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Topaz Energy Corp
(TSX:TPZ)
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Rating:78Outperform
Price Target:
C$35.00
â–²(9.58% Upside)
Action:Reiterated
Date:10/29/26
The score is driven primarily by strong financial performance (very high current profitability and strong recent free cash flow) and a positive earnings update (raised 2026 guidance and strong operational metrics). Technicals are supportive with the stock above key moving averages, though near-term momentum looks somewhat stretched (overbought Stoch). Valuation is a modest headwind due to a higher P/E despite an attractive dividend yield.
Positive Factors
Capital-light royalty model
Topaz’s non-operating royalty model can support durable cash generation because third-party operators fund and execute most drilling and production activity. This limits Topaz’s direct operating and capital burden while preserving exposure to production growth across a diversified Western Canadian asset base.
Negative Factors
Gas seasonality and commodity exposure
Topaz remains exposed to oil and natural-gas prices, and management specifically identified gas seasonality and volatility as risks to near-term production and financial visibility. Weakness in dry-gas areas could make cash flows and guidance less predictable across the next several months.
Read all positive and negative factors
Positive Factors
Negative Factors
Capital-light royalty model
Topaz’s non-operating royalty model can support durable cash generation because third-party operators fund and execute most drilling and production activity. This limits Topaz’s direct operating and capital burden while preserving exposure to production growth across a diversified Western Canadian asset base.
Read all positive factors
Topaz Energy Corp (TPZ) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$4.80B
Dividend Yield4.45%
Average Volume (3M)690.38K
Price to Earnings (P/E)27.3
Beta (1Y)0.39
Revenue Growth13.57%
EPS Growth102.90%
CountryCA
Employees13
SectorEnergy
Sector Strength52
IndustryOil & Gas Midstream
Share Statistics
EPS (TTM)1.13
Shares Outstanding154,900,000
10 Day Avg. Volume701,338
30 Day Avg. Volume690,382
Financial Highlights & Ratios
PEG Ratio0.20
Price to Book (P/B)2.79
Price to Sales (P/S)13.04
P/FCF Ratio13.96
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$35.00Price Target Upside9.58% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)1.18
Revenue Forecast (FY)C$418.00M
Topaz Energy Corp Business Overview & Revenue Model
Company Description
Topaz Energy Corp. operates as an entity primarily focused on energy royalties and infrastructure, segmenting its operations into Royalty Production and Infrastructure. The company maintains substantial gross overriding royalty interests, spanning...
How the Company Makes Money
Topaz Energy makes money primarily through cash flows generated from its non-operating interests in oil and natural gas properties. Its key revenue streams are: (1) Royalties: Topaz earns a percentage of gross production or revenue from oil, natur...
Topaz Energy Corp Earnings Call Summary
Earnings Call Date:Jul 27, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 02, 2026
Earnings Call Sentiment Positive
The call conveyed a predominantly positive operational and financial story: record liquids production, higher royalty volumes, strong cash flow and free cash flow growth, high infrastructure utilization and margins, a strategic tuck-in acquisition, and an upwardly revised production guide. Management acknowledged some near-term risks — gas seasonality, operator-controlled capital decisions, market volatility and existing leverage — and takes a cautious stance in guidance, but these risks appear manageable relative to the quarter's strong results and strategic progress.Positive Updates
Production Growth and Record Liquids
Second quarter royalty production of 24,233 BOE/day, up 9% year-over-year; record total liquids production of 7,178 barrels/day, up 6% year-over-year.
Negative Updates
Near-Term Gas Seasonality and Visibility Risk
Management flagged potential near-term gas volatility and seasonality risk over the next few months, especially in noncore dry-gas areas, which informed conservative second-half guidance despite year-to-date production of 24,400 BOE/day (guide midpoint 24,100).
Read all updates
Q2-2026 Updates
Positive
Negative
Production Growth and Record Liquids
Second quarter royalty production of 24,233 BOE/day, up 9% year-over-year; record total liquids production of 7,178 barrels/day, up 6% year-over-year.
