The motions before the meeting may be addressed during the meeting. All other questions will only be addressed during the question period at the end of the meeting. Following the formal portion of the meeting, Mr. Andy J. Mah, our Chief Executive Officer, will present an overview of Advantage's operations results. Mr. Mike Belenkie, our President and Chief Operating Officer, will present an update on Advantage's fully owned subsidiary on Entropy Inc. The meeting will now come to order. With your approval, I shall ask Jay P. Reid to act as Secretary of the meeting, and Patricia Selby, a representative of TSX Trust Company, to act as Scrutineer.
I have received confirmation from TSX Trust Company as to the mailing of the notice of the annual general and special meeting of shareholders, the information circular, proxy statement, instrument of proxy, notice and access notification, and 2020 annual report to shareholders in compliance with the applicable securities requirements. I direct that the confirmation, together with copies of the documents mailed to the shareholders, be kept by the secretary with the minutes of this meeting. If there are no objection, the reading of the notice of the meeting will be dispensed with. Pursuant to the bylaws of the corporation, business may be transacted at this meeting if there are persons present not being less than two in number and holding or representing not less than 25% of the shares entitled to be voted at the meeting.
I have the scrutineer's report, which shows that there is a quorum of shareholders present at the meeting. I now declare that the meeting is regularly called and properly constituted for the transaction of business. We will conduct each vote by way of vote cast on the TSX Trust platform and those submitted by proxy. I will now take a moment to ask that the polls be opened to registered holders and duly appointed proxy holders. The polls are now open. Please note that while the TSX Trust platform permits voting by registered holders and duly appointed proxy holders, you should not use this feature to vote if you have already submitted a proxy, as it will automatically cause your prior vote to be revoted.
At this point, all registered holders and duly appointed proxy holders who have properly logged in with their control numbers or username and wish to vote should click the voting button in the left column to submit votes. You will be able to see on the screen all motions being brought forth at this meeting, including a motion to terminate the meeting, which will be enacted after the announcement of the voting results of the matters considered at this meeting. Please register your votes by selecting the for, against, or withheld buttons as applicable next to each of the resolutions. You will only have a certain amount of time to vote. The polls will remain open during the period that all the motions for matters to be considered at the meeting are being made and seconded.
Once all of the motions for matters to be considered at the meeting have been made and seconded, we will give registered shareholders and duly appointed proxy holders one additional minute to finish voting, and then polls will be closed. Particulars of the votes cast on all matters may be obtained from the secretary after the meeting. I direct that the scrutineer's report on all matters be annexed to the minutes of this meeting as a schedule. The first item of business is the placement before shareholders of the financial statements of Advantage for the fiscal year ended December the 31st, 2020. A copy of Advantage's annual report, which includes the financial statement, has been mailed to each registered shareholder with a copy also located on the TSX Trust virtual dashboard page. The next item of business is to fix the number of directors to be elected at the meeting.
Second the motion.
As previously noted, voting on this resolution will be conducted on the TSX Trust virtual platform. We will report the results of the voting once all of the motions for matters to be considered at the meeting have been made and seconded. The next item of business is the election of eight directors of Advantage. In accordance with Advantage's advanced notice bylaw, the only individuals entitled to be nominated as directors at this meeting are the persons named as nominees in Advantage's information circular for this meeting. Therefore, I will now entertain a motion nominating such individuals for election as directors of Advantage.
I nominate Jill T. Angevine, Steven E. Byle, Deirdre M. Choate, Donald M. Clague, Paul G. Haggis, Norman W. MacDonald, Andy J. Mah, Ronald A. McIntosh as directors of Advantage Oil & Gas Ltd. to hold office until the next annual election of directors, or until their successors are elected or appointed, subject to the provisions of the Business Corporations Act (Alberta) and the bylaws of Advantage Oil & Gas Ltd.
I second the nominations.
As previously noted, voting on this resolution will be conducted on the TSX Trust virtual platform. We'll report the results of the voting once all of the motions for matters to be considered at the meeting have been made and seconded. I would like to take this opportunity to acknowledge that Mr. Grant Fagerheim and I chose not to stand for re-election this year. It has been a pleasure working with Grant for the last seven years, and we greatly appreciate all his contributions and insights on the board. The next item of business is an ordinary resolution approving certain amendments to Advantage's Restricted and Performance Award Incentive Plan.
I move that the ordinary resolution set forth on page 18 of Advantage's information circular, dated March 26, 2021, approving certain amendments to Advantage's Restricted and Performance Award Incentive Plan be approved.
I second the motion.
As previously noted, voting on this resolution will be conducted on the TSX Trust virtual platform. We will report the results of the voting once all of the motions for matters to be considered at the meeting have been made and seconded. The next item of business is an ordinary resolution approving all unallocated incentive awards under Advantage's Restricted and Performance Award Incentive Plan.
I move that the ordinary resolution set forth on page 19 of Advantage's information circular, dated March 26, 2021, approving all unallocated incentive awards under Advantage's Restricted and Performance Award Incentive Plan be approved.
I second the motion.
As previously noted, voting on this resolution will be conducted on the TSX Trust virtual platform. We will report the results of the voting once all of the motions for matters to be considered at the meeting have been made and seconded. The next item of business is an ordinary resolution reapproving Advantage's amended and restated shareholder rights plan agreement.
I move that the ordinary resolution set forth on page 24 of Advantage's information circular, dated March 26, 2021, reapproving Advantage's amended and restated shareholder rights plan agreement be approved.
I second the motion.
As previously noted, voting on this resolution will be conducted on the TSX Trust virtual platform. We will report the results of the voting once all of the motions for matters to be considered at the meeting have been made and seconded. The next item of business is a special resolution to amend the articles of the corporation to change the name of the corporation to Advantage Energy Limited.
I move that the special resolution set forth on pages 24 and 25 of Advantage's information circular, dated March 26, 2021, to amend the articles of the corporation pursuant to Section 173(1) of the Business Corporations Act of Alberta to change the name of the corporation to Advantage Energy Ltd., be approved.
I second the motion.
As previously noted, voting on this resolution will be conducted on the TSX Trust virtual platform. We will report the results of the voting once all of the motions for the matters to be considered at the meeting have been made and seconded. I will now entertain a motion for the appointment of the auditors of Advantage.
I move that the firm of PricewaterhouseCoopers LLP, Chartered Professional Accountants, be appointed auditors of Advantage Oil & Gas Ltd. until the next annual meeting or until their successors are appointed, and that the remuneration as such be fixed by the board of directors.
I second the motion.
As previously noted, voting on this resolution will be conducted on the TSX Trust virtual platform. We will report the results of the voting once all of the motions for matters to be considered at the meeting have been made and seconded. The final item of business is to arrange for the termination of the formal portion of the meeting following the announcement of the voting results on matters considered at this meeting. May I have a motion that the formal portion of the meeting be terminated following the announcement of the voting results on the matters to be considered at the meeting?
I make that motion.
I second the motion.
As previously noted, voting on this resolution will be conducted on the TSX Trust virtual platform. We will report the results of the voting once all of the motions from Advantage to be considered at the meeting have been made and seconded. Are there any questions on any of the motions from any registered shareholders or duly appointed proxy holders? We will provide registered shareholders and duly appointed proxy holders approximately one more minute to complete any electronic ballots. Thank you. The polls are now closed. I would ask that the scrutineer compile a report regarding the results of voting on all business matters. I have been advised by the scrutineer that all resolutions have been approved by more than the required majority. Therefore, I declare all of the resolutions carried.
I direct the results of the poll to be included with the minutes of this meeting, and the results of the voting will be announced in a press release in accordance with the policies of the TSX. In adherence to the approved termination motion, I declare this meeting terminated. With the formal portion of the annual meeting complete, I will turn the meeting over to Mr. Andy J. Mah, Advantage's Chief Executive Officer.
Thank you very much, Mr. McIntosh, and welcome to all that's joined us today. As Ron indicated earlier, I will be providing some summary highlights of Advantage, and Mike Belenkie will follow through with comments on Entropy. First thing I'd like to do is thank our board of directors for their support and also our shareholders for their strength in believing in this company and the great things that we have done in the last several years and look forward to even better results as we look ahead. I'd also like to upfront thank our staff, both in Calgary and in the field, for their dedication and extra efforts as we've gone through, as all of us would realize, a really tough period here in 2020. It continues through, but our people have excelled, and I commend them for their contributions to the company.
