Morning, ladies and gentlemen, and welcome to the Tourmaline Q1 2026 results conference call. At this time, all lines are in a 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 and then the number zero for the operator. This call is being recorded on Thursday, May 7th, 2026. I would now like to turn the conference over to Scott Kirker, Chief Legal Officer. Please go ahead. Thank you, operator, welcome everyone to our discussion of Tourmaline's financial and operating results as at March 31, 2026, and for the three months ended March 31, 2026 and 2025. My name is Scott Kirker, and I'm the Chief Legal Officer here at Tourmaline Oil Corp. 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'm here with Mike Rose, Tourmaline's President and Chief Executive Officer, Brian Robinson, our Chief Financial Officer, and Jamie Heard, Tourmaline's Vice President of Capital Markets. We'll start with Mike speaking to some of the highlights of the last quarter and the full 2025 year. After his remarks, we will be open for questions. Mike, go ahead. Thanks, Scott. Thanks, everybody for dialing in, and we're pleased to review our Q1 2026 results and provide an update on our broad range of activities. The company achieved record production in the first quarter, generated very strong earnings, and our cash flow and free cash flow forecast for 2026 and 2027 are steadily moving up. Some select highlights, continued new well outperformance in both gas complexes, leading to production at the midpoint of guidance despite significant Q1 capital deferrals. The first two major facility projects in the Northeast B.C. infrastructure build-out, those being Aitken and Groundbirch, remain on schedule. Due to strong global liquids prices and our access to Pacific propane exports, our 2026 NGL realizations are anticipated to increase by approximately 30% over 2025. Q1 2026 cash flow was CAD 862 million. That generated CAD 202 million of free cash flow for the quarter. Our Q1 2026 net earnings were a very strong CAD 658 million. We have steadily improving 2026 and 2027 full-year free cash flow outlooks. Net debt at March 31, 2026 was CAD 1.5 billion, which is below the long-term debt target of CAD 1.75 billion and is approximately 0.4 x net debt to cash flow. Looking briefly at production, first quarter 2026 average production was 666,089 BOEs per day within the original guidance range. Unchanged 2026 average production of 620,000 BOE-640,000 BOEs per day is anticipated. We intend to maximize the use of our new Dimsdale, Alberta storage capacity, as well as existing long-term Dawn in California storage facility positions, along with potential in-basin production curtailment during periods of low prices this spring and summer. We've also scheduled the vast majority of our 2026 facility maintenance into Q2 during low gas prices, which keeps gas volumes offline. Today, that equates to around 70 million per day, and some of that is higher cost third-party gas. That's all largely factored into 2026 guidance and Q2 guidance. Briefly on financial results, as mentioned, we generated CAD 202 million of free cash flow in the quarter, really despite extremely weak Western North American gas prices this winter. First quarter OpEx was CAD 4.75 per BOE. That's down 8% from Q1 2025. Our full year 2026 OpEx of CAD 4.50 per BOE continues to be expected, and that's down 9% from full year 2025 as we continue to make the business better, primarily through our BC build-out. Full year 2026 E&P capital budget remains at CAD 2.55 billion. That's following the CAD 350 million reduction that we announced on March 4th of this year. We have identified an additional CAD 200 million of what is primarily D&C capital that could be deferred from the 2026 E&P program should Western North American nat gas prices remain weak through the whole year. Tourmaline's exposure to international LNG prices and the increasing liquids pricing has improved current 2026 free cash flow estimates to a little over CAD 0.9 billion. The free cash flow benefit from our exposure to JKM and TTF pricing via our LNG export-related contracts will not be realized until Q2, and that's due to the timing of LNG cargos. That benefit was not in our Q1 cash numbers. Some marketing highlights, our average realized nat gas price in Q1 2026 was CAD 3.59 per Mcf, you know, significantly above the AECO 5A benchmark price of CAD 2.05 per Mcf for that period as we continue to reap the benefits of our diversified marketing portfolio and strategic hedging program. We have an average of 930 million cubic feet per day of natural gas hedge for the remainder of 2026 at a weighted average fixed price of CAD 5.13 per Mcf. We have an average of 220 million a day exposed to international pricing, TTF and JKM in 2026, that systematically grows over the next two years. The company is also amongst Canada's largest propane producers similar to the natural gas business that we have, we have a long-standing propane marketing diversification strategy in place. Currently, approximately 45% of our propane production receives the Argus Far East Index propane price. With the benefits of this improved NGL pricing and reduced ethane production, we do expect 2026 NGL realizations to average close to 30% higher than they did the prior year. Looking at the E&P program, as mentioned, well out performance compared to prior five-year averages has continued in both gas complexes. In the BC Montney complex, 25 well performance was up 22% over the previous five-year period. That being 2020 - 2024. In Q4 2025 and Q1 2026, this