Veren Inc. (VRN) Earnings Call Transcript & Summary

So good morning, everybody. My name is Barbara Munroe, and as Chair of the Board of Crescent Point, I will act as Chair of the meeting this morning. On behalf of the Board of Directors, it is my pleasure to welcome you to the Annual General Meeting of the Shareholders of Crescent Point Energy Corp. The Board and management thank you for your interest and for your attendance this morning. At Crescent Point, we always begin with the safety moment. And so I would like to advise that in the unlikely event, an emergency alarm will sound. And if you hear the alarm, please make your way to the doors to clear the hall and follow the signage out to the street level. Next, I acknowledge that we are in Southern Alberta, which is the traditional territory of many nations, including the Blackfoot Confederacy, Tsuu T'ina, and Nakoda nations and Métis nation Region 3. In the spirit of reconciliation, I respect to all those who have come before us in the Treaty 7 region of Southern Alberta. Before we proceed, I wish to acknowledge the contributions of Mr. Ted Goldthorpe. Ted is retiring at this year's meeting since being on the Board of Crescent Point [indiscernible] induction in 2017. On behalf of the Board, I would like to thank Ted for his service. And I would now like to introduce the other directors and nominees, in addition to me and Craig Bryksa standing for election to the Board at today's meeting: James Craddock, John Dielwart, Jennifer Koury, Mike Jackson, Francois Langlois, Myron Stadnyk, Mindy Wight. At this time, I would like to thank the Board for their continued support and guidance of the affairs of the company. Needed in attendance today is the executive team of Crescent Point, who will be available at the front of the room to answer any questions you may have after the formal business of this meeting has concluded. And after Mr. Bryksa has provided shareholders with the corporate update. We also have a number of employees in attendance, all of whom are shareholders. Thanks for coming along this morning. With respect to the logistics of the meeting, if you wish to vote or participate in the formal part of the meeting, you must be a registered shareholder of record on April 6, 2023, or duly appointed proxy holder of Crescent point. If you wish to speak, please start by stating your full name and confirming your status as a registered shareholder or a duly appointed proxy holder. In order to have the meeting proceed efficiently, we have asked a number of employees who are shareholders or proxy holders of Crescent Point to move and second the motions to be put forward to the meeting today. Note that because of the number of proxies held by management, all resolutions on today's agenda will be approved by the required majorities. If you wish, the scrutineer can provide you with a detailed breakdown after the meeting. If you have any questions about the business of Crescent point, we will address them following the conclusion of the formal meeting and following Mr. Bryksa's presentation. With that, I will now call the Crescent Point Annual Meeting to order. Our Senior Vice President and General Counsel, Corporate Secretary, Mark Eade, will act as Secretary of the meeting, and he is seated at the table at me. Jennifer Oliver of Computershare Canada, our transfer agent, is in attendance today, and I appoint her to act as scrutineer for the meeting. I ask Mr. Eade to file a copy of the notice of this meeting, which was mailed on April 11, 2023, to the shareholders of record on April 6, 2023. A copy of the notice and proof of service will be filed with the records of this meeting. Scrutineer has provided me with a preliminary report on attendance, and account indicates that 191 shareholders are present in person and by proxy, representing 231,608,790 common shares and accordingly, 42.3% of the common shares outstanding represented at this meeting. Therefore, I declare that a quorum is present and that this meeting is properly constituted for the transaction of business. A copy of the scrutineers' report will be filed with the records of the meeting. Copies of the minutes of last Annual Meeting of Shareholders held on May 19, 2022, are available. And I declare that the 2022 minutes have been verified and signed and have been filed in the corporation's minutes book. Anyone wishing a copy of the minutes may pick one up from the table located at the back of the meeting room. The first item with business is the receipt of the annual consolidated financial statements of the corporation and the auditor's report for the year ended December 31, 2022. The annual consolidated financial statements and auditor's report were mailed to shareholders in accordance with securities law requirements together with the notice of this meeting. Copies of the annual consolidated financial statements and the related auditor's report are available on again at the table located at the back the meeting room. I will request the Secretary to file a copy of such statements and the auditor's report with the minutes of this meeting. Jessica Bissett and Courtney Kolla of PricewaterhouseCoopers LLP, the auditor of the corporation are in attendance today and available to answer questions after the termination of the formal business of the meeting. The election of directors is the next item of business. And in connection with the election, it is necessary to first fix the number of directors to be elected. The articles of Crescent Point currently provide the Crescent Point shall have not less than 1 and not more than 11 directors. It is proposed that 9 directors be elected at this meeting to serve until the next annual meeting or until their successors are duly elected or appointed. We are satisfied that this number of directors is currently appropriate to provide a significant range and depth of expertise and to meet all corporate governance requirements. I would ask for a motion to fix the number of directors to be elected at this meeting at 9. I would now like to open the meeting for nominations of directors to serve for the following year. May I have a nomination for the 9 nominees being Barbara Munroe, Craig Bryksa, James Craddock, John Dielwart, Mike Jackson, Jennifer Koury, Francois Langlois, Myron Stadnyk and Mindy Wight.

