Good morning, everybody. Welcome to Paramount's 2024 annual general meeting of shareholders. My name is Jim Riddell, President, CEO, and Chairman of Paramount, and I'll be chairing today's meeting. We'll first hold the formal part of the meeting, and then, I'll be privileged to give you an update on your, on your company. So on with the formal part of the business of the meeting. I'll call the meeting to order. I'd like to ask, Mark Franko, our corporate secretary, to act as secretary of the meeting, and Bart Wingerak of Odyssey Trust Company to act as scrutineer. A notice of meeting and information circular dated March 18th was sent to all shareholders in advance of the meeting. I direct that notice of the meeting be attached to the minutes of the meeting. I have been advised by the scrutineer that a quorum of shareholders is present.
I direct that the scrutineer's report on quorum be attached to the meeting, to the minutes of the meeting. That's, that's here just for what it's worth. Due notice having been given and quorum being present, I declare the meeting to be regularly called and properly constituted for the transaction of business. Items of business and voting. There are five items of business to be considered at today's meeting: presentation of the 2023 financial statements, the election of directors, appointment of auditors, approval of the cash bonus and restricted share unit plan, and approval of unallocated options under the stock option plan. No vote is required with respect to the financial statements. Voting on the appointment of auditors will be shown by hands, by a show of hands. Voting on the other matters will be by way of ballot.
We have received all proxy voting results for today's resolutions in advance of the meeting. If you have already voted by proxy, there's no need to vote again by show of hands or ballot. The scrutineer provided the ballots to registered shareholders and appointed proxy holders as they entered the room. These ballots were to be completed and returned to the scrutineer prior to the commencement of the meeting. If any registered shareholder or appointed proxy holder did not receive a ballot, please raise your hand so that the scrutineer can provide you with one now. Okay. Seeing none, presentation of the financial statements. As the first item of business, I placed before the meeting that's me doing that here. Paramount's 2023 audited financial statements. A copy of the financial statements has been mailed to the registered shareholders and all beneficial shareholders who have requested one.
Extra copies of the financial statements are available on the table by the entrance. Election of directors. The next item of business is the election of directors. In accordance with Paramount's articles, the directors have fixed the numbers of directors to be elected at this meeting at eight. May I have the nominations?
Mr. Chairman. My name is Paul Kinvig, and I am a duly appointed proxy holder. I nominate for director the eight persons listed in the information circular, being James Riddell, James Bell, Wilfred Gobert, Dirk Jungé, Kim Lynch Proctor, Keith MacLeod, Jill McAuley, and Susan Riddell Rose.
Thank you, Paul. I can confirm that no other nominations were received. Are there any questions on this motion? Voting on this matter will be by ballot. Please raise your hand if you have a ballot that you have not yet submitted to the scrutineer. The scrutineer has provided their voting results, and I declare that the persons nominated have been duly elected as directors of Paramount to hold office until the close of the next annual general meeting of shareholders. The next item of business is the appointment of auditors. May I have a motion to reappoint Ernst & Young LLP as auditor?
Mr. Chairman, my name is Spencer Sinclair, and I am a duly appointed proxy holder. I move that Ernst & Young LLP be appointed as the auditor of Paramount to hold office until the close of the next annual meeting of shareholders.
I second the motion.
Are there any questions on this motion? All those in favor of the motion, please raise your hand. Contrary? I declare the motion carried. Approval of the cash bonus and restricted share unit plan. The next item of business is the approval of the shareholders' sorry, the company's cash bonus and restricted share unit plan. The required approval for this item is a simple majority of the votes cast. May I have a motion to approve the cash bonus and restricted share unit plan?
Mr. Chairman, my name is Bernie Lee, and I am a registered shareholder. I move that the resolution approving the cash bonus and restricted share unit plan as set out in the information circular be approved.
I second the motion.
Voting on this matter will be by ballot. Please raise your hand if you have a ballot that you have not yet submitted to the scrutineer. The scrutineer has provided their voting results, and I declare the vote the motion carried. The final item of business is the approval of the unallocated options under the company's stock option plan. The required approval for this item is a simple majority of the votes cast. May I have a motion to approve the unallocated options under the stock option plan?
