Pine Cliff Energy Ltd. (PNE) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the Pine Cliff Energy Limited Annual General Meeting. [Operator Instructions] Also note that this call is being recorded on Wednesday, May 19, 2021. And I would like to turn the meeting over to Mr. George Fink. Please go ahead, sir.

Thank you. Good morning, ladies and gentlemen, and thank you for calling in to the Annual and Special Meeting of Shareholders for Pine Cliff Energy. As announced already, my name is George Fink, and I am the Chairman of Pine Cliff Energy and I will act as Chairman for today's meeting. Before we begin the formal business of the meeting, I would like to take a moment to make a comment about the format of the meetings. In keeping with the restrictions on mass gathering implemented by the government of Alberta, in light of the COVID-19 global pandemic, the meeting is being held virtually by teleconference and the minimum number of Pine Cliff's management team present along with the scrutineers, Odyssey Trust Company, doing so reduces the risk of spread of infection to our employees, shareholders, directors and stakeholders. I invite the shareholders attending this meeting via the teleconference to participate in today's meeting. There will be time allotted for a question-and-answer session at the end of the formal business of the meeting and a brief corporate update from the President and CEO, Mr. Phil Hodge, but there will not be a corporate presentation, it's just too onerous to do that sort of stuff. Members of the executive team present include: Phil Hodge, Director, President and Chief Executive Officer; Terry McNeill, Chief Operating Officer; and Alan MacDonald, Chief Financial Officer and Secretary; Odyssey Trust Company representative, Ms. Jennifer Villareal. In order to cover the required business -- oops, let me get this straight here. In order to cover the required business, we have prearranged with certain shareholders to move and to second some of the motions of business. This is not intended to discourage comments from shareholders. On the contrary, should any shareholder or proxyholder wish to speak on any matter, I would only ask that you address the chair with your questions. We will deal initially with the formal requirements of the meeting, following which Phil Hodge will give a short update on recent operational activities and future plans. The meeting will now come to order. And with the consent of the meeting, I will ask Alan MacDonald to act as Secretary and Jennifer Villareal, Odyssey Trust Company, to act as scrutineer. We've received confirmation of the notice of meeting, information circular, audited financial statements, auditor's report and other required documents have been mailed or otherwise distributed to all of the registered shareholders and the necessary intermediaries by the prescribed deadlines. Pursuant to the bylaws of the corporation, business may be transacted at this meeting if shareholders holding or representing by proxy, not less than 5% of the outstanding common shares in the corporation are present. The scrutineers' report has been received, and it shows that there are present at this meeting, the aggregate member of 16 shareholders, holding or representing by proxy, at least 127,921,923 common shares or approximately 38.05% of the issued and outstanding common shares in the company. As a result, we have a quorum for the meeting. Accordingly, I now declare that the meeting has been regularly called and is properly constituted for the transaction of business. As was just noted, we have received proxies representing about 128 million shares or 38.05% of the issued and outstanding -- of the issued or outstanding shares voting in favor of each of the items to be addressed at this meeting. As such, the voting results for each of the items to be determined at this meeting have largely been determined. However, if any shareholder would like to have their vote recorded by telephone, you will be permitted to do so at the appropriate time. Our first item of business pertains to the audited financial statements of the corporation for the year ended December 31, 2020, and the auditor's report thereon. We are not required to vote on this matter, but we are prepared to respond to any questions or comments you may have with regard to the financial statements or the auditor's report. If you have any questions on the financial statements, please direct them to Mr. MacDonald following the meeting, and he will reply to you forthwith. We'll now proceed with the election of directors. The Board currently consists of 5 directors, and we are recommending that the Board remain at that number. I would ask for a motion to set the number of directors at 5.

Mr. Chairman, my name is Sydney Galt, and I move the number of directors to be set at 5.

Mr. Chairman, my name is Terry McNeill, and I second the motion.

Thank you Sydney and Terry. You've heard the motion. I will ask for any shareholders or proxyholders to verbally communicate any motion to the contrary? I'll just wait for a moment here to leave it open for someone to make a statement. [Voting]

Doesn't appear to be any, I declare the motion carried. Existing directors consist of Bill Rice, Jacqueline Ricci, George Fink and Phil Hodge, have been nominated for reelection, along with the nomination of Robert Fryk. As no additional nominations were received in accordance with the event's notice, bylaws adopted by the Board of the corporation described and included in the corporation's information circular that was mailed to all shareholders, which has been posted on SEDAR and the corporation's website, no additional nominees for elections to the corporation's Board of Directors will be considered at this meeting. Having received no further nominations, we ask for a motion to declare nominations closed.

Mr. Chairman, my name is Terry McNeill, and I move the appointment of the nominated individuals as directors.

Mr. Chairman, my name is Sydney Galt, and I second the motion.

Thank you, Terry and Sydney. We have received proxies totaling 107,075,491 shares, representing 31.8% of the issued and outstanding shares of the corporation voting in favor of electing the nominees. Would any shareholder like to have their vote recorded by telephone? Not hearing anything, all nominees have been elected as directors to hold office until the next annual meeting of shareholders or until their successors are elected or appointed. We'll now go into the appointment of the auditors. Our next item of business is the reappointment of Deloitte LLP as the corporation's auditors, its remuneration to be negotiated and settled by the Board of Directors. We ask for a motion to reappoint Deloitte LLP as the corporation's auditors.