Read all positive updates
Company Guidance
Topaz raised its 2026 annual average royalty production guidance to 23,900–24,300 BOE/d (midpoint 24,100), citing Q2 royalty production of 24,233 BOE/d (+9% y/y) and record liquids royalties of 7,178 bbl/d (+6% y/y); Q2 total revenue and other income was $111.2M, cash flow was $88.4M ($0.57/share, +9% y/y), free cash flow was $86.6M ($0.56/share, +17% y/y) and the company paid $54.2M in dividends ($0.35/share, a 4.5% trailing annualized yield). After a $38.7M acquisition of 300,000 gross acres (over 500 gross future drilling locations) Topaz exited Q2 with $497.4M net debt (~1.2x Q2 annualized EBITDA) and now estimates 2026 exit net debt of $435–440M (pre‑incremental acquisition); management expects 26–31 rigs active across its acreage through Q3, will maintain the payout at the lower end of a 60–90% long‑term target range, and noted infrastructure utilization of 96% with a 92% operating margin and processing revenue of $20.7M ($22.3M total processing revenue & other income).Topaz Energy Corp Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
74
Positive
Cash Flow
78
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 359.84M | 324.72M | 312.40M | 321.42M | 369.65M | 211.54M |
| Gross Profit | 233.39M | 182.86M | 305.05M | 314.52M | 363.27M | 207.29M |
| EBITDA | 405.81M | 333.16M | 221.11M | 316.13M | 351.45M | 193.01M |
| Net Income | 174.82M | 128.74M | 46.39M | 47.64M | 99.36M | 27.56M |
Balance Sheet | ||||||
| Total Assets | 2.22B | 2.24B | 1.94B | 1.70B | 1.89B | 1.67B |
| Cash, Cash Equivalents and Short-Term Investments | 1.23M | 580.00K | 147.00K | 3.46M | 0.00 | 0.00 |
| Total Debt | 545.39M | 570.77M | 540.40M | 391.64M | 464.58M | 276.86M |
| Total Liabilities | 710.83M | 723.35M | 627.64M | 460.41M | 532.40M | 346.97M |
| Stockholders Equity | 1.51B | 1.52B | 1.32B | 1.24B | 1.36B | 1.32B |
Cash Flow | ||||||
| Free Cash Flow | 315.25M | 303.50M | -161.63M | 246.03M | -36.81M | 162.24M |
| Operating Cash Flow | 321.22M | 308.76M | 276.27M | 300.58M | 317.88M | 165.02M |
| Investing Cash Flow | -129.46M | -132.19M | -439.99M | -51.96M | -354.10M | -921.40M |
| Financing Cash Flow | -190.84M | -176.14M | 160.41M | -245.16M | 36.22M | 536.20M |
Topaz Energy Corp Technical Analysis
Positive
31.94
Price Trends
30.30
Positive
30.53
Positive
30.16
Positive
Market Momentum
0.26
Negative
63.06
Neutral
81.96
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TPZ, the sentiment is Positive. The current price of 31.94 is above the 20-day moving average (MA) of 29.62, above the 50-day MA of 30.30, and above the 200-day MA of 30.16, indicating a bullish trend. The MACD of 0.26 indicates Negative momentum. The RSI at 63.06 is Neutral, neither overbought nor oversold. The STOCH value of 81.96 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:TPZ.
Topaz Energy Corp Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | C$4.80B | 27.32 | 12.16% | 4.45% | 13.57% | 102.90% | |
72 Outperform | C$40.73B | 24.66 | 10.54% | 4.13% | -0.28% | -4.26% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
62 Neutral | C$5.79B | 33.51 | 18.23% | 5.30% | 18.62% | 3.09% | |
61 Neutral | C$516.15M | -6.65 | -42.19% | 4.08% | 15.50% | -29.66% | |
59 Neutral | C$2.35B | 25.38 | 12.40% | 0.74% | 46.42% | 4.72% | |
57 Neutral | C$16.01B | 38.42 | 10.81% | 4.00% | 0.24% | -38.65% |
* Energy Sector Average
TSE:TPZ
Topaz Energy Corp
30.98
7.19
30.22%
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50.16%
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36.84%
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TSE:TWM
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309.22%
Topaz Energy Corp Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Tourmaline Cuts Topaz Stake in $330.6 Million Secondary Share Offering
Neutral
Oct 8, 2026
Tourmaline Oil Corp., a major shareholder in Topaz Energy Corp., has completed a $330.6 million bought deal secondary offering of 11.5 million Topaz common shares at $28.75 per share, including the full exercise of the underwriters’ over-all...
Business Operations and StrategyPrivate Placements and FinancingRegulatory Filings and Compliance
Topaz Energy Files Final Prospectus for Secondary Share Offering
Positive
Oct 5, 2026
Topaz Energy Corp. has filed and obtained a receipt for a final short form prospectus in all Canadian provinces except Quebec, advancing its previously announced secondary offering of common shares linked to a joint transaction with Tourmaline Oil...
Business Operations and StrategyStock BuybackPrivate Placements and Financing
Tourmaline to Sell $287.5 Million in Topaz Shares to Fund Share Buybacks
Positive
Sep 22, 2026
Tourmaline Oil Corp. is selling 10 million Topaz Energy Corp. common shares in a $287.5 million bought deal secondary offering led by Peters Co. and Scotiabank, reducing its stake from about 12.9% to 6.4%, or 5.4% if the over-allotment is exercis...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.