MEG Energy Corp.

Good morning. My name is Ludi, and I'll be your conference operator today. At this time, I would like to welcome everyone to the MEG Energy's 2023 Q3 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 the star, followed by the number 1 on your telephone keypad. If you would like to withdraw your question, please press the star followed by the number 2. Thank you. I would now like to turn the conference over to your speaker today, Mr. Derek Evans, President and CEO of Meg Energy. May we begin your conference?

Thank you, Ludi. Good morning, everyone, and thank you for joining us to review Meg Energy's 2023 Q3 Operating and Financial Results. On the call this morning are Ryan Kubik, our Chief Financial Officer, Darwin Gates, our Chief Operating Officer, and Law Use Deputy, our General Talent 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 for more details. A top priority at MEG 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, project execution, and ongoing well optimization have all contributed to a strong operational quarter. Before I turn the call over to Darlene and Ryan to share details of our results, I would like to briefly touch on the business highlights. Meg's financial performance continues to benefit from strong oil prices, which reflect favorable supply and demand fundamentals for both WGI and WCS heavy oil differentials. WGI prices averaged $82 a barrel U.S. in the third quarter, supported by increasing global oil demand and coordinated OPEC Plus production cuts and supply management. The WCS discount to WGI in Edmonton averaged $13 per barrel U.S. during the quarter, driven by effectively zero apportionments on the Enbridge system, strong U.S. Gulf Coast exports as a result of rising heavy crude capacity in Asia, and tight global heavy crude markets as a result of OPEC Plus reducing supply. That WCS differential is a key indicator of pricing for our product in Edmonton, But it's important to remember that we sold 73% of our blend volumes in the third quarter into the U.S. Gulf Coast. Heavy oil in that market has been even stronger, allowing us to receive a premium over what is achievable in Edmonton. Our market access and market optimization activities in the third quarter generated a weighted average premium of 69 cents per barrel on our realized AWB price over the Edmonton AWB benchmark. After deducting diluent transportation costs to get our product to market, our bitumen realization was $84.75 per barrel at our plant gate in Q3. WCF prices have more recently widened, reflecting refinery turnarounds, higher Western Canadian sedimentary basin production, seasonal heavy oil blending requirements, as well as perceived concerns about Alberta storage capacity and TMX timings. TMX Pipeline to Kansas West Coast is on track for start-up late in the first quarter. Line fill of 4.5 million barrels should positively impact the WCS differentials in Q1 2024. With 20,000 barrels per day of submitted capacity on TMX, Meg will have over 80% of its production with access to tidewater. Near-term fundamentals remain strong as we head into 2024. The industry will also be positioned with excess takeaway capacity for the first time in many years, and that should narrow and reduce the volatility of WCS heavy oil differentials. We anticipate the current wide WCS differentials will narrow slightly as we head into the end of the year and will remain elevated until TMX moves into operation at the end of Q1. Q2 and Q3 2024 differentials should look similar to 2023, with Q4 2024 only marginally higher than Q2 and Q3. Our financial results reflect strong operating performance and enable our commitment to debt reduction and share buybacks. Since April 2022, we've repurchased US$853 million of senior notes, and 668 million, or about 33 million shares, at a weighted average price of $20.16 per share. Those share buybacks represent approximately 10% of our 2021 outstanding share count. Free cash flow remains allocated at 50% to debt reduction and 50% to share buybacks, but that will ramp up to 100% shareholder returns next year when we reach our $600 million U.S. net debt target. The corporation published its third ESG report in September 2023, which discusses its foundational commitments of business model resilience and governance and the corporation's priorities ESG topics, health and safety, climate change and greenhouse gas emissions, water management, energy security, energy affordability, and indigenous relations. I will 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 Pathways Alliance efforts this quarter. Darlene, over to you.

Thank you, Derek, and good morning, everyone. In the third quarter, as Derek mentioned, we delivered strong safety, health, and environmental performance with no lost time injuries and no recordable spills. Production of about 104,000 barrels per day in the third quarter was delivered at a top-tier steam-to-oil ratio of 2.28, reflecting the successful completion of our short-cycle infill and redevelopment programs and a continued emphasis on steam allocation to the highest quality resource. When compared to the same quarter last year, this represents a 2% production increase and a 5% reduction in steam-to-oil ratios. These results were achieved while successfully completing our planned facility and field infrastructure projects, which will enable us to distribute a high-pressure beam to future well paths. Operating expenses net of power revenue averaged $5.11 per barrel in the third quarter, primarily reflecting higher production rates, planned maintenance activities, and inflationary pressures on services, chemicals, and staff costs. Power revenue exceeded energy operating costs in the quarter, generating a 4 cent per barrel net recovery, which continues to demonstrate the value of our cogeneration facilities. As we head into the fourth quarter, lower facility and maintenance activity levels and increased production rates are projected to drive our non-energy operating expenses back within our full-year guidance. Our outlook for second-half production continues to be approximately 105,000 barrels per day, and have us exiting the year near 110,000 barrel per day facility capacity. In October, we also achieved first production from our newest well pad, which we will continue to ramp up throughout the fourth quarter. I'd like to take this opportunity to thank our teams for this quarter's operational performance and confident they have position made for a strong finish to the year. With that, I'll turn it over to Ryan to provide the Q3 financial update. Ryan?