Strathcona Resources Ltd. Reports Second Quarter 2026 Financial and Operating Results and Announces Quarterly Dividend

CALGARY, AB, Aug. 5, 2026 /PRNewswire/ -- Strathcona Resources Ltd. ("Strathcona" or the "Company") (TSX: SCR) today reported its second quarter 2026 financial and operating results. The Board of Directors also declared a quarterly dividend of $0.30 per common share.

Q2 2026 Highlights

• Production of 117,022 boe/d (99.7% liquids)
• Operating Earnings of $376 million ($1.76 / share)
• Free Cash Flow of $296 million ($1.38 / share)⁽¹⁾

Quarter Review and Near-Term Priorities

Production for the second quarter of 2026 of 117 Mboe / d (99.7% liquids) was flat versus the first quarter. Operating Earnings of $376 million ($1.76 / share) reflected a 94% increase versus the prior quarter, largely driven by higher oil prices. Free Cash Flow of $296 million ($1.38 / share) was a record, with higher Operating Earnings combining with lower capital expenditures.

In Cold Lake, production improved 2% quarter-over-quarter, driven by the repair of Lindbergh's fuel gas supply line which forced a production curtailment in the first quarter due to reduced steam rates. Production was further supported by a stronger than expected ramp up of the Company's new 8 well pair D01 West pad at Lindbergh, which achieved a peak rate of approximately 7,000 bbls / d at a steam-oil-ratio of less than 2.0x in late June. Taken together, the restored fuel gas supply and strong D01 West performance contributed to production of over 20 Mbbls / d from Lindbergh in June, reflecting an approximately 50% increase versus the first quarter of 2026.

In Lloydminster Thermal, the Company achieved first steam at its Meota Central project on June 6, 2026. The project was completed at a total installed cost of approximately $345 million (3% under budget) over the course of 18 months (2 months, or 9% ahead of budget) with zero lost time incidents during approximately 370,000 man-hours of work during construction. Meota Central achieved first oil in late July, with production currently ramping up as expected, targeting a peak rate of approximately 13,000 bbls / d by mid-2027.

In Lloydminster Conventional, production improved approximately 1% quarter-over-quarter, driven by continued recovery of base production at the Company's Cactus Lake and Bodo-Cosine polymer floods following improved flood conformance. Current capital activity is focused on the Company's annual drilling program in Druid, comprised of 25 wells including 4 multi-lateral horizontals and the Company's first test well in the Waseca formation. Early results from the Waseca test are encouraging, with initial production rates of approximately 100 bbls / d derisking up to 40 additional Waseca locations at Druid.

During the second quarter of 2026 Strathcona exercised its $265 million accordion under its bank credit facility following receipt of lender commitments, increasing total capacity to approximately $3.755 billion. Subsequent to quarter end, Strathcona executed an amended and extended credit facility agreement, extending the term of the credit facility to December 31, 2030 and adding a $750 million accordion (increasing total potential credit capacity to $4.505 billion). At the end of the second quarter, Strathcona was approximately $1.9 billion drawn on the facility, leaving more than $1.8 billion in available liquidity.

Outlook

The midpoint of Strathcona's 2026 production guidance is unchanged, with the range tightened to 122 to 128 Mbbls / d from 120 to 130 Mbbls / d previously. Expected 2026 exit production remains approximately 135 Mbbls / d (reflecting an approximately 15% exit-to-exit growth rate). Strathcona's 2026 capital budget of $1.0 billion is also unchanged.

Quarterly Dividends

Strathcona's Board of Directors has declared a quarterly dividend of $0.30 per share to be paid on September 21, 2026 to shareholders of record on September 11, 2026. Payments to shareholders who are not residents of Canada will be net of any Canadian withholding taxes that may be applicable. Dividends paid by Strathcona are considered "eligible dividends" for Canadian tax purposes.

About Strathcona

Strathcona is one of North America's fastest growing pure play heavy oil producers with operations focused on thermal oil and enhanced oil recovery. Strathcona is built on an innovative approach to growth achieved through the consolidation and development of long-life assets. Strathcona's common shares (symbol SCR) are listed on the Toronto Stock Exchange (TSX).

For more information about Strathcona, visit www.strathconaresources.com.

Non-GAAP Measures and Ratios

The financial results for the three and six months ended June 30, 2026 and 2025 and the three months ended March 31, 2026, are presented below to reconcile continuing and discontinued operations to total results. Total results in a non-GAAP measure used by Management to assess the historical financial performance of the total business and is not intended to be indicative of future results.

"Oil and natural gas sales, net of blending and other income" is calculated by deducting purchased product and blending costs from oil and natural gas sales, sales of purchased product, midstream revenue and other income. Management uses this metric to isolate the revenue associated with the Company's production after accounting for the unavoidable cost of blending. Oil and natural gas sales, net of blending, is also reflected on a per boe basis calculated using sales volumes. This ratio is useful to management when analyzing realized pricing against benchmark commodity prices.

"Effective royalty rate" is calculated by dividing royalties by oil and natural gas sales, sale of purchased product and midstream revenue, net of blending and purchased product. This metric allows management to analyze the movement of royalty expenses in relation to realized and benchmark commodity prices.

