How much cash does Cavvy really make, and what is a share of it worth?

The words on this page

Real cash (true cash)

What was left in the bank each year after every bill, every tax payment and every well drilled. Not profit, and not "cash flow" as companies usually quote it, which leaves the drilling out. The strictest number there is.

Required return

The yearly return you insist on for taking the risk. A dollar promised in ten years is worth less than a dollar today; this rate says how much less. 9% is a common professional figure for a large Canadian producer; the reserve engineers use 10%.

Well life (reserve life)

How long the wells keep producing. After the life you choose, nothing is counted. Cavvy's year-end 2025 reserves report shows 260.5 million boe of proved plus probable reserves. Against 2025's average of 23,904 boe a day that is a 29.9 year 2P reserve life, which the model caps at 30; the company's own 2P reserve life index on forecast production is 25.8 years. A proved-only figure was not disclosed in the sources used.

What a share is worth

Every future year's cash, shrunk back to today's dollars at your required return, added up, less the debt, less the cost of cleaning up the wells, divided by the number of shares. Pay less than this and you earn more than your required return; pay more and you earn less.

Where the default growth comes from

Production has declined every year since 2021 while processing income grows, and 2026 guidance implies roughly 21,500 boe a day, so the growth dial starts at 0; the upgraded 2026 outlook is about income quality and debt repayment, not volume growth.

The arithmetic, step by step

1. Count the real cash each past year: cash generated by operations as reported, plus interest paid put back, minus rent on leases, minus every dollar spent on wells and plants. Buying and selling assets is shown separately.
2. Project it. The starting cash you choose (an average of the history, or the latest year) grows at your growth dial for ten years, then at the long-run rate for as long as the wells keep producing. Nothing is counted after the well life ends.
3. Bring it back to today. Each year's cash is shrunk by your required return, counted at mid-year because cash arrives through the year rather than on 31 December.
4. Turn it into a share value. Add up the shrunk cash; take off net debt of C$45M; take off the C$166M cost of cleaning up the wells if that switch is on; divide by 309.36M shares.
5. Work it backwards. "The growth today's price assumes" is the ten-year growth rate at which this start is worth exactly the share price.

Where the numbers come from

• Operating cash flow, cash interest paid, lease payments and capital spending for every year from 2021 to 2025 were hand-checked on 1 September 2026 against the audited Pieridae and Cavvy annual financial statements, and the mid-2026 debt, cash, decommissioning and share figures against the Q2 2026 interim statements; every figure matched the filings to the thousand of dollars.
• The history starts at 2021 because the earlier years were a different company mid-transformation: Pieridae bought Shell's Foothills assets in October 2019 (production jumped 88 per cent in 2020) while still spending on the Goldboro LNG project, and operating cash flow was negative $51.8 million in 2019 and barely positive in 2020. Five years is the minimum defensible run here.
• The Goldboro LNG history matters: Pieridae shelved the full-scale project in July 2021 after years of development spending, and sold the legacy Goldboro assets in 2024 for $12.0 million gross, which is the 2024 entry in acquisitions net of sales. The 2025 entry is $1.0 million of asset disposition proceeds per the audited investing section.
• The debt story is the story. The Shell deal was financed with a $206 million term loan at a fixed double-digit rate with interest partly paid in kind; the loan was refinanced in June 2023 into a senior facility plus 13 per cent subordinated notes, and a 2024 recapitalization added a $29 million rights offering that issued 118.5 million shares. Weighted shares nearly doubled from 163 million in 2023 to 290.5 million in 2025, and 309.4 million are out today. Principal debt has fallen to US$61.1 million at 30 June 2026 from about $234 million at the end of 2021.
• Interest is cash interest paid from the audited statements; sizeable non-cash paid-in-kind interest in the term-loan years (for example $13.7 million in 2022) is not in that line.
• Net debt follows the aggregator: total debt including lease obligations (and in 2024 a warrant liability) minus cash. The company's own net debt measure, which adds the working capital deficit, was $170.6 million at year-end 2025. At 30 June 2026 total principal debt was $86.8 million against $40.2 million of cash.
• The 2021 lease payment is derived from the lease note (payments of $2.5 million less the interest portion); later years are the principal payments in the financing section. The amounts are small.
• The decommissioning obligation of $166.1 million at 30 June 2026 is large for a $700 million company: sour gas plants and Foothills wells are expensive to retire. The clean-up toggle matters more here than for most names.
• Production figures exclude sulphur throughout. The 309.4 million share count is basic; about 3.5 million options were dilutive at mid-2026.
• Analyst targets: average C$2.75 across 2 analysts (stockanalysis.com analyst consensus, 28 August 2026).

For the technically minded

The method is the one used to evaluate capital projects, from Ted Lawrence, The Business Guide to Economic Evaluations: Projects, Leases, Tariffs and Acquisitions (2017). "Real cash" is the book's project cash flow (chapter 3) with depreciation, debt servicing and debt-like leases restructured out (chapters 4, 5 and 19); short operating leases stay in as a cost of producing, a chapter 19 judgment. The value per share follows the share-purchase evaluation of chapter 20: present value of the company's cash flows at the cost of capital (chapter 10), mid-year discounting (chapter 12), plus non-required assets, less net debt and the decommissioning liability. "What you gain or lose" is the bid-curve NPV of chapter 20; "when you get your money back" is the discounted payout of chapter 13; the bars follow the project profile of chapter 6. The reverse solve on growth is a plain reverse DCF.

Discount-rate anchors: 9% is a common cost-of-equity figure for a large Canadian producer and 10% is the reserve-report convention (PV10). The long-run rate defaults to 0% here: a depleting resource should not be assumed to grow forever, so anything above zero is a judgment you make with the dial.