0.10 $0.06 $0.32 $0.26 (1) As noted, calculated using the basic or diluted weighted average number of shares outstanding during the respective periods. Operating margin and operating margin percentage Operating margin (infrastructure assets) is a non-GAAP financial measure derived from processing revenue and other income, less operating expenses. Operating margin percentage (infrastructure assets) is a supplemental financial measure, calculated as operating margin (infrastructure assets) , expressed as a percentage of total processing revenue and other income. Operating margin (royalty assets) is a non -GAAP financial measure derived from royalty production revenue, less marketing expenses. Operating margin percentage (royalty assets) is a supplemental financial measure, calculated as operating margin (royalty assets), expressed as a percentage of total royalty production revenue. Operating margin and operating margin percentage are used by management to analyze the profitability of its infrastructure assets and royalty assets. A summary of the reconciliation of operating margin and operating margin percentage, for infrastructure and royalty assets, are set forth below: Operating margin and operating margin percentage (infrastructure assets) Three months ended Nine months ended ($000s) Sept.30, 2025 Sept.30, 2024 Sept.30, 2025 Sept.30, 2024 Processing revenue 21,221 18,279 60,977 47,539 Other income 2,931 2,626 9,467 9,488 Total 24,152 20,905 70,444 57,027 Operating expenses 1,545 2,209 5,503 5,749 Operating margin (infrastructure assets) 22,607 18,696 64,941 51,278 Operating margin % (infrastructure assets) 94% 89% 92% 90% Operating margin and operating margin percentage (royalty assets) Three months ended Nine months ended ($000s) Sept.30, 2025 Sept.30, 2024 Sept.30, 2025 Sept.30, 2024 Royalty production revenue 52,291 52,692 179,342 173,192 Marketing expenses 307 279 1,122 1,004 Operating margin (royalty assets) 51,984 52,413 178,220 172,188 Operating margin % (royalty assets) 99% 99% 99% 99%
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9 Adjusted working capital and net debt Management uses the terms “adjusted working capital” and “net debt” to measure the Company’s liquidity position and capital f lexibility, as such these terms are considered capital management measures. “Adjusted working capital” is calculated as current assets less current liabilities, adjusted for financial instruments and work in progress capital costs . “Net debt” is calculated as total debt outstanding less adjusted working capital. A summary of the reconciliation from working capital, to adjusted working capital and net debt is set forth below: ($000s) As at Sep. 30, 2025 As at Dec. 31, 2024 Working capital (26,633) 51,758 Exclude fair value of financial instruments 4,140 4,614 Exclude work in progress capital costs ─ (1,228) Adjusted working capital (30,773) 48,372 Less: bank debt 504,639 540,396 Net Debt 535,412 492,024 EBITDA and EBITDA per basic or diluted share EBITDA, as defined under the Company’s Syndicated Credit Facility and disclosed in note 8 of the Interim Condensed Consolidated Financial Statements as at and for the three and nine months ended September 30, 2025, is considered by the Company as a capital management measure which is used to evaluate the Company’s operating performance, and provides investors with a measurement of the Company’s cash generated from its operations, before consideration of interest in come or expense. “EBITDA” is calculated as consolidated net income or loss from continuing operations, excluding extraordinary items, plus interest expense, income taxes, and adjusted for non-cash items and gains or losses on dispositions. EBITDA per basic or diluted share is a supplementary financial measure that is calculated by dividing EBITDA by the basic or diluted weighted average common shares outstanding during the period and provides investors with a measure of the proportion of EBI TDA attributed to the basic or diluted weighted average common shares outstanding. A summary of the reconciliation of net income (per the Financial Statements), to EBITDA, is set forth below: Three months ended Nine months ended ($000s) Sept.30, 2025 Sept.30, 2024 Sept.30, 2025 Sept.30, 2024 Net income 11,357 18,040 51,804 41,960 Unrealized (gain) loss on financial instruments 4,764 (9,788) (1,724) (4,889) Share-based compensation 1,350 1,143 2,973 2,364 Finance expense 6,824 7,263 20,309 20,995 Depletion and depreciation 52,197 49,678 157,247 148,070 Deferred income tax expense 4,972 7,759 21,340 17,492 Less: interest income (52) (111) (221) (469) EBITDA 81,412 73,984 251,728 225,523 EBITDA per basic share ($/share)(1) $0.53 $0.51 $1.64 $1.56 EBITDA per diluted share ($/share)(1) $0.53 $0.51 $1.63 $1.55 (1) As noted, calculated using the basic or diluted weighted average number of shares outstanding during the respective periods. Payout ratio “Payout ratio”, a supplementary financial measure, represents dividends paid, expressed as a percentage of cash flow