"Operating Earnings – Discontinued" is considered a key financial metric for evaluating the profitability of Strathcona's discontinued operations. "Operating Earnings - Continuing" is a GAAP financial measure as it is used by the Chief Operating Decision Makers to evaluate profit or loss and is presented in the condensed consolidated interim financial statements for the three and six months ended June 30, 2026 and 2025. A quantitative reconciliation of Operating Earnings – Discontinued to the most directly comparable GAAP financial measure, Oil and natural gas sales, is presented above.

"Funds from Operations" is used by management to analyze operating performance and provides an indication of the funds generated by Strathcona's principal business to either fund operating activities, re-invest to either maintain or grow the business or make debt repayments. Funds from Operations is derived from Operating Earnings and adjusted for depletion, depreciation and amortization ("DD&A"), finance costs, gains and losses on risk management contracts – realized and gains and losses on foreign exchange – realized.

"Free Cash Flow" is a key financial metric for evaluating Strathcona's liquidity as it indicates the funds available for deleveraging, funding future growth, or shareholder returns. Free Cash Flow is derived from Operating Earnings and adjusted for DD&A, finance costs, gains and losses on risk management contracts – realized and gains and losses on foreign exchange - realized, capital expenditures and decommissioning costs.

Quantitative reconciliations of Funds from Operations and Free Cash Flow for both continuing and discontinued operations to the most directly comparable GAAP financial measure, Operating Earnings, are set forth below.

The following table reconciles Operating Earnings, Funds from Operations and Free Cash Flow from continuing and discontinued operations:

Supplementary Financial Measures

"Interest and finance costs" is an aggregation of interest and finance costs. Management uses this metric to obtain a fulsome understanding of all interest and accretion costs the Company is subject to.

"Other items" is an aggregation of risk management contracts, foreign exchange, transaction related costs, gain on marketable securities, gain on sale of assets, deferred tax expense, change in decommissioning liabilities, loss on contingent consideration and loss on settlement of other obligations from both continuing and discontinued operations. They are presented in such a manner to yield prominence to key financial metrics such as income and comprehensive income, Operating Earnings, Funds from Operations and Free Cash Flow.

"Non-cash items" is an aggregation of depletion, depreciation and amortization, and finance costs.

"Debt, net of marketable securities and cross-currency swap asset/liability" is comprised of debt less marketable securities and cross-currency swap asset/liability, as derived under the Accounting Standards.

Presentation of Oil and Gas Information

This press release contains various references to the abbreviation "boe" which means barrels of oil equivalent. All boe conversions in this press release are derived by converting gas to oil at the ratio of six thousand cubic feet ("mcf") of natural gas to one barrel ("bbl") of crude oil. Boe may be misleading, particularly if used in isolation. A boe conversion rate of 1 bbl : 6 mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio of oil compared to natural gas based on currently prevailing prices is significantly different than the energy equivalency ratio of 1 bbl : 6 mcf, utilizing a conversion ratio of 1 bbl : 6 mcf may be misleading as an indication of value.

References in this press release to initial production rates, peak rates and other short-term production rates and test results are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long-term performance or of ultimate recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating aggregate production for the Company or the assets for which such rates are provided. A pressure transient analysis or well-test interpretation has not been carried out in respect of all wells. Accordingly, the test results should be considered to be preliminary.

Product Type Production Information

National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities includes condensate within the natural gas liquids product type. The Company has disclosed condensate as combined with light oil and separately from other natural gas liquids in this press release since the price of condensate as compared to other natural gas liquids is currently significantly higher and the Company believes that this presentation provides a more accurate description of its operations and results therefrom. References to "oil and condensate" in this press release refer to, collectively, light and medium crude oil, heavy crude oil, bitumen and natural gas liquids. References to "natural gas" in this press release refer to conventional natural gas. References to "liquids" in this press release refer to, collectively, bitumen, heavy oil, condensate and light oil (comprised of condensate and light oil) and other natural gas liquids (comprised of ethane, propane and butane only).

The Company's quarterly average daily production volumes for three and six months ended 2026 and 2025, and the references to "natural gas", "crude oil" and "condensate", reported in this press release consist of the following product types, as defined in NI 51-101 and using a conversion ratio of 6 mcf : 1 bbl where applicable:

Forward-Looking Information

Certain statements contained in this press release constitute forward-looking information within the meaning of applicable securities laws. The forward-looking information in this press release is based on Strathcona's current internal expectations, estimates, projections, assumptions and beliefs. Such forward-looking information is not a guarantee of future performance and involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. The Company believes the material factors, expectations and assumptions reflected in the forward-looking information are reasonable as of the time of such information, but no assurance can be given that these factors, expectations and assumptions will prove to be correct, and such forward-looking information included in this press release should not be unduly relied upon.

