Thank you for standing by, and welcome to Peyto's Q3 2023 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. To remove yourself from the question queue, you may press star one one again. I would now like to hand the call over to President and CEO, JP Lachance. Please go ahead. Thanks, Latif. Good morning, folks, and thanks for joining Peyto's Q3 results conference call. I'd like to remind everybody that all statements made by the company during this call are subject to the same forward-looking disclaimer and advisory set forth in the company's news release, issued yesterday. Present with me today in the room, we have Kathy Turgeon, our Chief Financial Officer, Riley Frame, our VP of Engineering, Tavis Carlson, our VP of Finance, Todd Burdick, our VP of Production, Derick Czember, our VP of Land and Business Development, and Lee Curran, our VP of Drilling and Completions. Before we discuss the quarter, on behalf of the management team, I'd like to acknowledge and thank Peyto team, as we always do, for their efforts over the past quarter, including our people in the field for their commitment to Peyto. I mean that sincerely, as a lot of people are working extra hard these days to integrate the recently acquired Repsol assets. It was a very busy quarter at Peyto. Not so much on our, you know, on our capital program, which was relatively quiet as we continued with our careful approach to spending, given commodity prices were still down significantly as compared to last summer. I think AECO monthly, seven-day price averaged only CAD 2.26 a gigajoule, and NYMEX was around $2.58 an MMBtu for the quarter. But our systematic hedging and our diversification portfolio helped us maintain cash flow, while our capital program kept us flat on production over Q2. Cash costs of CAD 1.05 per Mcfe, excluding royalties, were up slightly from Q2, but when you factor out the CAD 0.05 per Mcfe we paid for some partial financing fees incurred from the acquisition, they were actually slightly lower, collecting typical lower summer operating costs, but also that we've seen inflation effects moderate now. Obviously, we've been very busy doing some exciting things other than the drilling program over this last quarter, like another tuck-in deal. You know, I call the Repsol deal that because it really fits with our strategy to acquire assets immediately adjacent to our own operations that come with lots of upside and operating facilities. So on October seventeenth, we closed the Repsol acquisition, and when you consider the bids went in shortly after our last call in August, that was pretty fast. But because of closing Q4, there's no production or revenue contribution from this deal in our Q3 results, aside from that initial financing costs. Clearly, you know, we're really excited about the opportunities here. We see over 800, you know, high-quality drilling locations right now, but I expect once we get drilling, we'll spot even more like we usually do. For us, it's like going into a time warp, since many of the great opportunities we've pursued in the past on our own lands are right next door, you know, right next door to these, are now available again on the Repsol assets. You know, where, you know, the difference is that this time we get to use our latest drilling techniques that we've been refining over the years, like our extended reach horizontals and increases in stimulation intensity. So that means the wells should be that much better. And as I said in the monthly report just published, the real work begins now, and we've already begun drilling. Lee has two rigs running on the Repsol lands, and we expect to drill seven more wells by the end of the year, seven wells in total by the end of the year. That, coupled with our two rigs, will help drive exit production to somewhere between 126-128 thousand BOEs a day, depending on, you know, hookup timing. While much of our staff is busy integrating data with systems into Peyto, our operations team is also busy working up field optimization projects, which I'll get Todd to expand upon later. The field synergies with Peyto's Greater Sundance area are fantastic. I would encourage you to look at the slides in our corporate presentation, and you can see the overlay of the plants and the gathering systems because, you know, that picture says it all. We now control and operate 1.5 Bcf a day, or 1.4 net Bcf a day, of processing capacity in the Deep Basin. We also released our preliminary budget for 2024, which targets between CAD 450 million-CAD 500 million capital spending, which should grow us to around 135-140 BOEs a day by the end of the year, next year. That plan has a combination of activity on both the newly acquired Repsol assets and our own Peyto legacy lands, where we plan to drill around or between a total of 75-80 net horizontals. On top of that, we expect to spend about CAD 10 million on closure activities to stay ahead of our abandonment and reclamation obligations. We believe our plan to grow over the next two years is well-timed with the expansion of LNG takeaway capacity, both from LNG Canada, which is getting built, and the projects in the U.S. In the meantime, we expect gas prices to remain volatile, so we've protected our revenues with a robust hedging program. 