AGM 2020

Apr 29, 2020

Welcome to Inventive's 2020 Annual Meeting Shareholders. I'm Clayton Whitis, Chair of Aventiv's Board of Directors. Thank you for joining us today at our first virtual shareholder meeting. These are challenging times in our industry and our society. We appreciate you making time to join us today. Joanne Alexander, our Corporate Secretary, will lead us through the meeting details. Joanne? Thank you, Clayton, and welcome to our shareholders joining by webcast. Also on the webcast with us today is Doug Suttles, Ovintiv's CEO. Other members of our Board listening in today and being nominated for election are Peter Dee, Fred Fowler, Howard Mason, Lee McIntyre, Margaret McKenzie, Steven Nantz, Suzanne Nimix, Thomas Ricks, Brian Shaw and Bruce Waterman. This meeting is being recorded by Ovintiv. No one else is permitted to record this call. We will conduct the business portion of the meeting first and allow you to vote on the matters described in our annual proxy statement dated March 6, 2020. The company has appointed Christine Ammerhein to act as Inspector of Elections and she has taken the oath to serve in this role. We are also joined by PricewaterhouseCoopers LLP, our independent auditors. Following the business portion of the meeting, we will use the web portal to conduct a question and answer session. Although we may not have time to address every question, we will do our best to provide as many responses as possible. Thank you, Joanna. It's now shortly after 10 am Mountain Standard Time on April 29, 2020, and this meeting is officially called to order. Joanne will now take us through the business of the meeting. Thank you, Clayton. And I confirm we have the affidavit showing that on March 19, 2020, notice of this meeting and related documents were made available online or mailed to shareholders as of the record date. This affidavit will be kept with the minutes of this meeting. The shareholder list shows that as of the record date, there were 200 and 59,821,141 shares of common stock entitled to vote at this meeting. We are informed by the Inspector of Election that there are approximately 193,000,000 shares represented in person or by proxy today, which is 74% of shares entitled to vote. Based on this report, I confirm there is a quorum. To make our meeting orderly and efficient, we will first read all the proposals. Then we will give shareholders an opportunity to comment. The online voting is open to you now and will remain open until we announce that voting has closed. The first proposal is to approve the compensation of Ovintiv's named executive officers through a non binding advisory vote commonly referred to as a say on pay resolution. The second proposal is the election of directors. Shareholders have been given the ability to vote for or against each individual nominee. The 12 nominees are listed in the proxy statement. The 3rd proposal is the ratification of PricewaterhouseCoopers LLP chartered accountants as auditors for the upcoming year. The final proposal is a shareholder proposal. We will now give the shareholder the opportunity to present their proposal. Good morning, and thank you, Mr. Chair. My name is Mitchell Anderson from the pension plan of the United Church of Canada, who has filed this shareholder proposal with the company. Our proposal asks Aventiv to adopt targets that address the company's key climate related risks and opportunities over the medium to long term. The importance of addressing climate related risks and opportunities cannot be overstated. Climate change is the largest systemic risk facing our economy. A growing recognition of this by consumers and governments means that there is increasing scrutiny being placed on the emissions associated with oil and gas production. There are opportunities therefore for companies that position themselves well to have a competitive advantage in a low carbon future and tremendous risk for those who fail to do so. As long term institutional investors, we know that both that we and the companies we invest in must take bold action. Our proposal is supported by industry guidance and best practices. Many of you will already be familiar with the widely recognized guidance of the task force on climate related financial disclosures. Targets are a key element of the task force's recommendations, which asks that companies disclose targets used to assess and manage relevant climate related risks and opportunities. There are already many examples of energy companies disclosing climate related targets and tracking performance against those targets across North America and internationally, including among many of Aventiv's peers in the oil and gas sector. And so, while we do commend Aventiv for the ongoing commitment to reducing emissions from operations, Without detailed disclosure related to specific climate related targets, shareholders are unable to determine whether the company is making meaningful progress toward that commitment relative to its industry peers. In short, we are asking the company to go beyond a general commitment to reducing emissions and help us understand what that commitment actually looks like. For these reasons, we believe that our proposal puts forward a reasonable request and