Strathcona Resources Aktie

Good afternoon, everyone. Welcome to the Annual Meeting of Shareholders of Strathcona Resorts Limited. My name is Adam Waterous, and I am the Executive Chairman of Strathcona and will act as Chair of the meeting. With me for the meeting is Connor Waterous, Chief Financial Officer of Strathcona; and Connie De Ciancio, Chief Commercial Officer of Strathcona. I'm also joined by certain other Strathcona team members who are either shareholders or duly appointed proxy holders and will be acting as motioners and seconders for the meeting.

The meeting will now come to order. During the course of this virtual meeting, registered shareholders and duly appointed proxy holders may vote by electronic ballot through the Lumi platform. If you have already voted by proxy, there is no need to vote again during the meeting. If you do vote again, your vote cast at this meeting will revoke your prior vote. Registered shareholders and duly appointed proxy holders may submit questions at any time during the meeting. If you wish to submit a question during the meeting, select the messaging tab on the Lumi platform, type your question within the box at the top of your screen and click the send arrow. Questions asked related to the business of the meeting will be answered in the order received for each item of business.

Now for the formal business of the meeting. With the consent of the meeting, Lindsay Hofer of Blake, Cassels & Graydon LLP will act as Secretary of today's meeting and Nazim Nathoo of Odyssey Trust company will act as scrutineer. Notice of this meeting, the management information circular and a form of proxy were sent on March 23, 2026, to shareholders of record as of March 6, 2026, and to the directors and auditors of Strathcona. I will ask the Secretary to file the declaration of meeting of those materials with the minutes of this meeting.

The scrutineer has advised that a quorum is present. I direct the Secretary to ensure that the formal report of the scrutineer on the quorum be attached to the minutes of this meeting. As due notice of the meeting has been given and a quorum is present, I declare the meeting to be properly called and constituted for the transaction of business.

For those that are entitled to vote at today's meeting and have not already submitted a proxy, voting will be conducted by an electronic ballot for each voting matter. If you are a registered shareholder or a duly appointed proxy holder and have not yet voted, you may vote at any time during the meeting by clicking on the voting tab at the top of your screen and selecting your vote for each ballot. The polls will remain open until discussion, if any, has concluded on all items of business of the meeting. I now declare the polls open and we will proceed with the matters under consideration at this meeting.

The first item of business is to receive the consolidated financial statements of Strathcona for the year ended December 31, 2025, together with the auditor's report thereon. Copies of such financial statements were mailed to shareholders who requested those materials, and additional copies are available electronically on Strathcona's website and on SEDAR+.

The next item of business is the election of directors of Strathcona. The number of directors to be elected at this meeting is 9. The corporation's nominees are individuals described in the management information circular all of whom are current directors of Strathcona. May I have a motion on the election of these 9 nominees as directors of Strathcona.

I move that the 9 nominees described in the Management Information Circular be elected as directors of Strathcona until the next Annual Meeting of Shareholders or until their successors are elected or appointed.

I second the motion.

Thank you. Ms. Hofer, are there any questions on this motion?

Mr. Chairman, there are no questions on this motion.

Thank you. If you have not already done so, you may cast your vote on this resolution, and we will proceed to the next matter.

The next item of business is the appointment of auditors. It is proposed that Deloitte LLP be appointed as Strathcona's auditors. I mean I have a motion on the appointment of Deloitte LLP as the auditors of Strathcona.

I move that the firm of Deloitte LLP, independent registered public accounting firm, be appointed auditors of Strathcona until the next Annual Meeting of Shareholders or until their successors are appointed.

I second the motion.

Thank you. Ms. Hofer, are there any questions on this motion?

Mr. Chairman, there are no questions on this motion.

Thank you. If you've not already done so, you may cast your vote on this resolution. That concludes the items of business set out in the notice of meeting. If you are a registered shareholder or duly appointed proxy holder and have not submitted your votes on any matters, please do so now. We will pause briefly to permit voting before closing the polls on all items. The line will go silent for about 30 seconds while we allow for votes.

[Voting]

Thank you for waiting. I now declare the polls are closed. I have been advised that the scrutineer has completed the tabulation of votes for all resolutions. With respect to the election of directors of Strathcona, I'm advised by the scrutineer that each of the proposed nominees has been duly elected. With respect to the resolution to appoint the auditors, I'm advised by the scrutineer that the resolution has been approved. The detailed voting results will appear in the press release to be issued today as well as on SEDAR+.