68% of our forecasted gas volumes are fixed for 2024, and 56% for 2025, at prices around $4/Mcf, which is quite a bit higher than the strip for 2024. We calculate that not only can we support the dividend and the capital program that we've got contemplated in our plans, but also pay down debt, you know, such that we should be under 1x debt to EBITDA, trailing EBITDA, sometime in 2025, under the current strip. But beyond our hedges, our remaining exposure for the winter, for this winter and into 2024, is some premium gas markets like Dawn, Malin in California, and the U.S. Midwest. Of course, we also have our supply contract to the Cascade Power Plant for 60,000 GJ a day, which has been delayed slightly, but should be up and running in Q1 of 2024, and we're all connected and ready to go in there when they are. We also released our annual sustainability report as part of the Q3 release, and you can find that on our website. We continue to hold the view that our focus on operational excellence naturally keeps our costs down, but also serves to emit less methane, use less water, use smaller surface footprints, and keeps facility utilization as high as possible. This report covers the year ending in 2022, so you know, it doesn't include the newly acquired Repsol assets. Of course, next year, we'll reevaluate the targets based on these combined assets. Before I close my opening remarks here, I'd like to congratulate Riley on his promotion to COO and Tavis to his promotion to CFO that will take place early next year. I know you guys are excited as I am to begin the next chapter at Peyto. Thank you, Kathy, for 20 years of dedication to Peyto as you move forward to a retirement in 2024. Before we go to the phone, Latif, I think I'll let Todd maybe expand upon a little bit. If you could, Todd, you could expand on these operational, these operations optimization projects as they relate to the Repsol synergies that we've been discussing. Maybe you can provide a little more color as what your team has planned for the rest of this year and into 2024. So Todd, I'll ask you to maybe expand upon that first before we turn it over to calls. Sure, sure. So I guess maybe to expand a little bit on your recognition of the Peyto people, I would say that we're pretty happy to see the former Repsol people that we brought in, really working hard along with our Peyto people to identify some synergies and optimization opportunities. They've really stepped up since they came in, and they look like really great additions, so we're pretty happy on that. I'm sure that's probably other groups are seeing that, too, I hope. As far as what we've got planned for the remainder of this year, we've got some quick wins, if you want to call it that. We've got immediate plans for three projects in the Greater Sundance area. Two should be completed here in November, one in December. Two of them involve some pipeline tie-ins that will redirect roughly 20 million cubic feet a day of well gas into lower line pressure and higher liquid recovery plants. And then a third involves a compressor sales pipeline redirection that ends up removing the need for about a CAD 2.5 million pipeline that we were previously envisioning building. So we have that savings, and then that all that gas that moves into that system will end up being at a lower line pressure, so that will help. And we're doing it for, you know, minimal cost, a few hundred thousand dollars and very little regulatory applications required. And then as far as going into 2024, we're going to focus on really adding infrastructure, I guess, and connecting infrastructure so that we're able to connect Repsol plants into Peyto infrastructure so that we've got swing capability, so that we can move gas around from plant to plant in outages, and then you know, continue to look for lower line pressure opportunities and that sort of stuff. So we've sort of got about five projects that we're envisioning right now. Several of them will be up in the northern area, sort of Wild River, Wildhay, Cecilia, and that will connect those three plants together, and then further south, connecting the Edson Gas Plant, the Medlodge Gas Plant into the Oldman, Swanson, and Nosehill facilities. So, we're excited about that, and, you know, expect to have a lot of this stuff done probably in the first half of 2024, and then we'll continue working on some of the, little bit more nuanced things as we move through, the first half of the year. And we'll probably be able to do, you know w e're expecting costs, pretty minimal costs, even for some of those larger header modifications and small pipeline builds to make that happen. Yep. Okay, thanks, Todd. That's good, it's good. Better color. Okay, I imagine there's a lot of questions, so Latif, let's open up the phone lines there. Perhaps we can see what we have for questions. Thanks. Yes, sir. As a reminder to ask a question, you will need to press star one one on your telephone. To remove yourself from the queue, press star one one again. Please, please stand by while we compile the Q&A roster. Our first question comes from the line of Jeremy McCrea of Raymond James. Yeah, hi, guys. It's been a month since the closing here now, and I'm curious if you're getting, any