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1. Company Snapshot

1.a. Company Description

Topaz Energy Corp.operates as a royalty and energy infrastructure company.It operates in Royalty Production and Infrastructure segments.


The company holds gross overriding royalty interests on approximately 5.3 million gross acres of developed and undeveloped lands.It is also involved in the natural gas processing and water management infrastructure activities.The company was formerly known as Exshaw Oil Corp.


and changed its name to Topaz Energy Corp.in November 2019.Topaz Energy Corp.


was incorporated in 2006 and is headquartered in Calgary, Canada.

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1.b. Last Insights on TPZ

Topaz Energy Corp.'s recent performance was driven by robust growth in royalty production, with a 64% increase in Q4 net income and a 17% rise in full-year royalty production. The company's infrastructure revenue growth and larger reserve base were also highlighted during its Q4 earnings call, with management pointing to continued drilling activity on its acreage and an active posture toward acquisitions. Additionally, CIBC Capital Markets maintained its outperformer rating on the shares, raising its price target to C$33.50 from C$29.50.

1.c. Company Highlights

2. Topaz Energy Corp. Delivers Strong Q4 and Full-Year 2025 Results

Topaz Energy Corp. reported a robust financial performance in Q4 2025, with royalty production revenue reaching $62.5 million, representing 72% of total revenue. The company's cash flow was $80.6 million or $0.52 per share, a 6% increase from Q4 2024. Notably, the actual EPS of $0.52 significantly exceeded the estimated EPS of $0.11, showcasing a substantial beat. The net income for Q4 2025 was $32.7 million, a 64% increase from Q4 2024, driven by higher royalty production, processing revenue, and a realized hedging gain. The company's full-year 2025 royalty production averaged 22,400 boe per day, a 17% increase from 2024.

Publication Date: Feb -26

📋 Highlights
  • 2025 Growth Metrics:: 17% royalty production increase, 20% infrastructure revenue growth, and 10% higher year-end reserves (55.7M boe).
  • Q4 Production Growth:: Royalty production averaged 23,400 boe/d (+15% YoY), full-year at 22,400 boe/d (+17% YoY).
  • Capital Investment & Drilling:: $2.8B invested, 694 gross wells drilled (10% YoY), and 22% more wells brought onstream in 2025.
  • Reserve Replacement:: 11.9M boe additions replaced 8.2M boe production at 1.5x ratio, with Clearwater achieving 3x replacement via waterflood.
  • Financial Performance:: Q4 net income up 64% to $32.7M, $0.34 dividend/share (65% payout ratio), and $80.6M cash flow (+6% YoY).

Operational Highlights

The operational performance was equally impressive, with an estimated $2.8 billion of operated capital invested on Topaz's acreage, resulting in a record 694 gross wells drilled. The company's year-end 2025 total proved plus probable reserves increased by 10% to 55.7 million boe, driven by growth in the Clearwater and Northeast BC Montney. As Marty Staples, President and CEO, noted, "Over the past 2 years, we have seen our Clearwater reserve life index double as a result of waterflood performance that continues to enhance heavy oil recovery."

Guidance and Outlook

Topaz has provided 2026 guidance estimates, expecting average royalty production to range from 23,500 to 23,900 boe per day and processing revenue to be between $92 million to $94 million. The company anticipates exiting 2026 with a net debt-to-EBITDA ratio of 1.2x and generating a 68% payout ratio. Analysts estimate revenue growth to be around 10.8% for the next year, indicating a positive outlook.

Valuation and Dividend Yield

With a current P/E Ratio of 83.5 and a Dividend Yield of 4.42%, Topaz's valuation appears to be factoring in a certain level of growth. The company's ROE of 4.44% and ROIC of 7.65% indicate a decent return on equity and invested capital. The dividend yield, combined with the expected payout ratio, suggests a sustainable dividend payment. The EV/EBITDA ratio of 16.51 is relatively in line with industry peers, indicating that the company's valuation is fairly priced.

3. NewsRoom

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How The Topaz Energy (TSX:TPZ) Narrative Is Evolving With New Targets And Valuation Assumptions

Feb -26

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Topaz Energy Corp (TPZEF) Q4 2025 Earnings Call Highlights: Robust Growth in Royalty Production ...

