Good day, ladies and gentlemen, and welcome to the Cavvy Energy Q3 2026 Financial Results Conference Call. Please be advised that today's proceedings are being recorded. Following the presentation, we will conduct a question-and-answer session. If you have a question and you're viewing on webcast, please use the Ask a Question button in the top- right hand corner to type your question at any time during the presentation. If you are participating via telephone and would like to ask a question, please press star one at any time. You will then be in the queue for the question-and-answer session at the end of the call. I would now like to turn the meeting over to Mr. Dallas McConnell, Vice President, Corporate Finance, p lease go ahead.
Thanks, Mark. Thanks very much and good morning. I would like to welcome everyone to Cavvy Energy's third quarter 2026 conference call. With me today are President and Chief Executive Officer Darcy Reding, Chief Financial Officer Adam Gray, Chief Operating Officer John Emery, and Chief Commercial Officer Paul Kunkel. Darcy and Adam will begin today with a review of our operating and financial results and certain other company developments. Following their prepared remarks, we will turn the call over to the conference coordinator for your questions. Before Darcy begins, I would like to remind you that our remarks today will include forward-looking statements that are subject to important risks and uncertainties. For information, excuse me, on these risks and uncertainties, please see the reports filed by Cavvy with the Canadian Securities Regulators on sedarplus.ca.
With that, I will turn the call over to President and CEO Darcy Reding to provide more detail on our performance in the quarter along with recent developments.
Thank you, Dallas. We are pleased to speak today to our third quarter financial and operating results. Before diving in, however, I want to briefly address yesterday's market pullback, largely focused on U.S. Equity, so that market sentiment does not distort your assessment of Cavvy's strong fundamentals. Cavvy's diversified revenue drivers come from hydrocarbon sales, third-party raw gas processing volumes, and the sale of our sulphur. We continue to have a substantial volume of our natural gas production hedged for the remainder of 2026 and into 2027. The valuation compression broadly seen in the markets does not change our business fundamentals or our outlook. Turning briefly to the 2026 Federal Budget tabled yesterday afternoon, based on the framework announced so far, I believe it includes provisions that will directly benefit Cavvy and the Canadian resource sector more broadly.
Specifically, the Canadian government has demonstrated support with a budget containing programs and incentives aimed at attracting investment to develop and grow Canada's natural resource sector and to expand infrastructure so that we can deliver those resources to global markets. Collectively, these provide additional clarity and certainty over the next five years. With these policy tailwinds reinforced by the Federal Budget, plus the diversified and resilient cash-generating capability of our business, which we've proven over the past several quarters, Cavvy Energy is strong, resilient, and has a bright future. That is the picture I want to leave you with today. Now, on to the business at hand.
Although this was a bit of an unusual quarter for Cavvy due to the facility outages that affected our production and cash flow, we continue to benefit from our strategy in the quarter that focuses on our upstream producing assets, the benefits of our key infrastructure ownership, and our sulphur production derived from producing and processing our sour gas volumes. I have referred to this information in previous investor calls, but it certainly is worth repeating that Cavvy offers a unique investment opportunity within the small and mid-cap energy space. Our upstream hydrocarbon assets provide sector-leading low production declines. In 2026, we expect our hydrocarbon sales to contribute approximately half of our gross revenue.
By virtue of our ownership and operatorship in the three deep-cut sour gas processing facilities in Waterton, Jumping Pound, and Caroline, we expect over $ 45 million, or about 10% of our revenue generation, from our third-party processing and marketing business. Lastly but certainly not least, our sulphur production and the exposure we have to market pricing in 2026 and beyond has been a game-changer. We have a lot to say about our sulphur business in the next few minutes, but importantly, our sulphur is expected to generate more than 40% of our revenue in 2026. In aggregate, Cavvy remains both a diversified and a compelling investment. Taking a moment now to address the path to shareholder value.
Our new strategy was kicked off back in 2023 when we simplified the business by focusing on our midstream and upstream assets, which resulted in the sale of our East Coast Liquefied Natural Gas Project and assets in 2024. We've relentlessly focused on deleveraging since then, reducing our total debt by over $ 150 million, even with low natural gas prices and a very low locked-in contractual sulphur price through the end of 2025. Growth in our third-party midstream business, where volumes have doubled in the last two years and revenue has nearly tripled in the past four years, provides a predictable revenue stream protected from the volatility of hydrocarbon prices. Our focus remains on continuous improvement within our core business, where we are striving to further improve our infrastructure runtime by minimizing unscheduled downtime.
