Ensign Energy Services Inc. (ESI) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Ensign Energy Services Annual Meeting. Thank you for joining us in this virtual format. My name is Suzanne Davies, and I'm the Corporate Secretary for Ensign, speaking to you from our head office from Calgary, Alberta. Also present in this virtual format are Murray Edwards, our Chairman; Bob Geddes, our President and Chief Operating Officer; Mike Gray, our Chief Financial Officer; and Nicole Romanow, our Director of Investor Relations. All other current members of our Board of Directors are also in attendance as virtual meetings. As with any technology platform, unexpected glitches or delays may occur. So please be patient if that happens so that our service providers can address any technological issues. If the background music starts mid-meeting, this means we've encountered an issue, and please just wait patiently while the problem is solved. Note that the Lumi platform we're using for this virtual meeting works best with the latest versions of the Chrome, Safari, Edge or FireFox browsers. The agenda for this meeting is brief, as usual, and includes the following items: first, to set the number and election of directors; second, to appoint the auditors of the corporation for the year; and third, an advisory vote on executive compensation. Instructions on how to ask questions and the voting procedure will be available on your screens once the meeting formally starts. For those shareholders who have already voted by depositing proxies in advance of the meeting, you do not need to vote during this meeting unless you'd like to change your vote. Registered shareholders who have not submitted a proxy and wish to vote their shares or wish to change their vote may do so by following the instructions on your screen. Duly appointed and registered proxy holders may also vote now. Again, please follow the instructions on your screen. Note that there is a small delay between the active voting and the receipt by the system of those votes. So due to this delay, we will be opening voting on all agenda matters momentarily and keep them open until the termination of the meeting. Votes can be cast at any time prior to the closure of voting. If you have any questions relating to the matters coming before this meeting, registered shareholders and duly appointed proxy holders can type the questions in the message section once it opens during the discussion period. We will do our best to answer questions during the meeting. However, if we're unable to answer all questions or if your question is one that is best answered in a one-on-one format, Nicole Romanow, our Investor Relations Director, will be in touch with you following the meeting to address your question using the e-mail address you provided when you logged in. With that, we will commence the formal business of the meeting. Voting will now open on all resolutions. Mr. Edwards, please call the meeting to order.

Thank you, Suzanne. The meeting will now come to order. Ms. Davies will act as Corporate Secretary for the meeting; and Marina St. Denis and Shannon Amerson of Computershare Trust Company Canada will act as scrutineers. I can confirm they are also attended at this virtual meeting. We confirm that we have received an affidavit from Computershare confirming the mailing of the notice of annual meeting, information circular and instrument of proxy to register shareholders of the corporation as the record date. We direct this affidavit, together with copies of documents mailed to shareholders, be kept by the Corporate Secretary with the minutes of this meeting. In terms of the meeting being ready constituted, under Ensign's bylaws, business is allowed to be transacted at this meeting if 2 persons are present, holding or representing by proxy not less than 25% of the total number of issued shares of the corporation entitled to vote at the meeting. The scrutineers' report has been received, and it shows that there is a required quorum of shareholders present at the meeting. Once again, a copy of the scrutineer's report will be kept by the Corporate Secretary with the minutes of the meeting. As such, this meeting is therefore, readily called and properly constituted for the transaction of business. It should be noted that all the resolutions presented at the meeting today are ordinary resolutions, which require approval by a majority of the votes cast at the meeting. Prior to this meeting, management of the corporation received proxies from the holders of 55.9% of the eligible shares attached to the outstanding voting shares of the corporation. As such, for meeting efficiency, serving members of Management Ensign, who are also shareholders of the corporation, have been asked to move or second the motion presented. We now move to the formal business of the meeting. The first item of business is the presentation of the financial statements of the corporation for the fiscal year ended December 31, 2021, and the auditors' report thereon. A copy of the earnings financial statements has been mailed to each registered shareholder, who requests one by mail, and these documents are also available on our website and on the SEDAR website. In terms of [indiscernible], the next item of business is setting the number of directors to be elected at 10. I ask the designated movers and seconders to move and second this motion. Do we have a motion in that regard?

I move that the number of tractors to be elected to be set at 10 directors.

Are you a shareholder, Mike?

Yes, I am.

Do you want to buy some more shares, Mike?

I continue to purchase shares.

Good. Do I have a seconder?

I second the motion.

You own any shares, Nicole?

I do.

Did you buy some last year?

I did.

Well, good and smart women Okay, good investors. The motion has been duly moved and second. I'll just briefly pause to see if there's any questions. Any questions being -- are there questions, Nicole?

No questions at this time.

Okay. Therefore, all shareholders who intend to vote on this meeting, please go ahead and do so now on the virtual website. We will address the results of this vote towards the end of the meeting. [Voting]

The next item of the formal business is the election of directors. For over a decade, the Board of Directors has had a majority voting policy for the election of directors. Details regarding this voting policy can be found on Page 25 of the corporation's March 18, 2022, Information Circular. We now [indiscernible] the motion for the directors of the corporation. Again, the movers and seconders can please move and second this motion.