has continued BC Montney well performance. Gas side is up 13% over the 2020 to now 2025 time frame, and the Alberta Deep Basin is up 6% over the same time period. That's based on IP30 rates because we haven't had the wells on for as long. Just some specific well highlights. We've done extremely well as we generally do during Q1 of 2026 in what we call the North Montney. We've delivered strong pad and well performance in all three sub-complexes in the north. At Aitken, the five well Birch pad averaged IP90 rates of 3.4 million cubic feet per day and 419 barrels per day of C5+. At Gundy, the eleven well d-4-G pad tested at average peak rates of 25 million cubic feet per day and 130 barrels per day of C5+. That's across eleven wells. That's the average. It is important for investors to know that we're choking almost all of our high deliverability gas wells in this current low local gas price environment. Further north in Conroy, the eight well Laprise pad averaged IP90 rates of 4.8 million a day and 283 barrels of C5+. Deep Basin also continued to deliver strong well results throughout the complex. You know, not as robust as the BC Montney, but very strong for the Deep Basin, particularly on the liquid side. The Resthaven three-well Wilrich A pad came on production in March, has an average IP30 of a little under 15 million cubic feet per day and 112 barrels per day of condensate along with that. The Ansell, 08-11 three well Wilrich pad came on in February. Average IP30 of 11.7 million cubic feet per day and 217 barrels per day of C5+, which is well above normal. In the South Deep Basin, the Farrier 02-20 two-well Glauconite pad started up in March, and it produced at average well rates of 724 barrels per day of C5+ and 2.7 million cubic feet per day of gas. You know, safe to say on a broader note, our year-end 2025 2P natural gas reserves of 27.7 Tcf, achieved with only booking 15% of current drilling inventories, position the company very well as recent international developments render sizable economic reserves in stable jurisdictions ex-increasingly attractive. On the EPI front, Tourmaline is the first Canadian company to be certified under the MiQ and the first company in MiQ's history to have certified integrated gas production and processing facilities. It applies to our full Northeast BC gas production base of 1.6 BCF a day, and it positions Tourmaline to access differentiated markets where verified methane intensity influences procurement decisions in landed jurisdictions. We continue to progress the multi-year diesel displacement strategy. That's a cost savings and an emissions reduction exercise. We've displaced over 250 million liters of diesel now since we started this and saved over CAD 245 million to date, and that includes the cost of the nat gas fuel replacement. Our new 10-year target is savings of CAD 565 million. These are material cost savings. Finally, our board of directors intends to declare a quarterly base dividend of CAD 0.50 per share in early June, which will be payable on June 30, 2026 to shareholders of record at the close of business on June 15, 2026. I think that's it for any kind of formal remarks, and we're all here to answer questions. Thanks. Thank you. Ladies and gentlemen, we will now begin the question- and- answer session. Should you have a question, please press the star button followed by one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star button followed by two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment for your first question. First question comes from Sam Burwell out of Jefferies LLC. Please go ahead. Hey, good morning, guys. I guess first off on gas dynamics, like the West Coast arb, which has been a little bit of a headwind, looks open for the summer. Curious if you think that exports can pick up meaningfully over the next few months. Have we seen any reaction in the Malin and PG&E strips from lower hydro generation tied to the Grand Coulee and that stuff? It's starting to materialize, as we look at BC Pac Northwest and Northern California Hydro, it's all moved down significantly from where it was. Jamie can talk to the strips. Really all we need in California now is some heat. We still have over 1 BCF a day of gas on GTN that should be going west that is backed up into Alberta. We need to see PG&E improve first, and we think we will when they get some heat because hydro has moved off. The Grand Coulee Dam maintenance is underway. We think, you know, that ultimately lifts AECO and Station 2. We think this happens during Q2, there's a number of other green shoots that we've seen that, you know, we're excited about. Let's make sure it's not another false start. All three markets have moved up over the past week, but let's see that happen on a sustained basis. Jamie, I think you've probably paid more attention to the strip. Yeah. We do see arbs coming into a place where we could expect exports to come back in July, August. Even just in the last couple weeks, as Mike was saying, we've seen firmness in PG&E and Malin directly translate into a better AECO strip. These markets are clearly connecting right now. Some other additional points. You know, Costa Azul started taking gas a little earlier than we expected. That's the LNG plant in Mexico. Long has been our thesis that that plant actually impacts the California corridor more than a Delaware egress point, and that's exactly how the strips reacted on feed gas. SoCal is the market that seemed to react the strongest, and that will further tighten the California corridor. As Mike