Tourmaline Oil Corp.

Work being recorded on Thursday, May 8th, 2025. I would now like to turn the conference over to Scott Kirker. Please go ahead. Thank you, Operator, and welcome everyone to our discussion of Turnley's financial and operating results as of March 31, 2025. This has pretty much ended March 31, 2025 and 2024. My name is Scott Kirker. I'm the Chief Legal Officer here at Turnley Oil. Before we get started, I refer you to the advisories on forward-looking statements contained in the news release, as well as the advisories contained in the Termini Annual Information Forum and our MD&A available on CDAR and on our website. I also draw your attention to the material factors and assumptions in those advisories. I'm here with Mike Rose, Termini's President and Chief Executive Officer, Brian Robinson, our Chief Financial Officer, and Jamie Heard, Termini's Vice President of Capital Markets. Let's start with Mike speaking to some of the highlights of the last quarter and our year so far. After his remarks, we will be open to questions. Go ahead, Mike.

Thanks, Scott. Good morning, everybody. Thanks for dialing in and being online. So we're pleased to review our first quarter 25 results, update ET activities, and update the outlook. A few of the highlights, first quarter 25 average production was 638,000 DOEs a day, up 8% over first quarter of 24, and quite ahead of our first quarter 25 expected production range. First quarter 25 cash flow was $963 million on total capex of $825 million, each spending was about $800 million, and that generated free cash flow of $150 million for the quarter. As you've seen, we continue to consolidate the Northeast BC Montney, one of the most profitable gas plays in North America. We're doing that in concert with our Northeast BC infrastructure build-out, and we're doing it ahead of the expected improving natural gas markets, which to some extent has already started to happen. Board of Directors has declared a special dividend of $0.35 per share payable on May 26, 2025. and the company intends to declare a quarterly dividend of $0.50 per share, payable on June 30th of 2025. A little on production. March 2025 average production was $645,000 BUEs a day, so higher than the quarterly average. The whole year forecast production range remains the same, however, at between $635,000 and $665,000. BOE per day. And production actually averaged $660,000, so the high end of the range for the first half of April as we finished off our completion activity from the winter, and then the volume came down for the second half of the month given weaker prices. We expect second quarter 25 average production in the $615,000 to $625,000 BOE per day range. as we've moved a significant amount of maintenance into Q2, given weaker prices currently, and particularly at Station 2. On financial results, our first quarter earnings were $213 million, or $0.56 per fully diluted share. I've mentioned first quarter ET capex was $800 million, so a little less than originally forecast. We expect EP capital spending during Q2 of $560 million, as activities are always a little lighter during spring breakups, and that should yield an estimated first half 25 free cash flow in the $430 million range. We do expect commodity prices to improve in the second half of this year with the start-up of the LNG Canada facility on the West Coast. and that should result in higher free cash flow in the second half of 25 relative to the first half. On the 25 capital program, the full year 25 program remains unchanged at between $2.6 and $2.85 billion. Given the week's case in two gas prices, We will defer some of the planned Q2 crack activity into the third quarter of this year and will continue to match planned production growth to the anticipated increasing natural gas price curve in the second half. We will release the updated multi-year EP plan, including the full Northeast BC Montney gas and liquid infrastructure build-out and incorporation of the recent acquisitions We'll do that in the second half of this year. Inclusive of projects not yet incorporated in that plan and the recent acquisitions, we're looking at very strong production volumes heading into the next decade of probably 850,000 UEs per day. And you'll see that full plan the second half of this year. Just looking at the two acquisitions that were announced yesterday, In the North Monteney, we've entered into an agreement to acquire the balance of the jointly-owned Latrice Conroy assets through the acquisition of Seguero Resources. And in the South Monteney, we've entered into an agreement to acquire assets in the Greater Septimus Area from a third party. Both transactions are expected to close in June. Our forward guidance and EP plan will reflect these acquisitions in the next update. In aggregate, the two transactions add approximately 20,000 DOEs per day of current production, an estimated 363 million DOEs of current 2T reserves, and approximately 410 Tier 1 future net drilling locations. Production and reserves from these assets are expected to experience significant future growth as each asset is systematically developed as part of the Northeast BC wanton build-outs. And real Tier 1 inventory is scarce in North America, and we've been systematically ensuring we have decades of Tier 1 inventory, Tier 1A, if you like, secured at Thermaline. The LaPree Conroy asset is the key component of the North Mountain Phase II project, and the Greater Septimus asset is complementary and adjacent to our planned ground birch project. $400 million a day, 20,000 barrels per day, two-phase gas plant development. The South Mahi transaction also included land and high-quality inventory in the North Deep Basin. We'll issue a total of approximately 13 million common shares as consideration for the two transactions, leaving the balance sheet in a very strong position for potential further acquisition in our core areas going forward. Briefly on marketing, our average realized natural gas price in the first quarter was $4.30 per MCF Canadian, so meaningfully ahead of the 805A benchmark price, which was $2.19 per MCF. So we continue to benefit from the expanding diversification portfolio and our strategic hedging program. From Q2 to Q4, $25 million. Termaline will average 2.1 GCF per day of natural gas sales that are not exposed to floating local market prices at ACO and Station 2. And we have an average of 1.16 GCF per day heads in 25 at a weighted average fixed price of $4.95 per MCF Canadian. We continue to be highly encouraged by the growing demand-driven natural gas price outlook in all of North America. and that includes the Western Canadian gas trading hubs. The company, though, continues to remain disciplined to not oversupply these local hubs and just remind that the natural gas growth that we achieved in 23 and 24 was almost entirely matched up with new export contracts out of the Western Canadian sedimentary basin. And for the approximately $200 million a day of gas growth, that will occur during calendar 25, 95 million of that, or about 50%, will actually connect Sloan to the Gulf Coast in November of this year. On E&P, we have very strong E&P performance across all of our operating complexes in the quarter, and we set production records in all three complexes. In D.C., we have a series of tags that are well ahead of performance-type curves, and they're detailed in the verbiage in that bullet. The strong 24 well performance that we delivered in the Alberta Deep Basin in 2024 continued in the first quarter of 25 with record March average production of 330,000 DOE per day from the total deep basin calm price. Notable exploration successes were realized in the South Deep Basin In the greater Williston Green area, our Hearst Valley River horizontal tested at 700 barrels per day of oil, less than 1% water cut and about a million a day of natural gas. And several new wells and pads in the downed GIF block play where that inventory continues to expand. And you'll see that well performance unfold over the next few quarters.

And I think that's it for the formal remarks, so we can move into Q&A. Thank you.