Saturn Oil & Gas Inc.

Good morning, ladies and gentlemen, and welcome to Saturn's fourth quarter and full year 2024 results conference call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After management's remarks, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. If you do need assistance during the conference call, you may signal an operator by pressing star then zero. We'll now turn the meeting over to Ms. Cindy Gray, Vice President, Investor Relations. Please go ahead, Cindy.

Thank you, Asya. Good morning, everyone, and thanks for joining us for Saturn's Q4 and year-end 2024 earnings call. Please note that the company's financial statements, MD&A, AIF, and press release are available on our website and have been filed on CDAR. Some of the statements on today's call may contain forward-looking information, references to non-IFRS and other financial measures, And as such, listeners are encouraged to review the associated risks outlined in our most recent MD&A. Listeners are cautioned not to place undue reliance on these forward-looking statements since a number of factors could cause the actual future results to differ materially from the targets and expectations expressed. The company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, unless expressly required by applicable securities law. For further information on risk factors, please view our AIS blog on CDAR and available on our website. All amounts discussed today are in Canadian dollars unless otherwise stated. Today's call will include comments from various members of Saturn's executive team, including John Jeffrey, our CEO, Justin Kaufman, CBO, and Scott Sanborn, our CFO. Following our prepared remarks, we're going to open the lines up to participants on the conference call for a question and answer session. If we are able to address your questions today, we'd encourage you to reach out to Saturn directly through our website. I'll now turn it over to John.