kind of update just in terms of some of the synergies that we could have expected. You know, are you getting, you know, maybe, you know... I'm, I'm just trying to think of, like, better potential for, you know, more access into the California market, better recontracts, better anything, just with some of the synergies and, and contracts that you guys may have had with Repsol. And then second question, a lot of M&A going on here in the sector here right now. Are you guys done with these tuck-in acquisitions, or is there more still to come here? Okay. So, hi, Jeremy. Thanks for your, your question. You know, in the first, I think Todd alluded to some of the projects that we got working on as far as optimizations go. We did get a little bit of a little bit of diversification with the acquisition into a little bit more California into the California market, with the marketing side. As far as, you know, as far as synergies around drilling and et cetera, really, we haven't changed our program. All we do is redirect it more on the Repsol assets. So we still have four rigs running, so, you know, that, that hasn't really materialized any changes to sort of synergy or, or larger synergies related to, to contracts like that. With respect to... What was the second part of your question? Just a lot of M&A going on in the sector- Yeah Here right now. Just your comments on that, and, you know, how do you guys fit in with all this M&A that you a re you guys done? Are you still looking at things or still opportunistic? Yeah, we haven't changed our approach, and in fact, I'd argue that what we just did isn't any different than what we've been doing all the way along. We call these tuck-ins because they have the synergies or, you know, they're right next to our own assets. We understand them really well, and so we'll continue to do that. You know, for us, it's the strategy really hasn't changed. We'll look at opportunities as they come around, and we'll jump on them if we think they make sense to us, and we can make them work. And typically, they're gonna come with facilities, and they're gonna come with a lot of opportunities so that we can continue our strategy of owning and controlling. We think that's really important, and we'll continue to look at any kind of opportunities like that. I think the Repsol acquisition provides us with additional opportunities. As we move out, our footprint gets bigger, and we see more opportunities on other kinds of tuck-ins that we'll pursue as we go along here. But you know, besides that, I mean, really, we have. You know, we're looking at land sales. We're looking at other ways to add, you know, to our land base. Maybe you want to comment on that, Derick? Yeah, sure. Yeah, we're definitely active still on the land sale front, continue to target prospective lands that fit our profile. In the quarter, we did pick up 10 sections of prospective lands for an average of CAD 211 an acre, and that put us to a total of 26 sections, year to date for an average of CAD 178 an acre. We're active on the land front, too, which is good. Yeah. So with the additional footprint of the Repsol lands, you know, many new Crown land sales in the future will now fit our profile, given their closer proximity to our pro forma land base. So we'll look to capitalize on those opportunities once they arrive. Okay. Thanks, guys. Thanks, Greg. Thanks, Jeremy. Thank you. Again, to ask a question, please press star one one on your telephone. Again, that's star one one on your telephone to ask a question. Our next question comes from the line of Chris Thompson of CIBC. Yeah. Good morning, guys. Thanks for taking my question. Just, firstly, on some of that infrastructure work that you're doing, you mentioned redirecting 20 million a day, with these projects coming up here, at the end of this year. Does that actually increase utilization on a specific plant? Does it decrease utilization on another? How should we be thinking about that? I noticed you specifically called out utilization in the press release there. Yeah, I'll get Todd to sort of expand a little further on that. You know, I think in general, though, we, you know, we're looking at this from the perspective of, we gotta get drilling here and start growing production in those areas, and that will really be the, the key driver for OpEx reduction. Because obviously, fixed costs at the plant, you know, they have been underdeveloped, these areas, and so, you know, the fact that these plants have not been—their production has been falling, the fixed costs are spread out, so we'll see those costs. And so that utilization is down relative to where, you know, where we'd like to see it. So obviously, we're going to get drilling here. But, you know, in the short term, Todd's got these projects planned to move production around and to optimize it, and part of that is we're lowering line pressures to help increase throughput as well, right? So, you know, the utilization rates are going to move around as we do that, obviously, right? I think specifically on the 20 million cubic feet a day of gas that I mentioned, that is moving some gas that's up in the Cecilia area. That Cecilia plant has been full for quite a long time, and its liquid recoveries are lower than