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

Hello, and welcome to the Annual Meeting of Stockholders of MEG Energy Corporation. 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 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 territories we reside on or are visiting. MEG has elected to host its 2024 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 in the virtual meeting guide that can be found on MEG's -- MEG Energy's website under the heading Investor Information 2024 Annual Shareholders meeting materials. I will now turn it over to Mr. Jim McFarland to commence the formal part of the meeting.

Thank you, Lyle, and good afternoon, everyone. I'm Jim McFarland, Chair of the Board of MEG Energy. It is my pleasure to welcome you to MEG's 2024 Annual Meeting of Shareholders. Before we begin the formal portion of the meeting, I would like to take a moment to remember Mr. Ian Bruce, who passed away in October 2023. Ian was passionate about our industry and brought a wealth of experience and wisdom to MEG as Chair of the Board from 2020 to 2023. He was a tremendous supporter of MEG and our management team and his loss has been felt deeply throughout the organization. We have 2 new Board nominees standing for election at the meeting, Ms. Darlene Gates and Mr. Robert Rooney. Ms. Gates, our former Chief Operating Officer, became President and CEO on May 1, 2024, succeeding Mr. Derek Evans, who chose to step down from this role and as a member of the Board on May 1. On behalf of the Board, I wanted to take this opportunity to thank Derek for his exceptional leadership of MEG over the past 6 years and our confidence in Darlene to lead us forward and to deliver value to all of our stakeholders. Ms. Gates brings direct operational and leadership experience in the oil sands and a track record of leading technical teams and stakeholder relations, including indigenous communities. Mr. Rooney brings over 40 years of experience in the energy business as a senior executive and director of a number of public and private entities, including significant experience in corporate governance, strategic planning and execution, leadership and management, mergers and acquisitions and government and external relations. The Board has seen a number of changes over the past few years, with more than half the members joining the Board since 2020. 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 exceed our targets with 4 women representing 44% of Board members and 1 racially diverse individual, representing 11% of Board members serving 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 Senior Vice President, Legal and Corporate Development, will act as secretary of the meeting. I would like to begin with introducing our Board of Director nominees. In addition to Darlene Gates, our President and CEO, who is present with us today, the Board nominees, the majority of whom are attending the meeting virtually are: myself, Jim McFarland; Gary Bosgoed; Bob Hodgins; Kim Lynch Proctor, Sue MacKenzie; Jeff McCaig; Diana McQueen and Robert Rooney. Next, I'd like to introduce the MEG leadership team. In addition to Darlene Gates, there is Ryan Kubik, Chief Financial Officer; Erik Alson, Senior Vice President of Marketing; Tom Gear, Senior Vice President, Production; Dave Granger, Senior Vice President, Human Resources; Lyle Yuzdepski, Senior Vice President, Legal and Corporate Development; Jim Campbell, Vice President of Communications and External Relations; [ Garth Carsten ], Vice President, Corporate Development and Strategy; Mike Dlugan, Vice President of Development; and Mark Telang, Vice President, Engineering and Projects. So 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 18, 2024, which were delivered and filed both on MEG Energy's website and on MEG Energy's profile on SEDAR+ in advance of this meeting. The business of the meeting is to receive the audited financial statements for the year ended December 31, 2023, and to consider and vote on 3 items as set out in the management information circular. These are the election of the directors, the appointment of the corporation's auditor and the nonbinding advisory vote on the corporation's approach to executive compensation. For efficiency, we have arranged for Ryan Kubik 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, 2023. 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 would 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, it is proposed that the following persons be nominated for election to the Board: Gary Bosgoed, Darlene Gates, Robert Hodgins, Kim Lynch Proctor, Susan MacKenzie, Jeffrey McCaig, James McFarland, Diana McQueen, and Robert Rooney. 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, Mr. Kubik. 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 is set forth on Page 7 of the Management Information Circular.

Thank you, Mr. Kubik. Is there a seconder for the motion?

Mr. Chair, I second the motion.

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