Canadian exploration and production firm Advantage Energy (AAV:TSX) outlined a share buyback program and production strategy at the EnerCom Denver – The Energy Investment Conference on Wednesday, positioning cash returns as its primary capital allocation tool through 2027.
The company, which trades at $10.89 per share, said it plans to repurchase at least 15% of outstanding shares over the next 24 months, with 50% of free cash flow earmarked for buybacks in the second half of 2026 and at least 90% dedicated to repurchases in 2027 and beyond. Advantage aims to maintain flat production at 90,000 barrels of oil equivalent per day through the end of 2027, a run rate above its original 2026 guidance of 81,000 to 85,000 BOE/day.
Production is expected to grow 7% to 8% annually over the three-year plan, supported by a drilling inventory exceeding 2,400 locations, including more than 20 years of Tier 1 inventory. Current output is roughly 85% natural gas and 15% liquids, with liquids contributing about half of revenue. The company operates 316 net sections of Montney rights in Alberta and British Columbia, alongside 251 net sections in the Charlie Lake formation, primarily in Alberta.
Advantage reported $470 million in revenue over the last 12 months, with a gross profit margin of 58%, and an enterprise value of approximately CAD 2.5 billion. Capital spending is projected at CAD 300 million annually. The company’s 52-week stock range stands at $9.185 to $13.20, with a beta of 0.45 indicating low price volatility.
Operational highlights include the recent completion of the Progress Gas Plant in Q2 2026, adding 75 million cubic feet per day of processing capacity. Advantage’s Glacier Gas Plant, with a capacity of 425 million cubic feet per day, accounts for roughly two-thirds of total production and operates in harvest mode without expansion plans. The company also holds 100 million cubic feet per day of mothballed gas plant capacity in northeast British Columbia.
On emissions reduction, Advantage’s Glacier Phase 2 carbon capture project, operated via subsidiary Entropy Inc., is expected to cut emissions at the Glacier facility by more than 85% once fully operational. The company has also reduced AECO exposure by 60,000 gigajoules per day over the past year and maintains hedges covering about 50% of remaining 2026 production, with hedging levels increasing through 2029.
Management emphasized the company’s drilling performance, noting Advantage drilled the top nine wells in the Alberta Montney over the past year, including what it described as the best well ever drilled in the formation. The company also cited industry-leading median well productivity across the Montney Gas Window, which it said has more than doubled the productivity of some peers.
Advantage’s share repurchase program reflects management’s view that the stock is undervalued relative to its asset quality and development opportunities, with buybacks to continue so long as the share price remains below intrinsic value.
