Source Energy Services Ltd. (SHLE) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Shareholders of Source Energy Services Ltd. Please note that today's meeting is being recorded. If you participate in today's meeting and disclose personal information, you will be deemed to consent to the recording, transfer and use of same. If you disclose personal information of another person in today's meeting, you will begin to represent and warrant Computershare and the corporation that you first obtained all required consents for the disclosure, recording, transfer and use of such personal information from all appropriate persons before your disclosure. [Operator Instructions] It is now my pleasure to turn today's meeting over to Stew Hanlon, Chair of the Board of Directors of Source Energy Services Ltd. Mr. Hanlon, the floor is yours.

Thank you very much. I would like to welcome everyone to the Annual Meeting of the Shareholders of Source Energy Services Ltd. My name is Stew Hanlon, and I'm the Chair of the Board of Directors of Source Energy Services Ltd. In accordance with Source's bylaws, I will preside as Chair of the meeting. Ms. Tracy Nielsen will act as secretary of the meeting. Today's meeting is being held as a completely virtual meeting, which is being conducted by a live audio webcast. This format will provide all shareholders, regardless of geographic location and equal opportunity to participate at the meeting and engage with directors of Source and management as well as other shareholders. Registered shareholders received a control number on their proxy form and shareholders who have validly appointed their own proxy holder to vote at this virtual meeting by following the proxy appointment process were given a control number by Computershare Trust Company of Canada, Source's transfer agent. These control numbers will act as your login credentials for this meeting for voting purposes. The procedure for voting will be discussed shortly. All others attending as guests are able to listen and submit written questions but are not able to vote at this meeting. Today's meeting of shareholders is being held to consider and vote only on those specific matters set forth in the management information circular previously mailed to the company's shareholders of record as of March 24, 2022. Source also provided a supplement to its management information circular to inform the company's shareholders of an important change to the business of the meeting, particularly to the individuals proposed to be elected to our Board of Directors effective March 30, 2022. Mr. Brad Thomson resigned as President and CEO and as a Director of the company. The Board of Directors appointed Scott Melbourn, COO of Source, as Mr. Thomson's replacement as President and CEO and as a Director of the company. The supplement forms part of and is deemed to be included in the management information circular. To the extent that any statement contained in the supplement modifies, supplements or amends any statement contained in the management information circular, such statement in the management information circular shall be deemed to be so modified, supplemented or amended. Any capitalized terms used, but not defined in the supplement shall have the meeting ascribed to such terms in the management information circular. I now call the formal part of the meeting to order. In order to expedite the meeting, I have asked certain shareholders to make certain motions at appropriate times. This is not intended to preclude shareholder discussion but only to assist in the progress of the meeting. I welcome questions or comments from shareholders at any time. I appoint Elissa Rojo, a representative of Computershare Trust Company of Canada, to act as scrutineer of the meeting. I've received a declaration as to the distribution of the Notice of the Meeting, together with the management information circular and proxy form to all registered shareholders of record as of the close of business on the record date of the meeting. This declaration will be filed with the minutes of the meeting. I received the report of the scrutineer, which indicates that we have a quorum for the meeting. I hereby appoint and report the scrutineer -- sorry. I hereby adopt the report of the scrutineer and declare that there is a quorum of shareholders present at the meeting. Based on the scrutineers' report and a quorum being present, I declare that this meeting is duly constituted for the transaction of business. I direct that the scrutineers' report on attendance be annexed to the minutes of the meeting. We will conduct the votes on matters considered at the meeting by an online ballot. As explained earlier, registered shareholders received a control number on their proxy form, and shareholders who have validly appointed their own proxy holder to vote at this meeting rather than voting in advance of the meeting by proxy, by following the proxy appointment process, were required to obtain a control number prior to the meeting from Computershare. These control numbers are required in order to vote at this meeting. If you did not receive a control number, you will not be able to vote at this meeting and are only able to attend as a guest. Voting is open and will close when indicated by me at the end of the formal part of the meeting. Participants will have been presented with voting buttons on the virtual meeting platform. By clicking on the voting button, participants will see the resolutions we will be voting on today, together with the voting options. Please cast your vote promptly. Once you have voted, you can click on the Review Your Notes button to confirm your ballot has been cast. If you previously voted and are voting the same shares today, your previous vote -- sorry, your previous votes will be null and void. While the resolutions are brought forward, we will open up the meeting for discussion on the resolutions, which will be done by way of spending online questions to the Chair of the meeting. [Operator Instructions] Please note that all questions are moderated before going to the Chair in order to eliminate repeated questions and to ensure a normal meeting protocol for appropriateness is applied. As your question may be of similar nature to that of another participant, please be aware that the questions may be presented to the meeting in a more generic format. If you intend to submit a question, you are invited to do so now. Any questions that are unrelated to the motion before the meeting are out of order and will not be addressed by the Chair. We will now proceed to the first item of business and present the annual financial statements of Source for the fiscal year ended December 31, 2021, and the auditor's report thereon. Shareholders do not have to take any action regarding the financial statements, and we will now move on to the next item of business. The next item of business is to fix the number of directors of Source to be elected at the meeting. I ask Scott Melbourn for a motion that the number of directors to be elected at the meeting be fixed at 6.

