Good morning, ladies and gentlemen, and welcome to the Tourmaline Quarter Two Results Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, July 29th, 2021. I would like to turn the conference over to Scott Kirker. Please go ahead. Thank you, operator, welcome everyone to our discussion of Tourmaline Oil Corp.'s results for the three and six months ended June 30, 2021 and 2020. My name is Scott Kirker, I'm the General Counsel of Tourmaline. Before we get started, I refer you to the advisories on forward-looking statements contained in the news release, as well as the advisories contained in the Tourmaline annual information form and our MD&A available on SEDAR and on our website. I also draw your attention to the material factors and assumptions in those advisories. I am here with Mike Rose, Tourmaline's President and Chief Executive Officer, Brian Robinson, Vice President of Finance and Chief Financial Officer, and Jamie Heard, Tourmaline's Senior Capital Markets Analyst. We will start by speaking to some of the highlights of the last quarter and our year so far. After Mike's remarks, we will be open for questions. Go ahead, Mike. Thanks, Scott. Thanks everybody for dialing in. We are pleased to review our second quarter results and answer questions that shareholders may have. Starting out with the highlights. Second quarter 2021 cash flow was CAD 1.89 per diluted share. We had record free cash flow of CAD 343.9 million on production of 410,339 BOEs per day, which exceeded the high end of production expectations despite challenging operating conditions with June's heat wave. The updated five-year plan at current strip pricing delivers CAD 1.8 billion of free cash flow in 2022 and CAD 7 billion over the full five-year duration of the plan. We received a credit rating upgrade from BBB to BBB (high) in July of 2021 by DBRS Morningstar. We now expect to achieve our year-end 2021 net debt target of approximately CAD 1 billion, or 0.4x debt to cash flow and less than 1x annual free cash flow, prior to year end. With incremental volumes on the GTN, Malin, PG&E systems and the company's recently announced Gulf Coast LNG pathway in 2023, Tourmaline will have 905 million a day exposed to export markets on firm long-term transport agreements by exit 2023. Our largest export market, PG&E California, is currently trading at $5.50 per MMBtu, in US dollars. Looking at production in a little more detail. As mentioned, second quarter 2021 average production was a little over 410,000 BOEs per day and a little over 414,000 BOEs per day prior to storage injections, into our storage reservoirs in California and Dawn. That's a 37% increase over the prior year, Q2 2020. We anticipate third quarter average production will range between 450,000 and 460,000 BOEs per day. We expect to reach the 500,000 BOE per day production milestone in Q2 of 2022, primarily through the completion of the Gundy Phase 2 project, the Mink Creek expansion project, and the ongoing Laprise development program. 2021 average production for the year remains estimated at 430,000- 445,000 BOEs per day. Looking at our very strong financial results. Second quarter 2021 cash flow was CAD 570 million, compared to CAD 225 million or CAD 0.83 per diluted share in Q2 2020. Second quarter 2021 after-tax net earnings were very strong at CAD 428 million. CAD 428 million. Sorry. CAD 420 million or CAD 1.40 per diluted share, and that compares to CAD 20 million or CAD 0.07 per diluted share in the second quarter of 2020. We delivered free cash flow of CAD 344 million on E&P capital spending of CAD 216 million in the second quarter. Full year 2021 cash flow of CAD 2.78 billion is now expected, with estimated free cash flow for 2021 of CAD 1.47 billion. We received the credit rating upgrade in July of this year following the close of the Black Swan Energy Ltd acquisition, moving up to BB B (high) from BB B for both the issuer rating and the senior unsecured notes. The credit rating upgrade is expected to result in lower effective interest rates on company debt, which already are extremely low and in the top tier at 1.27% for the second quarter. Revisiting the capital program and the financial outlook, second quarter 2021 E&P capital spending was on target at CAD 216 million. Full year 2021 E&P capital spending remains at CAD 1.27 billion. Net debt at June 30th of this year was CAD 1.7 billion, which excludes the two Northeast B.C. transactions with Topaz, which yield CAD 390 million in cash, both of which will close in the third quarter of 2021. Exit Q3 2021 expected net debt is approximately CAD 1.4 billion, including the impact of all acquisitions completed to date in 2021. We now expect to achieve the year-end 2021 net debt target of approximately CAD 1 billion. As at July 15, 2021, Tourmaline's Topaz equity ownership was valued at CAD 934 million, which essentially offsets the estimated 2021 year-end net debt. As mentioned, the updated five-year plan at current strip pricing now delivers CAD 1.8 billion of free cash flow in 2022 and CAD 7 billion over the full five-year duration of the plan. Looking in a little bit more detail at the growing free cash flow outlook and our plans, our consistent 2021 narrative has been that our top two priorities are modest sustainable dividend increases and continued debt reduction to our long-term debt target of 0.5x debt to cash flow. So far in 2021, we've used free cash flow for two dividend increases, and we now expect to hit that long-term debt target during Q4 of this year. As we look out to 2022 and the