ARC Resources Ltd.

Good morning. My name is Sylvie and I will be your conference operator today. At this time, I would like to welcome everyone to the AHRQ Resources second quarter 2024 earnings conference call. Note that all participant lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then number one on your telephone keypad. And if you would like to withdraw from the question queue, please press star then number two. Thank you. Mr. Lucco, you may begin your conference.

Thank you, operator. Good morning, everyone, and thank you for joining us for our second quarter earnings conference call. Joining me today are Terry Anderson, President and Chief Executive Officer, Chris Bibby, Chief Financial Officer, Armin Jahangiri, Chief Operating Officer, Lara Conrad, Chief Development Officer, and Ryan Barrett, Senior Vice President, Marketing. Before I turn it over to Terry and Chris to take you through our Q2 results, I'll remind everyone that this conference call includes forward-looking statements and non-GAAP and other financial measures with the associated risks outlined in the earnings release and our MD&A. All dollar amounts discussed today are in Canadian dollars unless otherwise stated. Finally, the press release, financial statements, and MD&A are available on our website as well as CDAR. Following our prepared remarks, we'll open the line to questions. With that, I'll turn it over to our president and CEO, Terry Anderson. Terry, please go ahead.

Thanks, Dale, and good morning, everyone. For the call today, I'm going to reflect on the quarter and speak to the outlook. We are laser focused on execution as the next few quarters will represent a significant positive change for the company with the TACHI phase one coming on stream later this year. I'll then pass it over to Chris to go through the financial results and open the line for questions. First, in terms of our operational performance, Q2 was another strong quarter of execution. Production of 330,000 BOE per day was at the top end of second quarter guidance over a very busy period in terms of planned maintenance activities. Executing these is no easy task in my mind. It's an underappreciated strength of our people. To that end, the team did an excellent job completing major turnarounds across our assets all in the second quarter. They were completed on schedule and on budget, and most importantly, safely. In total, roughly 140,000 hours were worked across the field this turnaround season with no recordable incidents. I'd like to thank our staff and contractors for their continued focus on safety, and operational excellence. This was critical in providing operational momentum into the second half of the year. In terms of production, the base assets performed in line with our expectations. Sunrise was the exception, having greatly outperformed. Late last year, we changed the well design in the upper Montney. We are now seeing the benefits, which has resulted in a positive revision to our tight curve. On a per-well basis, these changes are expected to yield a 40% increase in natural gas production over the initial 12-month period with only a 25% increase in cost. Effectively, we are reducing the total number of wells and total capital spent to recover the same amount of resource. The net effect is a 10% reduction in sustaining capital at sunrise annually and a lower break-even. It's also worth highlighting these type curve changes will reduce the full cycle break even in the upper Montney to approximately $1.10 per MCF. As many of you know, Sunrise has a long inventory runway and is direct connected to LNG Canada, making it a great option for us to supply natural gas to the project beginning early next year. Turning to our capital investments, We executed an efficient program that focused on advancing ATACHI while remaining active at our CONSATE rich assets at CAQA and Greater Dawson. This is expected to drive record CONSATE volumes for the organization by year end. At ATACHI, phase one is on schedule and on budget with a project sitting at approximately 75% complete. As of today, the plant is nearing completion with the final outstanding pieces of equipment now on site. We have drilled 30 of the 40 wells required to fill the 40,000 BUV per day capacity and have completed 20. Electrification of the project at startup is on track with construction and installation of critical infrastructure complete and ready to be energized. And the liquids gathering Lines and pipelines are on schedule and nearing completion. As one shareholder reminded me a while ago, the only percent complete staff that actually matters is the 100% one. Therefore, we will not be complacent and we will remain focused on executing on our key deliverables for phase one. I look forward to providing another update in October and showing firsthand the progress we have made at this exciting growth project at our first ever investor tour at Hitachi. Moving on, I'd like to highlight a couple of key developments that are of strategic importance to ARC. The first was an agreement that was recently announced by the government of BC and the Halfway River First Nation, which included a landscape planning pilot that further de-risked the long-term development plan at ARC's Hitachi assets. The agreement outlines a new framework that will exempt ARC from the disturbance cap for Hitachi that was previously implemented under the Blueberry Agreement. Under this landscape planning pilot, ARC will be the sole oil and gas producer exempt from the disturbance caps in this area. ARC's inclusion in this pilot is directly tied to our commitment to being a best-in-class responsible energy producer and the strong relationship we have established with the Halfway River First Nation over the past 20 years. I'd like to thank Chief Hunter and Council for their partnership. I'm truly proud of the collaborative efforts to advance responsible development in Northeast BC. Also last quarter, we witnessed the positive FID of Cedar LNG. In June, I had the opportunity to attend the celebration event and see firsthand the impact this project will have on Canada, BC, and the Haisla Nation. This is an important project and one we are excited to be part of. ARC will deliver approximately 200 million cubic feet per day of natural gas to the project, approximately half of the facility's capacity for a term of 20 years, which is anticipated to begin in late 2028. We continue to make excellent progress related to the sale and purchase agreement of the associated LNG offtake and are on track to have this completed by the end of this year. Together with the two other LNG agreements with Chenier that take effect later this decade, ARC will meet our target of having approximately 25% of future natural gas supplies physically delivered to and priced off of international prices. In the short term, we are operating in a cyclical bottom for natural gas, while condensate prices exceed $100 Canadian per barrel. With a balanced commodity mix and as the largest condensate producer in Canada, we have considerable flexibility to maximize the returns across our asset base. ARC is a very disciplined company focused on profitability over BOEs. With natural gas prices below $1, We have elected to shut in 250 million cubic feet per day at Sunrise, which is our only dry gas asset. This represents about 18% of our natural gas production, which will be easily restored when prices recover. And while Sunrise has a cash break-even of 65 cents per MCF and is one of the lowest-cost assets in North America, we are not meeting full-cycle returns below $1 per MCF. We have considerable operating momentum in our CONSATE rich assets at Greater Dawson, CAQA, and Atachi. Combined, these assets will drive record CONSATE volumes for ARC by year end and through 2025. As we look out to the second half of the year and into 2025, everything within our control is working in our favor. We are focused as an organization on efficient execution and are getting very close to delivering a meaningful increase in profitability with the commissioning of our first phase detachee. With that, I'll turn it to Chris.