To begin with, as you see, there'll be slides that you should be able to see, and we'll move those ahead as I speak. On the first slide, what I'd like to just touch on is the fact that in terms of our corporate strategy and direction, one of the key things that's laid out here, as you can look at the boxes across the top, is our strong foundations. That speaks to our assets, our financial and operating expertise and discipline, as well as our people, like I mentioned. We've continued to enhance and strengthen that, especially in the last two years, and the company is in better shape than ever in terms of meeting the challenges as we look ahead. In terms of generating free cash and moderate growth, that is what we're targeting to do in 2021 and ahead.
You can see that we're already moving our net debt to AFF down towards one. As we see this year unfold, we certainly will continue to improve our debt position. We intend to keep production growth between 5% and 10% and focus our investments into our top-tier economic plays and wells, which will serve us well. In addition, we created Entropy, as most of you have seen in the recent announcements. This is integrated with our carbon capture and sequestration expertise that we've done for well over a decade at our Glacier gas plant. This not only helps our industry and our company, but we will also be able to extend that technology to other sectors and reduce emissions to provide cleaner energy and products for all Canadians and for those abroad.
We're very proud of our ability to synthesize that into our operations and into our planned strategies ahead. Moving forward, we see ourselves enhancing resilience and also strength as we continue to grow our liquids, and we'll also look at scaling and enhancing the resilience of the company through acquisitions. We look at this slide, I'll talk a bit about our assets here. Glacier is our foundational asset that we started with in 2008 in the Montney, and we've developed that into a very strong cash-generating asset. Through the drilling and the development and building of our gas plant, which can process 400 million cubic feet per day, that asset continues to provide the base foundational cash flow for us to reinvest in opportunities, both at Glacier and in our other assets.
Over the last few years, we did focus more on our liquids assets, in progress on Wembley and also Valhalla. These assets are spectacular in terms of what results that we've been able to attain. We were able to optimize drilling and completions in those areas in the last few years, put in some initial infrastructure, and those are at the ready to be developed further. At this time, though, because of our constructive view of natural gas prices, we continue to invest back into our Glacier natural gas asset. The economics there are excelling in terms of the cost comparisons and results that we've seen. Moving into the next slide, you can see the results and the efficiency and performance improvements that we've continued to drive here.
Most notably in the last couple of years, we've been able to, as we invested back into Glacier, improve our well productivity by well over 87% and reduce our well cost by more than 10%. Those impacts are allowing us to see economics that are resulting in greater returns, well over 100% at current gas prices. Even in our liquids areas, at current oil prices, we can see returns of approximately 70%. As I explained, our best investments today are still into the natural gas side of the picture. This is a very interesting slide in terms of the fact that even a property like Glacier, where we've drilled over 200 wells, we're still able to improve it substantially. Next slide. On this slide, we continue to reinforce our low-cost structure.
As you look at other Montney players in this fairway, we continue to be one of the lowest cost producers out there, if not one of the lowest costs in North America. As we look ahead in some of our future plans, we expect to maintain that, and we expect that to help certainly deliver more and more free cash flow as the years go by. Next. In terms of our marketing diversification and hedging positions, we've also taken a portfolio approach where we began marketing into several different areas. We have AECO, Emerson, Empress, Dawn, and the U.S. Midwest, where we market our sales. In that, we've hedged our production. This year, you can see that in the middle on the charts as shown, we're hedged around 40%-45% for most of the year, little lower in the fourth quarter.
As we look forward, we're watching pricing here, which we believe will continue to be in that very strong price range for us to continue to add more hedges as we come upon the end of summer and early fall. We believe the 2022 price strips as currently are too low. We think that the constructive fundamentals will support that, and we believe that pricing will respond to that. In terms of crude oil and liquids, which make up a smaller proportion of our revenue streams, we've also done some hedging there to allow us to protect some of that volatility on the liquids side. On the right-hand side in the pie charts, that shows you our percentage of sales into each of these different end markets. As you can see in 2021, we're approximately 45% exposed to AECO Emerson, and that grows over time.
One of our strategies was to allow us to not get locked into hubs for too long, but allow us the opportunity to move gas into different arenas and opportunities as they come forward. That continues with our theme of flexibility. Next slide. Our 2021 capital investment program really reinforces our longer-term strategy. As outlined on this slide, we intend to spend between CAD 115 million and CAD 135 million of capital. We recently reduced our capital, and we increased our production and our guidance for 2021 on the heels of very strong wells that we drilled through the fourth quarter of 2020, and also what we are seeing in the first quarter of 2021, where we had spectacular results. We expect these investments here to provide us with strong capital efficiencies, driving net debt to AFF down towards one, as I mentioned earlier.