I nominate.

Got her now.

I nominate Barbara Munroe, Craig Bryksa, James Craddock, John Dielwart, Mike Jackson, Jennifer Koury, Francois Langlois, Myron Stadnyk and Mindy Wight to be elected as the directors of the corporation to hold office until the next Annual Meeting of Shareholders or until their successors are elected or appointed.

In 2013, Crescent Point shareholders approved the adoption of an advanced notice bylaw. This allows the corporation and its shareholders to evaluate the proposed nominees' qualifications and suitability as directors, helping shareholders cast an informed vote for the election of directors. No other nominations have been received in accordance with the advanced notice bylaw, there can be no further nominations. And accordingly, I declare nominations for the Board closed. I require a ballot vote on the motion. Mr. Eade, would you please explain the process?

Thank you, Barb. The scrutineers provided all to registered shareholders and proxy holders upon registration at today's meeting. And many of these ballots have already been executed and deposited back with the scrutineers for tabulation. If you voted by proxy already, your vote has been counted, and it's not necessary for you to execute a ballot. If you still would like to receive a ballot, please raise your hand and a representative of Computershare will provide you with one. So I will pass it back over to you, Barb. I don't think we need to go through the voting process.

Thank you, Mark. We will now continue with the business of the meeting while the scrutineer prepares the report on the vote. Next item of business is the appointment of auditors. I would request a motion that PricewaterhouseCoopers LLP, be appointed auditors of the corporation to hold office until the close of the next Annual Meeting of Shareholders at such remuneration as shall be fixed by the Board of Directors.

I so move.

I second the motion.

Thank you, Shelly and Kristen. All in favor? Contrary, if any? I declare the motion carried. The next item of business is the advisory vote on executive compensation. The Board believes that it is appropriate to hold a nonbinding say-on-pay vote with the intention that this advisory vote will form an integral part of the Board's shareholder engagement process around executive compensation. A detailed discussion of our executive compensation program is provided in the executive compensation section of the circular. I would now ask for a motion that on an advisory basis and not to diminish the role and responsibilities of the Board of Directors that the shareholders accept the approach to executive compensation disclosed in the information circular mailed to shareholders in advance of the meeting.

I so move.

I second the motion.

Thank you, Shelly and Kristen. All in favor? Contrary, if any? I declare the motion carried. Report on the ballots for the election of directors has now been received. In accordance with that report, I declare that Craig Bryksa, Jim Craddock, John Dielwart, Mike Jackson, Jennifer Koury, Francois Langlois, Myron Stadnyk, Mindy Wight and I have each been elected directors to Crescent Point to hold office until the next Annual Meeting of Shareholders or until our successors are elected or appointed. These report will be filed with the records of the meeting. As all business properly brought before the meeting has been dealt with, this concludes the business of the meeting, and I declare the meeting closed. Thank you again for your attendance today. And Mr. Bryksa will now give a presentation on the company. And following that, again, members of management and the Board will be available at front of the room to answer any questions.

