Thank you, John. Good morning, everyone, and welcome to our discussion of Topaz Energy Corp.'

s results as at and for the period ended March 31st, 2026. My name is Marty Staples, and I'm the president and CEO of Topaz.

With me today is Cheree Stephenson, CFO and VP Finance. Before we get started, I refer you to the advisories on forward-looking statements contained in the news release as well as the advisories contained in the Topaz Annual Information Form and within our MD&A available on SEDAR and our website.

I also draw your attention to the material factors and assumptions in those advisories. We will start this morning by speaking to some recent and first quarter 2026 highlights.

After these opening remarks, we will open for questions. Topaz had a strong first quarter marked by record royalty production on our acreage, and our board has approved a 3% dividend increase to 35 cents per share or $1.40 per share annualized, marking our 10th quarterly dividend increase and a 75% dividend per share growth since inception.

Topaz's first quarter royalty production was 24,609 boe per day, an increase 10% over the prior year. Q1 2026 royalty production included record natural gas production of 105.7 million cubic feet per day, 11% higher than the prior year, and record total liquids production of 6,998 barrels per day, 7% higher than the prior year.

Topaz generated total first quarter revenue and other income of $94.6 million, 55% from total liquids royalties, 20% from natural gas royalties, and 25% from our infrastructure portfolio. Processing revenue of $21 million increased 7% from Q1 2025, with total processing revenue and other income generated in the quarter of $23.4 million.

The infrastructure assets generated 98% utilization in the quarter, providing a 92% operating margin. During the quarter, Topaz also invested $2.4 million in modification projects on two jointly owned natural gas processing facilities in exchange for a proportionate increase to take-or-pay fixed-fee processing arrangements.

Drilling activity on our acreage remains strong, with 138 gross wells drilled and four gross wells reactivated, with 55% of drilling activity directed into oil-focused plays. Activity was diversified across our portfolio, with 48 wells in the Clearwater, 31 in Northeast BC and Alberta Montney, 23 in the Deep Basin, 13 in Central Alberta, 11 in Southeast Saskatchewan, and eight in the Peace River.

During Q1 2026, 130 total gross wells were brought on production, and as at March 31st, another 86 gross wells were drilled but not yet completed. Based on operator drilling plans, we expect 15 to 18 rigs to remain active across our royalty acreage through spring breakup, following which activity is expected to resume to 22 to 27 drilling rigs.

Topaz generated first quarter total revenue and other income of $94.6 million, cash flow of $80.1 million or 52 cents per share, and free cash flow of $78.7 million or 51 cents per share. Topaz distributed $52.6 million in quarterly dividends, 34 cents per share, during Q1, representing a 4.6% trailing annualized dividend yield to the first quarter average share price, and generated $26.1 million of excess free cash flow, which was allocated primarily to debt reduction.

Topaz exited the first quarter with $492 million of net debt, representing a 5% reduction from December 31st, 2025. We have continued our strategy to grow the dividend alongside sustainable revenue growth within the business.

Our quarterly dividend has been increased 35 cents per share, representing $1.40 per share on an annualized basis or a 4.5% yield to our current share price. Since inception, we have returned approximately $1 billion in dividends, which represents over 20% of our current market capitalization.

We have reconfirmed our previously announced 2026 guidance and do now expect annual average royalty production of 23,900 boe at the upper end of the range, driven by strong oil-focused activity while allowing for prudent natural gas-focused capital discipline. Based on updated estimates including the second quarter dividend increase, Topaz's 2026 exit net debt is now estimated at $407 million, which represents a 4% reduction from our prior guidance before consideration of incremental acquisitions.

Topaz expects to maintain a payout ratio at the lower end of the 60% to 90% long-term targeted range, providing financial flexibility for acquisition growth. Our 2026 dividend remains sustainable below $0.01 per Mcf of AECO and $55 US WTI, attributed to the high margin, stable infrastructure revenue which represents 43% of the 2026 increased dividend.

Our hedging strategy and financial derivative contracts in place, lower-decline royalty production supported by secondary recovery, and our diversification between oil and natural gas-focused undeveloped royalty acreage. As a reminder, our 2026 annual shareholder meeting will be held this Friday, May 8th, at 9:00 a.m.

at the Calgary Petroleum Club. At this time, we're pleased to answer any questions.

Back to you, operator.

Sure. Good morning.

A couple questions. I guess the first one, just any takeaways on the types of newer just kind of more exploration-style plays as we kind of go through the second half from your counterparties?

Usually when you get higher prices, folks will step out a bit more in terms of exploration. You kind of mentioned the Belly River, but anything else worth mentioning there would be good.

Then, second one maybe just for Cheree just on hedging. The book looks pretty light for 2027.

Lots of moving parts in there, obviously. Just wondering kind of what the strategy is as we move into the back half.

Good morning, Mike. Thanks.

We always kind of hear about the exploration plays after we release. Tourmaline holding the majority of our acreage will probably disclose some things later today.

