Good morning. My name is Anas, and I'll be your conference operator today. I would like to welcome everyone to the Second Quarter 2025 Conference Call of Strathcona Resources Ltd. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. For attendees on the conference call who would like to ask a question, press star then the number one on your telephone keypad. If you would like to withdraw your question, please press star followed by two. I now introduce Angie Lau, Treasurer of Strathcona, to open the conference and introduce the speakers. Welcome to the Q2 2025 Conference Call of Strathcona Resources Ltd. Yesterday, Strathcona released its second quarter results. We encourage our investors to visit Strathcona's website and review the disclosure materials in detail. Today's call will be focused on taking questions from analysts. Please note that all commentary made by today's speakers is subject to the same advisories regarding forward-looking information and non-GAAP measures, as can be found in yesterday's press release and our other disclosure materials. In particular, any comments made regarding the offer to make shareholders, as well as any expectations about the pro forma results or resulting capital structure of Strathcona, are based on our current expectations regarding our business and combined business and are in part based on MEG 's available public data. While we believe our current assumptions and expectations to be reasonable, actual results can differ materially from those discussed today, and listeners should not place undue reliance on any such statements. Please refer to Strathcona's offer to purchase and accompanying takeover documents starting May 30, 2025, available on our website and under the company's profile on SEDAR+ for further information. On today's call, we have from our management team: Adam Waterous, Executive Chairman; Connor Waterous, Chief Financial Officer; Connie De Ciancio, Chief Commercial Officer; Dale Babiak, Chief Operating Officer; Kim Chiu, President, Strathcona Cold Lake; Seamus Murphy, President, Strathcona Lloydminster Conventional; and Ryan Tracy, President, Strathcona Lloydminster Thermal. With that, in keeping with our practice, we will take all of our materials as read, and we would now like to jump straight to questions. Thank you. Ladies and gentlemen, we now begin the question- and- answer session. Should you have a question, please press star followed by one on your touch-tone phone. If you are a brown, that your hand has been raised. Should you wish to decline from the polling process, please press star followed by two. If you are using a speaker phone, please lift your hands up before pressing any keys. One moment, please, for your first question. Your first question comes from Patrick O'Rourke with ATB Capital Markets. Please go ahead. Hey guys, good morning and thank you for taking my question. I guess the first question just revolves around the MEG transaction here. In the past, you've spoken to engagement or lack thereof with the team over there. They're obviously running an open strategic process that they've provided a few updates on. Can you comment with respect to any changes in the level of engagement that you have had over there? Sure, this is Adam Waterous. We've had no engagement. We have asked for it multiple times, and we have been ghosted. Okay. Second question here, just with respect to, you know, in the scenario where you are unsuccessful with the bid that you've put out there, you've spoken to a $10 potential per share distribution here in a tax-efficient manner. I think you have about $15 in pot, but if you could sort of provide maybe a little bit of color with respect to how you think about the tax efficiency of that, and then alternatively with the extreme strength of the balance sheet being in a net cash position, how you weigh that versus the opportunity set for other M&A, or you're obviously having operational success through the portfolio, the potential that you could accelerate or upsize the organic growth. I think I got three questions in there, Patrick. The first was on tax efficiency. I really can't comment on that. That's a fairly complicated detail. The second thing is, how does this relate to, if we're unsuccessful in MEG, how does this, what are we thinking about doing with the cash? Our thought process was, and I've talked about this briefly before, is that our plan A has been to organically grow the business from 120,000 B/D to 195,000 B/D over the next five years. The plan A plus would be to acquire MEG. That ends up being important in that we've had lots of people say to us, "Hey, if you don't buy MEG, you got all this cash. Why don't you go buy something else?" The reason why we were looking to acquire MEG is very specific to that particular opportunity as opposed to, "Hey, we just want to buy things in general." As a consequence, if we are unsuccessful in acquiring MEG, our plan is to not buy something else, but instead provide approximately $10 per share of proceeds to our investors. This is not a, sometimes people think, "Oh, are you just building a generic war chest to go out and buy stuff?" No, we had a very specific plan A on organic growth and at the same time distributing cash to our shareholders. If we got a particular acquisition, be MEG, then we would do it. In terms of the third part of your question, which is, if we don't buy MEG, do we just accelerate growth? Actually, we quite like our current growth plan to go from 120,000 B/D to 195,000 B/D. I think it's a compound annual growth rate of about 8%. I'm not certain about this, but I think that's the fastest growth rate organically of any company of our scale in North America. I don't, it's not