Hello, and welcome to the 2025 Annual General Meeting of Shareholders of the Tenaz Energy Corp. Please note that this meeting is being recorded. Registered shareholders and proxy holders may submit questions via the Message tab at the top left of your screen by typing your message, then clicking the Send icon to the right of the message box. It is my pleasure to introduce Marty Proctor, Chair of the Board of Directors of Tenaz. Mr. Proctor, the floor is yours.
Good morning, ladies and gentlemen. I am Marty Proctor, the Chair of the Board of Directors of Tenaz Energy Corp, and I now call the meeting to order. Welcome to the 2025 annual general meeting of shareholders of Tenaz. Today's meeting is being held virtually by way of live webcast, accessible to all our shareholders who have followed the procedures described in the management information circular for this meeting or information circular for ease of reference. The virtual meeting format alleviates the logistical and travel expenses of in-person and hybrid meetings and is a more sustainable and environmentally conscious alternative to an in-person meeting.
I would like to welcome all shareholders, proxy holders, and guests at today's meeting, including the other Directors of the company, Anna Alderson, John Chambers, Varinia Radu, Mark Rollins, and Anthony Marino, a Director and President and CEO of the company, as well as the following officers of Tenaz. Jenson Tan, Chief Operating Officer, Jamie Gagner, VP General Counsel, David Burghardt, Senior VP Investor Relations, Jennifer Russel-Houston, VP Geoscience, Brian Giang, VP Finance, and Adam Iwanicki, VP of Marketing.
In accordance with the company's bylaws, I will act as chairman of the meeting. Jamie Gagner will act as Secretary of the meeting, and Bart Wingerak of Odyssey Trust Company will act as scrutineer. I would like to take a moment to comment on the meeting procedures. Voting on all matters at today's meeting will be conducted by electronic ballot.
Registered shareholders and duly appointed proxy holders will be able to vote on each item of business through the electronic meeting platform. Polling is now open for the items of business to be voted upon at this meeting. If you have not already voted prior to the meeting, please vote now. If you previously voted, you do not need to vote again.
The final voting results will be announced and filed by the company following today's meeting. Questions in respect of an item of business may be submitted by a registered shareholder or duly appointed proxy holder through the meeting platform. A corporate presentation will follow the formal portion of this meeting, and questions relating to the company's business and operations will be considered at that time.
For efficiency, we have arranged for Jenson Tan and Adam Iwanicki, officers and shareholders of the company, to move and second the motions at today's meeting. Notice of this meeting and the accompanying information circular and form of proxy were mailed on May 2, 2025 to shareholders of record on April 24, 2025. A quorum for the transaction of business at today's meeting is at least two persons present in person, holding or representing by proxy in aggregate, not less than 5% of the outstanding common shares entitled to vote at the meeting.
According to Tenaz's By-Law Number One, a person electronically participating in today's meeting is deemed to be present at the meeting. I am advised by the scrutineer that a quorum is present, notice having been properly given, I declare the meeting properly called and constituted for the transaction of business.
The first item of business is to receive the audited consolidated financial statements of the company for the financial year ended December 31st, 2024, and the auditor's report thereon. I would ask that questions on the financial statements be deferred until the formal business of the meeting has concluded. We will now move to the items of business to be voted upon.
The polls remain open for voting in respect of each item of business. You may vote at any time until the last item of business is completed, at which time the polls will close. As a reminder, if you have not already voted, please vote now. If you previously voted, you do not need to vote again. The next item of business is to fix the number of directors to be elected at the meeting at six. May I have a motion to fix the number of directors to be elected?
My name is Jenson Tan. I am a shareholder and a representative of Tenaz Energy Corp. I move that the number of directors at Tenaz Energy Corp to be elected at the meeting be fixed at six.
Will someone second the motion?
My name is Adam Iwanicki. I am a shareholder and a representative of Tenaz Energy Corp. I second the motion.
Is there any discussion on this matter? As there is no discussion on this matter, we will proceed to the next item of business. The next item of business is the election of directors for the ensuing year. The company's advanced notice by-law fixes a deadline by which shareholders must submit director nominations to Tenaz prior to an annual meeting of shareholders being not less than 30 days prior to the date of the meeting.
Tenaz did not receive any shareholder director nominations in respect of this meeting. Accordingly, the director nominees for election at the meeting are those named in the information circular for this meeting. Information regarding the director nominees was included in the information circular. Each nominee has indicated their willingness to serve as a director.
The board has adopted a majority voting policy that requires a director nominee that is not elected at this meeting, by at least a majority of the votes cast, to submit his or her resignation for the board's consideration. The board is then required to determine whether or not to accept the resignation within 90 days of the meeting. The majority voting policy provides that a resignation shall be accepted, absent exceptional circumstances. May I have a motion to nominate each of the directors of Tenaz Energy Corp specified in the information circular?
I nominate each person specified in the information circular for the meeting, namely Marty Proctor, Anna Alderson, John Chambers, Varinia Radu, Mark Rollins, and Anthony Marino, be elected as a director of Tenaz Energy Corp for the ensuing year.
Will someone second the motion?
I second the motion.
Is there any discussion on this matter? As there is no discussion on this matter, we will proceed to the next item of business. The next item of business is to appoint Deloitte LLP as auditors of the company for the ensuing year and to authorize the directors to fix their remuneration. May I have a motion to appoint Deloitte as the company's auditors?
I move that Deloitte LLP be appointed as auditors of the company to hold office until the next annual meeting of shareholders, and that the board of directors of the company be authorized to fix their remuneration.
Will someone second the motion?
I second the motion.
Is there any discussion on this matter? As there is no discussion on this matter, we will proceed to the next item of business. The next item of business is the consideration of an ordinary resolution to approve all unallocated awards under the Tenaz Incentive Plan. A summary of the incentive plan, together with information relating to the approval of the unallocated awards, is included in the section of the information circular for this item of business and Appendix B of the information circular. The full text of the resolution for approval at today's meeting is set out on page 12 of the information circular.
As stated in the information circular, since the number of common shares issuable from treasury under the incentive plan is based on a fixed percentage rather than a fixed maximum number of shares, the Toronto Stock Exchange requires a majority of the board and shareholders to approve every three years all unallocated awards under the plan. The board has approved all unallocated awards under the incentive plan and recommended that shareholders vote for the approval of all unallocated awards under the plan. To be effective, the resolution approving all unallocated awards under the Tenaz Incentive Plan must be passed by a majority of votes cast by the shareholders present in person or represented by proxy at this meeting. May I have a motion to approve all unallocated awards under the Tenaz Incentive Plan?
I move that the ordinary resolution to approve all unallocated awards under the Tenaz Incentive Plan, the full text of which is set out on page 12 of the information circular for the meeting, be approved and the approval be effective until May 29, 2028.
I second the motion.
Is there any discussion on this matter? I am advised there is no discussion on this matter. If you haven't already voted on the items of business, please do so now through the meeting platform, as voting will close momentarily. Voting is now closed on all items of business. As mentioned previously, the detailed voting results will be announced by the company following today's meeting. The scrutineers have provided their preliminary report of the results of voting at today's meeting, and I confirm as follows. In respect of fixing the number of directors to be elected at six, greater than a majority of votes cast have been voted in favor of this resolution and therefore I declare the motion carried.
In respect of electing each director nominee specified in the information circular as a director of Tenaz Energy Corp for the ensuing year, greater than a majority of the votes cast have been voted in favor of the election of each director and therefore I declare the motion carried and each nominee for election as a director has been elected. In respect of the appointment of Deloitte LLP as auditors of the company, greater than a majority of the votes cast have been voted in favor of the appointment of Deloitte LLP as auditors, and therefore I declare the motion carried. In respect of the approval of all unallocated awards under the Tenaz Incentive Plan, greater than a majority of the votes cast have been voted in favor of this resolution, and therefore I declare the motion carried. Is there any other business to be brought before this meeting?
Since there is no further business, may I have a motion to conclude the meeting?
I move that this meeting be concluded.
I declare the formal business of the meeting concluded. Thank you for your attendance. I will now ask Anthony Marino, President and Chief Executive Officer of Tenaz, to provide a brief business update.
Thank you, Marty, and thank you to our shareholders for attending. We appreciate your support and the vote of confidence on the ballot measures. I'm gonna give a very short presentation, mainly talk about 2024 and a preview of 2025, a little bit beyond that as well. I'll also briefly go back over our business model. As always, we ask you to note our investment advisory. Starting with 2024, certainly the main event for the year was negotiating the NOBV transaction. Project took two years to bring to the point of announcement. We had about an eight and half month period to get to closing after the announcement.