I move that the resolutions approving the unallocated options as set out in the information circular be approved.
I second the motion.
Are there any questions on this motion? Voting on this matter will be by ballot. Please raise your hand if you have a ballot that you have not yet submitted to the scrutineer. The scrutineer has provided their voting results, and I declare this motion carried as well. Is there any other business to discuss at today's meeting? Seeing none, I'll now entertain a motion to end the meeting.
I move that this meeting be concluded.
I second the motion.
Any objections? No, then I'll declare the meeting ended. Detailed voting results on all matters considered today will be disclosed in a press release and a voting report to be filed after the meeting. Okay. Thanks for that. Okay. So, yes, now my privilege to give you an update on Paramount's resources and tell you how your company's doing. So, as usual, I ask that everybody keep in mind our future-oriented disclosure information statement as it applies to everything that I'm going to say. So I guess as an overview of our Q1 that we released this morning before markets opened, I will maybe give you some of the highlights as I see them and kinda give you an update of where you're at.
So, the company, as you know, just celebrated our 45th anniversary last December, making us still one of the longest-standing independent companies, if not the longest, in Canada. Market cap of the company had 146.2 million shares outstanding, so the market cap and the enterprise value are both about CAD 4.5 billion. The most recent operating results, so in Q1, we averaged 100,977 BOEs per day, 47% liquids, and that was relative to consensus estimate from analysts that follow the company to have been 98,249, so about 3% higher than what expectations were for production. Our adjusted funds flow was CAD 226 million or CAD 1.56 per basic share versus consensus of about CAD 204 million or 11% higher than what expectations were for that period, generally affected by positive production variance and slightly lower costs offset by lower natural gas pricing.
CapEx was CAD 214 million, that compared to consensus of CAD 225 million. Dollars of CapEx are about 5% less. That doesn't our expectation is that we will still, that, cost will still come in as we had expected prior, and there's just a variance in the timing of those expenditures over the quarter end. ARO spending was CAD 17 million. We still expect to spend CAD 40 million for the year. We completed 26 additional abandonments through the quarter and reclaimed 17 new sites, through the quarter. Free cash flow was CAD -10 million versus consensus of CAD -31 million, and that was really a function of the higher production and cash flow offset by and then also, lower CapEx. Net debt, we're still undrawn on our, our billion-dollar revolver, so, have lots of financial flexibility. We have net debt, including working capital deficiency.
CAD 68.9 million, so approximately 70 million, as you see on the slide there. After the quarter ended, we did monetize some of our NuVista stake, which, that CAD 75 million that we brought in just after the quarter end would essentially leave us debt-free. In addition to that, we still have balance sheet items that are liquid and private investments that total over, well, CAD 569 million at quarter end. Again, net of the CAD 75 million that we executed after quarter end, that would be reduced to just under CAD 500 million of additional value on the balance sheet, in excess of the debt-free balance sheet. Then another highlight I thought was that we increased our dividend in the quarter. We increased it from CAD 0.125 per share per month to CAD 0.15, so a 20% bump in the base dividend.
motivation to do that is really seeing the Duvernay plays that we've been pursuing, being relatively de-risked in our view now and our five-year and I guess the company having a lot of confidence in its five-year plan as we've de-risked that future growth. And a bit of a return of proceeds. We did sell CAD 47 million of properties in the Q1, CAD 75 million right after quarter end, and a little bit of giving back of some of that excess one-time cash received in the form of an increase in the base dividend. And yeah, just a reflection of where we see the company going as we move into the second half of this year and into 2025. We bring on our Willesden Green expansions and Duvernay expansions at Kaybob.
We see a very bright future for our company, and this increase in the dividend moves us up to just over 5% total yield relative to where our share price trades today. Updated guidance. We essentially left our production guidance unchanged at 100,000-106,000 BOEs a day, left our CapEx guidance the same at CAD 830 million-CAD 890 million as a full-year CapEx. Again, ARO's unchanged at CAD 40 million. We did adjust our free cash flow estimate to CAD 205 million, which really just incorporates the actuals of Q1 from the prior estimate.
