Welcome to Peyto's First Quarter 2025 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's 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. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. I would now like to turn the conference over to JP Lachance, President and CEO. You may begin. Thanks, Yolanda. Good morning, folks, and thanks for joining Peyto's First Quarter Conference Call. Before we begin, 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 to answer questions is Riley Frame, our Chief Operating Officer; Tavis Carlson, our CFO; Todd Burdick, our VP of Production; Derek Sember, our VP of Land and Business Development; and the newest members of our senior management team, Mike Collins, Mike Rees, and Chrissy Raffas. Before we begin the quarter, on behalf of the management group, I'd like to say a big thank you to the entire Peyto team, both in the office and in the field, for their contributions to another strong quarter. It has been an event-filled first four months of 2025. We started out warm in January, but got some very cold weather in February across all of North America. That sent gas prices up sharply at many hubs, and Peyto was fortunate to have some of our gas pointed at these markets. It's been very significant. It also took a significant dent out of Alberta gas storage inventories, which otherwise would have been very full coming out of winter and into injection season. Although we believe tariffs, as they currently exist, have a minimal impact on Peyto's business, the uncertainty of the world economy continues to prevail, and it's likely going to be a bumpy ride for a while. Despite all this turmoil, it's business as usual for Peyto, and we continue to manage the things that we control, like drilling good wells and managing our production operations. Turning to Peyto specifically, we generated funds from operations of CAD 225 million in the quarter, thanks in part to our gas hedging gains, which amounted to about or amounted to CAD 0.83 per MCF, and our gas diversification portfolio, which created another CAD 1.13 per MCF in value. Together, that fetched us CAD 4.17 per MCF in the quarter, or 89% higher than the monthly AECO price. We still lead the industry with the lowest cash costs, and with that superior gas revenue, the superior gas revenue of our marketing program, it allowed us to generate a strong 71% operating margin. Cash costs were CAD 1.42 per MCFE for the quarter, down from CAD 1.51 per MCFE in Q1 of 2024, as we continue to realize synergies with the Repsol assets in our operations. Our operating costs are typically higher in the first quarter due to the extra costs associated with operating in the cold, and we expect that they will continue to come down throughout the year, very similar to last year. We spent CAD 102 million of capital this past quarter, and the strong cash flow that we had not only allowed us to pay out CAD 66 million in dividends, but coincidentally also allowed us to retire about CAD 66 million in debt, net debt. On the marketing side of our business, our gas diversification to U.S. price markets such as Parkway and Dawn, and then U.S. Midwest like Ventura and Chicago. We gas pointed Emerson, Henry Hub. They all contributed to a sound beat relative to the average monthly AECO price of CAD 1.92 a GJ. However, Alberta gas pool prices averaged only CAD 40 a MW, fetching us a similar price to AECO for the quarter on our direct supply deal to the Cascade Power Plant. Just a reminder, we're at the start of a 15-year deal there, and in the longer term, as power demand increases, we expect that contract will be quite lucrative. In the meantime, this is exactly why we want our gas to be directed to multiple markets, so we're not reliant on just one customer, which obviously is not a good business model. Looking forward to the summer and the rest of 2025, we're excited, as most producers are, about the prospect of gas heading off the West Coast through LNG Canada this year. We think this will be constructive to the AECO market, but the timing of the startup and the duration to ramp up to full capacity are still to be determined. In the meantime, we only have a small amount of our natural gas exposed to the AECO market through 2025. Switching to operations, we drilled 19 wells in the quarter, completed 13, and tied in 14. Part of the drilling program included a follow-up to the Flurrific Flare Channel that we discovered last year. It tested, the latest well tested similar to the other two wells on that trend, which were amongst the top decile of our individual lower turns that we drilled last year. Mike Reese and his team see another 20-plus locations there to drill on that trend in the fullness of time. We also drilled a couple of low working interest Cardium wells in the Chambers area to test a different drilling technique. It's new to Peyto, but not to the industry. We targeted lower in the zone to improve drilling penetration rates. Each of those two wells we drilled had a 2,500 m lateral and took about two weeks to drill from spud to rig release, so costs were way lower than our conventional method. We stimulated each of those with a 60-stage ball drop cemented liner system, and they're flowing back now. We intend to follow up with a couple more wells later in the year to continue to test this concept. Why does it matter? 25% of our undrilled 2P reserves are booked to the Cardium, and this method could improve the economics of some of those places. Facility capital was a little lighter than usual in Q1. We expect Q3 will be a bigger outlay of that part of our business since we have the Oldman plant turnaround scheduled for September and the construction of a field compressor project in the OBED area. That will, the OBED compressor project will bring more liquid-rich gas to the Edson gas plant via the Central Foothills Gas Gathering System in Q4. We did construct a pipeline project in Q1 that was as part of that capital outlay to connect some third-party gas to the Brazeau plant. This is for a multi-year agreement that is strategic in that we can use it for other third parties in the area too. We have lots of spare capacity at Brazeau, and this will not impact our growth plans there. Beyond Brazil, we continue to pursue other third-party volumes in key areas like Edson, where we have an extensive large diameter gathering system and spare capacity that could be used. Looking forward, our business plan and guidance remains unchanged for 2025. As I said earlier, business as usual. We plan to spend between CAD 450 million and CAD 500 million to generate production adds at a capital efficiency rate between CAD 10,000 and CAD 11,000 per flowing BOE by year-end, and that should be more than enough to offset our annual corporate decline rate of 27%. We think the future is bright for natural gas, especially as LNG projects, LNG Canada and others, come to fruition. We still believe Alberta is the right place to develop data centers, and we know that there are approximately 10 gigawatts of projects in the ASOQ, including Wonder Valley. Maybe all these projects do not get built, but they have the potential to increase Alberta gas demand by 1.3 BCF a day over the next few years. We think it is a very