Mr. Chairman, my name is Alan MacDonald, and I move that Deloitte LLP be appointed auditors of the corporation to hold office until the next annual meeting of shareholders at such remuneration as may be fixed by the directors.

Mr. Chairman, my name is Sydney Galt, and I second the motion.

Thank you, Alan and Sydney. We have received proxies totaling 127,890,350 shares, representing 38.04% of the issued and outstanding shares of the corporation voted in favor of appointing Deloitte LLP as auditors of the corporation. Would any shareholder like to have their vote recorded by telephone? Apparently not. And I declare that Deloitte LLP have been reappointed as the corporation's auditors. Next item will be #8, approval of unallocated options under the stock option plan. The item of business on our agenda is to the approval of those unallocated options under the stock option plan. The rules of the Toronto Stock Exchange require that every 3 years, all unallocated options, rights or other entitlements under a security-based compensation agreement, which does not have a fixed maximum number of securities must be approved by shareholders. The unallocated options were described in the corporation's information circular that was mailed to all shareholders and which is being posted on SEDAR and the corporation's website. We ask for a motion to approve all unallocated stock options pursuant to the corporation stock option plan as described in the corporation's information circular.

Mr. Chairman, my name is Terry McNeill, and I move to approve all unallocated stock options pursuant to the corporation's stock option plan.

My name is Sydney Galt, and I second the motion.

Thanks, Terry and Sydney. We have received proxies totaling 108,554,533 shares representing 32.29% of the issues and outstanding shares of the corporation voted in favor of approving all unallocated stock options pursuant to the corporation stock option plan. Would any shareholder like to have their vote recorded by telephone? Apparently not. The resolution approving all unallocated stock options to the corporation stock option plan has been approved. The next item of business on our agenda is to confirmation and approval of new bylaws. In accordance with the Business Corporations Act in Alberta, new bylaws are in effect until they are confirmed by shareholders and once confirmed, continue in effect in the form that they are approved. The new bylaws were described and included in the corporation's information circular that was mailed to all shareholders and which has been posted on SEDAR and the corporation's website. We ask for a motion to confirm the adoption of the new bylaws as described in the corporation's information circular.

Mr. Chairman, my name is Sydney Galt, and I move to confirm the adoption of the new bylaws as described in the corporation's information circular.

My name is Terry McNeill, and I second the motion.

Thanks again, Sydney and Terry. We have received proxies totaling 121,920,550 shares representing 36.27% of the issues and outstanding shares of the corporation voted in favor of confirming the new bylaw as described and in the form included in the information circular. Would any shareholder would like to have their vote reported by telephone? Once again, it doesn't appear that anyone would like that. So the resolution approving the confirmation of the adoption of the new bylaws has been approved. I think that wraps up the formal part. Is there any other proposed by this -- other proposed business by anyone at this point? Apparently, again, there isn't any. So as there is no further formal business to be brought before the meeting, may I please have a motion to terminate the formal portion of the meeting?

Mr. Chairman, my name is Terry McNeil, and I move that the meeting be terminated.

Mr. Chairman, my name is Sydney Galt, and I second the motion.

Thanks again, Terry and Sydney. I declare the meeting terminated. Thank you all for attending. And certainly, we continue to appreciate the support given by our shareholders. I'll now turn -- I will now turn the meeting over to Phil for his comments.

Thank you, Mr. Chairman. The comments are going to be very brief today. The -- we've had the recent financial statements for the Q1 that were released. My president's letter that you all would have received, talked about that quarter. It's -- we continue into 2021, and it looks to be a much stronger year than the previous 2 or 3 years that we've endured, and it's reflected in the financial statements. I would encourage any and all of you to go to our website, you'll see an updated presentation that will have our most recent charts and discussion about the supply-and-demand dynamics that's going on right now in the natural gas market, which are quite positive for the natural gas companies, producers like Pine Cliff. I would like to thank, echo our Chairman's thoughts and appreciation for everybody's voting at the AGM and for your continued support as shareholders. What I would ask is that if anyone does have any specific questions, you are more than welcome to ask them right now or by all means, feel free to call me directly at (403) 750-2552. At this time, we'll ask if there's any questions for the meeting.

[Operator Instructions] And at this time, Mr. Hodge, it appears we have no questions.

Thank you, Sylvie. I'd like to thank everyone who joined today's meeting via teleconference. Hopefully, this will be -- we can get back to our more typical Annual General Meeting for the 2022 year. We'll look forward to getting back in person and meeting everyone. On behalf of the corporation, I would like to pass along our sincere best wishes to everybody, continued best wishes in staying healthy during these challenging times. And again, I welcome any and all questions, if you want to just contact me directly, we'd be happy to talk to you about Pine Cliff or the natural gas markets or any other topics that you'd like to discuss. Thank you very much for your time today. It's appreciated.

Thank you, sir. Ladies and gentlemen, this does indeed conclude today's meeting. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines.