Tenaz Energy Corp. ($TNZ)

Hello, and welcome to the 2026 Annual Meeting of Shareholders of Tenaz Energy Corp. Please note that this meeting is being recorded. [Operator Instructions] It is my pleasure to introduce Mr. Marty Proctor, Chair of the Board of Directors of Tenaz Energy. Proctor, the floor is yours.

Good morning, ladies and gentlemen. I am Marty Proctor, the Chair of the Board of Directors of Tenaz Energy Corp., and I now call the meeting to order. Welcome to the 2026 Annual General Meeting of Shareholders of Tenaz. Today's meeting is being held virtually by way of live broadcast, accessible to all our shareholders who have followed the procedures described in the Management Information Circular for this meeting or information circular for ease of reference. The virtual meeting format alleviates logistical and travel expenses of in-person and hybrid meetings and is a more sustainable and environmentally conscious alternative to an in-person meeting. I would like to welcome all shareholders, proxy holders and guests at today's meeting. I would also like to recognize the directors and members of management attending in-person, including my fellow directors of the company, Anna Alderson, John Chambers, Berinia-Radu, Mark Rollins and Anthony Marino, a Director and President and CEO of the company; as well as the following officers and managers of Tenaz. Bradley Bennett, Chief Financial Officer; MarzetoDelkik, VP, HR and Sustainability; Jamie Gagne, VP, General Counsel; Brian Young, VP Finance; Adam Iwanicki, VP of Marketing; Kyle Preston, VP, Investor Relations; and Jennifer Russell Houston, VP, Geoscience; and Florissant asset manager. In accordance with the company's bylaws, I will act as Chairman of the meeting Jamie Gagner will act as Secretary of the meeting; and Bart Wingerak of Odyssey Trust Company will act as scrutineer. I would like to take a moment to comment on the meeting procedures. Voting on all matters at today's meeting will be conducted by electronic ballot. Registered shareholders and duly appointed proxy holders will be able to vote on each item of business through the electronic meeting platform. Holding is now open for the items of business to be voted upon at this meeting. If you have not already voted prior to the meeting, please vote now. If you have previously voted, you do not need to vote again. The final voting results will be announced and filed by the company following today's meeting. Questions in respect of an item of business may be submitted by a registered shareholder or duly appointed proxy holder through the meeting platform. Our corporate presentation will follow the formal portion of the meeting and questions relating to the company's business and operations will be considered at that time. For efficiency, we have arranged for Brian Young and Jennifer Russell Houston, officers and shareholders of the company to move and second the motions at today's meeting. Notice of this meeting and the accompanying information circular and form of proxy were mailed on April 28, 2026, to shareholders of record on April 22, 2026. A quorum for the transaction of business at today's meeting is at least 2 persons present in person holding or representing by proxy an aggregate of not less than 5% of the outstanding common shares entitled to vote at the meeting. According to Tenazs bylaw number one, a person electronically participating in today's meeting is deemed to be present at the meeting. I am advised by the scrutineer that a quorum is present and notice having been properly given, I declare the meeting properly called and constituted for the transaction of business. The first item of business is to receive the audited consolidated financial statements of the company for the financial year ended December 31, 2025, and the auditor's report thereon. I would ask that questions on the financial statement be deferred until the formal business of the meeting has concluded. We will now move to the items of business to be voted upon. The polls remain open for voting in respect of each item of business. You may vote at any time until the last item of business is completed, at which time the polls will close. As a reminder, if you have not already voted, please vote now. If you previously voted, you do not need to vote again. The next item of business is to fix the number of directors to be elected at the meeting at sales. May I have an option to fix the number of directors to be left.

My name is. Jennifer Russell Houston. I'm a shareholder and representative of Tenaz Energy second.

Is there any discussion on this matter? As there is no discussion on this matter, we will proceed to the next item of business. The next item of business is the election of directors for the ensuing year. The company's advanced notice bylaw fixes a deadline by which shareholders must submit director nominations to Tenaz prior to an Annual Meeting of Shareholders being not less than 30 days prior to the date of the meeting. Tenaz did not receive any shareholder director nominations in respect of this meeting. Accordingly, the director nominees for election at the meeting are those named in the information circular for this meeting. Information regarding the director nominees was included in the information circular. Each nominee has indicated their willingness to serve as a director. The Board has adopted a majority voting policy requiring any director nominee who does not receive a majority of the votes cast at this meeting to submit his or her resignation for consideration by the Board. The Board must determine whether or not to accept the resignation within 90 days following the meeting. Under the policy, a resignation is expected to be accepted absent exceptional circumstances. May I have a motion to nominate each of the directors of Tunas Energy Corp. specified in the information circular.

I nominate each person specified in the information circular for this meeting, namely Marty Proctor, Anna Alderson, John Chambers, Berenia-Radu, Mark Rollins and Anthony Marino, be elected as a Director of Tunas Energy Corp. for the ensuing year.

Will someone second the motion.

I second the motion.