We continue to work towards our objective of consolidating all company production into company-owned and operated infrastructure to improve costs and reduce our reliance on third parties. Ultimately, as we complete our transition into phase II of our corporate strategy, we will grow the business through strategic acquisitions and by organically developing the resource potential of our existing mineral leases. We are pleased with our progress and success to date, but we have a lot of hard work in front of us, and we are excited for the challenge. Advancing our corporate strategy will remain a priority for 2027. We anticipate releasing 2027 corporate guidance in early December, so stay tuned. Before we move into the highlights and a few details of our third quarter results, a quick refresh on the current sulphur market and its impact on our business is in order.
The historical pricing chart in the top- left corner of this slide effectively illustrates the incredible run-up in sulphur price. This is particularly notable since the onset of the Middle East Conflict that began at the end of February 2026. Cavvy has financially benefited from strong FOB Vancouver sulphur pricing, which has remained at unprecedented levels over much of 2026, exceeding $1,100 per metric ton at its peak. Cavvy receives this Vancouver market price on one-third of its sulphur sales in 2026, with the remaining two-thirds fetching a lower price by virtue of our 12-month sulphur pricing agreement executed in Q4 2025. We have extensively discussed this 2026 pricing agreement in prior quarterly calls and in related corporate disclosures, so I won't go into any further detail here. The table in the lower- left portion of this slide shows our estimated full-year revenue from 2026 sulphur sales.
These numbers are in Canadian dollars and are after royalty and after costs for handling and transportation. Given that three-quarters of the year are now complete and we have already captured $ 124 million in net sulphur sales revenue, we are projecting approximately $ 35 million of additional net revenue in Q4 for a full-year net revenue of approximately $ 160 million at current production and FOB Vancouver pricing. I would be remiss to not address the recent pullback in FOB Vancouver sulphur pricing to $775 per metric ton as of yesterday, November 5th. We believe it was broadly understood that Vancouver FOB prices in excess of $1,000 per metric ton were unsustainable, and the relative softening in the price of sulphur, which began in early September, was largely anticipated. This pullback is driven by a couple of primary factors.
First, high sulphur prices themselves led to demand destruction, particularly in the fertilizer industry, where the high cost of sulphur feedstock in phosphate fertilizer manufacturing has combined with the end of the Northern Hemisphere growing season. Second, and more recently, the prospect of the Middle East Conflict easing or ending has generated optimism that the Strait of Hormuz may be more open to shipping of export commodities, including sulphur. The Strait of Hormuz normally provides a transportation corridor for nearly half of the world's seaborne sulphur trade, so the restrictions through this shipping corridor are particularly disruptive to international supply. As we have stated previously, we believe sulphur demand as feedstock in the mining industry will remain high, and demand from the fertilizer industry will ramp up again in early 2027 as fertilizer manufacturing commences in advance of the Northern Growing Season.
Sulphur supply will remain below historical norms as geopolitical turmoil will restrict exports from large sulphur producers such as Russia and its allies, and sour gas processing and sulphur handling infrastructure in the Middle East that was damaged during the conflict will remain offline or at reduced capacity for a period of time beyond the end of the conflict. These supply-demand fundamentals will continue to be at play as we enter calendar year 2027, and the matrix in the bottom- center of this slide shows the estimated full-year revenue from our 2027 sulphur sales at various combinations of FOB Vancouver pricing and Cavvy sulphur production. As with the 2026 matrix to the left, these revenue numbers are in Canadian dollars and are after royalty and after costs for handling and transportation.
Note also, these numbers incorporate the 2027 forward sulphur pricing agreement executed in July 2026, where 200,000 metric tons of sulphur sales, or approximately 50% of Cavvy's current production, is contractually sold at $525 per metric ton. All excess sulphur sales receive FOB Vancouver spot pricing in 2027, less customary handling and transportation costs. At Cavvy's current production of approximately 1,000 metric tons per day, and at current FOB Vancouver pricing of $775 per metric ton, the full year 2027 net revenue from sulphur sales alone is approximately $ 235 million. Of note, approximately 45% of this amount, or $ 105 million, is guaranteed revenue under the terms of our 2027 sulphur pricing agreement.