You can see, if you look at the right-hand, bottom right-hand corner, that panel really shows the amount of growth that we're seeing in-year, even within 2024, where the first half of the year, we see 96,000-100,000 BOEs a day of production guidance, and then in the second half, growing up to 1,010 sorry, my eyes are getting it's a little too far for me to see. 104-112 is the actual range, to again get to that annual guidance of 100,000-106,000 BOEs a day. Yeah, that's I, I think really all I wanted to say. I guess the other main thing to point out on the slide is the middle panel, and that's just showing how on our CapEx, the CAD 830 million-CAD 860 million at the midpoint.
Half of that capital is being spent to maintain our existing production, so almost, well, just over 50% goes to maintaining that production level. The other half of our CapEx program is oriented towards in-year and future growth in the next few years past that. When you look at our cash flow that we do generate, I wanted to be clear on what our priorities are. And so I just look at the bottom right-hand chart here, and this just shows that priority of first and foremost, taking every dollar we make and making sure that we replace the production that we've produced in the period. The next priority is to pay that dividend.
So that base dividend, as we increase it, we consider it to be super important to maintain it and continue to grow it in the future. So you can see the levels in which, so the WTI price level to maintain the base production level consistent year-over-year, as well as pay that cash dividend, is $45 WTI, which is relative to current price today of $79. Shows you how much headroom there still is in order to maintain that priority. The rest is growth on top of that. And so our current budget gets funded up into that $80 range now. And then we did bring in one-time proceeds on top of that, which is maintaining that balance sheet at basically a debt-free position. So that's how our priorities do cascade.
Any additional cash flow that we do generate in year and in the five-year plan is first, on top of the dividend being allocated to additional growth opportunities, whether they be acquisitions and opportunistic opportunities to add organic opportunities into the portfolio or new properties, share repurchases. We do have that as an option. Special additional dividends on top of the base are an option. So our reserves, first time I get to address all the shareholders and tell you what we did on a reserve basis year-over-year at the end of 2023. So you can see the volume balances in the top left-hand corner on the pie chart just show the PDP volumes growing to 165 million BOEs, total proved 415 million BOEs, and 761 million BOEs 2P or proved plus probable.
That's net of a significant disposition that we made in 2023. If you remember, in January of 2023, we did sell a significant amount of reserves in our Kaybob area to Crescent Point for CAD 375 million. So we sold 8 million barrels of PDP, 36 million barrels of 2P or sorry, total proved or 60 million barrels of 2P reserves. So these balances are all net of that. And then you can see the net present value is grown to total proved CAD 4.5 billion, which is similar to what our enterprise value is just under CAD 8 billion, which on a 2P basis would be significantly in excess of what our current enterprise value is based on current market prices. The one I really like to focus on here is not so much the finding cost per BOE, but the recycle ratio.
So, if you look at our results on last year or rolling three-year average, I like to look at the value of the netback of the reserves that we're selling relative to the amount that we're paying to replace them. And that's what we call recycle ratio. So it's essentially, what did every barrel cost to add, and what did every barrel out the door generate in cash flow? And the division of the two gives you a recycle ratio. So, it's essentially what happens to every dollar that we allocate in capital, and what kind of value does it generate? And on a company basis, I'll just pick the 2P numbers. It's 2.2 on a total company basis and in the Grande Prairie area.
Just the PDP alone in Grande Prairie, you can see every dollar we're allocating into those activities is generating CAD 3.2 back in value. So what's our game plan? What are we doing? So we look at I guess the forward plan for the company is growing these additional blocks of incremental value in the different areas up to a plateau rate where it starts to generate free cash flow and then take that free cash flow that's being generated and return it to shareholders as well as reinvest it into additional future growth. So we look at the top left-hand is what we've achieved in our Grande Prairie area that's showing what we did do. So we did grow from nothing up to kinda 70,000-80,000 BOEs a day as a free cash flow generating entity.
It is now generating hundreds of millions CAD of free cash flow back into the company to be allocated to shareholders and reinvested into additional growth. We're taking that same model, and we're doing it, we're trying to duplicate it again in Kaybob and also in Willesden Green . So the five-year plan, just as an example, is showing the Willesden Green production forecast that we're expecting to follow, going from essentially zero up to that 50,000-60,000 BOEs a day as a fully developed entity and be able to, you know, reach that plateau level and achieve that free cash flow generation and maintain it for 20+ years is really the model. Then, a couple other things just to mention on this slide are the five-year outlook.