I nominate the following individuals as directors of the corporation to hold office until the next annual election of directors or until their successors are elected or appointed, subject to the provisions of the Business Corporation Act and the bylaws of the corporation: Gary Casswell, N. Murray Edwards, Robert Gaddes, Darlene Haslam, James Howe, Len Kangas, Cary Moomjian, John Schroeder, Gail Surkan and Barth Whitham.

I second the nominations.

Thank you, Michael. Thank you, Nicole. The motions have been moved and second. Is there any questions or comments as this regard, Nicole?

No questions at this time.

Okay. Thank you. Just briefly, I'd just quickly like to say our Board is -- the corporation is blessed with a very strong Board. A number of the individuals have been in the drilling industry in their past careers or legally or as a general counsel industry or in the energy industry global basis and they provide a lot of knowledge and support to management on a regular basis, not just at Board meetings, but in between Board meetings. In addition, I would like to note today that for the first meeting in which our most recent appointment, and in between of any meetings, the Board appointed one, Darlene Haslam. Darlene Haslam is Chartered Accountant by training, but has been in a number of Boards, and is active also in the charity community as a member of the Alberta Children Foundation Hospital and has had association with the oilfield service in the past. This is the first meeting we're actually bringing Darlene forward for the shareholders for a full vote. So welcome to the Board, Darlene. I know that you'll bring lots of skills and capabilities to the Board. So with that, we will then get the final vote towards the end of the meeting at the results. And in turn, the final results, the directors will also be disclosed in a report to be filed with the security regulators on SEDAR shortly after the meeting. However, I can confirm, based upon the proxies we received, we expect the vote total in favor of each director will be in excess of 96%. As such, those nominated are duly elected directors of the corporation to hold office until the next -- and next -- and election of directors or until their successors are elected or appointed subject to provisions of the Business Corporation Act and the bylaws of the corporation. Also, based on the results, we can also confirm that no nominating director will have more than 50% of the votes withheld from voting for his or her election. The next item of formal business is the appointment of auditors. Again, if the designated movers and seconders could move and second the motion, that would be appreciated.

I move that the firm of PricewaterhouseCoopers LLP and Chartered Accountants be appointed auditor of the corporation until the next annual meeting or until their successors are appointed, and that the Board of Directors be and hereby authorized to fix the remuneration.

I second motion.

Do you second the motion? Is Pricewaterhouse giving us a compensation for branding approach on this screen here, Mike? We'll go up there?

I have to discuss [indiscernible], thanks for remuneration.

Okay. That's good. Okay. Thank you. The motion has been moved and seconded. Nicole, once again, any questions?

There are no questions at this time.

Thank you, Nicole. All shareholders who intend to vote at this meeting, please go ahead and do so now. [Voting]

We will, again, address the results of the vote at the end of the meeting. The next formal part of the business is the advisory nonbinding shareholder vote on the corporation's approach to executive compensation. Will [indiscernible] here the designated movers and seconders in that regard.

I move on an advisory and nonbinding basis that the shareholders of Ensign accept the approach to the executive compensation, disclosed in Ensign's information circular dated March 18, 2022.

I second the motion.

Thank you, Michael. Thank you, Nicole. The motion has been moved and seconded. Any questions in this issue, Nicole?

No questions at this time.

Thank you. Based on the proxies received, I can confirm there will be a majority of votes cast in favor of this advisory nonvoting vote on executive compensation. So once again, a core -- this resolution has been passed. At the conclusion of the formal business of this meeting, voting will be closed on the virtual platform momentarily. So if anybody has not yet voted, please submit their voting now. [Voting]

With that, I now confirm voting is closed. So just to summarize, we can -- we have confirmed that we've been advised by the scrutineer that all resolutions have been approved by more than the requisite majority, and that those nominated have been duly elected as directors of the corporation. Accordingly, we declare the motions above carried, and the nominees to Board Directors elected. We once again direct scrutineers' report of the ballot be annexed to the minutes of this meeting. In addition, we will post the final detailed voting results on SEDAR. I now request a motion that the formal portion of the meeting be terminated. Do I have a motion in that regard?

I move.

Thank you, Michael. With that, the formal portion of the meeting is now terminated. The final voting results will be posted on SEDAR by the close of business on Monday. With that, that formally concludes the meeting. Nicole, unless there are any other general questions that have come in? Nicole?

There are no questions that have come in.

Thank you, Nicole. So just in closing, I would like to thank all of our Board, management team and employees for their commitment, not just over the last year, but over the last 2.5 years. COVID has, obviously, have had an impact on every business and all individuals, and our company was like no other one -- no less than other ones impacted by it. But I can tell you that our employees and management team worked tirelessly to try to safeguard our employees and continue the business the best they could in the context of the challenging situation. And we hope that this is our last virtual meeting, and that we next year return to a meeting in person and have opportunities to say hello to all of our shareholders in person. So with that, I now move to, terminate the meeting, Suzanne.

Thank you very much, Mr. Chairman. And I believe that our service provider will be terminating the meeting. Thank you.