MEG Energy Corp.

Good morning, ladies and gentlemen. My name is Michelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the MEG Energy 2023 Q1 Results Conference Call. All 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 the number one on your telephone keypad. If you would like to withdraw your question, please press star followed by the number two. At this time, I would like to turn the conference over to Mr. Derek Evans, CEO. Please go ahead, sir.

Thank you, Michelle. And good morning, everyone, and thank you for joining us to review MegEnergy's 2023 Q1 Operating and Financial Results. With me on the call this morning are Ryan Kubik, our Chief Financial Officer, Darlene Gates, our Chief Operating Officer, and Lyle Yuzdevsky, our General Counsel and Corporate Secretary. I'd like to remind our listeners that this call contains forward-looking information. Please refer to the advisories in our disclosure documents filed on CDAR and on our website. I'll keep my remarks brief today and refer listeners to yesterday's press release, along with the MD&A and financial results that you can find on CDAR. Our top priority at MAG is our focus on health, safety and the environment that ensures nobody gets hurt, eliminates serious incidents and delivers operational excellence. I'm extremely proud of the safety, operating and financial performance delivered by our team. Their focus on safety, plant reliability, steam utilization and ongoing well optimization have all contributed to a strong operational quarter. Our operations team have begun our scheduled turnaround at the Christina Lake facility. Our priority is to maintain safe and reliable operations throughout the turnaround. Before I turn the call over to Darlene and Ryan to share details of our results, I'd like to briefly touch on some of the first quarter highlights. Bitumen production rose 6% to approximately 107,000 barrels per day, an industry-leading steam oil ratio of 2.25, with an operating cost structure that was positively impacted by low natural gas and higher power prices. These strong operational results enabled our ongoing commitment to debt reduction. We continue to execute on our debt repayment strategy, repaying approximately 117 million Canadians with net debt declining to U.S. $1 billion approximately, or approximately $1.4 billion Canadian at the end of the first quarter. Approximately 50% of 2023 free cash flow is being allocated to debt reduction, with the remainder being applied to share buybacks. Once we achieve the U.S. $600 million debt repayment target, make or return 100% of free cash flow to our shareholders. I'll now ask Darlene Gates, our COO, to speak to our operating results, and ask Ryan Kubik, our CFO, to talk to our financial results. Before I open the call to questions, I'll provide an update on the Pathway Alliance's efforts this year. Darlene, over to you.

Thanks, Derek, and good morning, everyone. In the first quarter, MEG maintained its position as a leader in innovative and responsible energy development. The continued strong operational performance I will highlight today is underpinned by a commitment at all levels of our organization to ensure we take care of the safety of our employees, contractors, and the communities in which we operate. In the first quarter, we executed a high level of activity while achieving one of our lowest quarterly total recordable injury rates in the past several years at 0.24 incidents per 200,000 work hours. Our first quarter production averaged 107,000 barrels per day, a 6% increase over the same period. This production was delivered for Christine Lake at a top tier steam oil ratio of 2.25. Since exiting 2022 at record production rates, we've gained valuable knowledge surrounding water treatment optimization associated with the higher throughput rates at the facility. Our team's continuous improvement mindset has been instrumental in proactively managing this. Total operating expenses comprised of non-energy and energy costs of $6.13 per barrel for the first quarter. This is a 31% reduction from the same period last year. In the quarter, we continue to realize substantial benefits from our cogeneration facilities, which helps reduce energy operating costs net of power revenue of $1.36 per barrel. Non-energy costs remained essentially flat from the same period a year ago at $4.77 per barrel, and that's in line with our full-year guidance of $4.75 to $5.05 per barrel. As Derek mentioned, executing a safe and effective turnaround is a top operational priority for us in our second quarter. This year's turnaround will be focused on our Phase I and II facilities and is expected to have a full-year production impact of 6,000 barrels per day. This translates into a second quarter volumes outlook of approximately 84 to 88,000 barrels per day. Our teams recently completed safe ramp down of the facilities and have begun conducting scheduled maintenance focused on maintaining regulatory compliance and delivering improved performance. Despite continued pressure on short cycle labor availability and associated service rates, I believe we're well positioned to deliver a productive and impactful turnaround. Turning to development, this quarter we executed a robust winter drilling program. Preliminary results continue to validate quality of our long-term resource base. We also kicked off our 2023 infill and redevelopment drilling program, which pairs high-quality resource with proven innovative subsurface technologies. The supports are previously announced production guidance of 100 to 105,000 barrels per day. Looking ahead, We're focused on continuing to maintain a strong safety and environmental performance record to consistently deliver sustainable value to our shareholders. With that, I'll hand it over to Ryan.