Q2 2024 Baytex Energy Corp Earnings Call

Thank you for standing by. This is the conference operator.

Operator: Welcome to the Baytex Energy Corp. second quarter 2024 financial and operations results conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity for analysts to ask questions. To join the question queue, you may press star, then one on your telephone keypad.

Operator: Welcome to the Baytex Energy Corp, 2nd quarter, 2024 financial and operations results conference call. As a reminder, all participants are in lesson-only mode, and the conference is being recorded. After the presentation, there will be an opportunity for analysts to ask questions. To join the question, Keel, you may press star, then one, on your telephone keypad. You may also submit questions in writing at any time using the form in the lower section of the webcast frame. Should I need assistance during the conference call, you may signal an operator by pressing star, then zero.

Speaker Change: Welcome to the Baytex Energic Corp. 2nd Quarter 2024 Financial and Operations Results Conference Call.

Speaker Change: As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity for analysts to ask questions.

Speaker Change: To join the question queue, you may press star, then 1 on your telephone keypad.

Speaker Change: You may also submit questions in writing at any time using the form in the lower section of the webcast screen.

Speaker Change: Should you need assistance during the conference call, you may signal an operator by pressing star then zero.

Brian Ector: I would now like to turn the conference over to Brian Ector, Senior Vice President, Capitol Marcus, and Dr. Relations. Please go ahead.

Operator: You may also submit questions in writing at any time using the form in the lower section of the webcast screen. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Brian Ector, Senior Vice President, Capital Markets and Industry Relations. Please go ahead. Thank you, Brenda. Good morning, ladies and gentlemen, and thank you for joining us to discuss our second quarter 2024 financial and operating results.

Speaker Change: I would now like to turn the conference over to Brian Ector, Senior Vice President, Capital Markets and Industrial Relations. Please go ahead.

Brian Ector: Thank you, Brenda. Good morning, ladies and gentlemen, and thank you for joining us to discuss our 2nd quarter 2024 financial and operating results. Today, I'm joined by Eric Greager, our President and Chief Executive Officer, Chad Kalmakoff, our Chief Financial Officer, and Chad Lundberg, our Chief Operating Officer.

Brian G. Ector: Thank you, Brenda. Good morning, ladies and gentlemen, and thank you for joining us to discuss our second quarter 2024 financial and operating results.

Operator: Today I'm joined by Eric Greager, our President and Chief Executive Officer, Chad Kalmakoff, our Chief Financial Officer, and Chad Lundberg, our Chief Operating Officer. While you are listening, please keep in mind that some of our remarks will contain forward-looking statements within the meaning of applicable securities laws. I refer you to the advisories regarding forward-looking statements, oil and gas information, and non-GAF financial and capital management measures in yesterday's press release. All dollar amounts referenced in our remarks are in Canadian dollars unless otherwise specified.

Speaker Change: Today, I'm joined by Eric Greager, our President and Chief Executive Officer, Chad Kalmakoff, our Chief Financial Officer, and Chad Lundberg, our Chief Operating Officer.

Brian Ector: While listening, please keep in mind that some of our remarks will contain forward-looking statements within the meaning of applicable securities laws. I refer you to these visories regarding forward-looking statements, oil and gas information, and non-GAAP financial and capital management measures in yesterday's press release. All dollars on reference in our remarks are in Canadian dollars unless otherwise specified. And following our prepared remarks, we will be taking questions from analysts. In addition, if you are sitting in today to be the webcast, you will have the opportunity to submit an online question, in time permitting. We will strive to answer your question.

Speaker Change: While listening, please keep in mind that some of our remarks will contain forward-looking statements within the meaning of applicable securities laws.

Speaker Change: I refer you to the advisories regarding forward-looking statements, oil and gas information, and non-GAAP financial and capital management measures in yesterday's press release.

Speaker Change: All dollar amounts referenced in our remarks are in Canadian dollars unless otherwise specified.

Speaker Change: and follow in our prepared marks. We will be taking questions from analysts. In addition, if you are listening in today via the webcast, you will have the opportunity to submit an online question in time permitting. We will strive to answer your question.

Brian G. Ector: And following our prepared remarks, we will be taking questions from analysts. In addition, if you are listening in today via the webcast, you will have the opportunity to submit an online question, and time permitting, we will strive to answer your question. With that, I would now like to turn the call over to Eric. Thanks, Brian.

Eric Greager: With that, I would now like to turn the call over to Eric. Thanks, Brian. Good morning, everyone, and welcome to our 2nd quarter 2024 conference call. In the 2nd quarter, we delivered strong results with higher production, disciplined capital spending, and meaningful free cash flow. Importantly, and consistent with our full-year plan, we return $97 million to shareholders through our share buy-back program and quarterly dividend. As we continue to execute our plans for 2024, our free cash flow has expected to strengthen in the 2nd half of the year, allowing for increased shareholder returns and debt reduction. We increased production per share by 23% in Q2-24 compared to Q2-23, with production averaging more than 154,000 BOE per day, 85% oil and NGLs.

Speaker Change: With that, I would now like to turn the call over to Eric.

Eric Greager: Good morning, everyone, and welcome to our second quarter 2024 conference call. In the second quarter, we delivered strong results with higher production, disciplined capital spending, and meaningful free cash flow. Importantly, and consistent with our full-year plan, we returned $97 million to shareholders through our shared buyback program and quarterly dividends.

Eric Greager: Thanks, Brian . Good morning, everyone, and welcome to our second quarter 2024 conference call.

Eric Greager: In the second quarter, we delivered strong results with higher production, disciplined capital spending, and meaningful free cash flow.

Speaker Change: Importantly, and consistent with our full-year plan, we return $97 million to shareholders through our shared buyback program and quarterly dividend.

Eric Greager: As we continue to execute our plans for 2024, our free cash flow is expected to strengthen in the second half of the year, allowing for increased shareholder returns and debt reduction. We increased production per share by 23% in Q2-24 compared to Q2-23, with production averaging more than 154,000 BOE per day, 85% oil, and NGL. Our crude oil production, comprised of light oil, condensate, and heavy oil, increased four percent from Q124 to average over 110,000 barrels per day. We are executing our 2024 development plan with a tightened production guidance range of 152,000 to 154,000 BOE per day. At the midpoint, we continue to target 153,000 BOE per day for the year.

Speaker Change: As we continue to execute our plans for 2024, our free cash flow is expected to strengthen in the second half of the year, allowing for increased shareholder returns and debt reduction.

Speaker Change: We increased production per share by 23% in Q2'24 compared to Q2'23, with production averaging more than 154,000 BOE per day, 85% oil, and NGLs.

Eric Greager: Our crude oil production comprised of light oil, condensate, and heavy oil increased 4% from Q1-24 to average over 110,000 barrels per day. We are executing our 2024 development plan with a Titan production guidance range of 152,000 to 154,000 BOE per day. At the midpoint, we continue to target 153,000 BOE per day for the year. Our 2024 exploration and development expenditures guidance is unchanged at $1.2 to $1.3 billion, and we expect to generate approximately $700 million of free cash flow in 2024.

Speaker Change: Our crude oil production, comprised of light oil, condensate and heavy oil, increased 4% from Q124 to average over 110,000 barrels per day.

Speaker Change: We are executing our 2024 development plan with a tightened production guidance range of 152,000 to 154,000 BOE per day.

Speaker Change: At the midpoint, we continue to target 153,000 BOE per day for the year.

Eric Greager: Our 2024 Exploration and Development Expenditures Guidance is unchanged at $1.2 to $1.3 billion, and we expect to generate approximately $700 million of free cash flow in 2024, 75% weighted to the second half of the year. We intend to allocate 50% of free cash flow to the balance sheet and 50% to shareholder returns, which includes a combination of share buybacks and a quarterly dividend. Now, we'll turn the call over to Chad Kalmakoff to discuss our financial results. Thanks, Eric.

Speaker Change: Our 2024 Exploration and Development Expenditures Guidance is unchanged at $1.2 to $1.3 billion and we expect to generate approximately $700 million of free cash flow in 2024, 75% weighted to the second half of the year.

Eric Greager: 75% waited to the 2nd half of the year. We intend to allocate 50% of free cash flow to the balance sheet and 50% to share order returns, which includes a combination of share buybacks and a quarterly dividend.

Speaker Change: We intend to allocate 50% of free cash flow to the balance sheet and 50% to shareholder returns, which includes a combination of share buybacks and a quarterly dividend.

Chad Kalmakoff: Now, we'll turn the call over to Chad Kalmakoff to discuss our financial results. Thanks, Eric. We remain committed to a disciplined, return-based capital allocation philosophy to drive increased per share returns. In Q2, a just a fund flow was 533 million or 65 cents per share, 38% higher than 47 cents per share in Q2, 2023, and we generated net income of 104 million or 13 cents per share. During the second quarter, we generated 181 million of free cash flow, and as Eric mentioned, we returned 97 million to shareholders. We repurchased 16.4 million common shares for $79 million, and paid a quarterly cash dividend of 18 million, or 2.25 cents per share.

Speaker Change: Now, we'll turn the call over to Chad Kalmakoff to discuss our financial results.

Chad L. Kalmakoff: We remain committed to a disciplined returns-based capital allocation philosophy to drive increased per share return. In Q2, adjusted funds flow was $533 million, or $0.65 per share, 38% higher than $0.47 per share in Q2 2023. And we generated net income of $104 million, or $0.13 per share.

Chad L. Kalmakoff: Thanks, Eric. We remain committed to a disciplined returns-based capital allocation philosophy to drive increased per share returns.

Chad L. Kalmakoff: In Q2, adjusted funds flow was $533 million, or $0.65 per share, 38% higher than $0.47 per share in Q2 2023, and we generated net income of $104 million, or $0.13 per share.

Chad L. Kalmakoff: During the second quarter, we generated $181 million of free cash flow, and as Eric mentioned, we returned $97 million to shareholders. We repurchased 16.4 million common shares for $79 million and paid a quarterly cash dividend of $18 million, or $2.25 per share. During the last 12 months, we have returned $378 million to shareholders, repurchasing 57.5 million common shares for $304 million, representing 6.7% of our shares outstanding, and paying total dividends of $74 million, or $0.09 per share.

Chad L. Kalmakoff: During the second quarter, we generated $181 million of free cash flow, and as Eric mentioned, we returned $97 million to shareholders.