like we're growing slowly as far as our base plan A case. That'd be my thoughts. Maybe others may have any other comments or perspectives. Hopefully that's helpful, Patrick. Yeah, absolutely. You caught me trying to ask three questions in one there. Okay, thank you very much. Thank you. Your next question comes from Menno Hulshof with TD Cowen. Please go ahead. Thanks, and good morning everyone. I'll just start with a question on your crude-by-rail business. With the Hardisty Rail Terminal acquisition having closed, can we get an update on the status of integration of that asset? Maybe given your dominance on Western Canadian rail infrastructure, how should we be thinking about vertical integration in the rail activity outlook for Strathcona specifically if heavy diffs were to widen a couple of dollars into the back half of the year? Sure. When we think about the recent transaction, which we did to buy the largest crude-by-rail, third-party terminal in the country, what we see that as is just a pure natural hedge to the go-forward Strathcona stream business. We currently don't plan to put our own Strathcona barrels through the terminal at this time and have a long-term take-or-pay there with a strong investment-grade counterparty that is currently spitting off about $12 million of free cash flow per year. We see that as, especially with the current stabilized run rate cash flow, what the business will be in the current spread environment. That being said, if and when spreads on WCS start to widen, there's about 75%- 80% of that terminal that's currently not being utilized, which in turn means that there's a large amount of free space for spot volumes, which we think, certainly based on the past performance of that terminal, will start to fill up as spreads in the base start to widen. Terrific. Thanks for that, Connor. Maybe just flipping over to your partnership with Canada Growth Fund on the carbon capture side of things. Where do things stand on that front? Has the development trajectory changed at all based on liberal messaging under Carney to date? Sure. I'd say that we're still thrilled to have the partnership with the folks at Canada Growth Fund. We've made a lot of progress over the past 12 months since that partnership was first signed on the first steps of the detailed FEED work. Our view is it's really not a question of if, but when our first carbon capture and storage project gets sanctioned. We're still probably a couple of quarters plus away from that happening. There's still a little bit more FEED work that we need to do, and there's probably a little bit more clarity that we're seeking in terms of what kind of carbon pricing world we're in on both sides of the border. Thanks. I'll turn it back. Thank you. Ladies and gentlemen, as a reminder, if you have any questions, please press star one. Your next question comes from Travis Wood with National Bank. Please go ahead. Yeah, thanks. Good morning. The lower drainage program at Tucker sounds like it's been successful, especially through July there with the SORs below 3. Two questions and maybe just one broader one. Could you provide some details around those economics of the wells and how do you measure that? Two, what's the timeline of that ramp over those 75 locations as we think about Cold Lake in general? The third question, just to top Patrick there, maybe, is in general, across the assets, are you seeing any inflationary pressure on capital and/or OpEx? This is Kim Chiu with the Cold Lake business unit here. Let me just unpack some of those questions there. In terms of performance, I think I heard in there, how long does it take to ramp? We've actually been very pleasantly surprised off of our first program there on the D-East. Ramp-up profile is probably within a month to two months at the most. In terms of their current production and forecast, I think that particular pad is doing in excess of 5,000 B/D. Those eight LVW wells are probably 80% or more of the overall production for that pad. Off the top of my head, I have to admit, I can't remember what the exact rates of return or MOICs on those wells are, but they are certainly highly attractive with great F&D costs and great capital efficiencies. We are actually in the process of drilling our next batch in Tucker right now, and they are scheduled to come online early next year at this point in time. I'm not sure if I covered all the questions there or not. Yeah. Travis, this is Connor again, just speaking to things on the service cost side. I'd say that our view is we've been in a fairly stable service cost world for most of the last, I'd call it 18 - 24 months. There's always a couple percent of general inflation per year that kind of forms the hurdle that the teams need to eat back via an ongoing focus of trying to improve per unit efficiencies, but it's been a stable service cost world in general. Okay. That's perfect. I'll turn it back. Thank you. Thank you. Your next question comes from Dennis Fong with CIBC. Please go ahead. Hi, good morning. Thanks for taking my question. My first one here is just on Meota. Maybe following along to Travis's question. Just wondering if there's any opportunities to improve on the cost structure there, or if that's more of a fixed cost contract structure to build out that central processing facility. Yeah, it's Ryan Tracy here with the Lloydminster Thermal business unit. As far as the Meota central processing facility goes that we're constructing right now, it's a mix between there's some fixed cost lump sum contracts there on our main facility construction at the central processing facility. There's a lot of other components with our drilling and completions and some of our infrastructure