and prov ides investors with a measure of the percentage of cash flow that was used during the period to fund dividend payments. Payout rat io is calculated as cash flow divided by dividends paid. A summary of the reconciliation from cash flow to payout ratio is set forth below: Three months ended Nine months ended Sept.30, 2025 Sept.30, 2024 Sept.30, 2025 Sept.30, 2024 Cash flow ($000s) 74,844 66,972 232,208 205,466 Dividends ($000s) 52,303 47,827 155,331 140,550 Payout Ratio (%) 70% 71% 67% 68% Acquisitions, excluding decommissioning obligations “Acquisitions, excluding decommissioning obligations”, is considered a non-GAAP financial measure, and is calculated as: acquisitions (per the consolidated statements of cash flows) plus non-cash acquisitions but excluding non-cash decommissioning obligations. A summary of the reconciliation from acquisitions (per the consolidated statements of cash flow) to acquisitions, excluding decommissioning obligations is set forth below: Three months ended Nine months ended ($000s) Sept.30, 2025 Sept.30, 2024 Sept.30, 2025 Sept.30, 2024 Acquisitions (consolidated statements of cash flows) 71,733 ─ 115,204 99,189 Non-Cash acquisitions ─ ─ ─ ─ Acquisitions (excluding non-cash decommissioning obligations) 71,733 ─ 115,204 99,189
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10 BOE EQUIVALENCY Per barrel of oil equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil equivalent (6:1). Barrel of oil equivalents (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In addition, as the value ratio between natural gas and crude oil based on the current prices of natural gas and crude oil is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value. OIL AND GAS METRICS This news release contains certain oil and gas metrics which do not have standardized meanings or standard methods of calculation and therefore such measures may not be comparable to similar measures used by other companies and should not be used to make comparisons. Such metrics have been included in this news release to provide readers with additional measures to evaluate the Company's performance; however, such measures are not reliable indicators of the Company's future performance and future performance may not compare to the Company's performance in previous periods and therefore such metrics should not be unduly relied upon. INFORMATION REGARDING PUBLIC ISSUER COUNTERPARTIES Certain information contained in this news release relating to the Company's public issuer counterparties which include Tourmaline and others, and the nature of their respective businesses is taken from and based solely upon information published by such issuers. The Company has not independently verified the accuracy or completeness of any such information. CREDIT RATINGS This news release makes reference to Tourmaline's credit rating. Credit ratings are intended to provide investors with an ind ependent measure of credit quality of an issue of securities. Credit ratings are not recommendations to purchase, hold or sell securities and do not address the market price or suitability of a specific security for a particular investor. There is no assurance that any rating will remain in effect for any given period of time or that any rating will not be revised or withdrawn entirely by a rating agency in the future if, in its judgment, circumstances so warrant. SUPPLEMENTAL INFORMATION REGARDING PRODUCT TYPES This news release includes references to actual and estimated average royalty production. The following table is intended to provide supplemental information about the product type composition for each of the production figures that are provided in this news release: For the three months ended Sep. 30, 2025 Jun. 30, 2025 Mar. 31, 2025 Dec. 31, 2024 Sept. 30, 2024 Average daily production Light and Medium crude oil (bbl/d) 1,910 2,133 1,925 1,678 1,834 Heavy crude oil (bbl/d) 3,386 3,314 3,154 3,266 3,093 Conventional Natural Gas (mcf/d) 53,784 55,345 56,360 46,901 41,687 Shale Gas (mcf/d) 35,812 37,784 38,835 37,022 34,679 Natural Gas Liquids (bbl/d) 1,365 1,320 1,434 1,346 1,057 Total (boe/d) 21,596 22,290 22,380 20,279 18,712 For the year ended 2025 (Estimate)(1)(2) 2024 (Actual) 2023 (Actual) Average daily production Light and medium crude oil (bbl/d) 1,683 1,791 1,727 Heavy crude oil (bbl/d) 3,275 3,083 2,740 Conventional natural gas (mcf/d) 51,500 43,269 42,043 Shale gas (mcf/d) 42,178 35,760 37,177 Natural gas liquids (bbl/d) 1,430 1,180 1,181 Total (boe/d) 22,000 19,227 18,853 (1) Represents the 2025e midpoint guidance estimate. (2) Topaz’s estimated royalty production is based on the estimated commodity mix; drilling location and corresponding royalty rate; and capital development activi ty on Topaz’s royalty acreage by the working interest owners, all of which are outside of Topaz’s control. For further information: please contact: Topaz Energy Corp. Marty Staples Cheree Stephenson President and Chief Executive Officer VP Finance and CFO (587) 747-4830 (587) 747-4830