Chad L. Kalmakoff: We repurchased 16.4 million common shares for $79 million and paid a quarterly cash dividend of $18 million, or $2.25 per share.

Chad Kalmakoff: During the last 12 months, we have returned 378 million to shareholders, repurchased 57.5 million common shares for $304 million, representing 6.7% of our shares outstanding, and paying total dividends of $74 million or $0.09 per share. On June 26, 2024, we renewed our normal-course issuer bid with a Toronto Stock Exchange, which allows us to purchase up to 70 million common shares during the 12-month period ending July 1, 2025. As of yesterday, we are proud to say we have repurchased 7.2% of our shares outstanding, dating back to June 30th of last year.

Chad L. Kalmakoff: During the last 12 months, we have returned $378 million to shareholders, repurchasing 57.5 million common shares for $304 million, representing 6.7% of our shares outstanding, and paying total dividends of $74 million, or $0.09 per share.

Chad L. Kalmakoff: On June 26, 2024, we renewed our normal course issuer bid with the Toronto Stock Exchange, which allows us to purchase up to 70 million common shares during the 12-month period ending July 1, 2025. As of yesterday, we are proud to say we have repurchased 7.2% of our shares outstanding dating back to June 30th of last year. We touched on this last quarter, so I won't get into the details today, but I do think it's important to note that we have extended our debt maturity.

Chad L. Kalmakoff: On June 26, 2024, we renewed our normal course issuer bid with the Toronto Stock Exchange, which allows us to purchase up to 70 million common shares during the 12-month period ending July 1, 2025.

Chad L. Kalmakoff: As of yesterday, we are proud to say we have repurchased 7.2% of our shares outstanding, dating back to June 30th of last year.

Chad Kalmakoff: We touched on this last course, but I don't get into the detail today. However, I do think it's important to note that we have extended our debt maturity. The term structure of our long-term notes and the liquidity on our credit facilities have been greatly improved and positions us well to run our business through the commodity price cycles. Our total debt at June 30th was $2.5 billion, which represents a total debt to EBITDA ratio of 1.1 times. Our total debt is largely unchanged from year-end, as in addition to pre-patchable generated year-to-date, our total debt also reflects the strength of the US dollar relative to the remaining dollar, which increases the balance in our US nominated notes, the call premium and issuance costs in our notes offering, and the credit facility extension and strategic land acquisition that we did in the first half of 2024.

Chad L. Kalmakoff: We touched on this last quarter so I won't get into the details today, but I do think it's important to note that we have extended our debt maturities.

Chad L. Kalmakoff: The term structure of our long-term notes and the liquidity on our credit facilities have been greatly improved, and we are well positioned to run our business through the commodity price cycle. Our total debt on June 30th was $2.5 billion, which represents a total debt to EBITDA ratio of 1.1 times.

Chad L. Kalmakoff: The term structure of our long-term notes and the liquidity on our credit facilities has been greatly improved and positions us well to run our business through the commodity price cycles.

Chad L. Kalmakoff: Our total debt on June 30th was $2.5 billion, which represents a total debt to EBITDA ratio of 1.1 times.

Chad Lundberg: Our total debt is largely unchanged from year-end, as in addition to the free cash flow generated year-to-date, our total debt also reflects the strengthening U.S. dollar relative to the Canadian dollar, which increases the balance in our U.S. denominated notes, the call premium and issuance costs on our notes offering, and the credit facility extension and strategic land acquisitions we did in the first half of 2024. Continuing to strengthen our balance sheet remains a priority, and based on our forecast free cash flow and shareholder return profile, we expect a reduction in total debt in the second half of 2024. Now, I'll turn the call over to Chad Lumber to discuss our operating results. Thanks, Chad.

Chad L. Kalmakoff: Our total debt is largely unchanged from year end, as in addition to the free cash flow generated year to date, our total debt also reflects the strength of the U.S. dollar relative to the Canadian dollar, which increases the balance in our U.S. denominated notes.

Chad L. Kalmakoff: The call premium and issuance costs on our remotes offering and the credit facility extension and strategic land acquisitions we did in the first half of 2024.

Chad Kalmakoff: Continuing to strengthen our balance sheet remains a priority, and based on our forecast, brief cash flow and shareholder return profile, we expect a reduction in total debt in the second half of 2024.

Chad L. Kalmakoff: Continuing to strengthen our balance sheet remains a priority, and based on our forecast free cash flow and shareholder return profile, we expect a reduction in total debt in the second half of 2024.

Chad Lundberg: Now, we'll turn the call over to Chad Wembert to discuss our operating results. Thanks, Chad. The strong pre-patch flow that our business generates is a testament to the efficiency of our exploration and development program and our stable production profile.

Chad L. Kalmakoff: Now I'll turn the call over to Chad Lumbert to discuss our operating results.

Chad Lundberg: The strong free cash flow that our business generates is a testament to the efficiency of our exploration and development program and our stable production profile. I'm now pleased to speak about our Q2 operation and highlight the significant efforts of our team. During the second quarter, exploration and development expenditures totaled $340 million, and we brought 40 net wealth on stream.

Chad L. Kalmakoff: Thanks Chad. The strong free cash flow that our business generates is a testament to the efficiency of our exploration and development program and our stable production profile.

Chad Lundberg: I'm now pleased to speak to our Q2 operation and highlight the significant efforts of our team. During the second quarter, exploration and development expenditures totaled $340 million, and we brought 40 net wells on stream. In the Eagle 4, we continue to deliver strong results across our acres. We generated production of over 90,000 BUE per day, 82% oil and NGL, and brought 11 operated Lower Eagle 4 dwells on stream that were largely focused on the black oil window. Some of you will recall that during the second quarter we hosted Alice and investors for a tour of our Eagle Fruit operations.

Chad L. Kalmakoff: I'm now pleased to speak to our Q2 operation and highlight the significant efforts of our team.

Chad L. Kalmakoff: During the second quarter, exploration and development expenditures totaled $340 million, and we brought 40 net wells on stream.

Chad Lundberg: In Eagle Forge, we continue to deliver strong results across our acres. We generated production of over 90,000 BUV per day, 82% oil and NGL, and brought 11 operated lower Eagle Forge wells on stream that were largely focused on the black oil window. Some of you will recall that during the second quarter, we hosted analysts and investors for a tour of our Eagleford operation. One of the site's visitors was our Plutopath, which was in the midst of completion operations.

Chad L. Kalmakoff: In the Ego Forge, we continue to deliver strong results across our acres. We generated a production of over 90,000 BUE per day, 82% oil, and NGL.

Chad L. Kalmakoff: and brought 11 operated lower Egoford wells on stream that were largely focused on the black oil window.

Chad L. Kalmakoff: Some of you will recall that during the second quarter, we hosted analysts and investors for a tour of our Eagleford operations.

Chad Lundberg: One of the side visits was our Pluto path that was in the midst of completion operation. This path was brought on stream during the quarter and is now one of our strongest performing, oil-weighted paths to date, with three wells generating an average 30-day peak initial production rate of over 1,150 barrels per day of Trude Oil. Due to the efficient drilling and completion activities, in the first half of 2024 we realized an 8% improvement in operated drilling and completion cost for completed lateral foot over 2023. In our Canadian loyal business units, the first three well-pads from our 2024 Dubernate Program was brought on stream in May and generated an average 30-day peak initial production rate of 890 barrels of Trude Oil and 1,350 B.O.E.

Chad L. Kalmakoff: One of the site's visitors was our Plutopath that was in the midst of completion operations.

Chad Lundberg: This pad was brought on stream during the quarter and is now one of our strongest performing oil-weighted pads to date, with three wells generating an average 30-day peak initial production rate of over 1,150 barrels per day of crude oil. Due to the efficient drilling and depletion activity, in the first half of 2024, we realized an 80% improvement in operated drilling and completions costs for completed lateral feet over 2023. In our Canadian light oil business unit, the Clipper three-wheel pad from our 2024 Duvernay program was brought on stream in May and generated an average 30-day peak initial production rate of 890 barrels of crude oil and 1,350 BOE per day per well.

Chad L. Kalmakoff: This pad was brought on stream during the quarter and is now one of our strongest performing oil-weighted pads to date, with three wells generating an average 30-day peak initial production rate of over 1,150 barrels per day of crude oil.

Chad L. Kalmakoff: Due to the efficient drilling and depletion activity, in the first half of 2024, we realized an 80% improvement in operated drilling and depletion costs for completed lateral foot over 2023.

Chad L. Kalmakoff: In our Canadian light oil business unit, the first three-wheel pad from our 2024 Dubernay program

Chad L. Kalmakoff: was brought on stream in May and generated an average 30-day peak initial production rate of 890 barrels of crude oil and 1,350 BOE per day per well.

Chad Lundberg: per day per well. These initial results are consistent with our expectations. The second well-pads is expected to be on stream in August.

Chad Lundberg: These initial results are consistent with our expectations. The second Orwell pad is expected to be on stream in August, in our Viking Light Oil facility and across all our heavy oil operations. Second quarter activity is typically lower due to spring break-out.

Chad L. Kalmakoff: These initial results are consistent with our expectations.

Chad L. Kalmakoff: The second Orwell pad is expected to be on stream in August .

Chad Lundberg: In our Viking Light Oil and across all our heavy oil operation, second quarter activity is typically lower due to spring break-up. Following spring break-up, our heavy oil development program has ramped up with four rigs running across our P-Vine, Peace River, and Lloydminster region, and two rigs running in the Viking. P-vine continued to over-perform expectations, with production averaging almost 20,000 barrels per day, up 13% from June of 2024. We brought four well-pads on stream at P-vine that generated an average 30-day peak initial production rate of 750 barrels per day per well.

Chad L. Kalmakoff: in our Viking Light Oil and across all our heavy oil operations.

Chad L. Kalmakoff: Second-quarter activity is typically lower due to spring break-up.

Eric Greager: Following spring breakup, our heavy oil development program has ramped up with four rigs running across our Peavine, Peace River, and Lloydminster region and two rigs running in the Bakken. Peavine continued to outperform expectations, with production averaging almost 20,000 barrels per day, up 13% from Q1 2024. We brought four wells on stream at Peavine that generated an average 30-day peak initial production rate of 760 barrels per day per well. With that, I will turn the call back to Eric for his closing remarks. Thanks, Chad.

Chad L. Kalmakoff: Following spring breakup, our heavy oil development program has ramped up with four rigs running across our Peabine, Peace River, and Lloydminster regions, and two rigs running in the Viking.

Chad L. Kalmakoff: Peavine continued to outperform expectations, with production averaging almost 20,000 barrels per day, up 13% from Q1 2024.

Chad L. Kalmakoff: We brought four wells on stream at Peavine that generated an average 30 days peak initial production rate of 760 barrels per day per well. With that, I will turn the call back to Eric for his closing remarks.

Eric Greager: With that, I will turn the call back to Eric for his closing remarks. Thanks, Chad. I want to take a moment and circle back to our shareholder return framework. As many of you have noticed, we have gradually stepped up our buyback program and have now reached a consistent buyback level currently set at $1.4 million per trading day. We believe this is a prudent approach that allows us to meet our commitment to return 50% of free cash to shareholders in the form of share buybacks, quarterly dividends, and improving per share metrics. I am pleased with the strength of our Q2 operating and financial results.

Operator: I want to take a moment and circle back to our shareholder return framework. As many of you have noticed, we have gradually stepped up our buyback program and have now reached a consistent buyback level currently set at $1.4 million per trading day. We believe this is a prudent approach that allows us to meet our commitment to return 50% of free cash flow to shareholders in the form of share buybacks, quarterly dividends, and improving per share metrics.

Eric Greager: Thanks, Chad.

Eric Greager: I want to take a moment and circle back to our shareholder return framework. As many of you have noticed, we have gradually stepped up our buyback program and have now reached a consistent buyback level currently set at $1.4 million per trading day.

Eric Greager: We believe this is a prudent approach that allows us to meet our commitment to return 50% of free cash flow to shareholders in the form of share buybacks, quarterly dividends, and improving per share metrics.

Operator: I am pleased with the strength of our Q2 operating and financial results. As we execute our plans for the second half of 2024, our free cash flow is expected to strengthen, allowing for increased shareholder returns and debt reduction. And now, Operator, we are ready to open the call for questions. Thank you. We will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad.

Eric Greager: I am pleased with the strength of our Q2 operating and financial results.

Eric Greager: As we execute our plans for the second half of 2024, our free cash show is expected to strengthen, allowing for increased shareholder return to the adoption.

Eric Greager: As we execute our plans for the second half of 2024, our free cash flow is expected to strengthen, allowing for increased shareholder returns and debt reduction. And now, operator, we are ready to open the call for questions.

Operator: And now, operator, we are ready to open the call for questions. Thank you. We now begin the question and answer session. to join the questions, you may press start and one on your telephone keypad. You'll hear a tone and knowledge in your request. To submit your questioning writing, please use the form in the lower right section of the webcast frame. If you're using a speaker phone, please pick up your handset before pressing any key. To withdraw your question, please press Start then choose. We'll pause for a moment as colors join the queue.

Speaker Change: Thank you.

Speaker Change: We will now begin the question and answer session.

Speaker Change: To join the question queue, you may press star then 1 on your telephone keypad. You'll hear a tone acknowledging your request.

Operator: You'll hear a tone acknowledging your request. To submit your question by write-in, please use the form in the lower right section of the webcast frame. If you're using a speakerphone, please pick up your handset before pressing any keys.

Speaker Change: To submit your question in writing, please use the form in the lower right section of the webcast frame.

Speaker Change: If you're using a speakerphone, please pick up your handset before pressing any keys.

Operator: To withdraw your question, please press star, then two. We'll pause for a moment as callers join the queue. The first question comes from Greg Pardy from RBC Capital Markets. Please go ahead.

Speaker Change: Should we draw your question, please press star then choose.

Speaker Change: We'll pause for a moment as callers join the queue.

Greg Pardy: The first question comes from Greg Pardy from RBC Capital Markets. Please go ahead. Yeah, thanks. Thanks. Good morning, and thanks for the rundown. So I've got a couple of questions, but maybe just on the financial side.

Speaker Change: The first question comes from Greg Pardy from RBC Capital Markets.

Greg Pardy: Yeah, thanks. Thanks. Good morning and thanks for the rundown. So I've got a couple of questions, but maybe just on the financial side, could you give us a sense as to what the trajectory looks like in terms of, you know, capex and production in the second half and then just the potential, particularly, I think, for debt reduction and buybacks? Yeah, I'll take those two first because I don't think I'll remember more than two questions.

Speaker Change: Please go ahead.

Greg Pardy: Yeah, thanks. Thanks. Good morning and thanks for the rundown. So I've got a couple of questions, but maybe just on the financial side.

Eric Greager: Could you give us a sense as to what the trajectory looks like in terms of, you know, CAPEX and production of the second half and then just the potential, particularly, I think, for debt reduction and buybacks, please.

Greg Pardy: Could you give us a sense as to what the trajectory looks like in terms of, you know, capex and production in the second half, and then just the potential, particularly I think for debt reduction and buybacks?

Eric Greager: Yeah, hey, Gregg. Yeah, yeah.

Chad Kalmakoff: I'll take those two first because I don't think I'll remember more than two questions. On CAPEX and production trajectory, I'll answer that. On CAPEX, we're still pointing to the midpoint of CAPEX, and that's implied by the 1.2 to 1.3 billion dollar CAPEX guidance range. It should be weighted more toward Q3 than to Q4, just in terms of that weighting and trajectory. And in terms of production performance, we're still pointing to the midpoint of full-year annualized. So that's 153,000 B.O.E. per day, which would imply, you know, pretty level, second half of the year, kind of at the production level we're at right now.

Speaker Change: Yeah, hey Greg, I'll take those two first because I don't think I'll remember more than two questions.

Eric Greager: On CapEx and production trajectory, I'll answer that. On CapEx, you know, we're still pointing to the midpoint of CapEx. And that's implied by, you know, the $1.2 to $1.3 billion CAPEX guidance range. It should be weighted more toward Q3 than to Q4, just in terms of that weighting and trajectory.

Speaker Change: On CapEx and production trajectory, I'll answer that. On CapEx, you know, we're still pointing to the midpoint of CapEx, and that's implied by, you know, the $1.2 to $1.3 billion CapEx guidance range.

Speaker Change: It should be weighted more toward Q3 than to Q4 just in terms of that weighting and trajectory.

Eric Greager: And in terms of production performance, we're still pointing to the midpoint of full year annualized, so that's 153,000 BOE per day, which would imply a pretty level second half of the year, kind of at the production level we're at right now. And that, of course, backing into levelized operations across our footprint allows us to really generate more efficient levelized operations. As far as the debt paydown trajectory, I'm going to pitch it over to Chad Kalmakoff and have him give a quick answer on that, and then please jump back in if you've got another question. Sure. Yeah, thanks.

Speaker Change: And in terms of production performance, we're still pointing to the midpoint of full year annualized, so that's 153,000 BOE per day, which would imply a pretty level second half of the year, kind of at the production level we're at right now.

Chad Kalmakoff: And that, of course, backing into, you know, levelized operations across our footprint allows us to really generate more efficient, levelized operations.

Speaker Change: and that, of course, backing into, you know, levelized operations.

Chad L. Kalmakoff: As far as the debt pay-down trajectory, I'm going to pitch it over to Chad Kalmakoff and have him give a quick answer on that, and then please jump back in with...

Chad Kalmakoff: As far as the debt pay down trajectory, I'm going to pitch it over to Chad Kalmakoff and have him give a quick answer on that. And then please jump back in with if you've got another question. Sure. Thanks. Sure. Thanks, Greg. So that's pretty casual, a couple hundred million here in the first half of the year. We're looking at about 500 million in the back half of the year. And of that, we should have a couple hundred million hitting the balance here, paying down debt. So look, look, you'll see debt pay down, obviously, accelerate here in the back half of the year compared to the first half.

Speaker Change: if you've got another question.

Chad L. Kalmakoff: Sure. Thanks, Greg. Yeah, so we've had a pretty casual couple hundred million here in the first half of the year.

Speaker Change: Sure, yep, thanks.

Chad L. Kalmakoff: Sure, thanks Greg. Yeah, so we've had pretty casual a couple hundred million here in the first half of the year. We're looking at about another 500 million in the back half of the year.

Chad L. Kalmakoff: We've got another 500 million in the back half of the year, and of that, we should have a couple hundred million hitting the balance here, paying down debt. So look to see debt paydown obviously accelerate in the back half of the year compared to the first half. Obviously, we had the bond refinancing done here in Q2, and some fees and a discount associated with that, which would have impacted our ability to pay down debt this quarter.

Speaker Change: [inaudible]

Speaker Change: And of that, we should have a couple hundred million hitting the balance sheet or paying down debt. So look to see debt pay down obviously accelerate here in the last half of the year compared to the first half.

Chad Kalmakoff: Obviously, we had the bond refinancing done here in Q2 and some fees. And the discount associated with that, which would have impacted our release of the pay down debt this quarter, but at the same time, extending those debt maturities is pretty important to us. Again, that will be impactful in the years to come.

Speaker Change: Obviously, we had the bond refinancing done here in Q2 and some fees and a discount associated with that, which would have impacted our ability to pay down debt this quarter. But at the same time, extending those debt maturities is pretty important to us and getting that little recoup on that will be impactful in the years to come.

Greg Pardy: But at the same time, extending those debt maturities is pretty important to us and getting, Okay. Thanks for that. And maybe just completely shifting gears, maybe into DuVernay, could you frame maybe, you know, your learnings and results thus far as you work through your Seven Well program? And then is there anything to say maybe about efficiencies or, you know, where costs are kind of coming out on that? Because it's a pretty important program, I guess, going forward. You bet, Greg. Again, it's Eric Greager here.

Greg Pardy: Okay. No, thanks for that.

Eric Greager: And maybe just completely shifting gears. Maybe into the DuVernay. Could you frame maybe, you know, your learnings and results as far as you work through your seven and well program? And then, is there anything to say maybe about efficiencies or, you know, where costs are kind of coming out on that? Because it's a pretty important program, I guess, going forward.

Speaker Change: Okay, thanks for that. And maybe just completely shifting gears, maybe into the DuVernay, could you frame maybe, you know, your learnings and results thus far as you work through your seven well?

Speaker Change: program and then is there anything to say maybe about efficiencies or you know where costs are kind of coming out on that because it's a pretty important program I guess going forward.

