Good day, ladies and gentlemen. My name is Ian, and I will be your conferencing operator today. At this time, I would like to welcome everyone to the NXT Energy Solutions 2020 Second Quarter End Operating and Financial Results Conference Call. [Operator Instructions] I would now like to turn the meeting over to Mr. George Liszicasz, President and CEO of NXT Energy Solutions. Please go ahead, Mr. Liszicasz.

Thank you, Ian. Welcome and thank you, everyone, for joining us today for NXT Energy Solutions Second Quarter 2020 Financials and Operating Results Conference Call. This is George Liszicasz; and joining me today's conference call is Eugene Woychyshyn, Vice President of Finance and Chief Financial Officer; Dr. Xiang Gui, Director of R&D and SFD Sensor Development; Rashid Tippu, Director of Geosciences for Africa, Asia and Middle East; Enrique Hung, Director Hung -- Director of Geosciences for the Americas; and Mohammad Saqib, Operations Director and Head of Interpretation. The purpose of today's call is to briefly discuss the highlights of the release of NXT's second quarter 2020 financials and operating Results. Following our update, we will open the line for questions. Please note all statements made by the company and management during this call are subject to the reader's advisory regarding forward-looking information and non-GAAP measures set forth in our 2020 results, press release and MD&A issued last week. All dollar amounts discussed in today's conference call are in Canadian dollars unless otherwise stated. The complete financial and operating results and condensed consolidated interim financial statement for the second quarter of 2020 were published August 13 and are available on NXT's website, SEDAR's website as well as EDGAR's website. Now I'm going to ask Eugene to provide us the financial review. Thank you.

Thank you, George, and welcome, everyone. As George mentioned, our second quarter 2020 financial statements and management discussion analysis were filed on SEDAR's website last Thursday and EDGAR on Friday. From a financial perspective, the focus remained on continuing to control and optimize noncore corporate costs and support of the business development efforts. We've also participated in the Canada Emergency Wage Subsidy program during the quarter. For the second quarter, our financial results were as follows: there was $0.137 million of revenue earned in the second quarter and year-to-date from the termination of the cooperation agreement. We currently expect the final payment of approximately USD 500,000 from the 2019 Nigerian SFD survey, which is, in fact, a performance bond in the third quarter. We've elected not to enforce payment of it until either upon the completion of a new contract with PE Energy or at the closure of the current contract. For the quarter, NXT recorded a net loss of approximately $1.48 million or basic and diluted $0.02 per share based on 64.4 million weighted average common shares outstanding. This compares to a net income of $8.09 million [ in Q2 of ] 2019 or $0.12 per share basic or $0.11 diluted. For year-to-date, NXT recorded a net loss of approximately $2.81 million or basic and diluted $0.04 per share based on 64.4 million weighted average common shares outstanding. This compares to net income of $6.32 million year-to-date in 2019 or $0.09 per share basic and diluted. Total operating expenses for the second quarter were $1.48 million, including survey costs. This included noncash expenses of $0.45 million related to amortization and stock-based compensation expenses. Total operating expenses year-to-date were $3.23 million, including survey costs. This included noncash expenses of $0.92 million related to amortization and stock-based compensation expenses. Operating activities used $1.1 million of cash during the quarter and $1.7 million year-to-date. Cash and short-term investments were $4.9 million at June 30, 2020, and net working capital was $5.09 million. This includes a receipt of USD 466,000 of payments for the Nigerian SFD survey on March 25, 2020. General and administrative expenses increased 5% or $35,000 in quarter 2 2020 compared to 2019 as a result of the following: salaries, benefits and consulting charges increased $6,000 or 2% due primarily to approximately $150,000 salary costs being allocated to direct survey costs in 2019, offset by 1 less headcount and receipt of the Canada Emergency Wage Subsidy in 2020. Board and professional fees and public company costs increased $69,000 due to one additional Board member and higher professional fees. Premises and administrative overhead decreased 8% due to cost control efforts and business development costs decreased $22,000 or 101% due to restrictions on travel from the COVID-19 pandemic and therefore, switching discussions to teleconferencing and online video conferencing. General administrative expenses increased 5% or $87,000 year-to-date compared to 2019 as a result of the following: salaries, benefits, consulting charges decreased 4% due to one less headcount and receipt of the Canada Wage -- the Canada Emergency Wage Subsidy in 2020. Board and professional fees and public company costs increased $70,000 or 17% due to additional Board members and higher professional fees. Premises administrative overhead decreased 5% due to cost control efforts, and business development costs increased year-to-date by $67,000 due to travel in the first quarter where we are furthering discussion on business development opportunities. In 2019, the company's resources were focused on implementation of Nigerian SFD survey keeping costs low in this area last year. To summarize some key financial points, we ended the quarter with $4.9 million of cash and short-term investments on hand and a net working capital balance of $5.09 million. Net loss for the quarter was $1.48 million and $2.81 million year-to-date. Cash used in operations was $1.1 million and $1.7 million year-to-date. We continue to focus on cost control. I would now like to hand the call back over to George to further discuss our business update and forward plans.