any of the other plants. So our plan is to there's a connection right there, Repsol pipe going right past Peyto pipe, and we're going to move some gas up further north into the Wild River plant. So that plant utilization is already 100% as it were, but now we're gonna, we're gonna help lower pressures and increase utilization. Exactly. And we have you know, it will move a little bit of gas maybe out of the Wildhay plant, but it will relieve the infrastructure that we were directing to, you know, move that gas around. So yeah, definitely will help on line pressure and positively affect a lot of other wells in that area. Got it. Okay. And then from an infrastructure spending standpoint next year, you mentioned the big turnaround at the Edson plant. So just wondering if you can expand a bit on, you know, what, what the estimated costs are for that and, and other infrastructure spend in the budget? Yeah, I won't get into specific projects because those will move around on us, Chris. But generally speaking, our facility budget is close to, you know, 15%-18% of our annual budgets, and that isn't any different than in the past. Maybe, I guess, probably the past years, you know, was a little lower than that. But so, you know, there's a few projects that we've got on the go this year that related to that, you know, the gas plant. The gas plant, the Edson gas plant turnaround is actually spaced over a couple of different months, so it's spread out. But it'll be around, you know, the infrastructure costs, facility costs will be in that 15%-18% of our capital budget range. Okay. Then, next question from me. How should we be thinking about your royalty rate next year, and then, cash taxes as well? We've talked about operating costs in the past, but just wondering if there's been any change to your outlook on OpEx as well. Sure. Maybe I'll get Tavis to answer the royalty question here first, and we'll talk - we'll follow up with some other ones. Go ahead. Yeah, Chris, I think our royalty rate is going to be consistent with where Peyto's been over the last year. Like, obviously, if AECO does, you know, pick up a bit, we could see a little bit higher, but somewhere around that 8%-10% would be a good place to be modeling right now. In terms of cash taxes, we're modeling around 12%-14% next year. It's going to be a bit higher than where we are, where we're at in 2023. The Repsol acquisition is a partnership, so it doesn't come with many tax pools. The resource pools and non-capital losses will flow up to the partners immediately. So really, we're only inheriting a little bit of UCC pools and some resource pools that we would have generated from June first, during the effective period, I guess, that Repsol did for the most. Yeah, 12%-14% would be a good place to be modeling for next year. Chris, you also asked about operating costs. You know, operating costs, I mentioned it earlier, that utilization of their plants is down, and we'd like to think we're, you know, we can we have significant improvements that we can make on operating costs. staff costs will be higher, but we've already, you know, we're already gonna see some changes to that. In fact, as far as our people, synergies out in the field, and so, costs are going to go up for sure, but we still think that we have lots of opportunities to move those in the downward direction over the coming year in 2024, and that's what we'll be focused on doing. If you look to our corporate presentation, I have a sort of a total cash cost, you know, slide there that gives you some direction around where we see our total cash costs, including royalties and capital and tax in the corporate presentation to help you with numbers. All right. Thanks, JP. Maybe just last question from me. Just with your preliminary budget and guidance out, could you maybe help us a bit on the shape of the capital profile next year and the shape of your production profile next year? Yeah, sure. So capital, the capital program is probably relatively balanced throughout the year. You know, it'd be a little bit higher in the back end. And because we have different, and a lot of that has to do with the timing of facility projects that don't necessarily affect production. Production typically will be back end loaded. For us, you know, we have a couple of things there. We come out of the year, so we have a little bit higher declines at the front end. And so, you know, we're relatively flattish in the first half of the year, and then we grow in the back half, which is fairly typical of Peyto's profile. And part of that is to do with the fact that we have a breakup period. We're modeling right now, you know, that we aren't going to be running all four rigs through breakup. That could change, so that capital profile could change as well if we decide that, you know, it's a good time to go and it makes sense, the market's there. We can get to lower costs, which we've typically done, but not always. So right now, we're modeling, you know, more or less a flat front end and then a higher back end on the production side, and capital is more or less balanced throughout the year. Okay, I think you mentioned exiting 2024 between 135 and 140 thousand BOEs a day. So I mean, if we just, you know, connect the exit this