Rose was saying, it's about a BCF of export loss out of the WCSB today. To put that in perspective, LNG Canada has recently been getting to nameplate, so running at 2 BCF a day. Averaged about 1.5 BCF per day in the first quarter. Production in basin is up modestly. It averaged roughly 0.7 BCF a day in the first quarter, but at many times has been closer to flat. We are closer to flat entering into Q2, and we are flat on exit. We would normally, with, you know, the LNG plant on at 1.5 going to 2 and production up less than 1, be in a pretty tight market. What has masked that tightness completely is this lack of exports into that West Coast market. This LNG plant's going to be on for 40 years - 60 years ahead of us, while this West Coast export outage or lack of economic pull is going to last until July if we get heat, and August, September if we don't. We think this temporary disruption in how AECO is trying to balance is indeed going to be measured in months, and then we turn into a much tighter basin in the two years ahead of us. When we look out a little further, we see the WCSB averaging over a BCF of demand over the next five years. Okay. Understood. Then just longer term, curious what you think of Canada's entree into sovereign wealth. Could the Canada Strong Fund be a tailwind for a project like Cedar LNG's getting financed and getting to FID? Do you think that sovereign wealth or any other fiscal support can realistically drive additional LNG infrastructure on the West Coast beyond LNG Canada Phase 2 and beyond Cedar LNG's? I'd say yes would be the short answer to that question. If there's CAD 25 billion of additional capital available, it certainly can't hurt. All right. Got it. Thank you, gents. Next question comes from Patrick O'Rourke from ATB Cormark. Please go ahead. Thanks, guys. Good morning, thank you for taking my question. I guess just thinking about the potential of the incremental CAD 200 million capital reduction that you've pointed to, I think that probably most reasonable people could assume that you want to see how sort of the summer plays out from a storage dynamics, probably overall, but also regionally. What's sort of the gating parameters around that decision point? Then to the extent that you're choking volumes and building stocks here, does that act as a tailwind as well for the capital program in 2027? Yes, it does. Really as soon as second half 2026 because, you know, really we went through the same exercise to some extent in 2025 and matched the production growth curve to the improving price curve, and ended up achieving our production targets for 2025. In, like, by deferring production in Q2, and deferring capital expenditures in Q2, you make that cash all back up, in the second half and actually exceed it because you're gonna sell into a, what we think is gonna be a higher price environment. Yeah, I think largely you're correct on that assumption. Okay. Great. With the update here, you realize some of the improved waterborne gas prices, as well as some liquid pricing, incremental free cash flow. Net debt is, you know, still below sort of the target level and alluded to, you know, distribution of that. Can you walk through sort of how you see the mechanics of incremental free cash flow distribution going forward? I think it's a very dynamic time. You know, prices are moving dollars sometimes, you know, almost CAD 10 a day. Our strategy right now is to receive this free cash flow. We have some observations. One of our observation is, especially in NGLs, the backwardation is incredibly steep. It's a less liquid market. There's less visibility and liquidity, and so it backwardates steeply, and so it could very well outperform what strips say today. Our go-forward plan is to receive these higher cash flows. Definitely in Q2, cash flows will benefit from the tension the war has created in all of our markets. Once that cash is received, then we'll, you know, proceed with a decision on how it's going to be distributed. You're right. We're below our net debt target, and we definitely have a practice of continuing to deliver excess free cash flow back to shareholders. This time we just wanna make sure we have it in our pockets first, just 'cause the day-to-day changes and outlooks are, you know, more dramatic in this current environment. Okay. Thank you very much. Next question comes from Greta Drefke from Goldman Sachs. Please go ahead. Good morning, team, thanks for taking my questions. I was just wondering if you could speak a bit about your latest views on the outlook for in-basin power demand growth driven by data centers up in Canada. What are you seeing in terms of Tourmaline's-specific conversations, and are you seeing any new regulatory tailwinds too? Start at the end of that. On the regulatory side, the federal government deferred or eliminated the clean electricity regulations, which promotes gas-fired power in Alberta. The Alberta government with Bill 8 stacked the regulatory process rather than run it in sequence. Logically, that should make it go a little faster. We've been exploring the possibility of co-locating with a hyperscaler at one of our sites and are really a year into that evaluation process, and we offer a lot. If it's all competitive on a North American basis, we could do that or we could just simply be a provider of gas to another project. We don't have anything to announce at this point on our own initiative, but are well into it and will certainly advise the market if something material transpires. Alberta is a great place to do this. I