Eric Greager: You back, Greg. Again, it's Eric Greger here, so I'm going to give it kind of one minute at a high level, and then I'm going to pitch it to Lundberg for the details on efficiency gains. To seven well program, a three well pad and a four well pad, the three well pad came on in May. The results have been in line with our expectations and our model, and strong. And so 90% liquid, 65% oil, 1,350 BOE a day on average. We also pushed length on one of the laterals out to 4,000 meters, which feels pretty good.

Eric Greager: So I'm going to give it kind of one minute at a high level, and then I'm going to pitch it to Lundberg for the details on efficiency gains. It's a seven-well program, a three-well pad, and a four-well pad. The three-well pad came on in May. The results have been in line with our expectations, and our model is strong. And so 90% liquid, 65% oil, 1,350 BOE a day on average. We also pushed the length of one of the laterals out to 4,000 meters, which feels pretty good.

Eric Greager: You bet, Greg. Again, it's Eric Greager here, so I'm going to give it kind of one minute at a high level and then I'm going to pitch it to Lundberg for the details on efficiency gains.

Speaker Change: It's a 7-well program, a 3-well pad and a 4-well pad.

Speaker Change: The results have been in line with our expectations and our model and strong. And so 90% liquid, 65% oil, 1350 BOE a day on average.

Speaker Change: We also pushed length on one of the laterals out to 4,000 meters, which feels pretty good.

Chad Lundberg: So lots of good, I think operational learnings along the way, strong well performance. We should be bringing the four well pad on in August, and we'll have more to talk about there.

Eric Greager: So lots of good operational learnings along the way, strong well performance. We should be bringing the four-well pad on in August, and we'll have more to talk about there. Lundberg, over to you. Yeah, thanks, Greg. To really answer the question, you need to really look broadly in terms of efficiencies and what you need in Baytex now, as we have the DOE first and the DOE for today.

Speaker Change: So, lots of good, you know, I think, operational learnings along the way, strong well performance.

Speaker Change: We should be bringing the four-well pad on in August .

Chad Lundberg: Lundberg will leave you. Yeah, thanks, Greg.

Speaker Change: and we'll have more to talk about there. Yeah, thanks Greg.

Chad Lundberg: To really ask this question, you need to really look broad in terms of efficiency gains. What he needs to pay six now is we have to be occurred and to do it today. And I think this is a continuous evolution in learning process where the teams are swapping back and forth between each other. They're calibrating, launch, machine learning, all of these steps to better inform what we do over the next few days.

Chad Lundberg: And I think it's a continuous evolution and learning process where the teams are swapping back and forth. They're calibrating large machine learning model data sets to better inform what we do on a regular basis. If I think about the DOE itself, just talk results, we've got drill results at now 10% effective pumping hours per well. If I take it just one step, finish answering the question one layer deeper, you know, the model would inform us, year over year, that the changes we've been making are on the water side in the urban area, so increasing water intensity. And then, like I said, you have a lot of balanced conversation across the border.

Speaker Change: Now we have the UFO and the DuVernay, and I think it's a continuous evolution and learning process where the teams are swapping back and forth between each other. They're calibrating large machine learning model data sets to better inform what we do on photo data. If I think about the DuVernay itself,

Chad Lundberg: If I think it goes to doing it itself, it's a hard result. We've got drill results, and now a 2% reduction in overall drill days. That's translated into a 10% reduction in PAW; completion results are still being padded. I think you are. That was the more the same thing we see in a reduction in overall drill areas and increase in effective pumping hours very well.

Speaker Change: We've got drill results and now a 10% reduction in overall drill days. That's translated into a 10% reduction in cost. Completion results are still being tested. I think if you look south of the border, same thing. We've seen a reduction in overall drill days and increased in...

Chad Lundberg: I think it's just one that's finished answering a question, one layer deeper. The models would inform us year over year that the changes we've been making are on the water side in the oven, increasing in water intensity. And then, like I said, you have to have a balanced conversation across the border. If you think about across the border, it's more on the cluster spacing or stage spacing. So, in your evolution, we're playing the two plays off each other, seeing positive results in both. And I do believe that there's more to come.

Speaker Change: effective pumping hours per well.

Speaker Change: If I take just one step, finish answering the question one layer deeper, you know, the model would inform us, you know, year over year that the changes we've been making are on the water side in the urban area, so increasing water intensity.

Jeremy McCrea: You know, if you think about across the border, it's more on the cluster, cluster spacing, or state spacing. So, continuous evolution, we're playing the two plays off each other, we're seeing positive results in both, and I do believe that there's more to come. Okay, terrific. Thanks very much. The next question comes from Jeremy McCrea from BMO Capital Markets. Please go ahead.

Speaker Change: And then, like I said, you have to have a balanced conversation across the border.

Speaker Change: More on cluster, cluster spacing or stage spacing.

Speaker Change: So continuous evolution, we're playing with two plays off each other, seeing positive results in both.

Greg Pardy: Okay, terrific. Thanks very much.

Speaker Change: And I do believe that there's more to come.

Speaker Change: Okay, terrific. Thanks very much.

Jeremy Mccrea: The next question comes from Jeremy McCree from BMO Capital Markets. Please go ahead. Hi guys, thanks. I've got a couple questions here too. So, first one, did you guys do anything different with those Eagleford wells that came on at some of the best rates you've done? I'm just curious if that's some of the rates that we could expect going forward. And then the second part here is some of the efficiencies you noted in your press release. And then that built into your guidance in capital cause.

Speaker Change: The next question comes from Jeremy McCrea from BMO Capital Markets. Please go ahead.

Jeremy McCrea: Hi guys, thanks. I've got a couple of questions here too. So first one, did you guys do anything different with those Eagle Ford wells that came on at some of the best rates you've done? I'm just curious if those are some of the rates that we could expect going forward. And then the second part here is some of the efficiencies you noted in your press release. Is any of that built into your guidance and capital costs? And then with some of the results today, particularly in DuVernay, does it make you look to shift capital around come 2025? Yeah. Hi Jeremy.

Jeremy McCrea: Hi guys, thanks. I've got a couple of questions here too. So first one, did you guys do anything different?

Jeremy McCrea: with those Eagle Ford wells that came on at some of the best rates you've done. I'm just curious if that's...

Speaker Change: some of the rates that we could expect going forward. And then the second part here is some of the efficiencies you noted in your press release. Is any of that built into your guidance and capital costs? And then with some of the results today, particularly in the DuVernay, does it make you look to shift capital around come 2025?

Jeremy Mccrea: And then, with some of the results today, particularly in the DuVernay, does it make you look to shift capital around 2025?

Eric Greager: Yeah, hi Jeremy. It's Eric here.

Eric Greager: It's Eric here. Again, I'm going to maybe take one minute off the top and then pitch it to Lundberg for a little bit more on efficiency changes, particularly in Eagleford. So if we look back, I just want to put some kind of historical context on this. In H2 2023, the well performance on the crude oil side was about 700 barrels per day. Now those tended to be gassier, so the BOEs were way up, but let me just focus on oil for the moment. H2 2023, 700 barrels a day, average across 22 wells.

Eric Greager: Again, I'm going to maybe take one minute off the top and then pitch it to Lundberg for a little bit more around efficiency changes, particularly in the Eagleford. So if we look back, I just want to put some kind of historical context on this H22023. The well performance on the crude oil side was about 700 barrels per day. Now, those were tended to be gassier. So the BOEs were way up, but let me just focus on oil for the moment. H2 2023 700 barrels a day average across 22 wells. Then we advanced to the first half of 2024 and 23 wells.

Speaker Change: Yeah, hi Jeremy, it's Eric here. Again, I'm going to maybe take one minute off the top and then pitch it to Lundberg for a little bit more around...

Speaker Change: efficiency changes, particularly in the Eagleford.

Speaker Change: So, if we look back, I just want to put some kind of historical context on this, H2, 2023.

Speaker Change: The well performance on the crude oil side was about 700 barrels per day. Now those tended to be gassier, so the BOEs were way up, but let me just focus on oil for the moment. H2 2023, 700 barrels a day, average across 22 wells.

Eric Greager: Then we advanced to the first half of 2024, and in 23 wells, that same crude oil average daily on the IP30 went up from 700 to 835 barrels per day on average. And then if you compress that to the second half of the first half of the year, that is, Q2, the eight wells we turned in had an average IP30 crude oil of only 871. So to your point, that just reinforces that on the oil side of this mix, which is where all the value comes from, we've gone consistently higher, and in Q2, we had eight wells averaging 88%.

Speaker Change: Then we advanced to the first half of 2024 and 23 wells.

Eric Greager: That same crude oil average daily on the IP 30 went up from 700 to 835 barrels per day on average. And then if you compress that to the second half of the first half of the year, that is Q2. The eight wells we turned in had an average IP 30 crude oil only of 871. So, to your point, that just reinforces the, on the oil side of this mix, which is where all the value comes from, we've gone consistently higher, and in Q2, eight wells averaging 88%. And so that all feels pretty strong, continuing to be either in the top quartile or the very top of the second quartile in terms of crude oil performance among a strong cohort of performers in the Eagleford.

Speaker Change: That same crude oil average daily on the IP30 went up from 700 to 835 barrels per day on average. And then if you compress that to the second half...

Speaker Change: The first half of the year, that is Q2, the 8 wells we turned in had an average IP30 crude oil only of 871. So to your point, that just reinforces the, you know, on the oil side of this mix, which is where all the value comes from.

Speaker Change: We've gone consistently higher, and in Q2, 8 wells averaging 88%.

Eric Greager: And so that all feels pretty strong, continuing to be, you know, either in the top quartile or the very top of the second quartile in terms of crude oil performance among a strong cohort of performers in the Eagleford. In terms of strength and efficiency around the Eagleford specifically, Chad, why don't you take that and then I'll come back to the allocation question. Yeah, well, thanks, Jeremy.

Speaker Change: And so that all feels pretty strong, continuing to be, you know, either in the top quartile or the very top of the second quartile in terms of crude oil performance among a strong cohort of performers in the Eagleford.

Chad Lundberg: In terms of strength and efficiencies around the Eagleford specifically, Chad, why don't you take that and then I'll come back to the allocation question.

Speaker Change: In terms of strength and efficiencies around Eagle Perch, specifically, Chad, why don't you take that and then I'll come back to the allocation question.