Is there any discussion on this matter? As there is no discussion on this matter, we will proceed to the next item of business. The next item of business is to appoint Deloitte LLP as auditor of the company for the ensuing year and to authorize the directors to fix the remuneration. May I have a motion to appoint Deloitte as the company's auditor. I move that Deloitte LLP be appointed as auditor of the company to hold office until the next Annual Meeting of Shareholders and that the Board of Directors of the company be authorized to fix their remuneration. Will someone second the motion?

I second the motion.

Is there any discussion on this matter? I am advised there is no discussion on this matter. If you haven't already voted on the items of business, please do so now through the meeting platform as voting will close momentarily. Voting is now closed on all items of business. As mentioned previously, the detailed voting results will be announced by the company following today's meeting. The scrutineers have provided their preliminary report of the results of voting today and I confirm as follows: in respect to fixing the number of directors to be elected at 6 greater than a majority of the votes cast have been voted in favor of this resolution, and therefore, I declare the motion carried. In respect of electing director nominees specified in the information circular as a Director of Tenaz Energy Corp. for the ensuing year greater than a majority of the votes cast have been voted in favor of the election of each director, and therefore, I declare the motion carried and each nominee for election as director has been elected. In respect of the appointment of Deloitte LLP as auditor of the company, greater than a majority of the votes cast have been voted in favor of the appointment of Deloitte LLP as auditor and therefore, I declare the motion carried. Is there any other business to be brought before this meeting? Since there is no further business, may I have a motion to conclude the meeting?

I move that this meeting be concluded.

I declare the formal business of the meeting concluded. Thank you for your attendance. I will now ask Anthony Marino, President and Chief Executive Officer of Tenaz to provide a brief business update. Tony?

Thank you so much, Marty, and thank you to all of our shareholders and guests who are attending this virtual AGM. So I'm going to give a very brief presentation -- of course, this was a really transformative year for Tenaz, we closed 2 very important acquisitions during the year, and this dramatically increased our Netherlands business unit scale. That's very important for the long term as we provide more efficient growth and better unit costs as a result of having that scale. The first of those transactions was the closing of the DOM offshore or NOBV acquisition that we achieved in May 2025, we subsequently renamed that entity TEN and it is a substantially operated position, and we continue to have a big capital program there, and we think that there's going to be a very long-term growth and a diversified set of projects from that asset base. Second acquisition was the GES project, specifically Hansa hydrocarbons. We announced and closed that transaction on the same date in October 25. These are nonoperated license interest on the -- in the Dutch offshore and the German offshore right at the maritime border between the 2 countries. These are very high rate wells that are drilled on these licenses, really the highest rate wells in the Netherlands, and we think it's going to offer a really long-term set of development opportunities in the 3 already discovered pools and a number of very high-quality exploration prospects. And on both of these acquisitions, we have drilling activity right now. We feel we very efficiently and rapidly integrated these acquisitions. We've been able to establish quite a development program. In the first part of this year, we already had 3 drilling rigs running in our position, 3 jack-up rigs in the touch North Sea. One of those is an operated rig. I'll touch on that a little bit more in a minute, operating on NOBV lands now TEN. One was a nonoperated rig serving the gyms development project operated by One DOS. And in Q1, we also had a drilling working on a license in which we have a nonoperated interest operated in that case by ENI. So 3 drilling rigs. We also had one workover barge operating in Q1, and I'll talk later in just a minute about our plans going forward for workover. So a great deal of activity ramped up, I think, very efficiently by our staff. And this is a set of development programs that we intend to continue for the long term. As a result of the acquisitions and continuing with all of this development activity, we are now the largest natural gas producer in Netherlands on a working interest basis. Last year, we placed an additional tranche of our senior unsecured notes, this tranche with gross proceeds of CAD 179 million, and we used that to fund the remainder plus cash that we already have on the balance sheet of the GEMS acquisition. We also established duringthe year syndicated credit facilities during '25 upsized to CAD 115 million, and that has further. [indiscernible] Still we have plenty of liquidity to fund our future growth. With respect to stock performance, as at yesterday's close, May '26, the shares of Tenaz were up 101% for the year-to-date that follows an 89% increase in 2025. And so we're very gratified by that positive stock performance. And we appreciate the all the support that we received from our shareholders, and I'll touch on this a little bit more than it, too. On the next slide, we show a time line of the major events in 2025. I've discussed a couple of these already. In the first one, we point out the closing on May 1 of the OBV or now TEN acquisition. That's an aerial photo of our Denhelder plant. We're conducting our AGM, this virtual AGM from Den helter with our Board, much of our management present and a number of our management team members from the Netherlands business unit as well. And doing the meeting from here underscores the importance really of this asset and specifically this plant, largest nameplate gas plant in Europe to Tenaz. The second picture shown there showed the CFOX 4 barge that we began to use in September '25 and for a workover campaign and also for continuing asset integrity work that we routinely conduct on the assets. So we use CFOX 4 initially, it worked for us into Q1 of this year, and we will be picking up a new barge probably in Q3, the Triton 10 barge, which we think is very nicely suited to a real wide range of workover activities that we have available in the existing set of wells, these should be, we think, quite high rate of return, very diversified set of opportunities. And we think that's a long-term contract that we put in place. We think that those workovers should continue for a number of years and provide additional support to a significant growth profile in production that we think that we will have for the company. Next activity shown on the time line is the GEMS acquisition with a picture of the M5 platform. Again, as I mentioned earlier, operated by 1 DOS, highest rate well in the Netherlands for the existing well there. There's another well development well that is already on production, drilling is going to continue probably for the rest of this year on that asset base and continue to quite rapidly ramp up production there. And the next event shown in November '25, is the shelf drilling winter rig arriving to work for Tenaz, again, under a multiyear contract. We've identified a very large number of drilling opportunities, and we intend to have the shelf drilling winter here for several years, if not longer, and expect continuing EBIT improvement in our costs as we go forward and move along the learning curve in these drilling activities, been successful to date, we fully expect that to continue on what is really a pretty low rest set of drilling opportunities on the TEN assets. So we're very proud of what we've been able to accomplish this year. I want to thank all of our employees who have been involved in this. It was a big effort on the operated assets to really transform the business unit from one that was maintaining production to one that is [indiscernible].

