Enerflex Ltd.

Hello. Thank you for standing by and welcome to the EnerFlex third quarter 2021 results conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 on your telephone. Please be advised that today's conference may be recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Stephan Ali. Please go ahead.

Thank you, Operator, and good morning, everyone. Here with me are Mark Rossiter, Interflex's President and Chief Executive Officer, Sanjay Bishnoi, Interflex's Senior Vice President and Chief Financial Officer, and Ben Park, Interflex's Vice President, Corporate Controller. During this call, we'll be providing our financial results for the three months ended September 30th, 2021, a brief commentary on the performance of our three business segments, and a summary of our financial position. Today's discussion will include forward-looking statements regarding Enerflex's expectations for future performance and business prospects. Forward-looking information involves risks and uncertainties, and the stated expectations could differ materially from actual results or performance. For more information, please see the advisory comments within our news release, MD&A, and other regulatory filings. Approximately one hour following the completion of this call, a recording will be available on our website under the investor section. During this call, unless otherwise stated, we'll be referring to the three months ended September 30th, 2021, compared to the same period of 2020. We'll proceed on the basis that you've all taken the opportunity to read yesterday's press release. I'll now turn the call over to Mark.

Thanks, Stephan, and good morning, everyone. The third quarter saw continued strength across global energy markets, as economies continue their recovery from the COVID-induced downturn. Across each of our operating regions, market fundamentals remain very constructive. As global energy supplies tighten, commodity prices are responding, rig counts are accelerating, natural gas production is reaching new highs in key locations such as the Permian Basin, and demand for natural gas liquids is increasing. Concurrently, the industry's commitment towards maintaining capital discipline has further strengthened the bullish undertones for the energy complex, setting the stage for another industry upcycle. This dynamic was reflected in our third quarter financial results, where for the fourth consecutive quarter, we saw continued improvement in activity, booking $191 million in new engineered systems projects and increasing our backlog to $375 million, its highest point since the first quarter of 2020. Demand was broad-based, with roughly half of these new projects being destined for end users in international markets, and half for North American markets. New bookings also benefited from emerging demand for low-carbon solutions, where we sold over 10,000 horsepower of electrified compression and multiple landfill gas handling applications. In addition, we successfully completed the construction of an important power and gas treating plant in Columbia. Once commissioned, the system will reduce flare gas and CO2 emissions through a uniquely engineered solution that leveraged our cross-regional experience and is a win for the environment. While bidding activity remains strong across each of our three segments, navigating today's challenges will be front of mind. The manufacturing business is in the early stages of the recovery in a very competitive environment, which may pressure margins until such a time as excess industry capacity is put to work. In addition, global supply chain constraints that emerged earlier this year may impact the price and availability of certain inputs. While we've successfully navigated supply chain constraints to date, our teams must remain vigilant in neutralizing the impact of escalating costs on materials such as steel. Our aftermarket services business saw improved activity in the quarter across all segments on improved demand for parts and components, as well as operations, maintenance, and overhaul services. We've also seen operational efficiencies captured through instrumentation and telemetry upgrades, which are maximizing uptime and value for our customers. However, despite improved activity, the AMS business remains very competitive and is also seeing supply chain constraints, impacting the price and availability of OEM parts, pressuring margins in the AMS business across all regions. Turning to asset ownership, our global fleet continued to perform as expected. Utilization of our U.S. contract compression fleet improved to a third quarter average of 88%. while edging the quarter at 89%, its highest utilization rate since entering the U.S. contract compression business in 2017. With the drawdown in inventories of drilled but uncompleted wells to their lowest level since 2013, additional drilling will be required to replenish inventories and for producers to meet their production targets, particularly in locations with high well decline rates, such as the Permian Basin. Accordingly, if commodity markets remain constructive, we expect demand for our rental solutions to continue. We're also seeing increasing demand for electrified rental solutions as our customers turn their minds to managing their environmental impact and reducing Scope 1 emissions. We expect that demand for e-compression will continue to strengthen in geographies where it can be readily deployed as clients continue prioritizing their decarbonization efforts. In addition to our contract compression fleet, our international rental assets continue their strong performance across all geographies. We are progressing the 10-year gas infrastructure project awarded during the first quarter of 2021. And subsequent to the quarter, we're awarded a new 10-year, roughly $200 million, natural gas infrastructure contract for a customer in our rest of world segment. We've dedicated resources over the years to increasing our capabilities and expertise in complex gas handling applications. and are proud that our reputation for successfully delivering has assisted us in securing additional projects this year. Turning to our energy transition efforts, we continue our work in understanding how the transition could unfold and are already seeing a significant number of inquiries for lower carbon solutions, including in respect of e-compression, carbon capture and sequestration, renewable natural gas, and hydrogen. With support of oil and gas fundamentals, and development policy framework for the energy transition, we are modestly increasing our dividend, illustrating our commitment toward returning capital to our shareholders. Looking forward, we are focusing our attention towards supporting our global customers and their development plans while simultaneously building capabilities to capture opportunities within the energy transition landscape. I will now turn things over to Sanjay to review our financial results. Thanks, Mark.