Everybody hear me? Okay. I saw -- I heard a little bit of feedback there from Barb, so I'll try to speak very slowly and make sure everybody can hear. It's great to see everybody out here today. I certainly appreciate you all coming, especially when you go through a couple of years of doing this as a hybrid meeting. It's nice to be back in person for a second year now in a row back in person. So we're going to spend a little bit of time here today. We'll run through a presentation, have a good discussion. And then at the end of this, we'll open it up for questions. And please, for those of you that don't know me, and a lot of you as I look through the room, a lot of you do know me, the best part about the meeting is the questions at the end. So I'd love to engage and more than happy to answer anything you have. If you're uncomfortable getting up and asking a question, a few of us will be standing around here at the front afternoon, more than welcome to pop up and talk to us. Before I get going, I'd like to thank our staff, the emergency responders and firefighters for their hard work during the ongoing Alberta wildfires. And I wish the absolute best all the communities that are impacted by this. I'm excited to share with you some highlights from the past year and provide some insight into the outlook for our business. We've implemented a strategic transformation at Crescent Point since 2018, and we've never been better positioned -- in a better position than we are today. I'll touch on a few things today that I think helped tell the Crescent Point story, show how we position the company for success. Then we'll have that Q&A session like I mentioned after. Over the last 5 years, we have successfully transformed the company enhanced Crescent Point's position as a leading energy producer. Over the next few minutes, we'll talk about what sets us apart and how we move strategically and with purpose to build out a balanced portfolio with the significant depth of premium drilling inventory. We'll also talk about our continued demonstration of operational excellence, a relentless focus on the balance sheet and what all that means ultimately for everybody in this room in shareholder returns. We've achieved all of this while reducing our environmental footprint, reducing our emissions intensity by half during that same time period. We strategically built an optimal pairing of short- and long-cycle assets that deliver added sustainability and diversification. This portfolio is highly liquid-weighted and generates industry-leading netbacks, which allows us to punch well above our weight when you think of excess free cash flow on a per share basis. Our portfolio now has 15 years of premium drilling inventory. And what this ultimately means is the opportunity for us to deliver greater returns during that time period. Our short-cycle assets like those in our Duvernay and Montney plays have impressive initial production rates, low capital efficiency, attractive scalability and premium depth of inventory and quick payouts that allows us to quickly reinvest in the business. Our longer-cycle assets, like our Saskatchewan place complement our shorter-cycle assets with low decline stable production, low capital reinvestment and a significant excess cash flow generation. The strategic combination of these assets provides us with consistent sustainable cash flow with low breakeven and the opportunity for disciplined growth into the future. Crescent Point teams are among the best in the business. We are a highly technical team and have established a proven track record of consistently delivering on our word, delivering on efficiencies, driving down our cost structure, enhancing production and returns while also mitigating our declines. A great example of our innovation as we entered into the Kaybob Duvernay and you saw us quickly reduce our cost structure by 20%, all while ensuring safety is our top priority. I've spoken about our great assets and our great teams. Another piece that really sets Crescent Point apart is our capital discipline. Our capital allocation framework guides our decisions and ensure we prioritize balance sheet strength and long-term sustainability. In 2018, we have returned $4.4 billion towards our balance sheet through excess cash flow generation and very strategic asset dispositions. This focus on balance sheet strength and financial flexibility allows us to withstand periods of low commodity prices and be opportunistic as we reshape the portfolio as evidenced by both the Kaybob Duvernay and the Montney transactions. Long term, we targeted a leverage ratio of 1x debt to cash flow at a low commodity price environment in that $45 to $50 range is how we think of it. We'll also continue to allocate capital to our shareholders to fulfill our commitment to return 50% of our discretionary funds flow to our shareholders. When you layer on our base dividend, it actually works out to be in 60% of our excess cash flow that is earmarked for our shareholders. By the end of this year, we expect to distribute more than $1.5 billion of cumulative returns to our shareholders since 2018. And we'll deliver these returns through our base dividend, our share repurchase program and along with special dividends as laid out in our capital return framework. At Crescent Point, safety is a vital part of our everyday business, and I'm happy to report that in 2022, we achieved our safest year on record. This is a direct result of our deliberate actions to make safety our top priority. We've built an incredible safety culture within the company by engaging our employees and contractors and empowering them to make safe decisions. We've continued this momentum into 2023 and I'm pleased to report that we just realized our safest first quarter on record through a refresh, refocus and reconnect safety campaign. Our strong ESG performance is rooted in our prudent risk management approach. We've set targets to guide our performance and have achieved significant milestones in the past year, including successfully reaching our 50% emissions intensity reduction target, 3 years ahead of schedule. And I'm pleased to report that we've also reduced our asset retirement obligations by 50% during that same period. We look forward to sharing more detail on our progress in our upcoming sustainability report. Looking ahead, we'll continue to focus on the elements we believe set us apart from our peers and help us deliver attractive shareholder returns. We'll be disciplined and opportunistic in optimizing our portfolio. We'll continue our operational excellence and demonstrate our technical prowess across our asset base, in particular, our new Montney position. We'll maintain our capital discipline as we strengthen our balance sheet and our commitment to our shareholders will continue through our disciplined return framework. The outlook for 2023 looks very positive as the oil demand exceeds historical levels. This supply/demand forecast paints a constructive picture showing demand outpacing supply for much of this year. A few things have created this dynamic, including the under investment in the sector over the past few years, OPEC's continued support for the market and the increased global concern for energy security. All of this gives us great confidence that the global demand for products we produce will remain strong, and it gives us great pride to be a supplier of choice for responsible energy. This attractive macro outlook, combined with our 5-year results -- our 5-year plan results in a very positive outlook for Crescent Point. Over the next 5 years, we anticipate our production climbing to 195,000 BOE per day with 70% oil and liquids weighting. This level of production, combined with our industry-leading netbacks, is expected to generate $5.2 billion of excess cash flow, of which -- of which 60% is earmarked for our shareholders. And this is using a $75 price deck. In closing, I'd like to reiterate the priorities we have put in place to enhance shareholder returns. Our differentiated portfolio gives us exposure to 2 of North America's premium plays, paired with our long-cycle assets in Saskatchewan. Our operational excellence maximizes the value of these assets and epitomizes responsible resource development. And our capital discipline prioritizes balance sheet strength to position the company for success. Combined, these strategic elements generate significant excess cash flow and ultimately, returns for everybody in this room. I'd like to thank everybody here today for your continued support. Most of all, I'd like to thank our staff. We've transformed the company into a highly profitable enterprise with tremendous potential ahead, and we couldn't have done it without you. We'll now open up for questions. You can see the mics on either side of the aisle. If anybody has any questions, more than happy to sit and have a conversation.