year guidance to the exit next year guidance in a straight line, we kind of get to about 132 thousand a day, as an average next year. Is that, is that the right way to be thinking about it? Yeah. Again, I would say, you know, come out of the year, stay flat in the first half, and then ramp it up in the back half to those exit volumes. That should get you there. Okay, great. Thanks. I'll pass it back. Sure. Thank you. Thanks for your call, Chris. Thank you. As there are no questions in queue, I would now like to turn the conference back to JP Lachance for closing remarks. Actually, sorry, we do have a question. I'm sorry. We have a question. Please stand by from the line of Travis Wood of NBF. Hey, guys. Good morning. Two questions. First, just kind of carrying on from Jeremy's question around M&A. Anything that you see within the portfolio kind of pro forma now that you've been operating it for a month, that you could carve out as, you know, "non-core," including potentially some facilities with that? Yeah, there's you know, obviously, we're going to continue to look at these assets in a way that we've always been focused. You know, but really what we purchased here is quite focused, right? So, you know, none of the... I would suggest that the Repsol assets themselves aren't something like that we would consider carving out necessarily. It fits really, really nicely with. That's why we bought it. But there may be some minor properties that came along with this that we would look to divest, for sure. And we'll continue to look at that depending on what opportunities are out there and how we wanna sort of direct our capital program. But nothing specific. Okay. Thank you for that. Then unrelated, a lot of comments around maintenance and kind of optimizing infrastructure and directing volumes, kind of, you know, zigzagging across the portfolio. Anything from a optimization standpoint, as we think about liquids capture, is there anything within that optimization outside of costs? Is there anything on the revenue side where we could expect higher NGL ratios at the, on the back end? I think Todd mentioned there that, with respect to, you know, redirecting some of our gas to higher efficiency, higher liquid recovery plants, you know, certainly is part of that, and that's part of the, you know, we're It's about making money, it's not just about production, right? So obviously, the higher liquid recovery is where they make sense, but they gotta make sense, right? You know, if the deep cut doesn't make sense, we turn it down, we turn it off, like we always have at Oldman, and the same would go with anything on the Repsol lands. We would handle that the same way. So we'll always be looking for the highest net back we can get. If that means, you know, changing our processes or moving production around to do that, we're gonna be doing that. So, and I think this gives us even more opportunity now that we have, you know, this interconnection. As Todd mentioned, we're gonna interconnect all these plants together to give us maximum flexibility to be able to do those kinds of things. But nothing specific to tell you right now, Travis. Travis, we're still in the throes of all this, you know, right? Okay, fair enough. And then just specifically for Edson and the maintenance there, is that, is it related to, just, kind of, you know, not enough capital spend from Repsol over the years? Or is there something specific that you want to target before you start to change throughput there? Yeah. First of all, actually, I would say, you know, the capital, the capital spending done by Repsol in the past has actually been to maintain the Edson gas plant has been great. I mean, they. That's what they have spent their money on. So, the condition of that facility is in great shape. It's just, it's coming up to its turnaround. I'll let Todd expand upon that. The money we're spending there is more on preventative maintenance as part of an ongoing program, as opposed to fixing it up, as it were. Yeah, this is their 10-year turnaround, so they've got a... It's obviously a very big facility, so there's a lot of vessel entries that have to happen, a lot of PSE changes, that sort of stuff. And then, you know, along with that, some R&R work to replace stuff that's maybe coming to end of life, which is just typical. You do that 10-year and 5-year schedule, so it's just timed out that we picked up the assets right in the time of a very large 10-year turnaround. Okay. That's fantastic color. Thanks very much. I'll turn it back. Thank you. Once again, to ask a question, please press star one one on your telephone. Again, that's star one one on your telephone to ask a question. I show no questions. Mr. Lachance, the floor is yours for remarks, sir. Okay, thanks. Well, thank you all for tuning in. You know, as we, we're excited about going forward here and, you know, we need some time to digest and, and, assimilate, as it were, the, the assets. And, and, and, you know, but going forward, we're quite excited about the, the Repsol acquisition, and you probably can get that from Martin. So thank you very much for tuning in, and we'll see you next year. This concludes today's conference call. Thank you for participating. You may now disconnect.