think our current government recognizes it. It's something that has to get done relatively soon because there's not an infinite number of data centers that are gonna get built. We think the whole industry in Alberta on the data center behind fenced power gen looks a lot more legitimate as soon as a major announcement is made. Great. Thank you. Then just for my second question, I appreciate the color you provided on your outlook for local pricing over the next several months or so, but I was wondering if you could speak a bit more about your latest views and if you're looking to hedge out incremental local exposure in the near or medium term, if you're able to. Yeah, if we're able to. I mean, the reality is the strips over the past few months really haven't offered anything that looks attractive, but we certainly intend to run with a larger hedge book than, say, we did two and three years ago. Brian, anything? We have picked up a bit more LNG hedging, as well as taking advantage of the runoff in oil and lifting spreads a little bit. We're thinking about storage as a mechanism in your, you know, effective hedge book. It's like a physical hedge. You're moving volume from one quarter to the next. The contango in AECO is steep. I think it's gonna be an incredible year to store gas for Tourmaline. We now have 2 BCF in storage with 8 BCF to go. We have lots of options and lots of times in the months ahead of us to inject at when prices are low. We expect to have many opportunities in the third and fourth quarter and the first quarter next year to withdraw that gas at a much higher price. Thank you. Thank you. Next question comes from Josef Schachter from Schachter Energy Research. Please go ahead. Morning, everyone. Every time you turn on the TV on the business channels, you hear about OpenAI, Anthropic, and all kinds of AI stuff. What, what's going on in terms of business side, like for Tourmaline? Are you finding benefits, you know, in the field or head office? Can you give us some examples of things that you're integrating into your system? And does that impact materially in terms of productivity? Does it impact your labor force? Just to get an idea of how a real company is using all of this the new technology. We're using it and evolving it in many aspects of our business currently, from learning software in the field to optimize production for wells that are on plunger lift, to drilling technology just behind the bit to learn and drill faster and faster wells. Then there's a whole myriad of opportunities, within, you know, head office itself. AI bots going through 3D seismic volumes, looking at the horizons that are outside, you know, what we're landing our horizontals in the Deep Basin and the BC Montney, and can really complement an exploration program that we have going on already and are the only company in Canada at scale that is doing that. Yeah, the opportunities are endless. It's not gonna distract us from what our main business is right now. As tools, I think you just look at it as a series of tools, and use them effectively. Can you quantify yet productivity improvements or is it too early? Yeah, I'd say too early. Well, maybe. So- Yeah, go ahead. We have one tech that we're quite pleased with, and they're a private business called Ambyint. We've partnered with them, and they're steadily working across our fleet, and it's on the artificial lift side, so rod lift going to gas lift. The quick math is with optimized well calls, it could be a 10,000 BOE day uplift for our business. That's one example of lower base decline. There's a slew of emission benefits and cost benefits on top of that. We have found some real diamonds in our pursuit of looking at all the different applications that this can come into our business, and that's one we're really excited about and pleased with. Super. Thanks very much for answering my question. I appreciate it. Next question comes from Jamie Kubik from CIBC. Please go ahead. Yeah, good morning, and thanks for taking my question. We saw a major announcement last week with respect to M&A and the Shell and ARC transaction. Tourmaline historically been an active acquirer, particularly when gas pricing is weak. Would you be able to just discuss how the team is thinking about M&A in the current environment? Thanks. Yeah, I don't think we've changed our mantra from what we've been saying over the past year, Jamie, that, you know, post mid-2025, we're looking at small complementary tucked in asset deals in and around existing assets and infrastructure or infrastructure that we're going to construct over the next four to five years in BC. We're not pursuing large M&A at this point in time. Okay, thanks. We did see a dispose of an asset in this past quarter. Are further dispositions on the table or how are you thinking about that, Mike? Well, that, I mean, that was really a long-planned disposition. We sold our most mature production complex, a small component of the overall company, and essentially are gonna replace it with brand-new, lower-cost production, much earlier in life. You know, really, as we went through our M&A cycles, you know, over the almost 20 years of the company, we've been pretty good at disposing of assets that we didn't really felt fit in the long term. You know, there's no big dispositions being planned by the company right now. Okay. That's all for me. Thank you. Thank you. Next question comes from Chris Goran, a private investor. Please go ahead. Hey, thank you for thinking long term for investors. In the short term, kind of tying into that