We also are driving close to 10% production growth with CAD 30 million of growth capital. Very strong results as a result of continuing efficiency improvements in our operations. The last slide on Advantage, I just wanted to highlight here that if you dig a little deeper into the 2021 capital program, what we can see here on this slide is that moving from the left to the right. If you look at the sustaining capital that we require to keep production flat in this company, it's CAD 75 million. What's astounding is the fact that we can do that at a CAD 1.37 AECO pricing . To drive our 10% production growth, we could fund that at CAD 1.63.
In addition to funding not just the growth, but future initiatives, which will help us position us in the liquids and gas assets for 2022 and beyond, another CAD 20 million, which overall would say just under CAD 2, we can fund this entire program. When you translate that back to free cash, you can see that the numbers roll back around 70 as an average based on current prices, and it could be higher than that if we see stronger constructive gas developments occur through the last part of this year. With that, I'm going to turn it over to Mike Belenkie to talk about Entropy Inc.
Thank you, Mr. Mah. I'll walk through about 10 slides here to talk about Entropy. Entropy, of course, is our brand new subsidiary, focused on carbon capture and storage. The next slide, this is the introduction. Entropy are leaders in carbon capture storage. We have proven carbon capture storage technology, and this is innovative post-combustion carbon capture that we're talking about. It has been designed on the backs of a variety of skill sets that come from our pre-combustion carbon capture, which we've been doing at the Glacier plant for the last dozen years. It's an energy-efficient integration of multiple technologies, and it's built on decades of experience, both in geology and in processing and reservoir engineering. The result of all that work is a massive reduction in total installed cost, which is all that is really required, in the end, to make carbon capture a commercial project.
This has been made possible by Advantage knowledge and expertise, along with world-class technical partnerships with Allis-Chalmers Energy, our engineering company, backing us up, and actually a large part of the design. As well as a partnership with the Clean Energy Technologies Research Institute at the University of Regina, one of the most advanced carbon capture institutes in the world. It's been developing this technology for the last 30 years. Carbon capture is talked about a lot, but rarely actually executed. At Entropy, we're in the process of executing our first post-combustion carbon capture project right now. We've ordered the equipment. Construction will begin in the third quarter, and we should be capturing the first carbon late in the first quarter of next year. The first phase will cost CAD 27 million.
It's fully funded by Advantage and an external contributor, and it will capture 46,000 tons, capture and offset 46,000 tons per year of carbon dioxide, which delivers a net operating income of CAD 2.9 million per year. Important to Advantage is that at this point, roughly 20 or 25% of our gas will be net-zero gas sourced. This is something we'll begin to market as blue natural gas, and we believe will bring a premium in the market. Phase II will be developed following phase I and funded not using Advantage capital, but instead using Entropy capital. Part of the carbon capture and storage challenge, of course, boils down to cost.
Carbon capture is actually a technology that's quite old in different iterations, but the challenge has always been making it an economic proposition to finance, build, and run, both because the capital costs and the operating costs are very high using old technologies. What Advantage and Entropy have done together with our partners, ABC and CETRI , has driven the cost down for post-combustion carbon capture storage to about CAD 400 per ton per year on a capital basis and a CAD 15 per ton operating cost. We've tried to standardize these metrics because, in the world of carbon capture, there are many ways to look at it. This is the most transparent version that we've come up with so far. It's clean and obvious, and we hope that other projects are clear with the disclosure.
We've tried to show a couple comparisons here for what other people have accomplished in the past versus what we are in the process of accomplishing right now. The chart on the left of this page, slide 13, shows a green line, It's a trend line showing our cost structure for different sized projects. Since Entropy has been announced, we've been engaged to look at numerous different third-party projects, and as such, we've developed this cost curve to represent what we believe future projects will cost at different sizes. The most important part of this chart, of course, is that the cost curve has fallen by more than 50% to come down to our level, and almost every size of project falls at below the cost of what we know we can receive right now from tax incentives and the Canadian carbon market.
That's how this becomes a commercial project. On the right side of this slide, it shows a distribution of all the different emitting facilities in Canada, and r eally what it shows is there's more than 1,500 emitting facilities, and our project size falls right in the middle of the most frequent sizes to the left and the largest sizes to the right. The point of this slide, of course, is that we can do it economically. It's extremely scalable for different sizes, from low sizes to very large projects, and it's economic enough to scale up over and over again, which is the business plan. Going back to the Glacier project on the left side.