I have a question not so much related to the business, but it's mostly on buybacks. I've owned shares in the marketplace for about 40, 45 years now. And I always find that most people use their share buyback as an opportunity to try to push the share price up and eventually costing shareholders millions of millions of extra dollars that they don't have to pay because they could buy them on the open market at a much cheaper price. So I'd like to know how your share buybacks are conducted. Do you do it through your own people? Or is it farmed out to a brokerage house and I'd like to suggest that maybe if they do that, people only buy stocks on down days instead of trying to push the price of the share up to the moon on up days?

Yes. So that's -- it's a great question. One of the things that we were really happy to get out last year was our return to capital framework. So we put that out last saw, if you remember. And the commitment there from us is the company is to return 50% of our discretionary funds flow to our shareholders plus the base dividend is layered on top of that. And that's where that 60% comes from that I've talked to you about. So when you look at the 50% discretionary, the tool of choice right now for us has been mainly buybacks and when we sit down and as an executive team and a board and look through the valuation of our company and how we trade and you look at that intrinsic value on what we've got on our books for a net asset value and never mind what we have for potential running room ahead. It makes a lot of us -- a lot of sense for us to be buying those shares and repurchasing our own company at these levels. So look for us to continue to do that. I would say if you want to get into the dynamics of how we do it, we do it quarterly. Ken, our CFO, is in the room here, we sit down and go through it. We do a forecast on both production and then commodity prices and see from that what our cash flow is going to look like. On that, what's our capital spend, what's our discretionary cash flow going to be out of that and then trying to earmark that 50% out of that. So we are in the market every day. Like you mentioned, ideally, it makes more sense to buy it on down days, and certainly, we try to do it like that. But there is points in times where you're bumping into it in higher days as well. That all said, when you look at how we trade today and whatever we're at today, call it $9, I think, was the last price we saw, at the levels we are trading at and our net asset value on our books, it makes a lot of sense for us to continue to buy at these levels. The other thing I would tell you is we're not chasing strip when we're looking at this, the strip commodity price. We look at it more of a mid-cycle pricing. So in that kind of $65 environment, what is our net asset value on that. And certainly, at these levels, it makes sense for us to do that. So we're going to continue with that program. And it's a commitment we've made to you. So look for that to continue to play out here as we go. I don't know if that asked at all. That being said, so we do use banks. We do use different brokerage houses through the process. But the instructions come in to our management team.