therefore move that the company set and publish climate related targets that are aligned with disclosure recommendations set out by the task force on climate related Financial Disclosure. The targets set should seek to address Aventa's key climate related risks and opportunities over medium and long term horizons. Further, these targets should be quantitative, subject to regular review and progress should be reported to shareholders on an annual basis. Thank you very much. Thank you. If any shareholder would like to make a comment regarding any of these proposals, please submit your comment now through the web portal. As there are no comments on the proposals, we will remind shareholders that anyone who hasn't yet voted or wishes to change their vote, they may do so by clicking on the voting button on the web portal and following the instructions there. If you have sent in your proxy or previously voted, nothing further needs to be done. We will now pause for a moment to finalize voting. Clayton, the shareholders have now had the opportunity to vote. Thank you, Joanne. As everyone has had the opportunity to vote, I now declare the polls closed. Joanne, please read the preliminary voting results for the meeting. Certainly. We have been informed by the Inspector Certainly. We have been informed by the Inspector of Election that the preliminary vote report shows that the say on pay vote has been approved, that each of the directors nominated for election have been elected by a vote of more than 89%, the auditors have been approved by 97%, and the shareholder proposal has been approved by 56% of the votes. We will be publicly filing the final voting results shortly after the meeting. This now concludes the formal business of the meeting. Since there is no further business to be brought forward, I declare this meeting be terminated. Thank you, Clayton. This is Doug Suttles and CEO of Aventiv. Now we would like to open things up for shareholder questions on the web portal. Please note that only validated shareholders may ask questions in the designated field on the web portal. And out of consideration for others, please limit yourself to one question. We will attempt to answer as many questions as possible. The first question that's been submitted is in respect to the current oil storage situation. And as you know, the markets have been quite volatile lately due to the impact predominantly of the demand destruction because of COVID-nineteen. Our company has a great deal of flexibility with our operations and our marketing of our products, and we'll speak more about this when we release our Q1 results on the 7th May and have our results call on the 8th side, invite you to join that. We have another question here about our debt repayments, our debt payments that are due in 2020 2021. Maybe a few points on this. First is we have a tremendous amount of liquidity in the company. We renewed our $4,000,000,000 credit facility in January of this year and that facility is good through July of 2024. The only covenant on that is a debt to adjusted cap and we're well below that limit and we don't actually see us ever breaking that. So first, we have tremendous liquidity and about $3,500,000,000 of that $4,000,000,000 of facility is undrawn. Probably the second point to note is we're extremely well protected against the current low oil prices through our hedge book. With our recent press release, we indicated in there and you can take a look at that and get a sense of different prices about the value of that facility, but it's worth in excess in current market conditions of over $1,000,000,000 Probably the third thing to note is we have tremendous flexibility with our capital spending. We've already made significant reductions. We've also announced significant reductions in cost and we'll talk more about both of those once again on the 8. So we have clearly have the ability to repay those debt payments. We have a tremendous amount of liquidity. We have flexibility in the business. And I would also remind you that while oil prices have been weak, gas prices are strengthening and the company produces today over $1,400,000,000 1,400,000,000 cubic feet per day of gas production. With that, I think we have a couple more questions coming in. Let me just take a look at those. We had the final question here is around the indexing as we move the domicile from Canada to the United States. That's been progressing largely how we expected. We think that over the coming months, particularly over the Q2, that there'll be further announcements by the major indices around how we will be included in those. In the meantime, we did on the close of the domicile, we were only removed of 1 of the 2 major indexes in Canada. The other one is pending our inclusion in the U. S. Index. So we do expect to be to see progress on this over the balance of this quarter. So it's proceeding largely as we had expected. So with that, I think we've come to the end of the questions here. So I'd like to thank everyone. And this concludes our question and answer period. And on behalf of the Board, thank you for participating in today's meeting and for your investment in our company. And I wish you all the best in these challenging times. Thank you.