I know they've been working pretty aggressively on just different exploration ideas and not sure if they're ready to expose any of those yet as I think they're still trying to do some land acquisitions around that. As you highlighted, the Belly River's been some big upside inside our portfolio.

We saw nine wells drilled on that this quarter. That's a combination of Highwood, Tourmaline, and Obsidian.

Big surprise in some of those. We had some fairly high oil rate wells inside the Belly River complex that we never underwrote those ideas when we were buying a lot of this acreage.

Surprise to the upside, for sure. I think we've talked at length about the Grand Rapids and Headwater and both Tamarack have highlighted how important that's been to their portfolio.

We think that the Grand Rapids could add up to 10,000 barrels a day of incremental gross production. Net production to us is pretty high when we have a 7% royalty on the Headwater lands and a 5% on the majority of the Tamarack lands.

Big upside there. I think that's the big benefit is we see a lot of these producers through the portfolio that are out there doing exploration and it's no additional cost to Topaz.

Always for the upside to us when they do exploration projects. I think one thing to note as well is some of the disclosure Tamarack put out this morning and Headwater put out last week is the injection rates in 2025 have tripled.

They plan to double those injection rates in '26. Similarly, Headwater is targeting 60% of total oil production being supported by waterflood, and it's going to be 70% by 2028.

That's big upside for Topaz, and as I mentioned before, we did not underwrite a lot of that in our portfolio, so that's added upside to the overall complex.

On hedging, Mike, we're about 7% hedged on both liquids and gas for 2027 currently. Definitely will look to add more opportunistically.

The way we're thinking about it is maybe some wider costless collars on the oil side, and we kind of think of $3 gas as ideal. We're not going to panic hedge.

We're definitely going to layer some in as we see opportunities arise. The basically target we're always looking towards is where can that dividend be fully funded as at $0, $1 AECO, $55 WTI.

That's kind of our arbitrary threshold that we're trying to insulate.

That's great. Thanks for that color, guys.

Thanks, Mike.

Yep, good morning, and thanks for taking my question. Can you just talk a bit around the spud activity that you saw on your acreage during the quarter?

It looked like it was down considerably year-on-year and how that might translate into what we see from a production perspective in future quarters? Thanks.

Sure, Jamie. I think the most important wells to look at within that spud activity, and keep in mind it is spud and not rig release, there is some timing when you think about larger well pads.

The most important are definitely the Montney and Clearwater. We think those are the best resource, the best returns.

When we look at those, they haven't changed nearly as much. In fact, I would say the trending slightly downward on the Clearwater is a sign of that improving capital efficiency.

Same thing for the Montney, cuz we're still seeing great results out of both of those plays even with the slightly lower counts. The other thing year-over-year, the biggest three areas that we saw a reduction were Deep Basin, Southeast Saskatchewan, and Peace River.

The Peace River, we obviously saw some assets change hands, so that would have stalled some activity. Southeast Saskatchewan, those could be portions of wells, not necessarily owning the full mineral beneath.

We're overall not too fussed. On the Deep Basin, it could be some drier gas.

The other thing to note is year-over-year, we had a 3.3% average royalty rate last year, this quarter 3.7%, fewer wells, but higher royalty rates. Overall, we're not too fussed, especially with the strong performance in Q1.

We do naturally expect our production to be sort of U-shaped through the year, with Q1, Q4 being the peak, and Q2, Q3 being a function of spring breakup and then maybe some deferred activity or responses to natural gas pricing. Overall feel very strongly, as we mentioned in the press release, we're pointing to the high end of our guidance range, kind of held the oil production at that high end based on pricing, and obviously there's a bit of flex within the gas, but we kind of made up for it in Q1.

Jamie, we've been talking to a few shareholders. In fact, I was with this shareholder Mona last night, and she had mentioned that one of the comments just around natural gas-driven activity and if certain producers are going to reduce activity, and I think it's a good sign for us overall.

If we can save those molecules for better prices, we don't mind seeing that, I think it's a positive overall.

Thanks. Can you talk a bit about the gas processing plant modifications that Topaz participated in during Q1 and sort of what does that mean for future revenue upside from these assets?

Is there more things like this to do? Thanks.

Good question too. We have seen some acceleration in two of our Montney projects: one in the Pouce Coupe area, one in Musreau.

Participated in both those expansions. I think in the Musreau area, our producer Whitecap, and operator Whitecap, has produced some wells that are just fantastic.

They're all performing Type 1 curve, and so they just needed more capacity in that facility. We have the option, not the obligation, to participate and keep our pro rata share in place, and we did that, and so it will translate to locked-in fees from that participation.

Similarly, same deal on the Pouce Coupe facility where we participate alongside Logan. Just been drilling some fantastic wells up there, found a new zone in the Montney, and so this translates really well to us.

Not only do we increase capacity, but we also increase in the Pouce Coupe area for sure our royalty production as well.

Okay. Thanks for that.

I'll hand it back.

Appreciate it, Jamie. Thank you.

Appreciate everyone joining the call today, and look forward to hearing and seeing you guys for Q2. Thanks very much.