With phase I and phase II together, we've shown a variety of net operating income streams at different price decks. The red line on this chart shows the declared carbon pricing in Canada by the Trudeau government, and shows the incredible upwards trajectory of net operating income from simple investments in phase I and II of Glacier. Assuming this happens, the economics of carbon capture for Entropy projects are extremely positive. Looking to the right side, you see different jurisdictions around the world. Of course, current pricing, Canada is on the lower end of all these other countries in the pricing that they demand right now. Right up to the top range of California Low Carbon Fuel Standard, CAD 250 per ton, currently traded at. That's in Canadian dollars.
Not only is this a technology that's suitable in Canada, at floating markets, it's particularly suitable in the United States at the Section 45Q tax credit incentive rate, which is a fixed guaranteed rate by the federal government. Of course, in other jurisdictions that are moving actively to increase the cost of carbon. Scaling and replicating our technology in those jurisdictions is also a part of the business plan. Slide 15 shows a very simple rendering of the major equipment required to accomplish carbon capture in a modular sense. This is the Entropy Modular Carbon Capture solution. One of the most important pieces of the design is that almost everything that's manufactured for our design can be done so in a controlled environment, in a fabrication shop, and delivered on site and assembled very simply in a predictable way.
The cost overruns are much more unlikely than the mega projects where carbon capture is installed otherwise. We can do this design from a small project that's 8,000 tons per year, and there is no upper limits on scalability. The next slide shows a reference to our new generation of carbon capture solvents. In our partnership with the Clean Energy Technologies Research Institute at the University of Regina, we have access to and secured ownership of a brand new class of solvents that reduces energy input and reduces equipment requirements in order to capture carbon. This is an important part of our ability to drive down the cost of carbon capture.
We've secured this solvent and secured the research through CETRI, we have the unique ability to deliver this reduction in carbon capture costs, versus typical engineering companies who are required sticking with normal technology that's off-the-shelf, including off-the-shelf chemicals. A cartoon of the process. Many people ask how it works. What Reverse Entropy carbon capture really is we bolt up equipment to the exhaust stream of an industrial emitter. We have a number of proprietary technologies that we pre-process the gas with, a proprietary solvent to actually scrub the carbon dioxide out of the exhaust, and proprietary processing of those gases prior to being injected, in our case, at Glacier, 3,000 meters underneath the surface of the earth, permanently and safely stored in reservoirs that Advantage and Entropy have decades of experience in disposing into.
A very simple representation of a very complex process, which is the product of decades of experience. An important part of reducing emissions is being more efficient with our energy. One piece of technology that Entropy has developed significant experience with our partners is heat capture. An important part of any project, whether you're capturing carbon or not, is our ability to deploy heat capture into industrial emitters. On the storage side, many people ask about where the carbon dioxide goes after you've scrubbed it. The eventual home is, for us, going to be almost exclusively geologic storage.
We have the ability to do this in EOR situations, but broadly speaking, because we're looking at scalability and being able to scale up the number of times that we actually install these things, we are planning to rely heavily on geological storage in saline aquifers of high permeability. Again, a very complex skill set with Advantage and Entropy having decades of experience monitoring, including the regulatory environment. As with any team, slide 20 shows the importance of the partners and leadership. We think that the team that we've assembled at Entropy has the potential to continue to lead the industry well into the future, assuming we capitalize appropriately and seize the opportunities in front of us right now. This brings us back to a couple of Advantage slides. Advantage is already one of the lowest emissions energy producers, oil and gas energy producers, in the basin.
On a net basis in 2018 and 2019, we were just over zero tons per BOE, thanks to carbon offsets we've been receiving for our pre-combustion carbon capture scheme. When you relate that to the amount of emissions intensity for energy per BOE, that's the full life cycle emissions of three boxes. About community. Advantage has a long history of contributing to the community, not just through employment, but also through part-time jobs, services, operating activities, and contributing to social and environmental causes. With that, well, that'll wrap up our portion of the corporate presentations. I'll hand the floor back to, I guess, Ron.
Okay. Thank you, Mike and Andy. That was very informative. I think that all our shareholders would appreciate the material that you provided today. We will take a moment or two to see if there's any further questions or if there are any questions.