The plant is full. The Montney tests are still a flare report
Paramount (TSX: POU) reported second-quarter 2026 results on August 6. Sales averaged 47,279 boe/d, 49 percent liquids. First-half volumes were 47,765 boe/d, above the old first-half cap of 46,000. Cash from operations was $144 million. Adjusted funds flow was $176 million. Free cash flow was negative $129 million. Operating costs were $8.66 a boe, the fifth straight quarter lower. Capital in the quarter was $297 million. The year is still $1.0 to $1.1 billion of capital. Annual sales guidance moved from 48,000 to 52,000 boe/d to 51,000 to 53,000, 49 percent liquids. Third quarter is now 50,000 to 53,000. Fourth quarter is 60,000 to 63,000. Cash at June 30 was $449 million. The revolver is undrawn at $750 million.
Willesden Green averaged 27,466 boe/d. Alhambra phase two started in early June after a one-week outage and doubled design capacity to 20,000 barrels of liquids and 100 MMcf/d of gas. Ten Duvernay wells came on through the plant in June. Twenty-six wells now flow there and have filled the raw gas inlet. Nineteen of those wells are still choked. The Leafland interconnect and extra compression were aimed at an August start. Phase three of Alhambra is a later file. Management says a FID could come as early as the fourth quarter, with a possible 2028 start if they pull it forward.
Sinclair is a test rate. Shrink it before you write plateau
At Sinclair, the second two-well appraisal pad tested Upper and Lower Montney. Average raw rates over the last three days were 34 MMcf/d and 25 MMcf/d of dry gas. Paramount calls those the highest public Alberta Montney dry-gas tests in those benches after 2017 on laterals longer than 3,000 metres. The company also says they are test rates, not sales volumes, and that processing shrinks the number. The Sinclair plant is still earthworks, engineering, and offsite modules. Land there is now over 170,000 net acres. Willesden Green is over 350,000. About 48 percent of remaining 2026 gas is aimed off AECO, including Dawn, Malin, and Emerson. Liquids hedges are 7,000 barrels a day at C$109.19 WTI for the second half and 6,000 barrels a day at C$100.34 for 2027.
Fox Drilling was sold to AKITA on June 30 for about 19.3 million AKITA shares and $3 million cash. Those shares went out as a dividend in kind on July 16. The cash dividend is $0.05, payable August 31.
Neutral read
POU is on the listed producer list. The guidance raise is an Alhambra runtime story. Sinclair's 34 and 25 MMcf/d are not a 2026 volume add. 2027 talk of 60,000 to 65,000 boe/d and a 100,000 exit is a plan, not a plant. Watch the Leafland start, whether phase three gets a real FID, and whether Sinclair steel actually appears.