Chad Lundberg: Yeah, well, thanks, Jeremy. I would ask that this way, similar to Greg's, we're continually trying to form, through our machine learning, through our models, through our results, what we're going to do next. Specifically, when we think about efficiency, I think it's a capital efficiency discussion, not just production, not just a capital, but combining the two together. On the capital side, we see in a page 10 reduction in the eager for. This is from little things throughout the program, and again, we translate the learning to cross from the DNA geostere. So drilling in a tighter target, stage facing that I alluded to in specific to the Pluto pad, we did improve the stage facing that we think is helping the overall result, all the way down to, you know, how we handle fractals. That's how we handle hookups from the crack, the well-knit stuff. All that to say is there's a bunch of little things that are really driving on the cross.

Chad Lundberg: I would answer it this way. Similar to Greg's, we're continually trying to inform, through our machine learning, through our models, and through our results, what we're going to do next. Specifically, when we think about efficiency, I think it's a capital efficiency discussion, not just production, not just capital, but combining the two together. On the capital side, we've seen an 8% reduction in the ego-4. This comes from little things throughout the program, and again, we translate the learnings across from the DNA.

Chad: Yeah, well, thanks Jeremy. I would answer it this way. Similar to Greg's, we're continually trying to inform, through our machine learning, through our models, through our results, what we're going to do next.

Chad: Specifically, when we think about efficiency, I think it's a capital efficiency discussion, not just production, not just capital, but combining the two together. On the capital side, we've seen an 8% reduction in the Ego-4. This is from little things throughout the program. And again, we translate the learnings across from the DNA. Geosteering, so drilling in a tighter target, stage facing that I alluded to, and specific to the Pluto pad, we did improve the stage facing that we think is helping the overall result, all the way down to how we handle frack valves, how we handle hookups from the frack, the weld itself. All that to say that there's a bunch of little things that are...

Chad Lundberg: Geo-steering, so drilling in a tighter target, stage spacing that I alluded to, and specific to the Pluto pad, we did improve the stage spacing that we think is helping the overall result, all the way down to how we handle frack valves, how we handle hookups from the frack, and the weld itself. All that to say that there are a bunch of little things that are really driving up the cost. On the production side, again, I would point to intensity.

Chad Lundberg: It all comes back to the overall... We try to do our best to think about that in a budget cycle. I think that the only thing I would end with is continuous improvement, and I think there's more to come. We always seem to improve that year over year.

Chad Lundberg: On the production side, again, I would point to intensity; it all comes back to the overall square area that we can effectively stimulate in the rock. And to do that, we know any unconventional that comes back to the pure intensity in the fracture stimulation itself, so that's what we're really keen in on the Pluto pad; that's what we're reviewing. In terms of efficiency, baked in pour, we try to do our best to think about that in budget, so I think that the only thing I would end with is continuous improvement, and I think there's more to come. We always seem to prove that you're over here.

Chad: On the production side, again, I would point to intensity. It all comes back to the overall

Chad: We try to do our best to think about that in a budget cycle.

Chad: I think that the only thing I would end with is continuous improvement, and I think there's more to come. We always seem to improve that year over year.

Eric Greager: Okay, Jeremy, I'm going to come back to the allocation question. You know, here we are in kind of late July; it's a little bit early, you know, in the planning cycle for me to even have a really strong crystal clear view on allocation. But what we would say is we're always focused on allocating our capital toward the highest returning opportunities. And so, you know, we remain encouraged by the quality of our DuVernay asset, and the rate at which our machine learning models are advancing gives us a lot of confidence and encouragement around continued development in our DuVernay play. And of course, that includes the extension, the land extension that we executed on in Q1. So you should expect us to continue to grow that both in terms of its, you know, total production mix in the total portfolio along with increasing the rate at which we allocate capital to it given the advancement in our models. But it's too early to kind of guide more specifically than that.

Eric Greager: Okay, Jeremy, I'm going to come back to the allocation question. You know, here we are in kind of late July; it's a little bit early in the planning cycle for me to even have a really strong, crystal clear view on allocation. But what we would say is we're always focused on allocating our capital toward the highest-returning opportunities. And so, you know, we remain encouraged by the quality of our DuVernay asset.

Chad: Okay, Jeremy, I'm going to come back to the allocation question. You know, here we are in kind of late July . It's a little bit early.

Jeremy: in the planning cycle for me to even have a...

Speaker Change: a really strong, crystal clear view on allocation. But what we would say is we're always focused on allocating our capital.

Speaker Change: We remain encouraged by the quality of our DuVernay asset and the rate at which our machine learning models are advancing.

Eric Greager: And the rate at which our machine learning models are advancing gives us a lot of confidence and encouragement around continued development of our DuVernay play. And, of course, that includes the extension, the land extension that we executed on in Q1. So, you should expect us to continue to grow that both in terms of its production mix in the total portfolio, along with increasing the rate at which we allocate capital to it, given the advancements in our models. But it's too early to kind of guide more specifically than that. Okay. Thanks, guys. Thanks, Jeremy. The next question comes from Amir Arif from ATB Capital. Please go ahead.

Speaker Change: gives us a lot of confidence and encouragement around continued development in our DuVernay play. And of course, that includes...

Speaker Change: the extension, the land extension that we executed on in Q1. So you should expect us to continue to grow that both in terms of its

Speaker Change: It's a production mix in the total portfolio, along with increasing the rate at which we allocate capital to it, given the advancement in our models. But it's too early to kind of guide more specifically than that.

Jeremy Mccrea: Okay, thanks, Jeremy.

Speaker Change: Okay, thanks guys.

Amir Aris: The next question comes from Amir Aris from ATB Capital. Please go ahead. Thanks. Good morning, guys. I've had a few quick operational questions for you. Just first on the Duvernay, are you doing anything different on the second four-wheel pad or is this more just to do risk and delineate the side of what you're sitting on? Yeah, so the second four-wheel pad is going to have many of the same features in terms of cluster and stage architecture and, you know, lengths and how we land in terms of the stack, where we land in terms of the lithology and resistivity marks along the way and how we steer to stay in the highest quality reservoir.

Jeremy: Thanks, Jeremy.

Speaker Change: The next question comes from Amir Arif from ATB Capital. Please go ahead.

Laique Ahmad Amir Arif: Thanks. Good morning, guys. I just had a few quick operational questions for you. Just first, on the DuVernay, are you doing anything different on the second four-row pad? Or is this more just to de-risk and delineate the size of what you're sitting on? Yeah, so the second four-wheel pad is going to have many of the same features in terms of cluster and stage architecture and, you know, length and how we land in terms of the stack, where we land in terms of the lithology and resistivity marks along the way and how we steer to stay in the highest quality reservoir and all the same kind of operational tips So all of that's done, but because these models are learning constantly and the four-wheel pad is a little bit behind in time with the three-wheel pad, it will have a few more nuanced hydraulics.

Laique Ahmad Amir Arif: Thanks. Good morning, guys. Just had a few quick operational questions for you. Just first, on the Duvernay, are you doing anything different on the second four-wheel pad, or is this more just to de-risk and delineate the sides of what you're sitting on?

Speaker Change: Yeah, so the second four-wheel pad is going to have many of the same features in terms of cluster and stage architecture.

Speaker Change: and, you know, lengths and how we land in terms of the stack, where we land in terms of the lithology and resistivity.

Speaker Change: Marks along the way and how we steer to stay in the highest quality record.

Eric Greager: And all the same kind of operational tips and tricks of the trade in terms of cementing and casing and drilling. So all of that's done. But because these models are learning constantly and the four-wheel pad is a little bit behind in time of the three-wheel pad, it will have a few nuanced hydraulics, chemistry, you know, fluid and architecture changes in it that the model is suggesting. And so, you know, again, you don't waste an opportunity, not a moment, not a day, to test, you know, new applications and techniques. And so it'll have all the same advances that were built into our drilling casing and cementing program because it came at the same time.

Speaker Change: and all the same kind of operational tips and tricks of the trade in terms of cementing and casing and drilling. So all of that's done.

Eric Greager: Chemistry, you know, fluid and architecture changes in it that the model is suggesting. And so, you know, again, you don't waste an opportunity, not a moment, not a day, to test new applications and techniques. And so it will have all the same advances that were built into our drilling, casing, and cementing program because it came at the same time. But in terms of stimulation, it's a little further on, and so the model is a little bit more informed. The model's advanced literally every well that's drilled in the whole play, but very specifically relevancy-weighted to our own data, so they advance fast on our own data.

Speaker Change: Hydraulics

Speaker Change: chemistry

Speaker Change: You know fluid and architecture changes in it that that the model is suggesting and so, you know again You don't waste an opportunity not a moment not a day to test

Speaker Change: You know new new applications and techniques and so It'll have all the same advances that were built into our drilling casing and cementing program because it came at the same time

Chad Lundberg: But in terms of stimulation, it's a little further on. And so the model is a little bit more informed. The model is advanced literally every well that's drilled in the whole play, but very, very specifically relevancy weighted to our own data. So they advance fast on our own data. Is there anything, Chad, you'd like to add to that in terms of advancements in the four-wheel pad versus the three-wheel pad? Just looking at bound versus unbound well state thing. Yep, another opportunity to have that fit.

Speaker Change: But in terms of stimulation, it's a little further on, and so the model is a little bit more informed. The model's advanced literally every well that's drilled in the whole play, but very

Speaker Change: Very specifically, relevancy-weighted to our own data, so they advance fast on our own data. Is there anything, Chad, you'd like to add to that in terms of advancements in the 4-well pad versus the 3-well pad?

Eric Greager: Is there anything, Chad, you'd like to add to that in terms of advancements in the 4-well pad versus the 3-well pad? Just looking at bound versus unbound wells, it's basically just another opportunity to, I appreciate the color. And then just on to the Pea Vine, field level production continues to get better, better than the 15,000 that we were thinking about a while ago. Is 20,000 a number to think about as a sustainable rate or is there potential to even get that a little higher than that? Well, it'll all feel the same.

Chad: Just looking at bound versus unbound weld spacing is another opportunity for us.

Amir Aris: Okay, and I appreciate the color. And then just onto the p-vine, the field level production continues to get better, better than the 15,000 that we were thinking about a while ago.

Speaker Change: Okay, and I appreciate the color. And then just on to the Peavine. Field-level production continues to get better, better than 15.

Eric Greager: Is 20,000 a number to think about as a sustainable rate or as their potential to even get that a little higher than those levels? Well, it'll feel a little production. Yeah, no, it's a great question, Amir. And, you know, I was always trying to be, I think, prudent in my guidance given what you know and don't know about conventional reservoirs over time. As I think I've said before to you and publicly to others, the wells just continue to surprise to the upside as we moved our pads to the south in late 2023 and into 2024.