The formal items of the business as set out in the notice of meeting have now been dealt with. As there are no further business, may I have a motion to terminate the meeting.

I move that this meeting be terminated.

I second the motion.

I now declare the meeting terminated. I would like to thank you for attending the Annual Meeting of Shareholders of Strathcona. This concludes the meeting.

Good morning, everyone. Welcome to the special meeting of the shareholders of Strathcona Resources Limited.

My name is Adam Waterous and I'm the Executive Chairman of Strathcona and will act as Chair of the meeting. I am also joined by certain others Strathcona team members who are either shareholders or duly appointed proxy holders and will be acting as motioner and seconders for the meeting. The meeting will now come to order.

During the course of this virtual meeting, registered shareholders and duly appointed proxy holders may vote by electronic ballot through the Lumi platform. If you've already voted by proxy, there is no need to vote again during the meeting. If you do vote again, your vote is cast at this meeting and will revoke your prior vote. Registered shareholders and duly appointed shareholders may submit questions at any time during the meeting. opins. Questions will be answered in the order received and may be edited or paraphrased, and substantially similar questions may be grouped and answered wants to avoid repetition.

Now for the formal business of the meeting. With the consent of the meeting, Olga Kary, Corporate Secretary of Strathcona will act as Secretary of today's meeting and Nazim of Odyssey Trust Company will act as scrutineer. A notice of this meeting, the Management Information Circular and a form of proxy were sent on November 5, 2025 to shareholders of record as of October 17, 2025, and to directors and auditors of Strathcona. I would ask the secretary to file the declaration of meeting of those materials with the minutes of this meeting. The scrutineer has advised that a quorum is present. I direct the secretary to ensure that the formal report of the scrutineer on quorum be attached to the minutes of this meeting.

A due notice of the meeting has been given and a quorum is present. I declare this meeting to be properly called and constituted for the transaction of business. For those that are entitled to vote at today's meeting and have not already submitted a proxy, voting will be conducted by an electronic ballot for each voting matter. If you are a registered shareholder or a duly appointed proxy holder and have not yet voted, you may vote at any time during the meeting clicking on the voting tab at the top of your screen and selecting your vote for each ballot. The polls will remain open until discussion, if any, has concluded on all items of business of the meeting.

I now declare the polls open and we'll proceed with the matters under consideration at this meeting. The sole item of business at today's meeting is the approval of the special distribution, the full text of which is set out in Appendix A to the management information circular dated October 28, 2025, to approve a statutory plan of arrangement to effect a special distribution to Strathcona's shareholders in the amount of $10 per share. In accordance with the interim order of the Court of King's bench of Alberta, granted October 28, 2025, the special resolution must be approved by not less than 2/3 of the votes cast by the shareholders present in person or represented by proxy at this meeting. May I have a motion to approve the special resolution?

It means that the special resolution improving the statutory plan of arrangement and the special distribution as set forth in Appendix A to the Management Information Circular related to this meeting be approved.

I second the motion.

Thank you. Ms. Kary, are there any questions on this motion?

Mr. Chairman, there are no questions on this motion.

Thank you. If you have not already done so, you may cast your vote on this resolution. This concludes -- that concludes the sole item of business set out in the notice of meeting.

If you are a registered shareholder or duly appointed proxy holder and have not submitted your votes on any matters, please do so now. We will pause to briefly voting before closing the polls on this whole item of business. The line will go silent for about 30 seconds while we allow for votes.

[Voting]

Thank you for waiting. I now declare the polls are closed.

I have been advised by the scrutineer that the special resolution has been duly passed by over 99.9% of the votes cast on the matter. Accordingly, I declare that the special resolution has been passed. The detailed voting results will appear in the press release to be issued today and filed on SEDAR. The formal item of the business as set out in the notice of meeting has now been dealt with.

As there is no further business, may I have a motion to terminate the meeting.

I move that this meeting be terminated.

I second the motions.

I now declare this meeting terminated.

Good morning. My name is Jerome, and I'll be your conference operator today. I would now like to welcome everyone to the Third Quarter 2025 Conference Call of Strathcona Resources Limited. [Operator Instructions] I will now introduce Angie Lau, Treasurer of Strathcona, to open the conference and introduce the speakers.

Welcome to the Q3 2025 Conference Call of Strathcona Resources Limited. Yesterday, Strathcona released its third quarter 2025 results. We encourage our investors to visit Strathcona's website and review the disclosure materials in detail. Today's call will be focused on taking questions from analysts.