So just within our five-year plan, we see ourselves generating CAD 2.8 billion of free cash flow that's over and above all of the money that goes into or all the capital that goes into maintaining and paying for that growth, includes all of our ARO. That's obviously what we pay the dividend out of. So net of the dividend in that five-year plan, it would be, you know, CAD 1.5 billion of incremental free cash flow that's still unallocated to potentially be directed to other opportunities like acquisitions and things like more accelerated growth, things like that. I do also like to point out that we do have a tax horizon that's pushed out at current prices into the 2027 or 2028 timeframe. So we don't see ourselves paying any current tax.
You know, I'd be remiss if I didn't point out that we didn't come by that by having spent more than we had generated in value. We mostly captured that additional tax pool balance and extended that tax horizon out when we did the Apache transaction back in 2017. So that's worked out to be a very strategic decision as we've seen most of industry move into paying current taxes. Paramount still has a good tax horizon, pushed out, for a number of years so that we can maximize the amount of cash that we have available to return to shareholders and add additional growth. So our strategy this is so I do like to you know make sure you're clear on what our strategy is and continues to be.
So maybe just focusing on the right-hand slide. What Paramount thinks its core advantage is their ability to find things early, inexpensively that have significant opportunity to create value. So our teams spend a lot of time looking, you know, trying to get to places early, use technology on plays that are understood, and create, you know, capture opportunities that technology might enhance and do it in a way that allows us to generate a very strong return on capital employed by generally capturing that opportunity inexpensively first. And then try and delineate it, understand the size and scale of that opportunity, delineate it, de-risk it, and then start to develop it and then, you know, progress it through time to a mature state where it's generating a free cash flow.
The idea has been to try and capture these things and then plan for a longer plateau period than most industry, in my view, does. And so we think we maybe don't maximize net present value by doing that. You know, if you did that, you would probably accelerate it to a shorter timeframe. So you would probably ramp it up to an even higher volume and do it for a shorter period of time to get it faster. Our view has been to have a 15-20-year time horizon for reaching these plateaus and then generating free cash flow over that period. And the middle one is just to show, you know, the way we think about allocating capital.
So we're definitely trying to generate large ideas and then allocate that capital to the ones that generate the highest rate of return first. So, you can see that we're absolutely generating the highest rate of return at Karr. And so our first dollar of capital gets redirected to Karr to the extent we can. And then we move into the next tier of opportunities as the rate of return is maybe lower, but and so it gets deferred to being second and third and fourth. And then just the size of those balls on the middle slide are just the size of that opportunity. So when we take all of the locations and the NPV per location, you just get a feel of how big each of them are relative to each other.
And so you can see the just the one I'd point to is the Willesden Green . So we have a very significant amount of opportunity there. And we are working hard to try and increase the rate of return for every dollar that we spend by maximizing the wells. We spend a lot of time trying to drive the cost down and try and maximize the well results so that we can generate the highest rate of return possible and improve it constantly. But you can just see the sheer size and scale of that Willesden Green opportunity relative to the other balls is material. Okay. So just some area updates and what I think are highlights for each of them.
So it won't necessarily correspond to the text that you see on the slides here, but the ones I think are, so in the Grande Prairie area, the main thing that we've been trying to do there, so we produced 67,163 BOEs a day as average in the Q1. That was less than what the production capability of the facilities is in that area. And, you know, we found that as we came into the beginning of the year, we had a significant amount of downtime in the area in January due to cold weather. And then we also found that some of the forecasts that we had made on some of the wells were not quite as good as or proved to be a little optimistic.
And we didn't have available the deliverability from the legacy wells that we had drilled prior, mostly because we'd been deferring some of the operating workover capital that should have been spent to be able to maintain it. So we have been working very hard to redirect our attention into maximizing that base production. And we, you know, I can report that we've had some very encouraging results on that. And we started to see the legacy base production start to perform. So that's been a priority for us. Second is just some of the new well results at CAR.