last question, the ARC Shell deal, we can all see all the metrics in the PV10, the production and the price they paid, and we know you used to do business with them or worked there. Do you have any other comments about that deal, like, how comparing and contrasting to what your assets are? Are there gonna be any economies of scale that they're gonna get that's gonna impact you? Any questions or any ideas along that? Thanks again. I don't think there's economies of scale for us. From a macro standpoint, you know, we hope this is the catalyst that gets Shell to FID, LNG Canada, Phase 2. You know, we know the metrics that that deal happened as well, and they're at a, you know, a much higher per share valuation for Tourmaline than where we're currently trading at based on existing 2P reserves. You know, I'm kinda sad that ARC's gone. This is a multi-decade company that's had a long, storied history in the basin, and you know, it's kinda too bad that they're disappearing, but that's the business transaction that was arranged. Okay, thanks. Next question comes from Fai Lee out of Odlum Brown. Please go ahead. Great. Thank you. Mike, I just wanna quickly, you know, we've already a couple questions about the Shell acquisition, ARC, but I'm just wondering, have you been seeing any increased interest from like, you know, given, you know, what's happened geopolitically, increased interest in the space from foreign buyers? We saw Shell obviously, but they had some unique need there. What about other players that possibly could be looking to invest in Canada? What's your thoughts around that? Yeah, I think there definitely is enhanced interest, Fai. We're seeing a whole lot of interest on the LNG side. We have a lot more approaches on doing supply deals for various liquefaction facilities across North America. We're seeing, you know, more potential projects emerge that could add additional egress for the Western Canadian Sedimentary Basin. Yeah, it's exciting times. I mean, natural gas, you know, it's really evolved into the central core of the world's energy stock, and it's gonna be like that for decades to come. It's for all kinds of good, pragmatic reasons. We're excited. Just bear in mind that what's really exciting for us right now is that we're rapidly making a really good business that much better from well productivity to improving costs, to a fortress balance sheet, to decades of booked reserves, to an unmatched high-quality drilling inventory. Every aspect of our business is getting better. Lower Western North American gas prices are masking that in the short term. It's gonna be a double win for shareholders when this all turns around, and we think it can happen within a quarter on the local pricing front. Okay. On that note, I know Jamie talked about the temporary reasons why AECO gas might be depressed right now and, you know, I understand it makes sense to take the actions you're doing in terms of, you know, more gas storage and increasing your dock levels. I'm just kind of wondering, like, if, you know, given it's temporary, like, what sort of AECO price, you know, would we have to see before you know, in the future if this, you know, to keep, to avoid this kind of, increased storage and docks, like, what kind of AECO price? Would it be CAD 3? What price would you be looking at? When we're, I mean, we don't plan to increase our capital budget from what we've laid out in that five-year plan or the cadence of it, and we'll make sure the first two major facility projects in the North Montney Phase 1 build-out are accomplished on time. You know, when prices are getting weaker, what do we look at? It's on that inventory slide in our corporate presentation. Our break-even half cycle economic price for the Deep Basins in the CAD 1.90-CAD 2.00 range. That's why most of the capital deferrals or cuts have been on that side of the ledger. Our BC Montney Gas Condensate Complex, the break-even's CAD 1.40, which is partly why the whole build-out's happening in the first place. You know, those are the numbers that cause us to cut capital. We've got a very, you know, well thought out, very detailed capital program over the next five years in the BC build-out that, as I mentioned, will continue to improve our margins and drop our costs. Okay, that's great. Just a last quick question. I was just assuming when I read your press release that, you know, you're gonna get some excess cash flow in the second quarter due to the Iran war and that little bit of a windfall. I was just assuming it was gonna be paid on special dividends, but it sounds like it may not necessarily be that case and you might consider other options. Which brings the question, like, you know, what would cause you to think about share buyback perhaps? Yeah. Well, let's see how much free cash flow we have. That's what Jamie was basically saying, is that because things are so volatile and short term, let's realize the free cash flow win above the base dividend obligation, and then make decisions on where it's gonna be allocated. Okay. Would you be necessary to be looking at your share price or would be some other factors involved? We'll look at all the various options. Okay. Thank you. Thanks. There appears to be no further questions at this time. I would now like to turn the call over to Scott for closing remarks. Go ahead, Scott. Thanks, Josh. Thanks everyone for attending, and we'll talk to you at the end of next quarter. Ladies and gentlemen, this concludes. Oops, sorry about that, guys. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.