I'd like an update on the fire situation as far as the oil industry is concerned. But also with the share buybacks, did the federal government announced a 15% tax on share buyback.

Sorry, it was Shirley?

Yes.

So 2 questions there. You wanted a little discussion on the fires and then on the share repurchases. I can give you a quick update on the fires. But if you want to come up after our COO is in the room, Ryan Gritzfeldt, he's been monitoring the situation very close, not only our situation, but across the industry, so he can give you a lot more color than I can. I can tell you today, Crescent Point has about 45,000 BOE per day down. The major field for us that is feeling the main effect is our Duvernay -- Kaybob Duvernay position. And if you think of where that's situated on the map, it's right near the town of Fox Creek. The town now has been evacuated for, I want to say, 2 weeks pretty much. Ryan, 2 weeks maybe tomorrow. So a long time. So you think of what these people are going through absolutely terrible. I can tell you us as Crescent Point, and as an industry, you're doing absolutely everything we can to help out the communities and support them in any way that we can, whether it's financial aid, whether it's our people helping out with the evacuation process, or if it's having some of our commitment even support in the firefighting initiatives we're doing everything we can to the point even where helicopters water bombers are using our water hubs across the field to quickly reload their payload and then dump on the fire. So if you look at the sector as a whole, I think the last number I saw, and don't quote me on this, but I think the last number I saw was around 380,000-ish BOE per day down, there's ebbs and flows in that. But again, the sector as a whole, whether we're the producers, the E&P -- or sorry, the E&Ps, the service companies, the pipe companies, we're all working together to ensure that we can get this under control as fast as we can. But I would say the biggest difference is going to be rain, and it doesn't really look like that's coming our way until Monday. Ryan is in the room. He's been staring at it for 14 straight days. He's up here. I can point him out to you shortly after if you want to talk to him. He's been staring at this nonstop and can certainly give you more detail on that than I can. As far as your question of buyback. So that tax isn't 15%, it's 2%. So that starts in January of next year is how it looks.

I'm sure you guys could tell me how much energy you make on a daily basis. I'm curious how much you consume? And I noticed that metric on the slides, tons of CO2 per BOE. Is that something you guys going to be tracking go forward as a KPI?

Yes. Sorry, did you say Matt?

Yes.

Yes. You know what, Matt, I cannot tell you what we consume in a day for energy. I mean those are things that would take us a little work to sit back and find out exactly what that number is. I don't have that on the tip of my tongue. I'm not going to lie to you, Matt, that's first time I've ever been asked that. As far as emissions intensity, those are -- the intensity is what we track, and that's tons of CO2 equivalent on a BOE basis per day is how we think through it. And it equates then obviously, to an absolute number. So when you look at that near-term emissions intensity reduction target that we've achieved 3 years ahead of schedule, that was on our Scope 1 emissions. It actually worked out to be about 70% of our methane, absolute methane. So if you think of methane, everybody in the room is going to know that, that is the -- of all the greenhouse gases, that is the worst one, and our focus has been on methane. So we've clipped 70% of that on an absolute basis for methane then worked out to 50% of our Scope 1 emissions intensity. And since achieving that goal, we've reset a new goal. By 2030, we want to reduce our overall Scope 1 and 2 by 38% by the end of this decade, and I'm happy to tell you, Matt, that we are on track. So things on that look really good. We take this very serious. And I did mention in my slide presentation, we've got a capital allocation framework. The beautiful thing about any type of framework as it creates discipline in the system. And with that framework, we've got a commitment in there that 5% of our sustaining capital budget will be reinvested in environmental initiatives like that. So that's part of emissions intensity. Our asset retirement obligations. Those are all part of that as well. So making progress, and we're going to continue to make progress.

