MEG Energy Corp.

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 MEG Energy's 2023 Q2 Results Conference Call. Note that 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 number one on your telephone keypad. And if you would like to withdraw from the question queue, please press star followed by two. Thank you. Mr. Derek Evans, CEO, you may begin your conference.

Thank you, Sylvie. Good morning, everyone. And thank you for joining us to review MegEnergy's 2023 Q2 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 Uzdefsky, 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 will keep my remarks brief today and refer listeners to yesterday's press release for more detail. 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 plant reliability, steam utilization, and ongoing well optimization all contributed to a strong operational quarter. I want to congratulate and thank the MEG team on the execution of a safe and successful second quarter turnaround, despite the challenging labour market and ongoing supply chain constraints. Before I turn the call over to Darlene and Ryan to share details of our results, I'd like to briefly touch on the second quarter highlights. Bitumen production in the second quarter averaged 86,000 barrels a day, a 28% increase over Q2 2022. In the quarter, our bitumen realization after net transportation and storage expense of $57.64 was a 33% increase over the first quarter and was primarily driven by an almost US $10 per barrel improvement in the WCS differential since Q1. These excellent operational results enable our ongoing commitment to debt reduction and share buybacks. In the first half of 2023, we have repurchased US $126 million or $171 million Canadian of the outstanding seven and an eighth senior unsecured notes. Share buybacks in the same period totaled $169 million through the repurchase and cancellation of 8 million shares. Free cash flow remained allocated at 50% to debt reduction and 50% to share buybacks. Once the US $600 million debt repayment target is achieved, MEG will return 100% of free cash flow to shareholders. We anticipate achieving the $600 million debt target mid-2024. I will now ask Darlene Gates, our COO, to speak to the 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 quarter. Darlene, over to you.

Thank you, Derek, and good morning, everyone. Our top priority at MEG remains health, safety, and environmental performance. This quarter, we continued to advance our operations excellence and safety leadership development program. It is our approach to continuous improvement that enables us to be a leader in responsible and sustainable energy development. Production of 86,000 barrels per day in the second quarter was delivered at a top tier steam oil ratio of 2.25 and includes the completion of a major turnaround. This resulted in a quarterly production impact of approximately 20,000 barrels per day. Operating expenses net of power revenue averaged $6.63 per barrel in the second quarter. This is a 48% reduction from the same period last year. The completion of our scheduled turnaround was a key milestone in the quarter. It was the largest in our history in terms of work hours at just over 220,000 hours and was completed on schedule with zero recordable injuries and zero recordable spills. Increased turnaround costs in the second quarter reflect a larger plan turnaround scope, found work, inflationary pressures on labor costs, and supply chain challenges. I want to take this opportunity to thank our maintenance, operations, and contractor crews for their commitment to delivering and executing a safe turnaround. Moving forward, we are focused on optimizing second half production, which is forecasted to be approximately 105,000 barrels per day. Third quarter volumes will be impacted by planned facility and infrastructure and field infrastructure projects required to distribute high-pressure steam to the future well paths. This will be partially offset by the startup of infill and redevelopment wells drilled earlier this year. Steam injection to our newest pad in the third quarter will also commence. and ramp up to its full production by year end. We expect a strong finish to the year again with an exit rate of 110,000 barrels a day. With that, I'll turn it over to Ryan to provide the Q2 financial results.