full five-year plan, the vast majority of the free cash flow will be returned to shareholders. We'll provide more detail on the mix of the return opportunities over the upcoming two to three months, including continued sustainable base dividend increases, special dividends, and share buybacks where appropriate. We see special dividends matching up well to periods of elevated commodity prices and the excess free cash flow generated during those periods. Recall that our annual E&P program generates 3%-5% annual growth, and the only significant facility project of size in the current five-year plan is the Gundy Phase 2 expansion, and it will actually be done by the end of this year. The balance of the program in the out years is thus very capital efficient and will continue to generate significant free cash flow. The next large facility project is the Conroy North Montney development, which we've matched up to the LNG Canada startup when we expect very strong Western Canadian gas pricing. That timeframe is 2025, 2026. Hence, this project's not in the current five-year plan. It could be as large as 800 million per day. It will be a very strong utilization of free cash flow in the 2026, 2027 timeframe. We also have an initiative to capture more margin in our liquids business and are currently evaluating strong return projects to that end in this new business segment. These projects will compete for a portion of the free cash flow in the 2024, 2025 timeframe. A brief marketing update. The average realized natural gas price in Q2 2021 was CAD 3.25 per Mcf as we benefited from rising commodity prices, select hedging, and our broad natural gas market diversification portfolio throughout North America. The accelerated Gundy Phase 2 expansion project is expected to be on stream in January 2022 so as to take advantage of potential winter gas price premiums. We made that acceleration decision a couple of months ago as we were ahead of schedule on the facility pre-build. The PG&E California market continues to be very strong. An average Q2 benchmark price of $4 per MMBtu U.S. and strip pricing at July 23rd, 2021, of $5.48 per MMBtu U.S. for the remainder of 2021. NGL price realizations in Q2 2021 were up 130% over Q2 2020. We are Canada's largest NGL producer, averaging 55,500 barrels per day during the second quarter, and the NGL pricing outlook continues to improve. Briefly, some comments on the E&P program. We drilled 114 net wells in the first half, and we expect to drill approximately 250 net wells for full year 2021, completing approximately 220 of these by the end of this year. We are currently operating 12 drilling rigs and will add an additional rig on the former Black Swan lands in September as originally planned. We expect to bring approximately 140 net wells on stream through the balance of this year. Improved drilling time and cost performance for D&C operations has largely offset modest inflationary cost pressures that we are all observing. Drilling times have been materially reduced in all three core complexes through the application of multiple evolving technologies that we continue to trial. Recent horizontals in the Laprise B.C. Montney area are now being drilled to TD in five days. Overall, the second half 2021 E&P capital program is being executed slightly ahead of schedule. Moving to our environmental performance improvement initiatives. We intend to invest CAD 20 million-CAD 40 million per year in these initiatives, primarily in the areas of diesel displacement for E&P drilling and completion operations, methane emission reduction and ultimate elimination projects, gas plant emission reduction and associated waste heat recovery installation, and our multiple water management projects. The majority of these environment-related capital investments do indeed generate a modest positive return. We estimate that environmental initiatives to date have reduced our annual emissions by approximately 250,000 tons per year so far, a meaningful accomplishment. We have now installed over 200 zero-emission electric chemical injection pumps, providing an estimated GHG reduction of 40,000 tons of CO2 equivalent per year. The first hybrid gas Tier IV frac unit has been delivered and will be pumping on our B.C. Montney pads in the second half of 2021. Evolving zero methane emission technology is being implemented on all new well sites in all company-operated areas. Finally, the engineering design has been completed for the NGIF Emissions Testing Center. That East Edson facility is expected to be fully operational later on in Q3 of this year. This center will be evolving the next generation in emission reduction in the field. These are all technologies to be put in place during the next two to five years. We're not waiting for 2050. That's the end of the formal comments. We've got several of us here to answer any questions shareholders might have. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star, followed by the one on your touchtone phone. You will hear a three-tone prompt acknowledging your request and your questions will be pulled in the order that they are received. Should you wish to decline from the polling process, please press the star, followed by the two. If you have a speaker phone, please list the handset before purchasing any keys. Your first question comes from Fai Lee from Odlum Brown. Hi, it's Fai Lee here. Mike, I'm just wondering about this Gulf Coast LNG pathway. I just want to confirm, are the volumes moving on the TC pipeline, Alberta XPress AXP project? Is that how the volumes are getting to the Gulf Coast? Well, yes. There's really four pipeline segments to get it there, all TransCanada operated, if you go all the way back to the NGTL system. Okay. The total tolls are $0.86. Right. Is there potential room for expanding those volumes in the future, or the agreement you've reached is sort of the maximum for you guys? I think we've taken up all the available space in that pipeline system. Okay. Yeah, that's what it looked like. Okay. Yeah. Great. In terms of returning cash to shareholders, the free cash flow. In terms of share buybacks, I'm just wondering, I know you're going to provide more detail later, but do you have any initial thoughts on how you're going to handle the share buyback? Do you have some criteria in mind or how that's going to be handled relative to preference versus, say, special dividends? Well, it'll be in the mix of return to shareholder opportunities. We just renewed our NCIB, as you probably saw when we announced the closing of the Black Swan transaction. Is there some criteria? You say, okay, we'll do a share buyback under these conditions, or are you just going to try and come up with some sort of mix between the two? Well, we're finalizing what the mix between all the various return opportunities are. Obviously, our actions have demonstrated it, we like sustainable base dividend increases. In times and periods of significantly more free cash flow than modeled, we like the special dividend as well. Okay. All right. Thank you. Your next question comes from Sean McPherson from Industrial Alliance. Good morning, guys. Quick question. Oh, yeah, we can't hear you very well. Oh, sorry about that. How about now? That's a little better. Okay. Earlier this month, you guys announced a focus on cutting costs with each dollar supposed to add like CAD 180 million in free cash flow. Any idea how many dollars in costs you might be able to cut? Well, our goal internally is to initially try and shave CAD 1 off, or CAD 1 of improved margin over the next 12- 18 months. We're working away on it, and we've actually made good headway already. Awesome. Thank you. Your next question comes from Josef Schachter from Schachter Energy Research. Good morning, Mike. It's Josef Schachter. Two questions from me. First of all, on the technology side. We're seeing more comments in the States about intelligent fracking systems. Are you using that in Canada, and are you finding that the well productivity using these new frack and is the DGB unit capable of doing that, the new unit that's coming on, as you mentioned, in the next short while? That technology specifically is not something we're trialing right now, we're always evolving and improving our frack technology and performance and simultaneously trying to deliver better well performance for less dollars. It's never complete. It's always improving. Okay, real-time fracturing is not really something that's really shown up that much yet in terms of showing improvement in well performance. Yeah. That specific technology we're not using, but we are certainly using real-time frack technology as we stimulate these wells. Okay, super. Second question for me on the M&A side, is there much more available in your two core areas that you're looking at? Do you have really the footprint you want? The additional part is, are you looking to build a third core area, and would that be again in natural gas and NGLs, or would you be looking at a core area in, let's say, conventional the oil business? We've largely acquired the targets that we wanted in the Alberta Deep Basin and the B.C Montney, which are our two large gas complexes. It doesn't preclude us from doing small, and I mean small, bolt-on asset transactions within either of those areas, but we have nothing close on that front anyway. We have a third core area, and that's our Peace River High Charlie Lake Montney, and it's about 60% oil, 40% gas, and it generates this year about CAD 100 million of free cash flow on a CAD 70 million capital investment. We really like that area, even though it's significantly smaller than our two large gas complexes. As far as establishing a 4th core area, we have so much inventory, so many projects and so much production in the three complexes we have already that we have decades of drilling and E&P development to put in place. I think we're very happy with what we have under Tourmaline supervision right now. Super. Congratulations again on a great quarter. Thank you. Thanks, Josef. Your next question comes from Dan Lloyd from Forge First. Morning, guys. Hi. Just curious if you can give some color or maybe the Tourmaline perspective on the B.C. government Blueberry River First Nations judgment. Then kind of a follow-up, I guess if you could maybe speak to ideally the strength of your relationship with the Blueberry River First Nations. We've been working in that North Montney area, in and around the BRFN for over five years, and I think we've established a good working relationship. We continue at our full operational pace in that subarea within our overall B.C Montney complex. All I would say on the government was that I believe they chose not to appeal the B.C Supreme Court decision, and I think that ruling came out yesterday. Right. Saw that. Okay. Great. Thanks. As a reminder, should you have a question, please press star followed by one. There are no further questions at this time. Please proceed. Thanks everyone for dialing in. We'll talk to you next quarter. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.