Calgary, Alberta — December 17, 2025 — Leads & Copy — Saturn Oil & Gas Inc. (TSX: SOIL) (OTCQX: OILSF) has announced its 2026 capital budget and guidance, outlining a disciplined development plan focused on maintaining flexibility and targeting quick payback opportunities.
The company plans to allocate capital prudently, with a development capital budget ranging from $180 million to $190 million, based on a West Texas Intermediate (WTI) oil price assumption of US$60 per barrel. This budget is designed to position Saturn to achieve average production of 39,000 to 41,000 barrels of oil equivalent per day (boe/d), with approximately 81% weighted to oil and liquids.
According to Saturn, the 2026 budget prioritizes drilling targets with the highest potential returns, preserves asset value through disciplined capital allocation, and optimizes free funds flow generation. The program can be quickly scaled up or down in response to commodity price fluctuations, providing the company with flexibility across various price scenarios.
Saturn intends to use incremental free funds flow for ongoing debt repayment, share buybacks, and potential accretive tuck-in acquisitions at attractive metrics.
John Jeffrey, Saturn’s Chief Executive Officer, stated that the company is taking a prudent approach to its 2026 capital spending, which is 27% lower than the revised September 2025 guidance. He noted that the anticipated production is expected to average only 5% below that revised guidance, due to the company’s track record of exceeding type curves, reducing costs, and protecting margins through operational synergies and disciplined capital deployment.
Jeffrey added that the company’s mid-life cycle asset base requires minimal infrastructure spending and has shallower relative decline rates, helping to keep maintenance capital lower. He said that even in the current commodity price environment, the company continues to see compelling returns from its development program, specifically the open hole multi-lateral (OHML) and conventional Mississippian and Spearfish wells. He added that the company is committed to generating resilient free funds flow to continue reducing leverage and remaining nimble and opportunistic.
Key highlights of the 2026 budget include:
A development capital expenditure budget of $180 to $190 million, with nearly 85% directed to drilling, completion, equip and tie-in activities; approximately 5% to waterflood initiatives; and the balance to production optimization initiatives, facilities, land and seismic.
Forecast average 2026 production of 39,000 to 41,000 boe/d, with approximately 81% liquids.
Plans to drill 105 (78 net) wells targeting the highest return locations, concentrated in Southeast Saskatchewan (SE SK) Bakken and conventional Mississippian development areas, along with Central Alberta Cardium.
Up to 33% of development capital expected to be directed to high-return and capital efficient OHML locations in SE SK.
Budget assumptions include US$60.00 WTI, US$4.00 MSW-WTI differential, US$13.00 WCS-WTI differential, C$3.00/GJ AECO and 0.72x CAD/USD assumptions.
The 2026 budget is expected to be weighted to the second half of the year, with over 40% anticipated to be deployed in Q3, almost 30% in Q4, and 20% weighted to Q1, reflecting seasonal impacts of spring break-up. As a result, Saturn anticipates volumes will be highest through the first half, declining through the second half due to lower spending in the first half.
Saturn intends to apply its Blueprint strategy and focus on reducing net operating expenses through 2026 following the integration of tuck-in assets acquired in the latter half of 2025. The company is actively identifying opportunities to enhance efficiencies, capture synergies, and achieve further cost reductions.
Saturn’s forecasted funds flow is most sensitive to changes in crude oil prices. The company estimates that each additional US$5/bbl increase in the US$ WTI oil price would provide an incremental approximately $50 million in adjusted funds flow.
Approximately 60% of the total 2026 budget is allocated to Southeast Saskatchewan, with 77 (61.0 net) wells planned. Up to 33% of the 2026 budget is directed to OHML drilling, with 32 (21.8 net) OHML locations targeted. The company is also targeting 23 (21.0 net) conventional Mississippian wells and expanding the Bakken waterflood at Creelman.
Approximately 20% of the 2026 budget is allocated to continued Cardium development at Lochend along with development at West Pembina.
Saturn is planning two multi-well pads featuring extended reach horizontals up to 3-miles in this area, including one seven well pad and an additional six well pad.
The company plans to host a conference call on Thursday, December 18, 2025, at 8:00 am Mountain Time (10:00 am Eastern Time) to provide additional context around its 2026 capital budget and development program, followed by a question-and-answer session with attendees.
John Jeffrey, MBA – Chief Executive Officer
Tel: +1 (587) 392-7900
Cindy Gray, MBA – VP Investor Relations
Tel: +1 (587) 392-7900
info@saturnoil.com
Source: Saturn Oil & Gas Inc.