We closed at the beginning of May, a couple of months ahead of schedule. We're operating now, and I'd say so far, so good. Thank you to Kjell and NAM and all of our employees that worked so hard on that project for making this happen. Very important event, of course, for the company. We successfully issued a five-year, two-and-a-half year non-call set of Canadian notes. It's our first foray into the debt market, and though we didn't end up using it for NOBV consideration, it gives us a great deal of dry powder for other potential transactions. Thank you to National Bank and our creditors for their involvement in this issue.
We continued our share buyback program, bringing our cumulative purchases to date, to 2.3 million shares at an average cost of CAD 3.74 a share, when we include the purchases so far in 2025 on top of the ones that we list here at the end of 2024. Very importantly, we strengthened our organization significantly. In our officer group, we added Brian Giang as VP Finance, Adam Iwanicki as VP Marketing, Jamie Gagner as General Counsel and Vice President, and Jenson Tan as Chief Operating Officer. All of these officer additions are very important. But even more importantly for us, was the joining of forces with the NAM Offshore B.V. team in both offshore Netherlands and in the Assen office.
NOBV has now been renamed, TEN or Tenaz Energy Netherlands B.V. Over the long run, our people are going to be the dominant factor in our portions, and being with this team makes me confident that we're going to be successful. In Canada, we made a small gas plant acquisition, and we've increased throughput there already, by about 2/3 from the original level when we got it. In this transaction, we got some associated leasehold and recognized redevelopment opportunity, in two separate pools that came with the acquisition, one in the Ellerslie and another in the Glauconitic formation. That allowed us to start a multilateral drilling program, so multilaterals, horizontals without any fracturing. It's that unfract multilateral program that has been the basis for really, our entire 2024 and 2025 organic growth in Canada.
We still have substantial inventory in the Rex formation, also in the Sparky zone, using fracked horizontals, and there will be some remaining unfract multilateral drilling. I think we're in good shape with respect to inventory, again, having shifted for the time being to the multilaterals. Keep in mind that our reserve book at year-end 2024 included only Canada and the old Netherlands non-op assets that we had. We don't record NOBV, now TEN, within our ownership until closing, so we'll hit the year-end 25 reserve book. Even without including NOBV, we still recorded over a 300% 2P reserve replacement, and did that at over a two times recycle ratio. This is based on an independent report by McDaniel.
Of course, we continue to advance our transaction pipeline in our main areas of interest, first of all in Europe and secondarily in Latin America. That's 2024 in review. Let's go back further in time and take a look at the company's record since the recap of Altura in the third quarter of 2021. As shown in these various panels, production is up about 13-fold, and let me just explain how the pro forma bars work here for 2025. Again, in our guidance numbers, when we're doing our actual production accounting, we only count an acquired asset after closing. Of course, that's May 1 for the NOBV assets, the main piece of the company today.
In this plot, pro forma, we are showing how it would have looked had we owned NOBV at the beginning of 2025, so as of Jan 1, 2025. With that, production would be up 13-fold on that type of look versus where we were at at the time of the Altura recap. On the lower left, it's the same kind of presentation for pro forma FFO, again, counting NOBV as of the beginning of 2025. In that case, FFO would be up about 40-fold since the recap. On the upper right, really a pro forma look that includes NOBV in the reserve value at the end of 2024, we'd be up about 24-fold. Again, that's both time series is based on independent reports by McDaniel.
We did commission NAM Offshore B.V. reports at the time we made the acquisition. We updated at year-end, although it doesn't go into the official reserve book, of course, until closing. On the lower right, we show the share price performance. We've been very fortunate to have about a 9x increase in share price from the reverse split adjusted CAD 1.80 that we had at the time that we recapped. We see it as a record of growth and value addition, and we want to thank our employees, our suppliers, and our counterparties for their work with us in making this possible. Next, I'll briefly review our capital structure as of Q1. At Q1, we have nearly CAD 175 million in cash.
That includes restricted cash. We also have an undrawn bank line with NB. When you take into account the long-term notes that we issued and our working capital position, it brings us basically back to balance in terms of net debt. A very slight negative net debt position. This at the end of Q1 before any of the cash flows come in from NOBV. On the lower left, we have the Canadian high-yield note issue that we discussed earlier. On the upper right, just a reporting of our share position, basic shares, and also the dilutives that have currently been issued.
