MEG Energy Corp. (MEG) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Shareholders of MEG Energy Corp. Please note that today's meeting is being recorded. Lyle Yuzdepski of MEG Energy will begin with a land acknowledgment and a brief outline of the procedures and guidelines. Please go ahead.

Thank you, and good afternoon. MEG's management team is gathered in the city of Calgary for today's meeting. We would like to acknowledge the traditional Treaty 7 territory of the Blackfoot Confederacy, comprising the Siksika, Kainai, Piikani, as well as the Îyâxe Nakoda and Tsuu T'ina nations. We acknowledge that this territory is home to the Métis Nation of Alberta, Region 3 within the historical Northwest Métis homeland. As well, we acknowledge the Treaty 8 territory where our Christina Lake operations are located, the traditional and ancestral territory of the Cree and Dene. We acknowledge that this whole territory is home to the Métis settlements and the Métis Nation of Alberta Regions 1, 4, 5 and 6 within the historical Northwest Métis homeland. We acknowledge the many First Nations, Métis and Inuit who have lived in and cared for these lands for generations. We make these acknowledgments as an active reconciliation and gratitude to those whose territory we reside on or are visiting. MEG has elected to host its 2023 annual meeting virtually. We believe that a virtual meeting is in the best interest of the corporation's stakeholders. By improving access, a virtual meeting enables more shareholders of the corporation to participate, regardless of their geographic location. It also reduces the cost to MEG and its shareholders and reduces our carbon footprint by requiring less travel for our Board of Directors and shareholders. The formal portion of the meeting will be followed by a question-and-answer period where we will have an opportunity to answer your questions that have been submitted online. If your question relates to a voting matter, please submit your question immediately. We will answer your question when we reach that item during the meeting. All other questions will be answered at the end of the meeting. I will now briefly outline the procedures and guidelines for participation in the meeting. Your information screen displays instructions on how to vote and submit questions. Voting and question functionality are only available for registered shareholders and duly appointed proxy holders. All other guests are in listen-only mode. [Operator Instructions] Polling is now open. Voting is displayed on your information screen. If you have already voted, you do not need to take any further action unless you would like to change your vote. If at any time during the meeting you experience technical difficulties, please refer to the technical support information available on the virtual AGM guide. I will now turn it over to Mr. Ian Bruce to commence the formal part of the meeting.