More information pertaining to the materiality of our sulphur business, including the impact of forward sulphur pricing on our corporate net asset value, can be found in our latest corporate presentation and in the presentation materials shown at the Schachter "Catch the Energy" Conference in October, both of which can be found on our corporate website. Moving now to the highlights of our third quarter financial and operating results. As previously mentioned, we had an unusual quarter given we incurred downtime as a result of both our scheduled Caroline Gas Plant maintenance turnaround and an unscheduled 33-day outage at our Waterton Gas Plant. Although the Waterton outage was not scheduled, it was required in order to repair a low-pressure vessel instrumental to the efficient recovery of sulphur.
This Waterton outage was disclosed in our second quarter results call on August 12, in the midst of the outage, so the full scope and duration of the outage was not certain at that time. However, the effect of both of these outages are evident in our Q3 numbers. Net operating income generated in the quarter was $ 38.4 million, delivering just under $ 30 million of funds flow from operations, generating a netback of nearly $ 24 per BOE. Q3 production of just under 17,500 BOEs per day and 753 metric tons per day of sulphur reflects the 52-day maintenance turnaround outage at Caroline and the unscheduled 33-day Waterton outage. Capital in the quarter of approximately $ 35 million was primarily directed to the Caroline turnaround, with just under 25% of the capital expenditure directed to value-generating well workovers and facility optimization.
Despite the more challenging quarter, we managed to further reduce our total debt by $ 2.5 million as we continue to prioritize deleveraging until we meet our debt target, which we expect to achieve in 2027. Since I have already spoken on the importance of sulphur to our business, and specifically about our 2027 forward sulphur pricing agreement, I would like to now pass the floor to Adam Gray, Chief Financial Officer, for additional details on our third quarter results and business.
Thanks, Darcy. I'll begin with some additional details on our operating results, then move into our financial results, capital allocation, and our outlook. As Darcy noted, Q3 was anything but a normal operating quarter. We produced just under 17,500 BOE per day during Q3, together with 753 tons per day of sulphur. Both were lower than normal run rates, but within internal expectations, largely because Caroline was offline for 52 days and Waterton experienced a separate 33-day outage, as Darcy mentioned. Third-party throughput averaged approximately 116 million cu ft per day during the quarter, with Caroline volumes particularly impacted by the turnaround. The key point looking forward is that Q3 is not representative of normal operating run rates when all of our facilities are online. Our planned maintenance activities for 2026 are now behind us.
All three of our major facilities are operating very well, and as of October 1st, we've restarted approximately 800 BOE per day of Northeast BC production, which had previously been shut in during periods of weaker AECO pricing. As a result, we have had weeks recently during which production exceeded 26,000 BOE per day, and at Caroline, we also recently achieved a daily C2+ processing rate higher than at any time during the last 20 years. As a result, we are confident that our Q3 results were driven by concentrated downtime during the quarter, and our production guidance remains achievable. Despite the combined facility downtime during the quarter, our financial performance remained solid. Net operating income, as Darcy mentioned, was $ 38.4 million, up 25% compared to Q3 2025, and funds flow was $ 29.5 million, up 129%.
Operating netback was $ 23.86 per BOE, up 72% from Q3 last year. Sulphur continues to be an important contributor to netback. Our realized price for sulphur after physical hedging was $ 667 per ton, compared to $ 196 per ton in Q3 of last year. Sulphur contributed over $ 28 to our netback. Our natural gas hedges also continued to provide protection in the opposite direction. Our realized natural gas price increased from $ 1.55 per MCF before hedging to $ 3.16 per Mcf after hedging. We were approximately 80% hedged on natural gas during the quarter and remain at approximately the same level for Q4. I think those two outcomes together demonstrate the value of our broader approach to risk management.
Our objective in hedging is to protect a meaningful portion of our cash flow over time, especially until we have completed our debt repayment. When looking at commodity prices, we remain opportunistic in selecting which commodities to forward transact on. Onto capital expenditures. I would like to spend a little bit more time than usual on capital today, considering the larger-than-normal investment level we had during the quarter. We invested $ 35.4 million on capital, compared with $ 4 million in the same quarter last year and $ 4 million last quarter.
Approximately $ 19.7 million of that was spent on major turnaround projects, primarily at our Caroline facility and in the Caroline Gathering System. $ 8.6 million was invested in value-adding workovers, well and facility optimization projects, and debottlenecking, with very attractive returns on investment. Finally, a further $ 3.9 million went towards other facility maintenance, including the Waterton sulphur vessel repair.