that we've got to bring in, like water, gas, power, that is more on our reimbursable structure. There's some opportunity to come in under that capital budget, but as of right now, we're about halfway through that project from a capital spend perspective. Right now, everything's looking on budget, on time with that project. Nothing too big to report there, but it's looking positive in general. Great. Thank you. My second question turns back maybe to Adam. You've highlighted obviously in one of the prior questions that MEG is obviously a very unique opportunity for your company. Can you remind us on some of the things that you're really focused on in terms of opportunity sets and where you view specifically kind of attractive opportunities or what specific metrics you're continuing to look at as you evaluate the space? The reason we've been attracted to MEG is really, Dennis, threefold. Number one, the high degree of similarity between their business and our business. Why that ends up being important is our experience is that single-play companies are structurally prevented from optimizing the asset on their own due to lack of economies of scale and shared learnings. Meaning, each time we have bought an independent SAGD business, the economies of scale that we get by adding that to our existing business, not only is that business that we get have the opportunity to be improved, but the remaining businesses that we already have are improved through shared learnings. We have taken some of our success at Tucker in terms of how we're drilling wells or how we're drilling wells at Orion. This is a super fundamental point. The reason why this ends up being is that for a very long period of time, the last 20 years across North America, there has been a focus on single-play companies. The reason people have built single-play companies is because they've been the easiest to sell. If you have a single-play company, you have a structural impediment to actually optimizing the asset. We think because it's so similar to our existing business, not only do we think we'll end up operating the business more efficiently than existing management, we think that our existing businesses will be operated more efficiently and the performance will improve. That's not a comment, by the way, I quickly would say, on the quality of MEG's existing management. It's a structural impediment that single-play companies have. That's the first reason we are interested in acquiring. The second reason is that it provides Strathcona with three things, or in particular, really accelerates three things for Strathcona. Number one, it allows Strathcona to become investment-grade, which will lower our overall cost of funding. The second thing is it will increase the liquidity that Strathcona currently has in the stock market. Why that ends up being relevant is that allows us to be able to be included in some indices. As you are included in indices, that generally ends up being reflected positively in your stock. Those first two things are very, as I would say, very on-off, light switches. They happen almost immediately upon completing the transaction. The third is that the combined business will be in a very unique situation in the North American energy landscape in that it will be the only investment-grade, long-lived, floor-deployed, high-free cash flow oil business, pure play, you know, that does not have mines, does not have refineries. It will be, you know, in that space of a pure play, long-lived, floor-deployed, high-free cash flow, it will be many, many multiples larger than the next largest company in North America. We think that that will offer a very unique and attractive investment proposition to investors. That's what from Strathcona's perspective, that would be a plan A plus. Now, obviously, MEG's going to have their own, shareholders will have their own perspective. As I've said previously, what's highly unusual about this transaction is that the typical source of a return to a seller is what is the upfront premium. In this case, which is obviously relevant because usually a seller doesn't get anything more than the upfront premium. In this case, the selling shareholders get two additional things. Number one, they get per-share accretion, which is what we previously outlined as depending on whether they've got a cash flow or NAV, is somewhere between 10% and 25%. It's very large accretion on a per-share basis to MEG shareholders. That is super rare. Usually the target is trading at a discount to the acquirer. In this case, it's the reverse. That's why they're getting this accretion. The third source of return to MEG shareholders after the upfront premium and the per-share accretion is that this is principally a share transaction. 82% of the consideration is in Strathcona shares. Going back to why Strathcona is doing it, because they're receiving shares, that will be an incremental source of return for MEG. Put another way, the reason when we do this, we think that Strathcona's share price post-completing a transaction with MEG is going to go up. We think it's actually going to go up a lot. That's obviously why we're doing it. That ends up being another incremental source of return for MEG shareholders. All right, Dennis, hopefully that's a helpful response. Thanks, Adam. I'll turn it back. Thank you, Dennis. There are no further questions from our phone lines, I would like to turn the call back over to Adam Waterous for closing remarks. Sure. Thanks everyone for tuning in this morning, especially early at 7:00 A.M. Mountain Time. We'll look forward to our next conference call with you one quarter from now. Thanks so much. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a great day.