I move that the number of directors to be elected at the meeting be fixed at 6.

May I please have someone second that motion?

I second the motion.

As previously mentioned, voting is open and will close when indicated. [Voting]

The next item of business is the election of directors. As noted earlier in the meeting and as stated in the supplement to the management information circular, Mr. Brad Thomson resigned as a director of Source on March 30, 2022, and Mr. Scott Melbourn has replaced Mr. Thomson as a proposed nominee to the Board of Source. The proposed nominees are Jeff Belford, Stew Hanlon, Chris Johnson, Carrie Lonardelli, Steven Sharpe and Scott Melbourn. If elected, these individuals will hold office until the next annual meeting of shareholders or until their successors are duly elected and appointed. I ask Derren Newell for a motion that each of the proposed nominees be nominated for election as directors of Source.

I move that each of the proposed nominees be elected as directors of Source to hold office until the next annual meeting of shareholders or until they resign or their successors are duly elected or appointed.

May I please have someone second the nominations?

I second the nominations.

As previously mentioned, voting is open and will close when indicated. [Voting]

The next item of business is the appointment of auditors of Source for the current year. I ask Scott Melbourn for a motion to appoint Ernst & Young LLP as auditor of Source.

I move that Ernst & Young LLP be appointed as auditors of Source and that their remuneration, as such, be fixed by the Board of Directors.

May I please have someone second the motion?

I second the motion.

As previously mentioned, voting is open and will close when indicated. [Voting]

The resolutions are now open for discussion. I will pause for a moment to allow the moderator to ask any questions that have been submitted. Otherwise, we'll move to conclude the meeting. Hearing no questions, thank you. Ladies and gentlemen, this concludes the business of the meeting. I therefore declare the polls closed. Thank you for casting your votes. We will give the scrutineer a further moment to complete the tabulation of the votes cast, and we will report back momentarily. I'm pleased to report that we've now received the voting results. I confirm that the resolution to fix the number of directors at 6 has been approved and that those persons nominated are duly elected as directors of Source to hold office until the next annual meeting of the shareholders or until they resign or their successors are duly appointed and -- elected and appointed. I confirm that Ernst & Young LLP has been appointed as the auditor of Source and that the Board has authorized to fix the auditor's remuneration. If there's no further business, I would like to call for a motion to terminate this meeting.

I move that the meeting be terminated.

May I please have someone second the motion?

I second the motion.

Thank you all for attending today. I declare that the meeting is terminated. If any shareholder or proxy holder is interested in the exact number of votes cast in respect of the matters decided at this meeting, he or she may obtain the particulars of the meeting from the secretary. The report on the voting results will be filed on SEDAR after the meeting. Thank you all, and have a very pleasant day.

This concludes the meeting. You may now disconnect.