We brought on our latest, 7 - 33 North pad, 4-well pad, had an average IP for the 4 wells, IP 30 of 1,695 BOEs a day, 4.8 million a day, and 896 barrels a day or 187 barrels a million. I can tell you those are exceptional results. We've also fracked second pad 4-well pad at 15- 24. And that pad is in the process of being brought on stream now. Highlights at Wapiti, the latest 8- 15 pad. So that would be the pad that's the furthest south on the Wapiti property. Had, was brought on in the quarter, had an IP 30 of 1,164 BOEs a day, 2.7 million a day, and 708 barrels a day of NGLs or 259 barrels a million.
We've also got an additional eight well pad drilled at 14-5 that we expect to complete in the Q2. I'd say overall, Wapiti, we found that we actually have way more deliverability than we have capability to produce it through the facilities. It's actually a bit of a so we actually have a number of wells shut in there even waiting for production space. And so we've actually slowed our activity slightly in the Wapiti area and taken some of that capital and accelerated activities generally in the Duvernay and Kaybob and Willesden Green . We won't see that in 2024, but we will start to see it in 2025. One other highlight here that we're looking forward to is we've been working on building out the new node. We call it the Heritage Node. It's on the westernmost side of the Wapiti property.
And that's scheduled to come on stream at the beginning of the second half of 2024. And that will bring some incremental production into the Wapiti facility, incremental capacity to produce and new production. We have a new seven well pad that we just finished released the last well on. And we'll start to complete that and have it completed and tied in, ready to produce with the startup of the new facility at the Heritage Node. Kaybob North, in the Duvernay, we've had some, I'd say exceptional results. So we were excited to be able to disclose the IPs of the next pad that we've drilled in the Kaybob area at 15-7 North. So that'd be the of the two sets of green stars that you see on the map there.
It'd be the one on the west side of the map. IP 30 that we released was 1,271 BOEs a day, 1.8 million a day, and 980 barrels a day. So these are very high liquids ratio wells. We've also finished the completion activities on the next pad on the easternmost side of that map that you see, 5-well pad at 4-13 North, against the edge of our block of land there. And we've just done the 48-hour cleanup on all 5 of those wells. And I can tell you that those results are exceptional from what we've seen so far. And we expect to be able to provide. I expect to have those tied in in the next few weeks and then be able to hopefully report IP 30s by the time we report our Q2.
Willesden Green , the highlights here, as you would recall, we brought on our Leafland plants at the end of 2023. The startup of the expansion there added 6,000 barrels a day of liquids handling capacity to the plants. We also, coincident with that, brought on really our first real commercial 4-well pad. We've previously released the IPs on those wells, but they're again exceptional wells. We were able to iron out all of the startup issues with that new plant expansion and have had very good performance out of that facility. The other update is that we are well underway in building out the new plant that we've been speaking to in the south part of the Willesden Green area.
So that again is a 150 million a day plant to be built in three stages of, sorry, 150 million a day and 30,000 barrels a day to be built in three stages of 50 and 10,000 each, 50 million a day and 10,000 barrels a day of stabilization in each case. So, I guess activity updates, we have received all the permits that we're required to have in order to be able to build that plant out. We did clear and start to grade the physical location. It's a very significant site, I think it's almost an 80-acre site. So it's quite a big site.
We expect to be driving piles in the latter part of this year and then start to set all the major equipment that we've been procuring and having built in different shops across the province and other to start to have all those pieces in place and then do the mechanical and electrical starting in the Q1 of next year and have a startup in the Q3 of 2025. We've also, as I mentioned, by deferring some of the Wapiti spending, we've moved up some of the spending on the new wells that will fill this plant. So we wanted to try and de-risk having the 15-ish wells that we wanna have available to us to start up this plant and fill it up on day one.
And so, we've elected to keep a rig operating here and start to drill some of those wells earlier instead of starting up at the beginning of 2025 and risk not having them done quite in time for when the plant is started up. So, all in, I think, a super positive story. And just to keep in mind, we're spending over CAD 150 million of the CAD 860 million just on that plant construction alone. So it is a material part of our CapEx spend this year. Okay. And then, as I usually like to do, I like to point out some of the other strategic investments and other long-term investments that we hold within Paramount.