Thank you, Lyle, and good afternoon, everyone. I'm Ian Bruce, the Chair of the Board of MEG Energy Corp., and it is my pleasure to welcome you to MEG's 2023 Annual Meeting of Shareholders. Before we begin the formal portion of the meeting, I would like to recognize Mr. Grant Billing, who retired in June 2022 after serving on the Board since 2019. On behalf of the Board, I would like to sincerely thank Mr. Billing for his many contributions to the Board and the corporation. One of our Board nominees, Mr. Gary Bosgoed, was appointed to the Board on July 1, 2022, following the retirement of Mr. Grant Billing. Mr. Bosgoed is a highly valued addition to our Board of Directors, bringing extensive engineering consulting experience, specializing in major project construction and delivery, business advisory services and community engagement on capital projects as well as senior executive leadership experience. The Board has seen a number of changes over the past few years, with more than half the members joining the Board since 2018. We are committed to the corporation's diversity policy, having achieved our Board diversity and inclusion targets in 2022, well ahead of our original 2025 target. If the director nominees are elected as proposed, we will maintain compliance with our targets, with 3 women representing 33% of Board members and 1 racially diverse individual, representing 11% of our Board members on the Board. I will now call the formal meeting to order. In accordance with the company's bylaws, I will act as Chair of this meeting; and Lyle Yuzdepski, our Corporate Secretary, will act as secretary of the meeting. I would like to begin with introducing our Board of Director nominees. In addition to Derek Evans, our President and Chief Executive Officer, who is present with us today, the Board nominees, majority of whom are attending the meeting virtually are: myself, Ian Bruce; Gary Bosgoed; Bob Hodgins; Kim Lynch Proctor; Sue MacKenzie; Jeff McCaig; Jim McFarland and Diana McQueen. Next, I would like to introduce the MEG leadership team. In addition to Derek Evans, there's Ryan Kubik, Chief Financial Officer; Darlene Gates, Chief Operating Officer; Lyle Yuzdepski, Senior Vice President, Legal and General Counsel; Dave Granger, Senior Vice President, Human Resources; Erik Alson, Vice President, Marketing; Jim Campbell, Vice President, Public Policy and Government Relations; Tom Gear, Vice President, Operations; Jeremy Gizen, Vice President, Development; and Mark Telang, Vice President, Engineering and Technology. Moving forward with the meeting, I appoint Elissa Rojo from Computershare Trust Company of Canada to act as scrutineer of the meeting. The business of today's meeting is described in the notice of meeting and management information circular dated March 15, 2023, which were delivered and filed in advance of this meeting. The business of the meeting is to receive the audited financial statements for the year ended December 31, 2022, and to consider and vote on 4 items as set out in the management information circular. They are: number one, the election of the directors; number two, the appointment of the corporation's auditor; number three, the approval of the continuation of the corporation's amended and restated shareholder rights plan; and number four, the nonbinding advisory vote on the corporation's approach to executive compensation. For efficiency, we've arranged for Darlene Gates and Dave Granger, both shareholders of MEG, to move and second the formal business motions. I have been advised by the secretary that notice of this annual meeting was properly given and that a quorum is present. Accordingly, I declare the meeting properly called and constituted for the transaction of business. We will now proceed with the formal business of the meeting. The first item of business is to receive the audited financial statements and the auditor's report for the year ended December 31, 2022. The financial statements were delivered to shareholders in advance of the meeting and can be found under the Documents tab on the right-hand side of your screen and also on MEG's website at megenergy.com. We will now move on to the voting items. The polls are still open for voting on all items of business. You may vote at any time until the last item of business is completed, at which time I will declare the polls closed. As mentioned, voting will be conducted by online polling, and your voting options should be visible on your screen if you are a registered shareholder or a duly appointed proxy holder. If you have already voted, you do not need to take any further action unless you'd like to change your vote. The second item of business is the election of directors. The Board of Directors has determined that 9 directors are to be elected until the next annual meeting. In accordance with MEG's majority voting policy, the directors will be voted individually rather than as a slate. As described on Page 6 in the management information circular for this meeting, management proposes that the following persons be nominated for election to the Board: Gary Bosgoed, Ian Bruce, Derek Evans, Robert Hodgins, Kim Lynch Proctor, Susan MacKenzie, Jeffrey McCaig, James McFarland and Diana McQueen. Accordingly, may I ask for a motion, please?

I move for a vote on a resolution individually electing each of the proposed nominees as a director of the corporation.

Thank you, Ms. Gates. Is there a seconder for the motion?

Mr. Chair, I second the motion.

Thank you, Mr. Granger. Are there any questions on this motion?

Mr. Chair, there are no questions on the motion.

Thank you. We will now move to the third item of business, which is the appointment of PricewaterhouseCoopers LLP as auditors of the corporation, as set forth on Page 7 of the management information circular for this meeting. May I have a motion, please?

I move for a vote on a resolution to appoint PricewaterhouseCoopers LLP as auditors of the corporation, as set forth on Page 7 of the management information circular.

Thank you, Ms. Gates. Is there a seconder for the motion?

Mr. Chair, I second the motion.

Thank you, Mr. Granger. Are there any questions on this motion?

Mr. Chair, there are no questions on the motion.

Thank you. Now on to the fourth item of business, which is the approval of the continuation of the corporation's amended and restated shareholder rights plan for a further 3-year period, as set forth on Pages 7 and 8 of the management information circular for this meeting. May I have a motion, please?

I move for a vote on a resolution to approve the continuation of the corporation's amended and restated shareholder rights plan for a further 3-year period, as set forth on Pages 7 and 8 of the management information circular.