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Highlights
- Tenaz Energy has approved a 2026 capital expenditure budget of CAD 250 million to CAD 275 million.
- The company expects average production of 19,500 to 22,500 boe/d in 2026, representing a significant year-on-year increase at the midpoint.
- The 2026 program includes active drilling campaigns in the Dutch North Sea and a three-well horizontal program in Canada.
Tenaz Energy Corp. (TSX:TNZ) has announced its production and capital guidance for 2026, outlining planned investment levels and expected output following two acquisitions completed in 2025. The guidance sets out a capital expenditure program of CAD 250 million to CAD 275 million and an average production range of 19,500 to 22,500 barrels of oil equivalent per day (boe/d), supported by development activity in the Netherlands and Canada.
2026 production and capital framework
The company’s board of directors has approved the 2026 capital program, which is focused on organic development across Tenaz Energy’s asset base. At the midpoint of guidance, the production outlook represents an increase of approximately 115% compared with 2025 levels. Capital spending is planned to align with forecast funds flow from operations for 2026, based on current forward commodity pricing.
Due to the timing of drilling, workover, and tie-in activities, the majority of production growth from the 2026 capital program is expected to be realised in 2027. Based on current project schedules and risk assumptions, Tenaz has indicated that a production exit rate for 2026 could reach up to 27,000 boe/d.
Dutch North Sea operations
In the Dutch North Sea, three jack-up drilling rigs are currently operating across Tenaz’s asset portfolio. The Shelf Drilling Winner is drilling the K07-FB-103 well within the Tenaz-operated Joint Development Area, where the company holds a 45.6% working interest. At the GEMS area, the Borr Prospector 1 is on location, with operator ONE-Dyas preparing to re-enter and complete a partially drilled infill well in the N05 pool, in which Tenaz has a 33.3% working interest.
In the L10 area, the Noble Resolute has commenced drilling the Eni-operated L10-M4 Malachite well, where Tenaz holds a 21.4% working interest. Across the Tenaz Energy Netherlands operated Joint Development Area and L block, the company expects to drill three gross wells, equivalent to 1.6 net wells, alongside an ongoing workover campaign. These activities are expected to reduce the size of the contingent earn-out payment for 2026 by allocating cash flow toward development and exploration.
Canadian development program
In Canada, Tenaz plans to begin a three-well horizontal drilling program in the first quarter of 2026, with an 87.5% working interest. The Canadian program represents approximately 4% of the overall 2026 capital budget. It is expected to include two unfracked multi-lateral wells in the Ellerslie formation and one fracked single-lateral well in the Sparky formation.
Capital allocation and flexibility
Approximately 80% of the 2026 capital budget is allocated to drilling activities, with around 10% directed toward workovers and optimisation, and the remaining 10% assigned to long-lead items and facilities projects. Tenaz has stated that it will retain flexibility within the capital plan, allowing projects to be added or substituted during the year based on economic or strategic considerations.
Hedging and market context
Tenaz continues to use hedging as part of its risk management framework. As of the guidance release, the company is 42% hedged for full-year 2026 production on an oil-equivalent basis, with 45% of TTF exposure and 63% of AECO exposure hedged. Approximately half of projected 2026 revenue is currently covered by hedging arrangements.