The Caroline turnaround was a large operation, encompassing over 400 work packages and a peak labor force of over 300 workers. While we are obviously never pleased to spend more time or money on these projects than planned, once the facility was down, we believe completing the necessary work was the right economic decision, rather than deferring known maintenance requirements into a future turnaround. In this case, a number of vessels required significantly more cleaning than we had anticipated. Many of these had not been opened and cleaned since 2012. In addition to the turnaround, we have continued to invest materially in optimization, debottlenecking, and workover opportunities. Some of these projects were accelerated into the quarter in order to minimize operational disruption by taking advantage of facility downtime.
In a typical turnaround year, all else being equal, we think approximately $ 45 million-$ 50 million is a reasonable estimate of base maintenance capital requirements. We would generally expect a major turnaround in three out of every four years. Looking ahead, we are excited to roll out our 2027 capital allocation plan as part of our annual guidance, which we plan to release in early December. The first priority for internally generated cash flow in early 2027 is repayment of remaining debt. Given the significant progress we have made on the balance sheet, we also have a number of other opportunities competing for capital, and we will provide more detail on how we are thinking about those opportunities in December.
Turning to the balance sheet, I also want to explain the movement in net debt during the quarter, because at first glance, it may seem inconsistent with the strength of our operating cash flow. Senior debt principal continued to decline during Q3, although at a much reduced rate, ending the quarter at approximately $ 84 million. We have now repaid approximately $ 79 million through the first nine months of the year. Net debt, however, increased in the quarter. The principal reason for this is working capital rather than additional borrowing.
Because we invested so heavily in capital projects during the quarter, there is inevitably a lag between when the work occurs, when invoices are collected, and when those invoices are ultimately paid. At September 30th, we had approximately $ 28 million of accounts payable and accruals associated with the Q3 capital program, which we expect to normalize by the end of November.
At Q3, we also had $ 22.5 million of deferred revenue associated with our 2026 sulphur prepayment burdening the working capital number. This is not conventional financial debt, as I have previously discussed. It represents cash that we have already received in advance of sulphur being delivered during the fourth quarter, and so that number will continue to trend towards zero by year-end as sulphur deliveries are made. I think those distinctions are important when looking at the quarter-end balance sheet. Turning to our refinancing efforts, we continue to make excellent progress. There is not much more I can say on that today until we have something definitive to announce. I can reiterate that we are approaching this process from a position of considerable financial strength, and we expect to secure a reduction in both the cost of debt and an increase in financial flexibility.
Refinancing is an important opportunity, but is not a necessity, as we have a clear path to satisfy the existing debt maturities from internally generated cash flow if required. Lastly, I will turn to guidance. Despite the high maintenance and turnaround activity experienced during Q3, we are maintaining our 2026 guidance. We continue to forecast full-year average production of 22,000-23,500 BOE per day of hydrocarbon, and between 1,000 and 1,100 tons per day of sulphur, though we expect to be at the low end of those ranges.
We expect net operating income of $ 170 million-$ 180 million, though we expect to be at or above the high end of those ranges. Capital expenditures will be $ 52 million-$ 57 million for the year, and our year-end debt is expected to be in the range of $ 75 million-$ 85 million, including a normalization of net debt and working capital levels.
As a final reminder, we look forward to laying out our business and capital deployment plans for 2027 in early December. Similar to the prepayment terms in our 2026 sulphur pricing agreement, we will receive the first prepayment for the first 100,000 tons of 2027 sulphur sales at $ 525 per ton net of deductions, representing approximately $ 46 million on January 4, 2027. That is it for my comments today. Thank you very much, and I will turn the call back to Dallas.
Thanks, Adam and Darcy. I will now turn the call over to Mark, the operator, to handle any questions that are coming in over the phone. Mark can hand it back to me, and we will handle webcast questions. So over to you, Mark.
Thank you. We will now take questions. If you have a question and you are viewing on webcast, please use the Ask a Question button in the top- right hand corner to type your question. If you have a question and you are participating via telephone, please press star one on your telephone keypad. There will be a brief pause while the participants register. Thank you for your patience. The first question is from Adam Gill with Ventum Financial. Adam, please go ahead.
Thank you. Good morning, gentlemen. Two questions for me. First off, you've hedged a substantial part of your production on the sulphur side next year at a very attractive price relative to the historical norms. Is there any thought of maybe taking the risk off the table and hedging out the rest of production?