exciting time to be a natural gas producer in Canada. With that, Tawanda, I imagine there are some questions that we will open up to the phones and take some callers' questions about the quarter. Thank you. Ladies and gentlemen, as a reminder to ask a question, please press star one one on your telephone, then wait for your name to be announced. To withdraw your question, please press star onw one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Amir with ATB. Your line is open. All right. Thanks. Good morning, JP. Just had a quick follow-up question for you regarding that Cardium well. Was the difference in this well related just to the drilling in terms of drilling lower in the Cardium just getting better rate of penetration, or did you do anything different with the completions as well in terms of the 60-stage ball drop? Yeah. So yeah, we drilled a little bit lower in the Cardium formation, as I mentioned earlier, but yes, we did change the completion up. I'll maybe get Riley to comment on some more specifics around that. Maybe Riley, you can elaborate a little bit more on what exactly we mean by that. Yeah. So I mean, the concept of drilling in the bioturbated or lower portion of the Cardium has been around for a while. Lots of guys down in the Ferrier area are doing it. Yeah, the big difference is just the rate of penetration that you're able to achieve in that lower zone is quite a bit higher. The other advantage that we got out of doing it this way was also being able to drill these wells as a true monobore, so setting a surface casing and then drilling all the way to TD without setting intermediate. Sort of that monobore, drilling low, and then setting the cemented ball drop liner system were the three main components that really changed the overall design of these wells for us, and the cost structure associated with those has come in really, really good. Just to give you some sense of it, our drill cost per horizontal meter was 40% less than our historical program in this area. As JP alluded to, the impact on the go-forward Cardium could be fairly significant if we can continue to see success with this. On the completion side, aside from the size of it, just fairly standard completion, typical to what we would normally pump, except just obviously scaled to the 60 stages that we ran in the wellbore. Okay. With the longer lateral, like 60 stages on a ball drop, it's still fairly effective? You don't get to an issue of the small ball sizes? There is definitely frictional issues towards the end of the lateral, but we're still able to pump at rates that are comparable to what the guys are doing with the coil shiftable. We did not see too many issues, and we were able to place everything that we wanted to in this well at 60. Okay. Okay. I appreciate the color. Just a second question, more on the hedges. I know you have a diversified program, and you layer in hedges regardless of the gas price. Just curious, what is your target for percentage hedge for, given that you're now starting to layer in 2027 hedges? Just curious what your target would be for 2026 and 2027 by the time we get to the end of 2025 in terms of percentage hedge that you'd like to be. Yeah. As a reminder, the mechanical nature of our hedging program is such that we want to land in a current season anywhere between 50% to, say, as much as 75%-80% hedged volumes hedged once we arrive in that season. We are going three years out, so six seasons out, six gas seasons out. We will time it such that we are doing this fairly regularly and routinely, not at any price. We do have some lower-end targets. We are not going to hedge gas at CAD 2. Certainly, as we move forward, we are going to continue to hedge out 2027 and bring that up in the curve as we get closer and closer to it. That way, we are not speculating on price. We are doing this systematically over time, like dollar-cost averaging, right? That has not changed. Nothing has changed in our strategy. Our guardrails, as we like to call it, are 50-75% in the current season when we arrive, and that tapers down as we move out in the future over the next three years. Okay. Sounds good. Thanks for the color. Thank you. Ladies and gentlemen, that's star one one to ask the question. I'm showing no further questions in the queue. I'd like to turn the call back over to JP. Yeah. We do have some other questions that have come in here overnight or certainly from yesterday. Maybe I'll turn to Todd for one here. It's about operating costs. We were down at CAD 0.50 per MCFE last quarter. We're down from over a year, and I know our costs usually will fall down. We'll drop throughout the year. We have a history of doing that. Maybe you want to provide some more color on how you're going to get there, Todd, as we move forward throughout the rest of the year. Yeah. Sure. Yeah. Obviously, like you mentioned, Q1 typically higher. Q2 can be around the same, maybe a little lower, depending on how breakup goes. Obviously, we're hauling water at half loads, so you've got twice the trips and twice the cost on that side of things. We're quickly coming out of breakup here, so we should see those costs improve. We continue to work on small projects within the Edson gas plant that are aimed at reducing costs at the plant, including we recently completed a project that allows for delivery of produced water into the plant and then onto the plant's disposal well. We expect that will result in a modest reduction to our water handling costs. As we sort of understand better the compatibility side of water and that sort of thing, we expect to expand the, I guess, area around the plant that we'll be able to bring water in instead of bringing it to third-party processors and disposal companies. Additionally, we also made some changes to some of our maintenance contracts at a few of our gas plants, which should help with a small reduction in some of the plant maintenance costs. On the chemical side, in May, we saw a 10% reduction in methanol costs, which is encouraging given we saw about a 25% increase over the past year. While we're cautiously optimistic, obviously, you mentioned the bumpiness of the world markets, and methanol is sort of tied to the world economy in some ways. We do not have a clear line of sight if those prices are going to continue to drop or even hold where they are currently, but we are cautiously optimistic on that front. You put all those together, it is small little gains that we are getting right now, and we are not getting big gains by shutting in sour production and things like that, but we will continue to push and work on it in fractions of a penny, if you will. We're always done. That's right. Okay. I do not see any more questions on the caller's list, so I might just wrap it up here for folks because we all got work to do. Thanks for tuning in. Remember, our AGM is next week, Thursday, May 22 at 3:00 P.M. It is in our building on the plus 15 level. It is an in-person meeting, and we are not telecasting it live, but we will record it and put it up on the website later. Vote now if you have not already, and we will see you at that meeting or see you on the next conference call. Thank you. Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.