Yes. And I'm wondering -- on the 2% tax. So I'm wondering if we're talking about making buybacks more of a priority and dividends less of a priority. So -- and because we can always make dividends more of a priority at a later date when there's other factors like the PE is much higher because it's not going to stay at 5.6 [indiscernible] [ 13, 14 ], and all of a sudden then we're buying back stock at a PE of 12 or 13.

So that's a good question. I would tell you right now, again, I step back on how we trade relative to our NAV, it makes sense for us to buy back. So we've all -- and whether we look at that on a recycle ratio on F&D, any type of metric you want to look at it returns, it makes sense for us to do that. So we're going to do that. I would tell you, it is absolutely the 2 of our choice. But when you step into a quarter, and the company is no different than me, it can get blacked out during the quarter, depends what we're doing. So when we step into a quarter and we sit down at the start of this and the management team is planning on how we're going to do things for the quarter, you're looking at a very volatile commodity price. You're looking at a production profile that ideally is always better than you set, but you never know, things like we're living here through with the wildfires can come into play. And then you've got a capital spend throughout that quarter. So you're trying to navigate live numbers and punch out 50% return like we've said, our return to capital framework is very formulaic, and you can see it, and that's why we love it. It's a great discipline. So that 50%, we're trying to do the majority on that as buybacks as we can. But at the end of the day, there might be a little bit that doesn't quite get hit and then what we end up doing in order to hit that percent as that gets kicked out as the special. So buybacks are the 2 old choice. That being said, we want to continue to grow our base dividend. Our base dividend is extremely important to us as a management team and the Board, and we want that to grow over time. Look for us to continue to grow that. As you've seen us now move it to, call it, $0.40 a year right now, roughly a 4% yield. As we continue to drive our leverage down, our debt count, we'll look to move that base level dividend up to 12. So to answer your question, we are trying to. You got to remember, 50% goes to the shareholders. 50% stays with us in the company to reinvest in the business. And right now, that's being directed towards the balance sheet. So hopefully, that answered your question. It sounds like you'd like us to do more.

I guess I just want you to do what I want you to do.

Yes. No, I get it.

[indiscernible], a registered shareholder. Just a couple of questions, Craig. I've been a shareholder since June 3, 2009. I've seen that your price fluctuated a great deal. I've seen the dividend disappear and return. Several questions. One is maybe a comment on how do you think the buyback tax is going to affect the strategy of buybacks next year. I'm sure your team has given some thought to that already. You're not going to wait until January 1. The second thing, I personally like the buybacks. I favor that. But at the same time, I see where the dividend is very important to the share price. And quite often, I compared to white cap. I know I don't own them anymore. I agree with the gentleman who was here prior that said that he'd like to see more of the buybacks. I'm certain or I feel confident that the Board and the management have a pretty good plan on determining how much the buybacks will be, when to do it? I realize that the NCIB, there's limits that are set to the buybacks within any quarter. But at the same time, I like the buybacks. I don't know what the 2% tax is, how that's going to affect the buybacks, certainly going to discourage, I think -- but at the same time, I'd like to see that dividend increase is that share price a little bit higher. That's just my own opinion.