On the lower right, we take that reserve value pro forma that we talked about on the previous slide and convert it to a per share number, show the time series since the recap up about 24-fold. Next, let's take a look at 25 forward. Some of this activity, of course, has already occurred. We've already drilled 2.4 net wells, three gross in Canada. All three of the wells produced oil and gas. I would say two of the three were very successful. Basically 1.9 net out of the 2.4 very successful wells. That allowed continued organic growth in Canada on not a whole lot of capital investment.
Identifying and executing this type of capital efficient reinvestment is an example of what we think Tenaz can bring to the table in other assets, such as NAM Offshore B.V. In Netherlands, a non-operated drilling project is planned for the end of 2025. That's the L10 Malachite Well that is listed here. We have a 21% working interest. In our operated assets, offshore Netherlands, we aspire to begin barge workover activity late in the summer, and drilling activity in the fourth quarter of the year. We'll start with some earlier well work activities, primarily using our walk-to-work vessel.
Overall, the capital program that we have intended, CAD 55 million-CAD 61 million for the period in May through December, will be about three-quarters well work and one quarter facility projects. Over the long term, what we address on the bottom part of this slide, really only about Dutch North Sea reinvestments that are available. We've got a whole range of projects. We've got a number of facility projects, mainly compression, but other vessel and piping redesign that we think will allow us to produce at higher rates and pull these fields down to lower abandonment pressures. We'll be continuing the workover program, as I mentioned earlier.
It's really gonna be a more or less a continuous, multi-year program, using the vessel and the barge, as we discussed, and continuing the very high-quality asset integrity work that NAM had already done. We'll have a tie-in of unproduced to date, unproduced discoveries. One example of that is the J9 Well, and that will in turn, we believe, with the existing pipelines that'll be established, allow follow-up drilling in some other prospects and pools that we have. We will have a drilling program, again, as I mentioned earlier, from existing platforms, using existing well slots, and hope to start this late in the year.
I would see us running a continuous program after that would probably span all of 2026, and, you know, into the future, on an intermittent basis, over, we hope, a long number of years, continuing the development of the Netherlands offshore. The final style of project that we have listed includes greenfield exploration, such as on the large exploration, BF block that we have shown on the northern part of this map sheet. Some of this, assuming we make discoveries, would require new platforms.
Those are longer term projects, but, you know, it's just a part of the whole range of projects that we have available that we think can lead to organic growth at the same time that we're generating free cash for a long period of time. In addition to this, we, of course, have the Canadian assets to invest in the Rex, the Sparky, remaining multilateral development in the Ellerslie. That'll be a smaller part of our capital reinvestment program, but again, contributing to organic growth in the company. At the same time, we throw off free cash and utilize a portion of that in our buyback program. To speak very briefly to the M&A strategy, it's really the same as we had talked about previously. There's a great deal of international opportunity.
We feel that NOBV is an example of the great opportunities, and we're very fortunate to have that transaction. Certainly, we had a very honorable counterparty and a very strong workforce at NOBV that made that possible. The advantages internationally, we see really being a twofold or two-step process. We think that there are lower multiples due to lower competition than in the North American market than at the time that we make the original investment. The second phase of that is really more opportunity to increase production and reduce unit costs in the operation phase. We intend to have NOBV be an example of that as well. Our geographies that we're targeting remain mainly Europe and Latin America.
We've got some other possibilities, we think, in Middle East, North Africa, and optionality for Canada. It's a broad geographic funnel and a model that, you know, we think can bring significant value add in the future to Tenaz Energy. At this point, we would attempt to take any questions online. We'll just take a minute here and see if any are lodged. We see no questions. With that, let me finish by again thanking our shareholders for their support and their confidence in us. We know your capital is hard earned, and we're honored that you've taken a risk with us. We thank our honorable suppliers, counterparties, and regulators in Netherlands and Canada.
It takes a team effort to execute and be successful in oil and gas. It certainly is not solely due to what we do at Tenaz Energy. Finally, I thank our board for the guidance that they have given us, our employees for all their hard work and energy. I know that successful companies are built on the sweat and the guts of their employees, and I'm very lucky to work with this group of people. The shareholders, all of our employees and board members are aligned with the rest of our shareholder base. Thank you again, and goodbye.