Good morning, welcome to the Pipestone Energy Corp Q1 2023 Financial Operational Results conference call. At this time, all participants are in listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. As a reminder, this call may be recorded. I would now like to introduce your host for today's conference, Dan van Kessel, Vice President of Corporate Development. You may begin. Thank you. Good morning, everyone, and thank you very much for joining the call. With me, I have Dustin Hoffman, Interim Chief Executive Officer and Chief Operating Officer, and Craig Nieboer, Chief Financial Officer. On today's call, Dustin will start by providing an update to Pipestone's operations. Craig will follow with an overview of our Q1 2023 financial results, and I will follow with an update on our risk management activities. I will now hand the call over to Craig Nieboer, Chief Financial Officer for Pipestone Energy, to provide the disclaimer and some opening comments. Thanks, Dan. Listeners should be advised that some of our remarks today will contain forward-looking statements within the meaning of applicable securities laws. I refer you to our advisories regarding forward-looking statements, non-GAAP financial measures, and capital management measures in today's press release and our Q1 2023 MD&A. All dollar amounts referenced in our remarks today are in Canadian dollars, unless otherwise specified. To begin, as you would have seen in our Q1 release earlier today, our President and CEO, Paul Wanklyn, will be taking a leave of absence for health reasons. We remain optimistic about his recovery, but we have no certainty on timeline for his return. Our board has appointed Dustin Hoffman to fulfill the dual roles of COO and interim President and CEO. Listeners should be reminded that Dustin joined Pipestone as CEO back in September 2019. Prior to that, spent more than 25 years building a successful career at Ovintiv and its various predecessor companies. With that, I would like to pass it over to Dustin, who will provide an update on Pipestone's operations. Thanks, Craig. Good morning, everyone. I'd like to start by saying our thoughts are with our founding CEO, Paul Wanklyn, for a speedy recovery and with the people and communities being impacted by the wildfires. I'm very pleased to announce our record Q1 2023 production results of 35,162 BOEs per day, which puts the company well on track to achieving its annual production guidance range of 34,000-36,000 BOEs per day. Pipestone had a very active first quarter, executing on approximately CAD 106 million or 42% of our planned capital program at the midpoint of our CAD 245 million-CAD 265 million guidance range. The company's first quarter development activity included drilling nine of the 27 planned 2023 drills and completing 14 of the 26 planned 2023 completions. Approximately CAD 40 million of this year's capital program is being spent on delineation activities, focused particularly on the southeast portion of our acreage situated within the Montney volatile oil window. During the first quarter, we drilled two new wells on our 11-09 pad with an average lateral length of approximately 4,500 meters. Average drill costs were CAD 3.4 million per well or CAD 765 per lateral meter drilled, which is 14% below our 2023 budget drilling cost per lateral meter. We completed these two wells in April 2023, with well site facility construction underway to enable extended flow tests during Q2 of this year. In April, we retested the original well on the 11-09 pad, which was completed by Pipestone's predecessor company in 2018. Over the 7-day flow test, the original 11-09 well produced an average of 710 barrels per day of condensate and 3.4 million cubic feet per day of raw gas, which equates to a condensate-gas-ratio of 209 barrels per million cubic feet. It should be noted that the two new wells on the 11-09 pad are double the lateral length of this original well. We plan to commence construction of a new gathering pipeline to tie the 11-09 pad into Pipestone's existing 12-14 battery this summer. During the quarter, the company conducted a number of land swaps with offset producers south of the Wapiti River to create a more consolidated operated land position. As a result, we have drilled an additional delineation well off the 14-14 pad site. This well was completed in April 2023 and is expected to commence initial flow back operations later in Q2. In addition to the delineation activity on the 11-09 and 14-14 pad sites, we have drilled and rig released the final three to four planned wells on the second occupation of our 02-31 pad. We rig released four wells during the second occupation of our 02-25 pad and also drilled a water disposal well at our 6-30 pad. In late December of 2022, we commenced frack operations on a 6-well pad at the 11-05 pad, which continued into January of this year. The 11-05 pad facilities were constructed in February 2023, and all six wells were brought on production at the beginning of March. These six wells have achieved an average IP60 of 382 barrels per day of wellhead condensate and 4.4 million cubic feet of raw gas, equating to a condensate-gas-ratio of 87 barrels per million cubic feet, meeting our VRGC1 type curve expectation. Eight additional wells drilled at the 02-31 and 02-25 pad sites were also completed in March, with initial flow back operations ongoing. These wells are expected to be on production by mid-May of 2023. We firmly believe that we are on track to meet our objectives for 2023 in delivering continued efficient production growth and unlocking the value of this asset through compact delineation. I will now hand it over to Craig to provide an overview of our Q1 2023 financial results. Thanks, Dustin. As a result of the record production volumes in the quarter and despite weaker commodity prices, the company's Q1 2023 adjusted funds flow from operations of CAD 86.3 million in Q1 2022. As Dustin mentioned, Pipestone has front-loaded its capital expenditures in 2023, which will de-risk the company's ability to deliver on its annual production guidance. The total capital investment in Q1 of CAD 106.6 million, excluding capitalized G&A, represents 42% of the full year budget of CAD 255 million at guidance. As a result of the higher capital spending in Q1, the company exited the first quarter of 2023 with net debt balance of CAD 150.4 million and was drawn CAD 98.3 million on its CAD 280 million bank lending facility. Pipestone's ratio of net debt to annualized trailing quarter adjusted funds flow from operations at March 31, 2023 was 0.4 x, down from 0.6x at March 31, 2022, which demonstrates the continued strength of the company's financial position. We will continue to target a run rate net debt balance of about CAD 100 million, which we expect to achieve later this year as the capital program levels out. We're also pleased to report this morning that we have successfully redetermined and extended our CAD 280 million RBL with maturity out to May 2025. This provides ample liquidity and optionality for the business going forward. Pipestone executed on its enhanced shareholder return framework with the payment of its inaugural CAD 0.03 per common share quarterly dividend on March 31st, 2023. The quarterly dividend represents the cornerstone of the company's strategy to return capital to shareholders and represents an annualized yield of approximately 4.7% based on yesterday's market close of CAD 2.53 per share. It was also announced today that the company's board of director declared its second quarterly dividend of CAD 0.03 per common share, which will be payable on June 30th to common shareholders of record at the close of business on June 15th, 2023. I'll now hand it over to Dan to provide an update on our risk management activities. Thanks, Craig. Pipestone views commodity price risk management as integral to protecting its capital program and preserving optionality with respect to its shareholder returns objectives. The company capitalized on improvements to the WTI futures prices in early April due to the surprise OPEC plus output cut announcement to significantly expand its oil hedge position through the end of 2023. Further details on our updated hedge positions can be found in today's press release in the MD&A. With respect to the condensate market, between January and April of this year, condensate traded at a large premium to WTI. Through the remainder of Q2, we expect it to trade at a small discount to WTI as a result of the turnaround activity happening in the oil sands, with pricing expected to strengthen through the back half of the summer and trade in and around par to WTI. I'll now turn it over to Craig to conclude the call. Thanks, Dan. Thanks everyone for listening today. With that, we'll turn it over to the operator for any Q&A. Thank you. Ladies and gentlemen, if you have a question at this time, "please press the star one one" keys on your touchtone telephone and wait for your name to be announced. Please stand by while we compile the Q&A roster. One moment for our questions. Please stand by while we compile the Q&A roster. Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone, have a great day.
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