Saturn Oil & Gas: Shifting to Growth With Improved Capital Structure

Research evidence excerpt

Saturn Oil & Gas: Shifting to Growth With Improved Capital Structure

Tarek Hamid AC North America Credit Research

(1-212) 834-5468 29 July 2026 J P M O R G A N

tarek.x.hamid@jpmorgan.com

refinancing of its US$504 million of 9.625% Secured Notes due 2029 with US$575

million of 8.50% Sr Notes due 2031 and C$185 million of Sr Notes due 2031. The

company essentially extended its maturity, eliminated the liens, removed the mandatory

amortization, funded the cash purchase price of the Saskatchewan acquisitions, and

repaid the revolver, all while reducing its overall cost of capital.

NEGATIVES:

• They can afford to grow, but creates more risk. The company has a fairly sizeable

activity plan relative to its overall scale, which exposes the company to a potential peace-

driven decline in crude prices. However, the company’s stated sensitivity to crude price

changes as well as our own modeling indicates that even with a $20/bbl move lower in

WTI, the company shouldn’t burn meaningful cash in the near-term.

OUR TAKE:

• Deploying growth activity plan. Saturn pre-released its 2Q26 results earlier this month

in conjunction with its previously announced refinancing transaction, and there were no

surprises in the numbers. More importantly, the company announced major changes in

its guidance as it shifts to a growth strategy amid the current commodity price

environment. Saturn nearly doubled its capex guidance for the year, with the bulk of the

incremental capex being spent in 3Q26 as it looks to achieve an exit production rate of

~49Mboe/d. The sizeable activity plan modestly exposes the company to a potential

peace-driven decline in crude prices, but the company is well positioned near-term due

to its hedgebook. Longer-term, higher-cost/lower-return assets can be tricky as lower