MEG Energy Corp.

Good morning, my name is Mark and I'll be your conference operator today. At this time, I'd like to welcome everyone to MEGS Energy's 2023 Q4 Results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there'll be a question and answer session. If you'd like to ask a question during that time, simply press star and then the number one on your telephone keypad. If you'd like to withdraw your question, you can press star and then the number two. And now I'd like to hand the call over to Mr. Derek Evans, CEO. You may now begin your conference.

Thank you, Mark. Good morning, everyone. And thank you for joining us to review Mega Energy's fourth quarter and annual 2023 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 Ustefsky, 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 Plus and on our website. Before we get started, I'd like to make a few comments regarding the CEO succession announcement we made yesterday. After almost six years leading MEG, I've decided to step down as president and CEO and from the board on May 1st. Darlene Gates, our chief operating officer, has been appointed by the board as my successor and will be named president and CEO and nominated to join the board of directors at MEG's annual general meeting. When I joined MEG in 2018, I set out to deliver shareholder value by strengthening our balance sheet, improving efficiencies, and reshaping MEG's long-term strategy. That work is complete. and Meg is now positioned with an enduring foundation for the future. As such, I'm confident this is the appropriate time to step down. Over the past few years, I've worked with the board to plan and execute a smooth CEO succession. Since Darlene joined Meg in 2021, we've worked together on her development as part of that process, and she continues to demonstrate that she's uniquely positioned to lead Meg. Darlene brings many skills to the role, the most important of which is her deep commitment to our people, the environment, and the communities in which we live and work. She's also been an exceptional partner to me, driving an intense focus on health and safety and was instrumental in delivering our operating and financial results and strategy. I have great confidence that Meg will flourish under her leadership And I'm excited about the company's future as it continues to execute the strategy that we have built together. I joined MEG because we had a world-class resource base and a team that was known for its technological innovation and best-in-class execution. Those qualities remain. Working the past six years as part of MEG's team has reinforced my belief that fundamentally, this is a people's business, people business. where talented and innovative people can make extraordinary things happen. I want to thank the board and the entire MEG team for being part of this journey with me. I'm extremely proud of where MEG is today and how it is poised for the future. Thanks again. And with that said, let's move into a discussion of our fourth quarter and annual 2023 results. Our top priority at MEG is our focus on health, safety, and the environment, which ensures nobody gets hurt, eliminates serious incidents, and delivers operational excellence. Those priorities were clearly reflected in the performance delivered by our team in 2023. MEGS financial results continue to benefit from a relatively strong WTI oil price, averaging about US $78 per barrel in 2023, that was supported by increasing oil demand and coordinated OPEC Plus supply management. While the Edmonton WCS discount averaged a relatively wide US $22 per barrel during the fourth quarter and US $19 per barrel in 2023, the historic lack of pipeline egress driving those wide differentials is about to change. The TMX pipeline to Canada's West Coast continues to progress. with TMX calling for line fill in April and startup estimated in the second quarter of this year. Achieving that long-awaited milestone will be a key catalyst to deliver value to Meg's shareholders, as the price of all of our barrels will benefit from unconstrained market access. Over 80% of our production will also have the ability to reach high-value markets in the U.S. Gulf Coast and internationally. Through our diverse market access and marketing optimization activities, Meg was able to deliver a premium of US $2.10 per barrel in 2023 for our production, compared to the AWB index price in Edmonton. Our 2023 results also reflect the company's strong operating performance that has enabled our significant commitment to debt reduction and share buybacks. We are on the cusp of reaching our U.S. $600 million long-term net debt target, and that significant milestone will be the end of our multi-year balance sheet rebuild and mark the transition to a company focused on moderate production growth, where 100% of the free cash flow is being returned to shareholders. That strategy capitalized on the strengths of Meg's high-quality long-life reserves and and will deliver maximum long-term value to our shareholders. Once again, I'm truly proud of the hard work delivered by the MEG team. With that, I'll now ask Darlene Gates, our Chief Operating Officer, 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 last quarter. Darlene, over to you.

Thank you, Derek, and good morning, everyone. Before I jump into the results, Derek, I'd like to thank you personally for your leadership, integrity, and your commitment to making MEG the success it is today. You set a great example for what an outstanding CEO and leader should be. On behalf of everyone at MEG, thank you for everything you have done for our people and our business. know that you have had a significant impact on every one of us. Thank you. I'll now turn our focus over to our operating results. May continues to be a leader in innovative and responsible energy development, and we delivered another quarter of strong safety, health, and environmental performance with no lost time injuries. In 2023, we achieved a 15% reduction in our total recordable incident rate and our lowest annual spill volume in MAG history. This performance was a result of a continued focus on strong safety culture and our teams and contractor partners. As part of our commitment to continuous improvement, I'm proud to share that we rolled out a new operations excellence management system. This new system helps us create a workplace where serious incidents are eliminated, improves operational performance, and moves us towards our vision of Nobody Gets Hurt. In the fourth quarter of 2023, production averaged over 109,000 barrels per day, and we exited the year at 110,000 barrels per day in the month of December. This performance capped off a strong year for Meg, as we delivered a full year production average of over 101,000 barrels per day, which is a new annual record for us, and a 6% increase over 2022. We also achieved a 4% year-over-year reduction in our steam-to-oil ratio, reflecting continued success in steam optimization across our top-tier resource. Fourth quarter non-energy unit operating costs were $4.64 per barrel, driven by low maintenance activity levels and high production rates. In 2023, our total operating costs net of power revenue were an industry-leading $5.96 per barrel, which demonstrates the value of our low-cost structure and cogeneration facilities. In addition, our 2023 capital and development program was also delivered in line with guidance at $449 million. That program included key investments in redevelopment wells, SEGD well paths, field and facility infrastructure, and a major facility turnaround. As we move into 2024, we've navigated a cold start to the year and kicked off a development program that underpins moderate capacity growth. In the first half of the year, we are increasing drilling activity across ZEGD pads and executing a short cycle redevelopment and infill program. This positions us to bring on two new ZEGD pads in 2024, one late in the first half and another late in the second half. This will support our previously announced production guidance of 102,000 to 108,000 barrels per day. Engineering is also progressing on our multi-year moderate capacity growth projects, and we expect to see activity ramp up through 2024. 2023 was a strong year for MEG, and our continued focus on safety, culture, and operational excellence positions us well to deliver on our 2024 commitments. With that, I will turn it over to Ryan to provide the financial update.