Please note that all commentary made by today's speakers are subject to the same advisories regarding forward-looking information and non-GAAP measures as can be found in yesterday's press release and our other disclosure materials. On today's call, we have from our management team, Adam Waterous, Executive Chairman; Connor Waterous, Chief Financial Officer; Dale Babiak, Chief Operating Officer; Kim Chu, President, Strathcona Cold Lake; Seamus Murphy, President, Strathcona Lloydminster Conventional; and Ryan Tracy, President, Strathcona Lloydminster Thermal.

With that, in keeping with our practice, we will take all of our materials as read, and we would now like to jump straight to questions.

[Operator Instructions]

There are no further questions at this time. Turning over back to Adam.

First of all, we appreciate everyone for tuning in. So we don't have any questions. I take that as provided comprehensive materials, and we look forward to providing you a further update on or about the 1st of December post the closing of our scheduled transaction with Cenovus. Thanks so much.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

Good morning. My name is Annis, and I'll be your conference operator today. I would like to welcome everyone to the Second Quarter 2025 Conference Call of Strathcona Resources Ltd. [Operator Instructions] I now introduce Angie Lau, Treasurer of Strathcona, to open the conference and introduce the speakers.

Welcome to the Q2 2025 Conference Call of Strathcona Resources Ltd. Yesterday, Strathcona released its second quarter results. We encourage our investors to visit Strathcona's website and review the disclosure materials in detail. Today's call will be focused on taking questions from analysts.

Please note that all commentary made by today's speakers are subject to the same advisories regarding forward-looking information and non-GAAP measures as can be found in yesterday's press release and our other disclosure materials. In particular, any comments made regarding the offer to MEG shareholders as well as any expectations about the pro forma results or resulting capital structure of Strathcona are based on our current expectations regarding our business and combined business and are in part based on MEG's available public data.

While we believe our current assumptions and expectations to be reasonable, actual results could differ materially from those discussed today, and listeners should not place undue reliance on any such statements. Please refer to Strathcona's offer to purchase and accompanying takeover bid circular dated May 30, 2025, available on our website and under the company's profile on SEDAR+ for further information.

On today's call, we have from our management team, Adam Waterous, Executive Chairman; Connor Waterous, Chief Financial Officer; Connie De Ciancio, Chief Commercial Officer; Dale Babiak, Chief Operating Officer; Kim Chiu, President, Strathcona Cold Lake; Seamus Murphy, President, Strathcona Lloydminster Conventional; and Ryan Tracy, President, Strathcona Lloydminster Thermal.

With that, in keeping with our practice, we will take all of our materials as read, and we would now like to jump straight to questions.

[Operator Instructions]

Your first question comes from Patrick O'Rourke with ATB Capital Markets.

I guess the first question just revolves around the MEG transaction here. In the past, you've spoken to engagement or lack thereof with the team over there. They're obviously running an open strategic process that they provide a few updates on. Can you comment with respect to any changes in the level of engagement that you have had over there?

Sure, Patrick. This is Adam Waterous. We've had no engagement. We have asked for it multiple times, and we have been ghosted.

Okay. And then second question here, just with respect to -- in the scenario where you are unsuccessful with the bid that you've put out there, you've spoken to a $10 -- potential $10 per share distribution here in a tax-efficient manner. I think you have about $15 [indiscernible], but if you could sort of provide maybe a little bit of color with respect to how you think about the tax efficiency of that. And then alternatively, with the extreme strength of the balance sheet being in a net cash position, how you weigh that versus the opportunity set for other M&A or you're obviously having operational success through the portfolio, the potential that you could accelerate or upsize the organic growth.

I think I got 3 questions in there, Patrick. The first was on tax efficiency. I really can't comment on that. That's fairly complicated and detailed. The second thing is how does this -- if we're unsuccessful in MEG, how does this -- what are we thinking about doing with the cash? So our thought process was -- and I talked about this briefly before, is that our plan A has been to organically grow the business from 120,000 barrels a day to 195,000 barrels a day over the next 5 years.

And the Plan A plus would be to acquire MEG. Now that ends up being important in that we've had lots of people say to us, well, gee, you don't buy MEG, you got all this cash, why don't you buy something else? Well, the reason why we're looking to acquire MEG is very specific to that particular opportunity as opposed to, hey, we just want to buy things in general.