The use of any of the words "expect", "target", "anticipate", "intend", "estimate", "objective", "ongoing", "may", "will", "project", "believe", "depends", "could" and similar expressions are intended to identify forward-looking information. In particular, but without limiting the generality of the foregoing, this press release contains forward-looking information pertaining to the following: the Company's business strategy and future plans; expected operating strategy; expected range of 2026 production volumes and exit 2026 production volumes; the Company's production and capital spending guidance for 2026; the Company's capital budget for 2026, including the anticipated composition, timing and benefits thereof, including year-over-year production growth and generating significant excess Free Cash Flow; the Company's capital program, including the anticipated results thereof; the targeted peak rate of approximately 13,000 bbls / d at Meota Central by mid-2027; and the Company's future allocation of excess Free Cash Flow.

All forward-looking information reflects Strathcona's beliefs and assumptions based on information available at the time the applicable forward-looking information is disclosed and in light of the Company's current expectations with respect to such things as: Strathcona's ability to generate sufficient cash flow to fund debt repayment and dividend payments; Strathcona's ability to declare and pay dividends; the success of Strathcona's operations and growth and expansion projects; expectations regarding production growth, future well production rates and reserve volumes; expectations regarding Strathcona's capital program, including the outlook for general economic trends, industry trends, prevailing and future commodity prices, foreign exchange rates and interest rates; the availability of third party services; prevailing and future royalty regimes and tax laws; fluctuations in energy prices based on worldwide demand and geopolitical events; the impact of inflation; the integrity and reliability of Strathcona's assets; decommissioning obligations; Strathcona's ability to comply with its financial covenants; and the governmental, regulatory and legal environment. In addition, certain forward-looking information with respect to the Company's 2026 guidance assumes commodity prices and exchange rates of: US$85 / bbl WTI, US$15 / bbl WCS-WTI differential, 1.36 USD-CAD and C$2.00 / mcf AECO. Management believes that its assumptions and expectations reflected in the forward-looking information contained herein are reasonable based on the information available on the date such information is provided and the process used to prepare the information. However, it cannot assure readers that these expectations will prove to be correct.

The forward-looking information included in this press release is not a guarantee of future performance and involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information, including, without limitation: changes in commodity prices; changes in the demand for or supply of Strathcona's products; the continued impact, or further deterioration, in global economic and market conditions, including from inflation and/or certain geopolitical conflicts, such as the ongoing Russia/Ukraine conflict and the conflict in the Middle East, and other heightened geopolitical risks and the ability of the Company to carry on operations as contemplated in light of the foregoing; determinations by the Organization of the Petroleum Exporting Countries and other countries as to production levels; unanticipated operating results or production declines; changes in tax or environmental laws, climate change, royalty rates or other regulatory matters; changes in Strathcona's development plans or by third party operators of Strathcona's properties; competition from other producers; inability to retain drilling rigs and other services; failure to realize the anticipated benefits of the Company's acquisitions; incorrect assessment of the value of acquisitions; delays resulting from or inability to obtain required regulatory approvals; increased debt levels or debt service requirements; inflation; changes in foreign exchange rates; inaccurate estimation of Strathcona's oil and gas reserve and contingent resource volumes; limited, unfavourable or a lack of access to capital markets or other sources of capital; increased costs; a lack of adequate insurance coverage; the impact of competitors; and the other factors discussed under the "Risk Factors" section in Strathcona's Management's Discussion & Analysis and Annual Information Form, each for the year ended December 31, 2025, and from time to time in Strathcona's public disclosure documents, which are available at www.sedarplus.ca.

Declaration of dividends is at the sole discretion of the board of directors of Strathcona and will continue to be evaluated on an ongoing basis. There are risks that may result in Strathcona changing, suspending or discontinuing its quarterly dividends, including changes to its Free Cash Flow, operating results, capital requirements, financial position, debt levels, market conditions or corporate strategy and the need to comply with requirements under its credit agreement and applicable laws respecting the declaration and payment of dividends. There are no assurances as to the continuing declaration and payment of future dividends or the amount or timing of any such dividends.

Management approved the capital budget and production guidance contained herein as of the date of this press release. The purpose of the capital budget and production guidance is to assist readers in understanding Strathcona's expected and targeted financial position and performance, and this information may not be appropriate for other purposes.

This earnings release contains information that may constitute future-oriented financial information or financial outlook information (collectively, "FOFI") about Strathcona's prospective financial performance, financial position or cash flows, all of which is subject to the same assumptions, risk factors, limitations and qualifications as set forth above. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise or inaccurate and, as such, undue reliance should not be placed on FOFI. Strathcona's actual results, performance and achievements could differ materially from those expressed in, or implied by, FOFI. Strathcona has included FOFI in order to provide readers with a more complete perspective on Strathcona's future operations and management's current expectations relating to Strathcona's future performance. Readers are cautioned that such information may not be appropriate for other purposes.

The foregoing risks should not be construed as exhaustive. The forward-looking information contained in this press release speaks only as of the date of this press release and Strathcona does not assume any obligation to publicly update or revise such forward-looking information to reflect new events or circumstances, except as may be required pursuant to applicable laws. Any forward-looking information contained herein is expressly qualified by this cautionary statement.

SOURCE Strathcona Resources Ltd.