Speaker Change: that we were thinking about a while ago, is 20,000 a number to think about as a sustainable rate or is there potential to even get that a little higher than those levels?

Eric Greager: It's a great question, Amir, and I was always trying to be, I think, prudent in my guidance given what you know and don't know about conventional reservoirs over time. As I think I've said before to you and publicly to others, the wells just continued to surprise to the upside as we moved our pads to the south in late 2023 and into 2024. The pads came on stronger. They stayed stronger for longer.

Speaker Change: Well, it'll feel like a production.

Speaker Change: Yeah, no, it's a great question, Amir, and, you know, I was always trying to be...

Speaker Change: I think, you know, prudent in my guidance, given, you know, what you know and don't know about, you know, conventional reservoirs over time, as I think I've said before to you and publicly to others.

Speaker Change: The wells just continued to surprise to the upside as we moved our pads to the south.

Speaker Change: In late 2023 and into 2024, the pads came on stronger. They stayed stronger for longer. The pads and the team continues to surprise to the upside.

Eric Greager: The pads came on stronger; they stayed stronger for longer. The pads and the team continues to surprise to the upside and, you know, we're facing today a 20,000 barrel a day play here in Q2. I think that it can probably hold this for a little while, but I'm not going to suggest a new normal that's meaningfully above 15. But what I would say is maybe Pevine could exit the year, you know, around 17. And that probably, you know, means that it heads toward 15 over the longer arc of time. But, again, if wells stay in stronger for longer and continue to surprise to the upside, that could be a while out.

Eric Greager: The pads and the team continue to surprise to the upside, and, you know, we're facing today a 20,000 barrel a day play here in Q2. I think that it can probably hold this for a little while, but I'm not going to suggest, you know, a new normal that's meaningfully above 15, but what I would say is maybe Peavine could exit the year around 17, and that probably means that it heads toward 15 over the longer arc of time, but again, if Wells stay in stronger for longer and continue to surprise to the upside, that could be a while out.

Speaker Change: And, you know, we're facing today a 20,000 barrel a day play here in Q2. I think that it can probably hold this for a little while, but I'm not going to...

Speaker Change: I'm not going to suggest a new normal that's meaningfully above 15, but what I would say is maybe Peavine could exit the year around 17.

Speaker Change: And that probably, you know, means that it heads toward 15 over the longer arc of time, but again, it's well staying stronger for longer and continue to surprise to the upside. That could be a while out.

Eric Greager: So, you know, I feel bad for having said 12 to 15 for so long, but I am going to say over the long arc of time, you know, we should continue to be in these kind of mid-teens, and I'll continue to say 15 until we know a whole lot more about the aerial extent.

Eric Greager: So, you know, I feel bad for having said 12 to 15 for so long, but I am going to say, over the long arc of time, we should continue to be in these kind of mid-teens, and I'll continue to say 15, until we know a whole lot more about the aerial extent. But it feels really, really good, and just the whole thing is performing very well. That helps. And then just on the aerial extent part of it there, Eric, I know you moved to the south from the core. Any plans to move to the northeast area, or is that more of a 25, 26 event?

Speaker Change: So, you know, I feel bad for having said 12 to 15 for so long, but I am going to say over the long arc of time.

Speaker Change: You know, we should continue to be in these kind of mid-teens, and I'll continue to say 15 until we know a whole lot more about the aerial extent. But it feels really, really good, and just the whole thing is performing very well.

Amir Aris: But it feels really, really good, and just the whole thing is performing very well. Yeah, that helps.

Eric Greager: And just on the aerial extent, part of it, Eric, I know you've moved to this out from the core. Any plans to move to the Northeast area? Or is that more of a 2526 event? Yeah, over time we will, Amir. We will continue to move eastward and to the northeast. But it will take some time. One of the things we've mentioned is that we remain very conscious of our social license to operate with the Pevine Métis. And it's not unique to legal obligations as much as it is. We like to do what we say we're going to do.

Speaker Change: Yeah, that helps. And then just on the aerial extent part of it there, Eric, I know you moved to the south from the core. Any plans to move to the northeast area, or is that more of a 25, 26?

Laique Ahmad Amir Arif: Yeah, over time, we will. We will continue to move eastward and to the north and east, but it'll take some time. One of the things we've mentioned is that we remain very conscious of our social license to operate with the Peavine Metis, and it's not unique to sort of legal obligations as much as it is we like to do what we say we're going to do. But also, around capital, it's a very efficient use of capital to keep these developments nice and tight.

Eric Greager: Yeah, over time we will, Amir. We will continue to move eastward and to the north and east.

Speaker Change: but it'll it'll take some time you know one of the one of the things we've mentioned is that we remain very conscious of our social license to operate with the Peavine Métis.

Speaker Change: And it's not unique to sort of legal obligations as much as it is we like to do what we say we're going to do. But also around capital, it's a very efficient use of capital to keep these developments nice and tight.

Eric Greager: But also around capital, it's a very efficient use of capital to keep these developments nice and tight. And so over time, we're going to move eastward and then northeastward. But the tighter we keep it geographically, the more we're able to maintain high capital efficiency on the sort of pipelines and driving rights of way we've built and locations we've built. And that will just increase the efficiency of the investment over time. But we will, over time, move eastward and northeastward.

Laique Ahmad Amir Arif: And so, over time, we're going to move eastward and then northeastward, but the tighter we keep it geographically, the more we're able to maintain high capital efficiency on the sort of pipelines and driving rights of the way we've built and the locations we've built. And that will just increase the efficiency of the investment over time, but we will move eastward and northeastward over time. It makes sense. And then, just finally, shifting to the Eagle further, Eric, I know as you move to the black oil, it's got lower overall rates with better oil cuts, so the total oil weights aren't significantly different. But I believe it's also shallower.

Speaker Change: And so over time, we're going to move eastward and then northeastward.

Speaker Change: The more we're able to maintain high capital efficiency on the sort of pipelines and driving rights of the way we've built and locations we've built, and that will just increase the efficiency of the investment over time, but we will over time move eastward and northeastward.

Laique Ahmad Amir Arif: Can you just give us a sense of what the well-cost differences are from the volatile oil windows? You stepped into the black oil window and then also into the second half of the year. Do you plan to stay in the black oil window? Or are you moving around? Do you like which position?

Amir Aris: And then just finally shifting to the eagle for the Eric, I know I've moved to the black oil. It's got lower overall weights with better oil cuts. So the total weights aren't significantly different. But I believe it's also shallower, can just get a sense of what the well cost differences are from the volatile windows. You stepped into the black oil window and then also just second half plans. Do you plan to stay in the black oil window, or are you moving around to your equic position? Yes, so one of the reasons we move around is partly to take advantage of gathering system room.

Speaker Change: Okay, makes sense. And then just finally shifting to the EGLE further, Eric, I know as you move to the black oil, it's got lower overall rates with better oil cuts, so the total oil weights aren't

Speaker Change: [inaudible]

Eric Greager: Yeah, so one of the reasons we move around is, you know, partly to take advantage of gathering system room. So that is to say, you build a CDP at some point in time, and then you fill it, but as the wells that justify that central production facility decline, they leave available capacity, and that available capacity through the CDP and through the gas gathering and oil gathering system is effectively free.

Speaker Change: Yeah, so one of the reasons we move around is, you know, partly to take advantage of

Eric Greager: So that is to say you build a CDP at some point in time and then you fill it. But as the well that justified that central production facility to climb off, they leave available capacity, and that available capacity through the CDP and through the gas gathering and oil gathering system is effectively free. And so one way to manage capital efficiency on the facilities part of the business is to move around and what I call knife into that available capacity. And so one of the reasons we move around is a to continue to inform our models and keep them very current in terms of stimulation designs and optimizing that, but b to also ensure that we are making maximum use of the available system space.

Speaker Change: gathering system room. So that is to say, you build a CDP at some point in time and then you fill it.

Speaker Change: But as the wells that justify that central production facility decline off, they leave available capacity, and that available capacity through the CDP and through the gas gathering and oil gathering system is effectively free.

Eric Greager: And so one way to manage capital efficiency on the facilities part of the business is to move around and what I call knife into that available capacity. And so one of the reasons we move around is, A, to continue to inform our models and keep them very current in terms of stimulation designs and optimizing that, but B, to also ensure that we are making maximum use of the available system space. So, you know, in terms of capital, it's all very much in line with our expectations. Our AFEs have come in ahead of expectations. Our capital budget is coming in on expectation, and everything's running in line.

Speaker Change: And so one way to manage capital efficiency on the facilities part of the business is to move around and what I call knife into that available capacity. And so one of the reasons we move around is, A, to continue to inform our models and keep them very current.

Speaker Change: in terms of stimulation designs and optimizing that, but B, to also ensure that we are making maximum use of the available system space.

Eric Greager: So, in terms of capital, it is all very much in line with our expectations. Our AFEs have come in to expectation, our capital budget is coming into expectation, and everything is running in line. And so, as I mentioned earlier, in terms of our current budget reiteration, it all feels quite good, and we are going to continue to move around a bit to ensure that we take maximum advantage of available space. But the wells are going to continue to perform well according to the stimulation designs, and I would say with confidence almost no matter where we go, we will be able to get the best out of the rock using the machine learning model.

Speaker Change: So, you know, in terms of capital, it's all very much in line with our expectations. Our AFEs have come in to expectation. Our capital budget is coming into expectation, and everything's running in line.

Eric Greager: And so, as I mentioned earlier, in terms of our current budget reiteration, it all feels quite good, and we're going to continue to move around a bit to ensure that we take maximum advantage of available space. But the wells are going to continue to perform well according to the stimulation designs, and I would say with confidence that almost no matter where we go, we'll be able to get the best out of the rock using the machine learning model. Okay, can you just quantify the well-cost difference? I think it's 10 and a half on average across Eagle Ford. Is it different in the black oil window? Is it similar to that?

Speaker Change: And so, as I mentioned earlier in terms of our current budget reiteration, it all feels quite good. And we're going to continue to move around a bit to ensure that we take maximum advantage of available space.

Speaker Change: But the wells are going to continue to perform well according to the stimulation designs. And I would say with confidence, almost no matter where we go, we'll be able to get the best out of the rock using the machine learning models.