Yeah. Thanks, Adam. Darcy here. Great question. Obviously, we will continue to look for hedging opportunities in our business. We don't feel super compelled at this point in time to hedge any additional sulphur production for 2027, but obviously, if the opportunity is there at prices that we think are reasonable and reflective of what the forward market will be, we would not say that we would not do that either. Maybe more importantly or as importantly, we certainly look forward into 2028 and beyond as well for opportunities to do something similar on the sulphur side. At this point in time, we don't think the forward pricing into 2028 and beyond is reflective of where we believe the markets will be, so that is not anything that obviously we've transacted upon to date.
Okay, understood. My second question relates to kind of bringing on production that's been shut in. You've made a move to bring on some of that Northeast BC production. Is it unreasonable to think that Ram River production could come back on sometime in 2027, or is it just kind of too far out, the negotiations are going to take a bit longer, and maybe that's a 2028 catalyst?
Yeah, it's not unreasonable at all to have that assumption. As you probably recall from previous comments we've made in these investor calls, this is something that we've been working on for quite some time. It's a fairly complex animal to deal with because we've got a situation where well production and major infrastructure facilities have now been down for 2.5 years roughly. There's sort of three major parties that are all needing to be involved and work together collaboratively between gathering system operators, well operators, and gas plant operators. That collaboration has been moving along, and we remain very optimistic that we will get production back online. What we can't be as optimistic about is nailing down what the timing of that looks like.
Obviously, we're trying to do things that are economically favorable and feasible as quickly as possible, but we just can't nail down the timing of that yet.
Okay, understood. That was it for me. Thank you, gentlemen.
Thank you, Adam.
Your next question is from Tiago Villa with AFP Capital. Tiago, please go ahead.
Congratulations to the team on safely completing the Caroline turnaround. I got two questions. First is around guidance, particularly sulphur. The unchanged low end kind of requires 24,400 BOE a day in Q4. That's essentially kind of a return to Q1, but on the sulphur side, you need 1,175 tons a day. That's about 8% above Q1, and quite a bit above every other quarter for the last two years. Could you just walk us through the sulphur bridge and how much of that comes from restored runtime at Caroline and Waterton, and how much comes from optimization work or other sources? Also, what was October's average production rate?
Okay, great. Let's try to answer that in a comprehensive yet brief way. You're right, we do require Q4 numbers that are substantially higher than certainly what we saw in Q3, and as Adam alluded to in his prepared remarks, we've had time periods within the fourth quarter here where we're seeing production of hydrocarbons that exceed 26,000 BOEs a day. We are getting a significant amount of flush production when we have our producing fields shut in for as long as they were during the third quarter in the Waterton area and, of course, in the Caroline area. When you bring them back on, you get that pressure buildup in the reservoirs and the flush production that comes out of the ground and out of the wells.
The amount of sulphur production is commensurate with the 26,000 bbl a day plus kind of range that we've seen, like I said, quite regularly since resurrecting all of our production and getting it back online here. We still feel confident that those guidance ranges are accurate, although, as Adam alluded to, both the production of hydrocarbon and the production of sulphur, we expect to be on the lower end of the guidance range.
Got it. Then, onto the 2027 sulphur agreement, I would just like to understand the economics on the prepayment. What sort of fixed price could you have secured without the advances, and what is sort of the embedded interest rate in that deal, and how does it compare to the senior debt you guys have?
Sure. It is a pretty simple agreement from that perspective, Tiago. We hedged for 2027, 200,000 tons for the year. The prepayment is literally split into two payments, the first on January 4 and the second right after the Canada Day long weekend in July. The first payment is for 100,000 tons at $525, net of the expected transportation deduction to get it to Vancouver. There is no implied discount rate. There is nothing like that. It is actually a really great prepayment from a balance sheet management perspective and a cost of capital perspective. The deduction will be trued up every month as we deliver sulphur under that agreement for actual transport costs, but those are expected to be relatively muted from the estimate. Does that answer your question?
Got it. Yeah, that is great. Thanks, Adam.
Yeah.
There are no further telephone questions at this time. I would like to turn it back to Mr. McConnell to manage the webcast question and answer the portion of the call.
Thank you. We do have a couple questions on the webcast. The first, given the recent share price action and the dramatic dislocation between the market value of Cavvy's equity and its intrinsic value, does management foresee implementing an NCIB, which is a normal course issuer bid, which screens as highly accretive at today's share price, especially with Cavvy trading at a 2027 free cash flow yield of approximately 40%-50%, assuming Central Alberta volumes are reactivated?