Feb -25

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CIBC Maintains Topaz Energy's Outperformer Rating, Raises Price Target to C$33.50 From C$29.50

Feb -25

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Topaz Energy Q4 Earnings Call Highlights

Feb -25

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Topaz Energy Q4 Adjusted Profit Slips; Announces 2026 Guidance

Feb -24

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TOPAZ ANNOUNCES 2026 GUIDANCE AND FOURTH QUARTER 2025 RESULTS INCLUDING 10% RESERVES GROWTH AND 1.5X RESERVE REPLACEMENT

Feb -24

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Topaz Energy Corp.'s (TSE:TPZ) Financials Are Too Obscure To Link With Current Share Price Momentum: What's In Store For the Stock?

Feb -08

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With 40% ownership, Topaz Energy Corp. (TSE:TPZ) has piqued the interest of institutional investors

Dec -31

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.44%)

6. Segments

Royalties

Expected Growth: 6%

Topaz Energy Corp.'s 6% royalty growth is driven by increasing oil and gas production, rising commodity prices, and strategic acquisitions. Additionally, the company's focus on optimizing operations, reducing costs, and expanding its asset base have contributed to the growth. Furthermore, favorable regulatory environments and growing demand for energy resources have also supported the royalty income growth.

Infrastructure

Expected Growth: 8%

Topaz Energy Corp.'s 8% growth in Infrastructure is driven by increasing demand for midstream services, strategic acquisitions, and expansion into new markets. Additionally, investments in digitalization and technology enhancements improve operational efficiency, reduce costs, and increase capacity utilization, further supporting growth.

7. Detailed Products

Fuel and Lubricants

Topaz Energy Corp. offers a range of fuel and lubricant products, including gasoline, diesel, jet fuel, and lubricants for industrial and commercial use.

Commercial Fuels

Topaz Energy Corp. provides commercial fuels, including diesel, gasoline, and alternative fuels, to businesses and organizations.

Home Heating Oil

Topaz Energy Corp. offers home heating oil for residential customers, providing a reliable and efficient source of heat during the winter months.

Agricultural Fuels

Topaz Energy Corp. supplies specialized fuels and lubricants to the agricultural industry, supporting farmers and agricultural businesses.

Marine Fuels

Topaz Energy Corp. provides marine fuels and lubricants to the marine industry, supporting commercial and recreational vessels.

Aviation Fuels

Topaz Energy Corp. supplies aviation fuels and lubricants to airports, airlines, and general aviation customers.

8. Topaz Energy Corp.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Topaz Energy Corp. operates in a industry where substitutes are available, but they are not a significant threat to the company's operations.

Bargaining Power Of Customers

Topaz Energy Corp. has a diverse customer base, which reduces the bargaining power of individual customers.

Bargaining Power Of Suppliers

Topaz Energy Corp. relies on a few key suppliers for its operations, which gives them some bargaining power.

Threat Of New Entrants

The energy industry is highly regulated, and new entrants would face significant barriers to entry, but the threat is still present.

Intensity Of Rivalry

The energy industry is highly competitive, and Topaz Energy Corp. faces intense rivalry from established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 23.95%
Debt Cost 6.45%
Equity Weight 76.05%
Equity Cost 6.45%
WACC 6.45%
Leverage 31.49%

11. Quality Control: Topaz Energy Corp. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Western Midstream Partners

A-Score: 7.8/10

Value: 5.9

Growth: 6.6

Quality: 9.0

Yield: 10.0

Momentum: 6.0

Volatility: 9.3

1-Year Total Return ->

View Full Report
Stock-Card
Frontline

A-Score: 7.3/10

Value: 5.5

Growth: 8.8

Quality: 5.4

Yield: 9.0

Momentum: 9.5

Volatility: 5.3

1-Year Total Return ->

View Full Report
Stock-Card
Topaz Energy

A-Score: 7.1/10

Value: 3.4

Growth: 8.1

Quality: 6.2

Yield: 9.0

Momentum: 6.0

Volatility: 9.7

1-Year Total Return ->

View Full Report
Stock-Card
Plains All American Pipeline

A-Score: 7.1/10

Value: 9.0

Growth: 3.6

Quality: 5.5

Yield: 10.0

Momentum: 5.0

Volatility: 9.3

1-Year Total Return ->

View Full Report
Stock-Card
Plains GP Holdings

A-Score: 6.7/10

Value: 7.6

Growth: 3.6

Quality: 5.1

Yield: 10.0

Momentum: 4.5

Volatility: 9.3

1-Year Total Return ->

View Full Report
Stock-Card
DT Midstream

A-Score: 6.5/10

Value: 3.3

Growth: 5.8

Quality: 6.4

Yield: 7.0

Momentum: 8.0

Volatility: 8.7

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

31.29$

Current Price

31.29$

Potential

-0.00%

Expected Cash-Flows