Amir Aris: K.

Chad Lundberg: Can you just quantify the low cost difference? I think it's 10 and a half on average across the equal foot. Is it different in the black oil window? Yeah, I didn't come background to that. It tends to get a little bit less in the black oil window because you're dealing with a little bit lower pressure. So one of the reasons why it's less gassy is because it's less thermally mature, and thermal maturation, time and temperature, and burial depth and all of those things drive gas production. And so, because it's not as deep and it's not as highly pressured or thermally mature, you tend to get a little bit of a break on things like kick tolerance and the depth of casing shoes and those sorts of things.

Speaker Change: Okay, can you just quantify the well cost difference? I think it's ten and a half on average across Eagle Ford. Is it different in the black oil window?

Laique Ahmad Amir Arif: Yeah, sorry, Amir. I didn't come back around to that. It tends to get a little bit less in the black oil window because you're dealing with a little bit lower pressure. So one of the reasons why it's less gassy is because it's less thermally mature. And thermal maturation, time, and temperature, and burial depth, and all of those things drive gas production. And so because it's not as deep and it's not as highly pressured or as thermally mature, you tend to get a little bit of a break on things like kick tolerance and the depth of casing shoes and those sorts of things.

Speaker Change: Yeah, sorry Amir. I didn't I didn't come back around to that It tends to get a little bit less in the black oil window because you're dealing with a little bit lower pressure

Speaker Change: So, one of the reasons why it's less gassy is because it's less thermally mature and thermal maturation, time and temperature and burial depth and all of those things.

Speaker Change: Drive gas production and so Because it's not as deep and it's not as highly pressured or thermally mature You tend to get a little bit of a break on You know things like kick tolerance and the depth of casing shoes and and those sorts of things

Chad Lundberg: Having said that, you tend to have to drive a more intense stimulation into lower thermal maturation rock. And so the model compensates for all of these things. I'd say generally in line, but maybe a little bit lighter on a kind of a cost per foot basis. Chad, you want to just reinforce that, or just... Well, yeah, so the only other significant difference is they are generally cooler with more temperatures. So to get deeper, and that's what I mean, is the gas here, portion of the gas condensate area. We run hotter temperatures that, in some cases, pushes us to different bottom bowl assembly.

Eric Greager: Having said that, you tend to have to drive a more intense stimulation into lower thermal maturation rock. And so the model compensates for all of these things. I'd say it is generally in line, but maybe a little bit lighter on a kind of cost per foot basis.

Speaker Change: Having said that, you tend to have to drive a more intense stimulation into lower thermal maturation rock. And so the model compensates for all of these things. I'd say generally in line, but maybe a little bit lighter on a kind of a cost per foot basis.

Chad Lundberg: Chad, you wanna just reinforce that, or just say it? Well, yeah. So the only other significant difference is they are generally cooler reservoir temperatures. So to get deeper in the gasier portion of the gas compensates for area. We run hotter temperatures, but in some cases, it pushes us to different bottom hole assemblies.

Speaker Change: Chad, do you want to just reinforce that, or just... Well, yeah, so the only other significant difference is they are generally cooler reservoir temperatures, so as you get deeper in the clay, and it is gassier portion of it, or gas constant state.

Chad: We run power temperatures, but in some cases it pushes us to different bottom hole assemblies.

Chad Lundberg: Just in terms of quantifying, you know, we're in the half million dollar range to drill these black wells first. And so we're drilling more of the gas. That's the difference between the two.

Chad Lundberg: Just in terms of quantifying, you know, we're in the half million dollar range. If there are these black oil wells first, then that would work really more of the gas. That's the difference between the two. That's right. Okay.

Speaker Change: Just in terms of quantifying, you know, we're in the half-million-dollar range to drill these black oil wells versus in the south where we're drilling more of the gas. That's the difference between the two. That's right.

Eric Greager: That's right. Yeah. Appreciate the insights. This concludes the question and answer session from the phone lines. I'd like to turn the conference back over to Brian Ector for any questions received online. All right, thanks, operator.

Amir Aris: Okay, appreciate the insights. Thanks.

Speaker Change: Appreciate the insights. Thanks.

Operator: This concludes the question and intercession from the phone lines.

Chad: Yeah.

Chad: This concludes the question and answer session from the phone lines. I'd like to turn the conference back over to Brian Ector for any questions received online.

Brian Ector: I'd like to turn the conference back over to Brian Echter for any questions received online. All right. Thanks, operator. Can we have a number of questions come in? I feel like we've addressed the majority of the operational questions that have come in. Today, as we discuss the efficiencies across the portfolio and our guidance being unchanged. The one common question coming in area does relate to the share price performance and the reaction to the results today. What is your takeaway or thoughts on the market reaction today? Yeah. Thanks, Brian. Well, look, I'm disappointed anytime the share price trades down.

Brian G. Ector: We've had a number of questions come in. I feel like we've addressed the majority of the operational questions that have come in. We've discussed the efficiencies across the portfolio and our guidance being unchanged. The one common question coming in, Eric, does relate to the share price performance and the reaction to the results today. What is your takeaway or thoughts on the market reaction today?

Brian G. Ector: All right, thanks operator. We have had a number of questions come in. I feel like we've addressed the majority of the operational questions that have come in.

Chad: on the webcast today as we've discussed the efficiencies.

Speaker Change: across the portfolio and our guidance being unchanged.

Speaker Change: The one common question coming in, Eric, does relate to the share price performance and the reaction to the results today.

Eric Greager: What is your takeaway or thoughts on...

Eric Greager: Thanks, Brian. Well, look, I'm disappointed any time the share price trades down, but this is a good quarter.

Eric Greager: on the market reaction today. Yeah, thanks, Brian . Well, look, I'm disappointed any time the share price trades down, but this is a beat.

Eric Greager: But this is a beat quarter. We came in above consensus estimates on production, above consensus estimates on AFF per share. We continue to take out more shares every day. We've levelized our share repurchase plan so that it now accomplishes, you know, dollar cost averaging, which should over time drive the lowest possible volume weighted average price for those for that use of free cash flow. And what I would say is, you know, we can't control the share price. What we control is the business allocation of capital, capital efficiency, cost of capital to a lesser degree, not directly.

Eric Greager: We came in above consensus estimates on production and above consensus estimates on AFF per share. We continue to take out more shares every day. We've levelized our share repurchase plan so that it now accomplishes dollar cost averaging, which should, over time, drive the lowest possible volume-weighted average price for that use of free cash flow. And what I would say is we can't control the share price. What we control is the business, the allocation of capital, capital efficiency, and the cost of capital, to a lesser degree, not directly.

Speaker Change: We came in above consensus estimates on production, above consensus estimates on AFF per share. We continue to take out more shares.

Speaker Change: Every day, we've levelized our share repurchase plan so that it now accomplishes dollar-cost averaging, which should, over time, drive the lowest possible volume-weighted average price for that use of free cash flow.

Speaker Change: And what I would say is...

Speaker Change: You know, we can't control the share price. What we control is the business, allocation of capital, capital efficiency, cost of capital.

Brian Ector: And the free cash flow that we generate, if the share price goes down, will simply buy back more shares. And so eventually the shares we take out of the system and we cancel that math will continue to drive better and better, you know, intrinsic per share metrics. As I mentioned earlier in my prepared remarks, over the past four quarters we've increased our production per share by 23% in one year, a 23% increase in production per share. And that's both higher production on a flat share number of shares, but also we're taking out shares, and that will continue.

Speaker Change: to a lesser degree, not directly. And the free cash flow that we generate, if the share price goes down, we'll simply buy back more shares. And so eventually...

Eric Greager: And the free cash flow that we generate, if the share price goes down, we'll simply buy back more shares. And so, eventually, the shares we take out of the system and we cancel, that math will continue to drive better and better, you know, intrinsic per share metrics. As I mentioned earlier in my prepared remarks, over the past four quarters, we've increased our production per share by 23 percent in one year. A 23 percent increase in production per share.

Speaker Change: The shares we take out of the system and we cancel, that math will continue to drive better and better, you know, intrinsic per share metrics, as I mentioned earlier in my prepared remarks.

Speaker Change: Over the past four quarters, we've increased our production per share by 23 percent in

Speaker Change: year, 23% increase in production per share.

Eric Greager: And that's both higher production on a flat number of shares, but we're also taking out shares. And that will continue. So I like a bargain as much as the next guy, and we're going to keep buying back our shares at a discount. And eventually, that's going to be irresistible. But that math really works.

Speaker Change: and that's both higher production.

Speaker Change: on a flat share number of shares, but also we're taking out shares, and that will continue.

Eric Greager: So I like a bargain as much as the next guy, and we're going to keep buying back our shares at a discount, and eventually that's going to be irresistible. But that math really works when you're generating strong and resilient cash flows and free cash, so Brian, that math works to our advantage.

Speaker Change: I like a bargain as much as the next guy and we're going to keep buying back our shares at a discount and eventually that's going to be irresistible. But that math really works when you're generating strong and resilient cash flows and free cash flow, Brian . That math works to our advantage.

Eric Greager: When you're generating strong and resilient cash flows and free cash flow, Brian, that math works to our advantage. Okay, thanks, Eric. And this is a question that came in from an investor. It's a statement as much as it is a question, and I think it relates to our performance today. And the statement is that the market is inaccurately focused on lower sequential BOE; the BOE pre-rate in the Eagle fertile is lost; on the market was the higher oil cuts and lower cost in Eagleford, producing more oil per well in Eagleford during the second quarter, getting oilier sequentially to a positive trend that drives higher cash flow generation. Eric, I know we've talked about Eagleford a lot, but any final comments on getting oilier, No, I think that statement is spot on, Brian.

Brian Ector: Thank you, Eric. And this is a question that came in from an investor. It's a statement as much as it is a question; I think it relates to the performance today. And the statement is that the market is in accurately focused on lower sequential BUE, the BUE pre-rate in the Eagle Pardole loss. On the mark, it was a higher oil cuts and lower costs in the Eagle Pardrys in more oil for well-neagle per during the second order to get more. Getting oil years sequentially to the positive trend that drives higher cash with generation. Eric, I know we talked about the Eagle for the loss, but any final comment on getting oil year or the oil rates in the performance in the Eagle Pardrys?

Brian G. Ector: Thanks Eric. This is a question that came in from an investor. It's a statement as much as it is a question. I think it relates to the performance today and the statement is that the market is

Speaker Change: inaccurately focused on lower sequential BOE, the BOE play rate in the Eagle-Bird or Lowe's loss.