And so as a consequence, that's why if we are unsuccessful in acquiring MEG, our plan is to not buy something else, but instead, provide approximately $10 a share proceeds to our investors. So this is not a -- sometimes people think, oh, wow, are you just building a generic war chest to go out and buy stuff. No, it's very -- we had a very specific plan A on organic growth and then at the same time, distributing cash to our shareholders.

And if we got a particular acquisition being MEG, then we would do it. In terms of the third part of your question, which is if we don't buy MEG, do we just accelerate growth? Actually, we quite like our current growth plan to go from 120,000 to 195,000. I think it's a compound annual growth rate of about 8%. I think -- I'm not certain about this, but I think that's the fastest growth rate organically of any company of our scale in North America. So I don't -- it's not like we're growing slowly as sort of our base plan A case. So that would be my thoughts. Maybe others may have any other comments or perspectives. Hopefully, that's helpful, Patrick.

Your next question comes from Menno Hulshof with TD Cowen.

I'll just start with a question on your crude by rail business. With the Hardisty Rail Terminal acquisition having closed, can we get an update on the status of integration of that asset? And maybe given your dominance on Western Canadian rail infrastructure, how should we be thinking about vertical integration and the rail activity outlook for Strathcona specifically if heavy dips were to widen a couple of dollars into the back half of the year?

Sure. So when we think about the recent transaction, which we did to buy the largest crude by rail -- crude by rail third-party terminal in the country. Really, what we see that as is just a pure natural hedge to the go-forward Strathcona upstream business in that we currently don't plan to put our own Strathcona barrels through the terminal at this time and have a long-term take-or-pay there with a strong investment-grade counterparty that is currently spinning off about $12 million of free cash flow per year.

And we see that as effectively what the current stabilized a run rate cash flow will be on the business in the current spread and environment. That being said, if and when spreads on WCS start to widen, there's about 75% to 80% of that terminal that's currently not being utilized, which in turn means that there is a large amount of free space for spot volumes, which we think certainly based on the past performance of that terminal will start to fill up as spreads in the base start to widen.

And then maybe just flipping over to your partnership with Canada Growth Fund on the carbon capture side of things. Where do you think stand on that front? And has the development trajectory changed at all based on liberal messaging under [indiscernible] to date?

Sure. So I'd say that we're still thrilled to have the partnership with the folks at Canada Growth Fund, and we've made a lot of progress over the past 12 months since that partnership was first signed on the first steps of the detailed FEED work. And our view is it's certainly not a question of if, but, when our first carbon capture and storage project get sanctioned. And -- but we're still probably a couple of quarters plus away from that happening as there's still a little bit more FEED work that we need to do, and there's probably a little bit more clarity that we're seeking in terms of what kind of carbon pricing world are we in on both sides of the border.

[Operator Instructions] Your next question comes from Travis Wood with National Bank.

The lower drainage program at Tucker sounds like it's been successful, especially through July there with the SORs below 3. So 2 questions and maybe just one broader one. Could you provide some details around those economics of the wells? And how do you measure that?

And then two, what's the time line of that ramp over those 75 locations as we think about Cold Lake in general? And then the third question, just to top Patrick there maybe is, in general, across the assets, are you seeing any inflationary pressure on capital and/or OpEx?

This is Kim Chiu with the Cold Lake business unit here. So let me just unpack some of those questions there. So in terms of performance, I think I heard in there, how long does it take to ramp? We've actually been very pleasantly surprised off of our first program there on the D-East. Ramp-up profile is probably within a month to 2 months at the most.

In terms of their current production and forecast. I think that particular pad is doing in excess of 5,000 barrels a day. And those 8 LBW wells are probably 80% or more of the overall production for that pad. Off the top of my head, I have to admit, I can't remember what the exact rates return or MOICS on those wells are, but they are certainly highly attractive with great F&D costs and great capital efficiencies, and we are actually in the process of drilling our next batch in Tucker right now, and these are scheduled to come online early next year at this point in time. I'm not sure if I covered all the questions there or not.

Yes. And then... Yes. And then Travis, this is Connor again. Just speaking to things on the service cost side. I'd say that our view is we've been in a fairly stable service cost world for most of the last, I'd call it 18 to 24 months. There's always a couple of percent of general inflation per year. That is that kind of forms the hurdle that the teams, I need to eat back by an ongoing focus of trying to improve per unit efficiencies, but it's been a stable service cost world in general.

Your next question comes from Dennis Fong with CIBC.

My first 1 here is just on Meota maybe following along to Travis' question. Just wondering if there's any opportunities to improve on the cost structure there or that's more of a fixed cost contract structure to build out that potential processing facility?