Thanks, Cindy. Good morning, everyone, and thank you for joining us. As demonstrated in our results, Saturn has continued to evolve, and 2024 was a year of notable progress on many fronts. We enhanced the quality and sustainability of the asset portfolio through two core-up acquisitions and closed the significant These transactions drove further growth and high grading of our drilling inventory while expanding our future development potential. The South Saskatchewan acquisition also provided water flood development that can help further reduce Saturn's already low declines. While improving our long-term sustainability, with the U.S. $650 million of senior notes, featuring lower interest rates, more favorable terms, and an amortization feature that provides for systematic principal repayments of 10% per year. Recognizing U.S. denomination debt means we are exposed to currency fluctuation. We also layered on a foreign exchange hedge at approximately $1.34 Canadian to U.S., which served to fix the interest rate and principal payments on the debt for the next three years. Given the recent erosion of the Canadian dollar over the past few months, the impact of foreign exchange has significantly affected the Canadian dollar value of our U.S. debt, and some investors and market participants may not recognize the degree of that impact. For example, last half a year of 2024, we made two debt prepayments totaling U.S. $32.5 million, resulting in a year-end balance of the senior notes of U.S. $618 million. Although, when expressed in Canadian dollars, these payments don't seem obvious. Thanks to our foreign exchange hedges, Saturn has notionally offset a portion of the increase in net debt caused by the currency fluctuation, which at year-end represented an offsetting value of $20 million, and would have reduced our net debt to $840 million if this could have been included in our net debt calculation. However, when the impact of the exchange rate is applied and converted to CAAT, it almost completely offset the impact of our prepayment. That, in addition to our scheduled capital program, makes the net debt period even larger in Canadian dollars. In reality, should the foreign exchange return to prior levels, we are exactly on track to meet our debt obligations, as I'll illustrate. If we look ahead to Q2 of this year, the situation could be vastly different depending on the outcome of the trade wars and the Canadian election. Since our planned capital spending is so much lower in that period, It contributes to a working capital surplus, which improves net debt. For example, using our guidance assumptions for capital and production, which I will say we are well ahead of, and using a 74-cent dollar, our ending debt for the quarter will be 700 million CAD, or approximately 160 million reduction in Q4 levels. And again, this is exactly on track to our guidance. Whereas applying the current effects of 69 cents results in net debt for the quarter of $750. Again, this just demonstrates the sensitivity of foreign exchange on our net debt and supports Saturn's decision to layer on that foreign exchange hedge to protect interest and principal. Again, adjusting for currency, our gross and net debts are exactly on track to achieve our guidance set out earlier in the year. Now, what I don't want to overlook here is that a lower Canadian dollar helps the oil industry, as effectively we are paid in U.S. dollars. The lower the loonie, the higher their revenues. And at today's WTI levels, thanks to a depressed dollar, we are still enjoying prices in the 90s. Notwithstanding the foreign exchange impact on our net debt, our Q4 results reflect the consistent execution of our value proposition, coupled with strong operational performance. Production averaged just over 41,000 barrels a day in Q4, exceeding the high end of our guidance range and beating analyst expectations of just over 105 million. We entered the year even higher, with December volumes averaging approximately 42,000 VOE a day. We had a record Q4 adjusted funds flow totaling 124 million, or 64 cents a share, beating the Street Consensus estimates by 12%. For the full year 2024, our AFF was $2.10, or 380 million. Reflecting on our team's ability to control costs, identify operational synergies, and enhance margins. We reduced net operating expense for $19 for the year and just over $18 in the quarter, well under the $20 target we had set. We have also realized lower royalties and transportation expenses in both quarters and the year, which contributed to an operating net back of just over $43 of BOE in both periods. With approximately $134 million of refunds blown in 2024 for $0.74 a share, Saturn continued to deliver on our return-focused value proposition. Since the launch of our share buyback in August, we have repurchased about 6.7 million shares in the open market, or about 3% of our outstanding balance. Our robust hedge book positioned Saturn well to withstand market turbulence. Again, this backdrop and the impact of the commodity pricing and the weakening dollar volatility by hedging commodity prices, differentials, and FX. So putting all that together, Saturn is resilient. We have a flexible asset base and we can rapidly pivot our capital program at the pace of our development in response to the broader market. We believe we have added tremendous value to our shares in the period by returning approximately $15 million to shareholders through buybacks, repaying $45 million of debt, undertaking accretive acquisitions, exceeding our tight curve on our CapEx, while meaningfully reducing our operational costs below our stated goal. We firmly believe our shares offer an extremely compelling value at current prices and represent the deepest value on the market today. Once again, I am proud of Saturn's accomplishments, which showcases our team's exceptional performance and innovative approach. Our ability to challenge conventional practices, both operationally and corporately, has been a key driver to our success. In addition, our team's ability to see and do things differently has allowed us to disrupt traditional, often inefficient practices in our industry, and things keep getting better. We look forward to continuing to consistently deliver results, walk the talk, and keep all of our stakeholders updated the long way. With that, I'll turn it over to Justin to talk to our operational performance and reserves. Thanks, John. 2024 was our year of solid execution in the field that set several new records for Saturn, including Q4 results that beat analysts' expectations on several metrics, many of which are due to the overperformance of development goals, thanks to the innovation and expertise of the technical team and the high-quality acreage of the company. The integration of the acquisition assets in mid-2024 resulted in the formation of our three core areas, and expanded our development inventory of high return opportunities in southeast Saskatchewan and west Saskatchewan. We executed a $105 million capital program in Q4 and $246 million over the full year, drilling 54 wells in southeast Saskatchewan, 27 in west Saskatchewan, and 16 in Alberta, within the Cardium and Monty place. Other notable projects and developments in 2024 include several firsts or new record achievements across our play areas, such as We built the first-ever 12-way monoboard horizontal well. This is on a sample set of 600 wells drilled in the Flat Lake area and will lead to future capital efficiencies. We built the first-ever Flat Lake open-home balkan well and the first open-home multi-lake spearfish well, applying learnings and expertise gained from our open-home multi-lake balkan development. This is an extremely exciting engineering technique that is unlocking barrels in areas that were previously uneconomic, and we will continue to expand on this development in 2025. We had one of our fracked Balkan wells ranked as Saskatchewan's seventh best performing well in December 2024. This is a rarity for a one mile fracked Balkan well to make this list and hasn't happened in quite some time. Our well spacing and fracked designs are why we are realizing these strong production results. We also adjusted the fracked designs in Flat Lake and Currion, which improved capital efficiencies. Specifically in the Currion, the combination of longer laterals and innovative hybrid completion technique helped expand the efficiency of the tracks to reach the tow and enhance the economics. This track design involved a ball drop system on the tow, followed by a switch to coil almost half-way through. This strategy allowed us to increase track pressure rates, generate significant cost reductions, improve well completion times, and is expected to be applied to future extended-reach carding wells. We also implemented new down-hole drilling bottom-hole assembly tools. that helped us drill Canada's longest accordion well at 7570 meters mesh depth. These innovations in technology have helped us transform what was historically a sleepy plane accordion into a higher impact reservoir with competitive economics. Santa Clara posted growth in all reserve categories over 2023, with 2P reserves of 200 million barrels, 1P of 133 million barrels, and PDP of 87 million barrels. This year, we also further increased as we hybrid in the floor. From a value perspective, the net asset value per share comes in at over $5.50 on a P&P basis and approaches $14 per share on a 2P basis, which really represents a compelling opportunity given a steep disconnect between current market values and the net asset value of the company. As Scott will also speak to later, our capital program is heavily weighted to the second half of the year, which means the outcomes from the activity are often realized true for reserves and production as volume on-stream from activity in the fourth quarter may not appear until Q1 or Q2 of the next year. We saw this in our 2024 year-end reserves as we invested significant development capital in Q3 and Q4, yet a material amount of development won't be reflected until we report our 2025 reserves. While the access in June provided additional new reserves and location, it also pushed more capital in Q4 development which, again, mostly won't get credited until the year-end 2025 reserves. Following the acquisition, we also chose to upgrade the five-year development plan as part of our year-end reserve evaluation process. While high-grade locations and reserves, this led us to shift some probable locations and improved on the belt category, which is great, and removed a portion of our previously booked locations that no longer fit within our development plan. In addition, we expanded our location inventory in 2024 with over 1,100 book locations in the result report, an increase of 27% over last year, along with an incremental 1,200 internal identified unbooked locations. We're also pleased to have booked our first ever water flood reserves at Newfield in 2024, recording approximately 600,000 barrels. This booking is adjacent to Barron's water flood operations, within an existing unit that has a large original oil in place of over 70 million barrels, with that 11% recovery factor. However, we see the potential of getting to a 20% recovery factor with water flood. Currently, we have eight wells booked on this line, but if water flood is successful, there's potential to expand this on a meaningful scale with pre-pressurized water flood locations. We see water flood as a significant driver to mitigate decline, and as John mentioned, increased sustainability of the company. I'm also very proud of our team's safety performance in the year, with zero lost time injuries and only three reportable injuries. Despite increasing our personnel by 38% in the year to a total of over 1.4 million personnel. We also increased our hazard identification by 60% in 2024 over 2023, a significant step forward in preventing future incidents. I'll now turn it over to Scott to review his financial highlights.