Thanks for the question, Jackson. I think, as I've mentioned in previous calls, we need to get the bulk of the debt repayments done. I'd like to get past the refinancing. We have quite a lot of opportunity to deploy capital next year based on how we're looking at the year. We have a lot of growth opportunities that we'd like to start investing in. Those are both production growth opportunities and midstream growth opportunities. But I can't deny that your comment's correct. It is compelling from a return perspective, and we will be talking internally over the next months about an NCIB and whether that could be part of our 2027 capital plan.
If I could just supplement Adam's comments as well, it's something that we've spoken about in previous communications. When Shell owned the assets that we own today, we believe for approximately five years or so before we bought the assets from Shell, they spent appropriate funds to keep the assets reliable and safe, but they did not invest in the assets whatsoever in terms of trying to grow or develop additional production cash flow and resource. Since we purchased the assets, we've been uber-focused on deleveraging the business. We didn't have a ton of free cash flow, obviously, at that low pricing, particularly low sulphur pricing under that old legacy sulphur sales contract. We did not invest adequate levels of capital into the assets either in order to exploit and develop opportunities further.
We have a tremendous amount of low-hanging fruit type opportunities, and taking some of the free cash that we expect to deliver going forward and putting it back into the business, we think is going to generate shareholder return that is not going to be matched by any other capital allocation needs. That's our shorter-term view of things, but as Adam alluded to, certainly in the mid- and long- term, we're looking at the possibility for an NCIB.
Great. Next question is from Kalvin Baim at ATB Financial. With sulphur prices down since quarter- end, would you add to the 2027 contract, or does keeping about half open still feel right? What price would make you lock in more?
Yeah, I think we've more or less addressed that through the prepared remarks and also in the answer to one of the previous questions. Having said that, though, I'll just take the opportunity to elaborate a little bit more. We feel pretty comfortable having 50% of our current sulphur production exposed to open pricing. We do believe that, although $1,000 per metric ton and higher may not be a reasonable expectation to sustain on sulphur pricing, we also don't believe that that historical long-term average is real either. I explained a little bit in my prepared remarks about the supply-demand curve and the fundamentals around that, and we think that those fundamentals will continue to support reasonably strong sulphur pricing and very strong sulphur pricing relative to where it's been over the long-term history.
Again, we'd always consider and look at locking in additional amounts if the opportunity is there. Likely, I'm feeling pretty confident that with the recent pullback in sulphur pricing, even the $525 number that we've got 50% of our sulphur exposed to or locked into right now for 2027 may not be a real number for additional volumes. We're pretty comfortable. Bottom line is, we're pretty comfortable with where we're at today for 2027.
Thanks, Darcy. Another question. You guys have invested a bit of capital in optimization activities this quarter, which you guys have communicated pretty high IRRs in prior calls. What sort of things have you done, and do you have any early results?
Yeah, we can comment on that for sure. Typically, we are looking at IRRs on a forward-looking basis that are in excess of 80%-100%. These are typically projects that there is tremendous cash flow in that from that, tremendous value generation from that. Now, having said that, some of these optimization projects are not necessarily reserve-adding projects. Sometimes they are associated with things like well optimization, where the reserves are already on the books. We may have seen things like, without getting too technical, liquid loading in wellbores, which has decreased the production rate, and that negatively affects the economics. So in order to maximize the economics or optimize the economics, we look at doing investment into those projects so that we can drive a return from the capital invested. Those are the kinds of projects that we are looking at.
Wellbore optimization, field compression optimization, gas gathering optimization by utilizing larger diameter pipes where we can. We have got an extensive amount of infrastructure that sometimes just changing flow paths or debottlenecking valve restrictions and things like that will provide very sound investment returns. Those are the kinds of things that we are investing in.
Thanks, Darcy. Next up, do you have any idea where all the recent selling pressure on the shares is originating?
Yeah, this is Adam. I would not want to speculate too much on that. I think lots of things happening at the same time here with geopolitics, with the price of sulphur normalizing a little bit, with production results for the quarter that were maybe not what certain people were expecting. I think we just have to let the last two days and the next couple days play out. But as we have all said today, we are pretty excited about the long-term and short-term prospects for this business. We will just let the dust settle.
Thanks, Adam. Those are all the questions we have for today. I would like to thank everyone for participating in today's call. We very much appreciate your interest in Cavvy Energy. If you have any further questions, please call us at 403-261-5900, or you can email our IR team at investors@cavvyenergy.com. Thanks again, and we look forward to speaking to you soon.
Thank you. The conference has now ended. Please disconnect your line at this time.