Surge Energy Inc. (SGY) Earnings Call Transcript & Summary

Hello. Welcome to the special meeting of the holders of common shares of Surge Energy, Inc., who I will refer to during this meeting as Surge shareholders. The meeting will now come to order. My name is Jim Pasieka, Chairman of the Board of Directors of Surge Energy, Inc., and I will act as Chairman of the meeting. Before we begin the formal part of the meeting, I'd like to introduce members of our Board and management who are joining us online today. We have, of course, Paul Colborne, President and CEO and Director; Murray Bye, Chief Operating Officer; Jared Ducs, Chief Financial Officer; Margaret Elekes, Senior Vice President, Land and Business Development; and Derek Christie, Senior Vice President, Geosciences. Now before we begin, despite the relaxation in Alberta restrictions relating to COVID, we were -- which were announced and came into effect following the mailing of this information circular and other materials related to this meeting, Surge has determined to proceed with a virtual-only format for this meeting. In making this decision, Surge focus on the health and safety of its employees, shareholders, directors and other stakeholders and on ensuring the highest [indiscernible] from our shareholders. In making the decision to employ a virtual meeting, it was paramount that we ensure that shareholders' rights were protected. Accordingly, we have ensured the meeting offers shareholders the same opportunities to participate as in past in-person meetings. There won't be -- there will be opportunities for shareholders to ask questions specific to each resolution on the webcast. [Operator Instructions] We will address questions that directly relate to a particular motion at the appropriate time of the meeting. For questions of a Board general nature and not relating to proposed amendments or objections, we request that you e-mail Paul Colborne, our Chief Executive Officer, at pcolborne@surgeenergy, all one word, dot-ca, with your question, and we will endeavor to answer it as soon as possible following the conclusion of the meeting. Voting during this meeting can only be done through our virtual voting platform on the webcast. Once the polls open, the voting browser window will open. In order to register to vote, enter your control number, which you would have previously received as your user name and entering surge2021, all lower case, no spaces, as your password. Please note that the password is case-sensitive. So that's surge2021, all lower case, no spaces. The polls will now be open, and the polls will be open for all resolutions at the same time. Voting can be completed at any time from now until the end of the formal business of the meeting. Thank you to those who have already voted. If you have already voted in advance of the meeting and do not wish to change your vote, then you need to do nothing more. Nothing more. For those who have not yet voted, we encourage you to vote now. In order to have the meeting proceed efficiently, certain individuals have been asked to move and second motions, which are to be called for in the notice of meeting. This is not intended to limit in any way your right to participate in the meaning. Any proposed amendments or objections to a motion will need to be submitted as questions. All proposed amendments or objections will be addressed during the meeting, provided that they are submitted during the period when the polls are open. So let's proceed and let's speak to the appointment of Secretary and scrutineers. I'll call the meeting to order. And if there are no objections, I'll ask Michael Bennett to act as Secretary of the meeting; and Gloria Gherasim, representative of Odyssey Trust Company, will act as scrutineer. Please note that only the holders of the corporation of record at the close of business of July 15, 2021, or their duly appointed proxies are entitled to participate and vote at the meeting. I've received a declaration from Odyssey Trust Company as to the due mailing of the notice of meeting, the joint information circular and the form of proxy to Surge shareholders. I direct that, that declaration, together with copies of the documents, mail to the Surge shareholders to be kept by the Secretary with the minutes of this meeting. Now the bylaws of the corporation provide that a quorum exists if at least 2 persons are present holding or representing at least 5% of the shares entitled to be voted at the meeting. Further, the bylaws of the corporation also allow for the meeting to be held by virtual means. The preliminary scrutineer's report has been received, and it shows the required threshold for a quorum at this meeting has been met. Accordingly, I declare that a quorum is present, and the meeting is regularly called and properly constituted for the transaction of business. I direct that a copy of the scrutineer's report be kept with the minutes of the meeting. Now let's proceed to voting. There are 2 items of business to consider at today's meeting. First, to consider and, if thought fit, to pass an ordinary resolution in the form set out in Appendix B-1 of the joint management information circular of Surge and Astra Oil Corp. dated July 16, 2020 -- sorry, July 16, 2021, approving the issuance of Surge shares pursuant to a plan of arrangement under Section 193 of the Business Corporations Act of Alberta involving Surge, Astra Oil Corp. and the shareholders of Astra Oil Corp. And the second resolution to consider and, if thought fit, to pass a special resolution an amendment to the articles of Surge to effect a consolidation of the Surge shares on the basis of one post-consolidation Surge share for each 8.5 pre-consolidation Surge shares. And all of that is more particularly described in the joint information circular and proxy statement of Surge and Astra. We'll conduct the votes on the matters before us by a poll. On a poll, every shareholder or proxy holder entitled to vote on the matter has one vote in respect of each share entitled to vote on the matter and held or represented by that shareholder or proxy holder. As I mentioned earlier, only shareholders and proxy holders present at the meeting are entitled to move motions, speak to them and vote on them. Now let's proceed with the formal business of the meeting, please, and we'll speak to, first of all, the Surge issuance resolution. And that's the consideration of the Surge issuance resolution. Any further information concerning that is set forth under the heading Matters to be Acted Upon at the Surge Meeting, and that's found on Page 25 of the information circular. In order to be effective, this resolution must be approved by a simple majority of votes cast at the meeting. Full text of the resolution is set out in Appendix B-1 of the information circular. Unless there are any objections, I'll dispense with the reading of the motion. Now please, may I have a motion with regards to this matter?

Mr. Chairman, my name is Kathy Kopelchuk, and I am a Surge shareholder. I move that the share issuance resolution to approve the issuance of Surge shares pursuant to a plan of arrangement involving Surge, Astra Oil Corp. and the Astra Oil Corp. shareholders be approved.

Thanks, Kathy.

Mr. Chairman, my name is Stephanie McNeill, and I am a Surge shareholder. I second the motion.

Thanks, Stephanie. You've heard the motion. I will now ask the Secretary to please advise if any questions specific to this motion were submitted.

Mr. Chair, no questions specific to this motion have been submitted.

Thanks, Mike. If there's no objections then, let's proceed to vote. Please record your vote now, remembering, of course, that if you've already voted in advance and do not wish to change your vote, no further action is required. [Voting]

So let's now proceed to the Surge share consolidation resolution. And that's the next item of business. And further information concerning that is set forth under the headings Matters to be Acted Upon at the Surge Meeting at Page 25 of the information circular. In order to be effective, this resolution must be approved by at least 66 and 2/3 of the votes cast at the meeting. The full text of the resolution is set out in Appendix B-2 of the information circular. If there are no objections, I will dispense with the reading of that resolution. May I please have a motion with regards to this matter?

Mr. Chair, my name is Kathy Kopelchuk, and I am a Surge shareholder. I move that the Surge share consolidation resolution to approve the consolidation of the Surge shares on the basis of one post-consolidation Surge share for 8.5 pre-consolidation Surge shares be approved.

Thanks, Kathy.

Mr. Chair, my name is Stephanie McNeill, and I am a Surge shareholder. I second the motion.