[indiscernible] on a numerical basis, I'm going to use this next slide to compare the quarterly results for Q1 '26 to Q1 '25, just to give you a snapshot of the improvement in results in the company, the growth that we've seen in all of these categories. Production up substantially to over 16,000 BOE/d in Q1. This is consolidated for the company. It's not just Netherlands. We've actually had a very successful program in Canada as well, and I want to thank the Canadian employees for their work in a super efficient program that has been maintaining production will lead to a small increase this year, very low CapEx and positive free cash flow from that asset. So that has contributed to the production result as well. And we do expect pretty steady continuing growth out of our asset base as we look at the next quarters and actually probably for the next number of years with this large set of drilling and workover opportunities that we have. Reserves as at year-end of 25 as compared to year-end shown here, a substantial increase, reflecting bringing in both TEN and GEMS and identifying a number of development opportunities. We also published an independent resource report, both contingent and prospective resources for Netherlands and there are substantial volumes there as well. And in fact, much of our drilling comes off that -- those resource locations as opposed to just the ones that are on the reserve report. CapEx, of course, up substantially to run this much bigger program. The numbers you see reflected here are annual totals at guidance level for this year compared to the total that we recorded for 2025. It's a self-funded program, which still results in very substantial growth. And it's something we would like to continue high levels of activity generating more and more cash flow over time, presumably more and more free cash flow and as we continue the growth each quarter and each year. Looking at FFO per share, again, up substantially as we see the impacts primarily of higher production, but some increase in prices as well. And as I'll touch on in just a minute, we do expect that increases in FFO will continue again always subject to commodity prices and our share price shown at the end of Q1 '26 as compared to the end of Q1 '25, up substantially. So if we turn to the next graph, this is a multiyear historical result and projection of our production, netback and then resulting FFO at the consensus of the analysts covering our company. So again, not internal projections. These are independent view of the analyst community. Of course, they use different prices and commodity prices in their projections expecting a pretty substantial increase in production, again, not only for '26, but continuing to '27. We would expect to continue to have increases in production after that as we continue our capital program. Looking at the middle panel there, this is our operating netback as projected by this group of analysts, it's going to be dependent on commodity price. We are -- we do have a very, I feel, sophisticated hedging program that will modulate the sensitivity of our netback to prices. For example, we're a little bit over 50% hedged this year for our dominant product, TTF natural gas, the -- although we are going to be dependent to some degree on commodity, the fact is that as we increase our production, we do expect our unit cost to come down. And so actually, even if we had constant prices, we would expect to have some improvement in operating netback. The product of production and our corporate netback after accounting for interest and and taxes results in FFO, again, historic result for the 3 years, '23 through '25 and then analyst consensus projection for '26 and '27, if we have this production increase, and we have -- [indiscernible] very excited about the future that it represents. In closing, the last slide that I'd like to use here is just to the Tenaz share price. We have seen a pretty substantial increase since the recap originally occurred in August '21. I can assure you that we're going to do everything that we can as the employees of the company to continue to deliver for the shareholders going forward. So that concludes the presentation. My final point I would like to make is that we're very appreciative of the work of our employee group here in Netherlands and in Canada and our accounting group that we have in Poland as well. We are very appreciative of the support that we've had from the Netherlands government in the rejuvenation of the Dutch offshore and increasing production here in domestic energy security. We appreciate very much the support and cooperation of our partners, our partner companies in Netherlands, we're supportive and we recognize what a great environment we operate in with these communities that we are located in, in Netherlands. And finally, of course, I want to thank our shareholders for their investment in the company and the support that we've had to date. So for this broad stakeholder group, I assure you that we are going to do everything we can to continue to deliver as we go forward. So that concludes my remarks. And again, we thank everybody who has tuned in for this virtual AGM.