And, again, at quarter end, CAD 569 million of kinda mark-to-market value that we have or book value that we have on the investments in public securities, private securities. For the most part, the public securities are NuVista. We own, now after the sale, 31.3 million shares of NuVista, which are worth about CAD 375 million in current market value. The Sultran investment, which is a private co in a logistics business on the west coast of Canada. And then our Fox Drilling subsidiary. We own essentially 3 Super Spec triple-size rigs that operate principally for Paramount. And they would represent almost 10% of the Super Spec triple-size fleet in Canada for perspective.
So it's and it does truly add value to Paramount by holding that as it does allow us access to the top crews and top equipment and allows us to drill cheaper, faster, better in all of the areas that we operate in when we use Fox rigs. Some of the other things, we have long-term significant gas resource in the Liard and Horn River Basin. We think that is an exceptional play for the future and is a material resource that is worthy of mention. We also have significant resources in the cold flow and thermal opportunities in northeast Alberta in the oil sands area, generally speaking. Those are held within our Cavalier Energy entity. And we have an operating team that focuses on that on a daily basis. Yeah. So I so again like to mention that.
I think to summarize, you know, 45 years of some pretty fantastic results. We've definitely had ups and downs through that. But I think that insider ownership has allowed us to take a longer-term approach all the time to have a slightly differentiated strategy that lets us buy things early, inexpensively, and realize on them in a way that not everybody does. We do have a very good near-term 5-year plan, 15- and 20-year plan in generating free cash flow off those existing developments that I spoke to, the Grande Prairie, Kaybob, and Willesden Green assets, an exceptional balance sheet for us to be able to continue to look at opportunistic opportunities to acquire other assets in and around what we're doing. Where we have a strategic advantage generally is where we're looking.
and, you know, to be able to essentially look at a billion-dollar acquisition and know you've pre-financed that with the undrawn line that we have is a very exceptional place to be. And, again, the monthly dividend, you know, generating a solid return back to shareholders as we build through this growth and continue to reward and grow with our shareholders. So, with that, I'd be happy to take any questions that you might have from the floor, as well as the opportunity for anyone online that wants to send one in. We'll also capture that and try and answer it. So I'll turn it over to—I don't know if we have a microphone or if there's a question, I'll—oh, there is a mic. Oh, there is a microphone.
If you have a question, maybe we'll get you to use that if you don't mind. Then people online can hear the question. And then, we'll also check online for questions. Okay. Nothing in person. Oh, sorry. What's our outlook on hedging some of our production going forward here just for commodity pricing? Yeah. Actually, that's good. I'm glad you asked that question. So, I didn't actually touch on that, but we did in the quarter add some material hedging on the liquid side. So we hedged just under 15,000 barrels a day or 4.5 million barrels over the next 12 months of future production. We hedged it at in Canadian dollars at, I think it's about CAD 111.2. I know the exact individual contracts. I just trying to remember the summary there.
But actually, if we were to do a mark-to-market today with where prices have been even in the last few days, I think the mark-to-market on that oil hedge would be in the order of $35 million-$40 million. So, we have done that. That's about a third of our liquids production that we expect to produce in the next 12 months. We have done some hedging on basis on, so we do have some basis for oil, $265 a barrel on Light Sweet that we put in place. We also hedge some of the gas differentials between the NYMEX price and the AECO price, around $0.93. And current is about $1.30. So those are in the money by $ a few million as well. We haven't gone as far as so we haven't done any gas hedging.
Current gas prices are quite low. So hedging at those values is not super attractive. When we do look out to 2025, 2026, 2027, the futures market is quite, quite strong. So the opposite of oil where we see a futures price that's lower than today, on the gas side, it's actually quite a bit higher. You can hedge 2025, 2026, 2027, or 2028. I'm gonna say 2026, 2027 and 2028, you can hedge at about $4.50 Canadian sorry, U.S. NYMEX price, which I know Paramount with our opportunities, we can make a lot of money at those prices. Hedging out that far is, is does carry a lot of risk. If you're wrong, you can lose a lot of money if you're on the wrong side of that. So we haven't done any yet, but I can say we are looking quite closely at that, that opportunity to hedge some of that. Okay. If there's no more questions in-house and none online, that's, that's great. You let me off easy. So appreciate that. And thank you very much for attending.