Cavvy Energy Announces 2026 Guidance & Capital Program

Press Release

CALGARY, ALBERTA – December 8, 2025 – Cavvy Energy Ltd. (“Cavvy” or the “Company”) (TSX:CVVY) is pleased to release 2026 guidance, highlighted by accelerated debt reduction targeting $50 million and an increase in net operating income of over 25% versus mid-point 2025 guidance.

Cavvy has delivered a one-year total shareholder return of approximately 333% as of December 4, 2025. Successful execution of the business plan achieved material reductions in long-term debt and lower operating costs, providing strong free cash flow supported by significant hedging gains from the Company’s risk management program. The risk management program is a key component of the Company’s strategic plan, mitigating the impacts of commodity price volatility on cash flow to protect the 2026 capital program and debt reduction objectives for the long-term benefit of shareholders.

“We will build on our 2025 success and expect to continue delivering strong shareholder returns moving forward,” said Darcy Reding, President and CEO. “The majority of Cavvy’s growing 2026 free cash flow will be directed towards aggressively paying down long-term debt, supporting a 2026 year-end debt target of $110-$125 million, a decrease of up to $50 million from an estimated $160 million at year end 2025. With even higher 2026 cash flow and a rapidly improving balance sheet, we believe Cavvy will soon be positioned to pursue accretive growth opportunities, resulting in additional value for our shareholders.”

2026 Guidance

($ 000s unless otherwise noted)	Initial 2026 Guidance
	Low	High
Production (boe/d) (1)	22,000	24,500
Sulphur production (mt/d)	1,000	1,150
Net operating income (2)(3)(4)	125,000	140,000
Capital expenditures (5)	35,000	40,000
Total debt (at YE 2026) (6)	110,000	125,000

(1) Production guidance assumes persistence of previously announced shut-ins in Central AB and Northern AB, while production in Northeast BC is assumed to be on-production through 2026
(2) Refer to the “Net Operating Income” section of the Company’s MD&A for reference to non-GAAP measures
(3) Assumes unhedged average 2026 AECO price of $3.15/GJ, average unhedged 2026 WTI price of US$60.90/bbl and average unhedged 2026 Vancouver FOB Sulphur price of US$237.50/mt
(4) Includes the impact of hedge contracts and the 2026 structured sulphur price agreement
(5) Excludes asset retirement and decommissioning expenditures
(6) Assumes USD/CAD exchange rate of 0.7210

Maintaining momentum from key milestones achieved in 2025 including operating cost structure reduction, third party processing volume and revenue growth, and sustaining our risk management initiatives, is expected to contribute to strong cash flow and material debt reduction in 2026. This further supports management’s increasing focus on identifying accretive growth opportunities in 2026, consistent with the Company’s long-term objective to replenish and grow its production base and enhance its inventory of investment opportunities.

Specific priorities for 2026 are:

• Sustain a safe and regulatory compliant business
• Capture additional opportunities to grow third-party gathering and processing business value
• Minimize facility outages to maximize sales and processing revenue
• Reduce long-term debt to improve financial flexibility and position the Company to refinance its 2027 debt maturities
• Identify and high-grade both organic and acquisition opportunities that replenish Cavvy’s resource base and increase development upside

Production

Production guidance of 22,000 to 24,500 boe/d assumes the continued shut-in of uneconomic dry gas production in Central AB and Northern AB for the entire calendar year, accounting for approximately 8,900 boe/d. This production is tied-in to high cost, non-operated, non-owned gas processing facilities where Cavvy is fully exposed to operating and maintenance turnaround costs on a ‘flow-through’ basis.

Previously shut-in Northeast BC production of approximately 800 boe/d was restarted in Q4 2025 and is expected to remain on production through all of 2026.

Production guidance also includes a planned six-week maintenance turnaround at the Caroline gas plant scheduled for Q3 2026, and two weeks of unavoidable downtime at the Waterton gas plant related to a maintenance outage on the non-operated sales gas transportation system anticipated for Q2 2026.

With sulphur production and sales revenue providing a more important impact to business results in 2026, Cavvy is providing sulphur production guidance of 1,000 to 1,150 mt/d.

Third Party Processing

Cavvy has delivered tremendous growth in third-party processing volumes and revenue at the Caroline and Jumping Pound facilities over the last two years, achieving a record high of 136.1 MMcf/d in raw gas volumes processed in Q3 2025. The Company recently entered a multi-year take-or-pay agreement with an anchor processing customer at the Caroline gas plant and has successfully contracted additional third-party volumes at Jumping Pound as the result of the shutdown of a nearby third-party gas processing facility. Additionally, Cavvy continues to re-melt and process third-party sulphur at the Central AB Shantz sulphur facility, which further contributes to the stable fee-based revenue stream.

Risk Management

Cavvy has hedged approximately 71,140 GJ/d of its 2026 natural gas production at a weighted average hedge price of $3.36/GJ, and 1,465 bbl/d of its 2026 condensate production with a weighted average floor price of CAD$84.75/bbl and a weighted average ceiling price of CAD$91.49/bbl. The Company’s aggregate hedge position for 2026 totals 12,702 boe/d or approximately 55% of the above production guidance range. The unrealized, discounted gain on the hydrocarbon hedge portfolio, which extends to mid-2028, is approximately $18.6 million using the forward strip as of December 4, 2025.

In Q4 2025, a structured sulphur pricing agreement for 2026 sulphur production was executed with a third-party sulphur buyer, as previously disclosed in the Company’s November 6, 2025 press release. This agreement provides revenue protection from potentially volatile sulphur pricing, while still retaining the ability to meaningfully participate in the spot sulphur market.

Capital Program

Cavvy’s $40-$45 million capital guidance includes $15-$20 million allocated for the scheduled maintenance turnaround at the Caroline gas plant in Q3 2026 and long lead procurement for future facility turnarounds. Additionally, $8 million is allocated for asset retirement and reclamation obligations, $5 million for IT and plant control system upgrades, and the remainder for capital maintenance and discretionary well and facility optimization projects.

Net Operating Income

The growth of the third-party processing business, hedged 2026 hydrocarbon and sulphur revenue, and continued reliable operation of major gas processing facilities underpins management’s 2026 NOI guidance of $125-$140 million. The 2026 NOI guidance assumes an unhedged Vancouver FOB sulphur price averaging US$250/mt for the first half of 2026 and US$225/mt for the second half of 2026, an average unhedged 2026 AECO price of $3.15/GJ, and an average unhedged 2026 WTI price of US$60.90/bbl.

ABOUT CAVVY ENERGY

Cavvy Energy is a Canadian energy company headquartered in Calgary, Alberta. The Company is a significant upstream producer and midstream custom processor of natural gas, NGLs, condensate, and sulphur from Western Canada. Cavvy’s vision is to provide responsible, affordable natural gas and derived products to meet society’s energy security needs.

For further information, visit www.cavvyenergy.com, or please contact:

Darcy Reding, President & Chief Executive Officer

Telephone: (403) 261-5900

Adam Gray, Chief Financial Officer
Telephone: (403) 261-5900
Investor Relations
investors@cavvyenergy.com

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