Yes. Ryan Tracy here with the Lloyd Thermal business unit. As far as the Meota central facility those we're constructing right now, it's a mixed between there's some fixed cost, lump sum contracts there on our main facility construction at the central processing facility. But there's a lot of other components with our drilling and completions and our -- some of our infrastructure that we've got to bring in like water, gas, power that is more on a reimbursable structure. So there is some opportunity to come in under that capital budget. But as of right now, we're about halfway through that project from a capital spend perspective, and right now, everything is looking on budget, on time with that project. So nothing too big to report there, but it's looking positive in general.

Great. My second question turns back maybe to Adam. You've highlighted, obviously, in the -- one of the prior questions that bag is obviously a very unique opportunity for your company. Can you remind us on some of the things that you're really focused on in terms of opportunity sets and where you view specifically kind of attractive opportunities? Or what specific metrics you're continuing to look at as you evaluate the space?

So the reason what we've been attracted to MEG is -- really Dennis, threefold. Number one, the high degree of similarity between their business and our business. And why that ends up being important is our experience is that single play companies are structurally prevented from optimizing the asset on their own due to lack of economies of scale and shared learnings, meaning as we've -- each time we have bought an independent SAGD business, the economies of scale that we get by adding that to our existing business, not only is that business that we get have the opportunity to be improved but the remaining businesses that we already have are improved through shared learnings.

We have taken success to -- some of our success at Tucker in terms of how we're drilling wells because how we're drilling wells at Orion. Now this is a -- so this is a super fundamental point. And the reason why the sense of being is that for a very long period of time, the last 20 years, across North America, there has been a focus on single-play companies. And the reason people built single-play companies is because they've been the easiest to sell. But if you have a single-play company you are structurally -- a structural impediment to actually optimizing the asset.

And so we think by some of our existing business, not only do we think will we end up operating the business more efficiently than existing management. We think that our existing businesses will be operated more efficiently and the performance will improve. And some comment I quickly would say on the quality of that MEGs existing management. It's a structural impediment that single-play companies have. So that's the first reason we are interested in acquiring it.

The second reason is that it provides Strathcona with the 3 things or in particularly accelerates 3 things for Strathcona. Number one, it allows Strathcona to become investment grade, which will lower our overall cost of funding. The second thing is it will increase the liquidity that Strathcona currently has in the stock market and why that is being rolled because that allows us to be able to -- be included into some indices. As you are included in the indices, that generally ends up being reflected positively in your stock.

So those first 2 things are very, as I would say, very on-off, light switch. They happen almost immediately upon completing the transaction. The third is that the combined business will be in a very unique situation in the North American energy landscape and that it will be the only investment-grade long-life solidifying high free cash flow oil business to pure play that does not have mines, does not have refineries. And it will be in that space of a pure-play long-life fine high free cash flow, it will be many, many multiples larger than the next largest company in North America.

And we think that, that will be offer a very unique and attractive investment proposition to investors. So that's what from Strathcona's perspective, that would be a plan A plus. Now obviously, MEGs going to have their own -- shareholders will have their own perspective. But as I've said previously, what's highly unusual about this transaction is that the typical source of a return to a seller is what is the upfront premium.

In this case, for SAGD, I'd say, relevant because usually they don't get -- SAGD doesn't get anything more than the upfront premium. In this case, the selling shareholders get 2 additional things. Number one, they get per share accretion, which is a repeat sale line is depending on whether the cash flow or an EV is somewhere between 10% and 25%. So it's very large accretion on a per share basis, the 2 MEG share of shareholders. That's super rare. It's usually the target is usually trading at a discount to the acquirer. In this case, it's the reverse, and that's why they're getting this accretion.

But the third source of return to MEG shareholders after the upfront premium and the per share accretion is that this is principally a share transaction, 82% of the consideration is in Strathcona shares. And going back to why Strathcona is doing it, because they're receiving shares, so that will be an incremental source of return for MEG and put another way is the reason when we do this -- we think that Strathcona's share price post-completing a transaction with MEG is going to go up, and we think it has a lot.

And that's obviously why we're doing it. And that ends up being another incremental source of return for MEG shareholders. Right, Dennis, hopefully, that's a helpful response.

There are no further questions from our phone lines. I would like to turn the call back over to Adam Waterous for closing remarks.

So thanks, everyone, for tuning in this morning, especially early at 7:00 in the morning at Mountain Time, and we look forward to our next conference call with you 1 quarter from now. Thanks so much.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a great day.