Okay. So all of those things I agree with. I'd like to see the share price higher and the dividend increase or go over time as well. So we're on the same page. As far as the buybacks, as we look into the next year, and again, I'm going to pull it back to how we trade in this commodity price environment relative to our net asset value. It makes sense for us to do that. So I'm happy to tell you that the 2% tax that's going to be on it is not discouraging us from that. As we look out into the future, we're going to continue down that path. And that's -- that's the beautiful thing about having a return of capital framework. It's a commitment to the market, and it's a promise that we've made to you. And you can hold me accountable for that. You can hold the executive team and the Board accountable for that. That's why we put out that framework. And like I say, a big portion of that is earmarked for buybacks. Keep in mind, to date, year-to-date, we bought back 10 million shares already, and we're active on it. The other thing I would say is -- with any type of commodity-based company that has a significant amount of capital program, it ebbs and flows, your excess cash flow ebbs and flows quarter-to-quarter based on how much your capital program. So for us, Q1 is a more capital-intensive quarter relative to Q2 and then even a little bit more relative to Q4. So there's quarters where you have the ability to do more of it, and then there's quarters just based on how your free cash flow is modeled. You have the ability to do -- not the ability, but you're constrained to do a little bit less. And then for us, we look at it on an annual basis, right? And that's where that target of total discretionary, but 60% of the excess cash flow comes into play. But if you step back and think about it, what I just talked about funding through our 5-year plan, we're growing to 195,000 barrels a day, which is 2% CAGR when you think of it, which I would call very disciplined, manageable, sustainable growth into the future. And things for us, I've been in this role 5 years and this company has never looked better than it does today with the portfolio as it's come together with the Montney and the Duvernay II premier North American place paired with our long cycle assets in Saskatchewan. So that projection as we look into year 5 and into year 10 looks great. But the highlight in there, if you believe $75, and I hope you're more bullish on oil than I am while maybe not quite than I am. But $75 seems absolutely a reasonable price during that time period when you start to look at the supply-demand balances going and shifting throughout the globe. That's $5.2 billion of excess cash. Our market cap today is going to be somewhere around 5. So we're going to excess cash flow over the next 5 years at a $75 price environment more than we're trading for today and 60% of that is going back to this room. The other 40% is going to come towards our balance sheet and allow us to reinvest in the business. So I fundamentally agree with both of you on the repurchases. We also agree as a management team and a Board that we need to continue to advance the base dividend. And I love the questions.

Your assets in Saskatchewan is a lower decline. Do you think -- do you see any opportunity to take some of those, call it, novel production techniques or strategies into these new assets with -- that are kind of more in your scalable side of things? What's the impact.

Yes. So it's a good question, Matt. And if you look at our Saskatchewan assets, a lot of these have been in the portfolio for a long time, both in Southeast and Southwest. Saskatchewan runs at about 65,000 barrels a day, first BOE a day for us right now. When you look across our 5-year plan, it's basically dead flat. The beautiful thing about these assets now is your sub 20% decline rate. So they don't take a lot of capital to hold them flat, and that's because of the advancement of the waterfloods and the polymer floods we've been doing out there. And the other thing I would note in Saskatchewan, just the Southeast portion alone, free cash flow was $515 million of the $75 price deck. And when you layer on Southwest, you add on another about $150 million to that. So these things don't take a lot of capital and generate a significant amount of excess cash that allows the company to do so many other things with. So to your question as far as can we take some of those techniques and advance them across the play? I mean there are certainly things we'll look at, maybe more so in the Montney than the Duvernay and the geos and [indiscernible] are in the room here, and they can help me with some of this answer after as well if you want to pop up. But you got a little bit -- in particular, the Duvernay, it's a little bit tighter reservoir. It's extremely deep with extremely high pressure. It doesn't really bode itself well to something like waterflood or polymer floods just on how tight it is. Montney might be something that we can look at down the road more water-ish, but we'll see how that plays out. It's just in the -- it's in a different phase of its life cycle than Saskatchewan, right? It's under that primary development and the opportunity set right now in front of us is more for that. So things will look at though. I've been doing this 5 years. As you know, this is my fifth year, never had this many questions. I've never had this many questions. I think two of these have been in person. Two of them have been virtual, and 4 of them, I think I had no questions. So I appreciate it. With that, if there aren't anymore, we'll maybe wrap it up. And if you do want to pop up front, we're going to be here for a little while. I can say, Shirley, Ryan's here, I'll point them right out to you and you can give you a bit better of an update than I could. But we thank each and every one of you for your continued support. The company has made significant progress in the last 5 years. It's fundamentally different than where we were 5 years ago. And 5 years from now, we're going to be fundamentally better and we can't do all that without you. So I appreciate everything. If we didn't have any questions that you've got, just run up front after and will be happy to talk. So thank you.