Speaker Change: On the market was a higher oil cuts, a lower cost to the Eagle for producing more oil.

Speaker Change: for Weldon Eagle Group during the second quarter to be at Marble.

Eric Greager: Getting oilier sequentially, which is a positive trend that drives higher cash flow generation. Eric, I know we've talked about the Eagleford a lot, but any final comments on getting oilier or the oil rates and the performance in the Eagleford? No, I think that statement is spot on, Brian . What I would do is I would simply reiterate, eight wells, 88%.

Eric Greager: No, I think that statement is spot on, Brian. What I would do is I would simply reiterate eight wells, 88%, and in the Duvernay, the three-well pad is 90% liquids. And so, we're in an oil company. Our Q2 results were 85% weighted to high-value liquids, and we will continue to focus on that. And in terms of our free cash flow yield, when the share price goes lower relative to our free cash flow generation, that just means it punches at an ever stronger level in terms of these impacts to per share metrics. So, I like the mechanism.

Brian G. Ector: What I would do is I would simply reiterate, And in DuVernay, you know, the three-well pad is 90% liquids. And so, you know, we're an oil company. Our Q2 results were 85% weighted to liquids, high-value liquids, and we will continue to focus on that. And you know, in terms of our free cash flow yield, when the share price goes lower relative to our free cash flow generation, that just means it punches at an ever-stronger level in terms of these impacts on per-share metrics. So I like the mechanism.

Speaker Change: And in the DuVernay, you know, the three-well pad is 90% liquids. And so, you know, we're an oil company. Our Q2 results were 85% weighted to liquids, high-value liquids.

Speaker Change: and we will continue to focus on that.

Speaker Change: And, you know, in terms of our free cash flow yield, when the share price goes lower relative to our free cash flow generation, that just means it punches at an ever-stronger level in terms of these impacts to per-share metrics. So I like the mechanism. I don't like...

Eric Greager: I don't like the share price, but we can take advantage of it, and we will continue to buy back shares according to our NCIV and keep that VWAP as low as possible.

Eric Greager: I don't like... the financial side does relate to the debt repayment and the timing. We addressed it in our prepared remarks. Chad addressed it.

Speaker Change: The share price, but we can take advantage of it, and we will continue to buy back shares according to our NCIB and keep that VWAP as low as possible.

Eric Greager: And the other comment coming in on the financial side does relate to the debt repayment and the timing addressed in our prepared remarks. Chad addressed it. Any comments on the importance of continuing to deliver across it? Well, yeah, no, it's extremely important. And I know folks are frustrated and have pointed to that. You know, our total debt to EBITDA is 1.1 times, and that is a strong position to be in today in terms of the total debt to the cash-generative capacity of the business. And that will get better over time. But we thought it was more important within the first half of the year to take advantage of these record-type spreads to prepare a more defensive posture with regard to our long-term debt structure.

Eric Greager: Any comments on the importance of continuing to deliberate across the board? Well, yeah, it's extremely important. You know, I know folks are frustrated and have pointed out that our total debt to EBITDA is 1.1 times, and that is a strong position to be in today in terms of the total debt to the cash generative capacity of the business, and that will get better over time. But we thought it was more important in the first half of the year to take advantage of these record-tight spreads to prepare a more defensive posture with regard to our long-term debt structure.

Speaker Change: You know, I know folks are frustrated and have pointed to that.

Speaker Change: You know, our total debt to EBITDA is 1.1 times, and that is a strong position to be in today in terms of the total debt, the cash generative capacity of the business. And that will get better over time.

Speaker Change: But we thought it was more important within the first half of the year to take advantage of these record-tight spreads.

Speaker Change: prepare a more defensive posture with regard to our long-term debt structure and so

Eric Greager: And so, both reducing the coupon and extending the term of our long-term debt made a lot of sense to us, and then not allowed us to push our credit facility out in other two years. And so, the term debt structure within our business is very strong and very defensive. And you have to do that when you can, because you can't control the timing. But these are record-type spreads for high yield energy, and we took advantage of it, and we think it's the right thing to do. And we think when our debt paydown does begin to happen in Q3 and Q4 and continue from there, folks will begin to take advantage of and realize the benefit of all of this.

Eric Greager: And so both reducing the coupon and extending the term of our long-term debt made a lot of sense to us, and then that allowed us to push our credit facility out another two years. And so the debt structure within our business is very strong and very defensive, and you have to do that when you can, because you can't control the timing. But these are record-tight spreads for high-yield energy, and we took advantage of that.

Speaker Change: Both reducing the coupon and extending the term of our long-term debt made a lot of sense to us.

Speaker Change: and then that allowed us to push our credit facility out another two years. And so the term debt structure within our business is very strong and very defensive. And you have to do that when you can because you can't control the timing. But these are record-tight spreads.

Eric Greager: And we think it's the right thing to do, and we think when our debt paydown does begin to happen in Q3 and Q4 and continue from there, folks will begin to take advantage of and realize the benefit of all of this. Thanks, Derek. At a higher level, portfolio-wise, any thoughts on after-sales disposition, the overall portfolio, and where you see the business going over the next two to three years? Yeah, I can't really comment specifically on asset sales or dispositions.

Speaker Change: for High Yield Energy and we took advantage of it and we think it's the right thing to do and we think when our debt pay down does begin to happen in Q3 and Q4 and continue from there, folks will begin to take advantage of and realize the benefit of all of this.

Eric Greager: Thanks, Eric. At a higher level, portfolio wise, any thoughts on alpha-tailed dispositions, the overall portfolio where you took the business point over the next two to three years? Yeah, I can't really comment specifically on alpha-tailed dispositions. What I would say is every asset in our portfolio is investable. Every asset is being invested in, and that all feels pretty good. But we're always looking at this through each planning cycle, and making sure that if there are assets that we're allocating our capital to the highest returning assets possible, running all of our assets within the bands of maximum operational efficiency. And if there are assets we cannot invest in, then those are the assets that move to sale against a retention value expectation.

Speaker Change: Thanks, Eric. At a higher level, portfolio-wise, any thoughts on asset sale dispositions?

Speaker Change: I can't really comment specifically on asset sales or dispositions. What I would say is every asset in our portfolio is investable. Every asset is being invested in and that all feels pretty good.

Eric Greager: What I would say is that every asset in our portfolio is investable. Every asset is being invested in, and that all feels pretty good. But we're always, you know, looking at this through each planning cycle and making sure that if there are assets that we're allocating our capital to the highest-returning assets possible, running all of our assets within the bands of maximum operational efficiency, and if there are assets we cannot invest in, then those are the assets that move to sale against a retention value expectation.

Speaker Change: But we're always, you know, looking at this through each planning cycle.

Speaker Change: and making sure that

Speaker Change: If there are assets that we're allocating our capital to the highest returning assets possible, running all of our assets within the bands of maximum operational efficiency, and if there are assets we cannot invest in,

Speaker Change: then those are the assets that move to sale against a retention value expectation.

Eric Greager: Okay, Eric, and we're coming up on our time limits here, but just one last question because it's in the news that there are a bit of late, lots of wildfires, again, across Alberta and BC. Any impact to our operations so far this year with respect to the wildfires? Yeah, it's absolutely heartbreaking to read about Jasper and anyone who's lost their homes or their businesses. It's actually heartbreaking to see and to witness. We've had no impacts and have no wildfires, you know, within close proximity to our operations. So we're sort of better off this year than we were last year in terms of proximity of fires.

Eric Greager: Okay, Eric, and I know we're coming up on our time limits here, but just one last question because it's been in the news a fair bit of late: loss of wildfires, again, across Alberta and B.C., any impact on our operations so far this year with respect to the wildfires? Yeah, it's absolutely heartbreaking to read about JASPER and anyone who's lost their homes or their businesses. It's absolutely heartbreaking to see and to witness.

Speaker Change: Okay, Eric, I know we're coming up on our time limits here, but just one last question.

Eric Greager: because it's in the news a fair bit of late.

Speaker Change: Lots of wildfires again across Alberta and B.C. Any impact to our operations so far this year with respect to the wildfires? Yeah, it's absolutely heartbreaking to read about Jasper and

Speaker Change: Anyone who's lost their homes or their businesses, it's absolutely heartbreaking to see and to witness.

Eric Greager: We've had no impacts and have had no wildfires within, you know, close proximity to our operations, so we're sort of better off this year than we were last year in terms of the proximity of fires. We remain on high alert; we're always looking and watching and reading and lending a hand to our peers and our friends any place that we can, so that's about all I would say, Brian, on that. Thanks, Eric.

Speaker Change: We've had no impact

Speaker Change: wildfires, you know, within, you know,

Speaker Change: close proximity to our operations so we're sort of better off this year than we were last year in terms of proximity of fires.

Eric Greager: We remain on high alert; we're always looking and watching and reading and lending a hand to our peers and our friends in any place that we can.

Speaker Change: We remain on high alert. We're always looking and watching and reading and lending a hand to our peers and our friends.

Brian Ector: So that's about all I would say right on that trip. Thanks, Eric.

Brian G. Ector: Anyplace that we can so that's about all I would say Brian on that. Sure. Thanks, Eric So thanks to everyone as we reach the end of today's call. I would just like to thank everyone for participating For those who submitted questions via the webcast if your question was not addressed Please reach out to our investor inbox and we will be sure to respond With that thank you operator and thanks to everyone for participating in our second quarter conference call. Have a great day

Brian Ector: So thanks everyone as we reach the end of today's call. I would just like to thank everyone for participating. For those who submitted questions via the webcast, if your question was not addressed, please reach out to our investor inbox, and we will be sure to respond.

Eric Greager: So, thanks everyone. As we reach the end of today's call, I would just like to thank everyone for participating. For those who submitted questions via the webcast, if your question was not addressed, please reach out to our investor inbox, and we will be sure to respond. And with that, thank you, Operator, and thanks to everyone for participating in our second quarter conference call. Have a great day. This brings today's conference call to a close. You may disconnect your line. Thank you for participating, and have a pleasant day.

Operator: With that, thank you, operator, and thanks to everyone for participating in our second quarter in conference call. Have a great day.

Operator: This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Speaker Change: This brings to a close today's conference call. You may disconnect your line. Thank you for participating and have a pleasant day.

Speaker Change: and John Release.

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