Thank you, Eugene. First, I would like to convey my sincere hope that everyone is well and continues to stay healthy at these difficult times. Though currently there are several challenges facing our world and industry, NXT is focused on minimizing risk and continues to advance discussions for SFD survey opportunities within Nigeria, East-Central Africa, Mexico and in South America primarily via videoconferences. The worldwide reduction in exploration arising from the COVID-19-related slowdown of economic activities and international price war has negatively impacted NXT's financial results and activity. But the good news is that the study -- is the steady rise of oil prices. And at the time of our last call on May 19, the WTI was trading at $32 barrel; today, it is trading around $43; and the Brent is around $45. As I mentioned on our last call, I expect WTI to stabilize around $45 in September. Global demand for oil is expected to increase as more countries are returning to normal level of operations and consumption. In general, there is an ambience of optimism, conditions for business are improving and returning to normal remains a priority. That brings [Audio Gap] opportunities NXT is pursuing currently. As discussed before, NXT continues to focus most of its business development on national oil companies, NOCs, given their longer strategic planning time horizon, large fiscal resources, general stability, available land base and their relative insulation from the day-to-day happenings of the hydrocarbon markets. Our contract history to date, while slow and measured, has demonstrated the success of this effort. In many countries, the NOCs contribute significantly to the nation's economic well-being over the long term, which means they have multiple reasons to continue with their exploration and production activities. Given the current fiscal state of the industry, they have to find ways to explore and produce more effectively at a lower cost. NXT provides the NOCs with a proven and patented upstream geophysical method that can be rapidly deployed at a highly competitive cost during the exploration and development phases with the potential of significantly enhancing success whilst fitting effectively within the established exploration cycle. Given the essential status afforded to the oil and gas industry, they remain operational in spite of the COVID-19-related hurdles, the parties stay committed to advancing the SFD survey projects. In the first quarter, my team and I engaged in a broad scale international market business development effort, which included a signed memorandum of understanding with an independent oil company with interest in Central Africa. With the recent uptick in the oil price, we expect greater momentum with respect to this opportunity. Regarding Nigeria, as previously discussed, there are multiple business initiatives in advanced stages of discussions in Nigeria involving state-owned entities. Furthermore, these opportunities and our work done to date will gain NXT invaluable exposure to the international majors who are regional stakeholders throughout Africa. A new reform bill proposed by the Oil Ministry is ready for signing by the President. It will provide a more balanced investment opportunity for the IOCs to explore and increase Nigerian hydrocarbon production onshore and offshore. Our Nigerian partner, PE Energy, has informed us that Nigeria plans to be open for business potentially in September, which will facilitate our efforts to secure the said SFD contract. With respect to Mexico, NXT and its local resources continue the effort to reactivate the long-term framework agreement with the international procurement department of PEMEX. Progress continues and we believe to implement a road map towards continued SFD operations in Mexico. The outstanding drilling results of the 2012 SFD survey covering 6 basins and the 2017 SFD survey over the 2.1 bid-round offshore blocks have been instrumental in our progress. Let us now turn our attention to the technological advancement NXT has made, especially in the last quarter. First, an additional SFD acquisition system consisting of 8 new sensors was built and tested during the quarter, which includes 4 of the recently patented cascade devices. NXT now has 4 fully functional SFD survey systems, which increases our operational readiness and reliability. This allows us to deploy SFD in 2 countries, for example, simultaneously. One of the most important undertaking in our companies -- company today is the development of mathematical transformation methods that will significantly improve the presentation of the SFD results and bridge the gap between our clients and the SFD products. Because of the complexity and nature of the SFD technology in the past, we heavily relied on the qualitative evaluation and interpretation of the SFD signals. Such approach was often proved difficult to sell our product to the industry in spite of outstanding drilling results. The application of these transformations and methods have enabled us to extract additional information, speed up our processing and provide a platform for the development of algorithmic interpretation. Furthermore, once completed and tested, these methods will allow NXT to move from the qualitative interpretation to numerically enhanced model data set that will substantially facilitate the understanding, acceptance and the integration of SFD data and results within the existing industry workflow. Now this approach has been made possible by the current generation of sensors with higher stability and control that have led the way to previously mentioned mathematical approach. Many of you recall that in 2017, NXT undertook a grid survey in the GoM, which was the first time the new generation sensors were deployed, and they are now patented as well. If you have any question, Dr. Xiang Gui can speak to that during the Q&A. It is important to emphasize that these results themselves have not changed, i.e., the final conclusions that you are drawing from the data. However, the way you draw the conclusion has changed. The data and results presented lend themselves to an easier and faster path to discovery. This is NXT's first foray into the widespread geoscience applications realm. Users of subsurface data utilize such workflows to commonly and interactively write, submit and debug customs routines. To further establish the applicability, validity and viability of this process, NXT will need to conduct SFD surveys in regions where commercial opportunity exists in active exploration areas, such as the Atlantic Margin in Canada, the North Slope in Alaska and the light oil plays in Alberta/British Columbia, Canada. I am very proud of our current efforts. I wish to emphasize that this work is in progress with risk attached. Nevertheless, it carries tremendous upside. NXT is targeting the potential implementation of these new mathematical methods by the time the next survey commences. We will continue to update our investor base on our progress as warranted. If you have any questions regarding this R&D undertaking, please ask them during the Q&A period. In conclusion, notwithstanding the COVID-19, we are advancing our initiatives in Africa, Latin America and Southeast Asia to secure SFD survey contract. Every day, we are focused on moving customer discussions towards SFD surveys and are preparing ourselves to be ready to execute these projects. We will continue delivering results and growth for our shareholders. On behalf of our Board of Directors and the entire team at NXT, I want to thank you all -- all of our shareholders for their continued support in these trying times. We wish the best of health to you and your families. I now ask Ian to open the line for us to take a few of your questions. Thank you very much.

[Operator Instructions] Your first line -- sorry, your first question comes from the line of Peter Mork.

I hope the fireworks are not -- I mean the fire is not damaging your...

Yes. We're dealing with it down here. So far, so good. But yes, it's going to be a regular occurrence, these fires. But hey, I had one question and then one kind of follow-up. First one is on the -- on just kind of contracts. And it sounds like you've got a lot of initiatives going. I think we can all appreciate that COVID has slowed things down. But if -- just kind of from a broad perspective, last year, you look at your revenue and you can really see what makes this company work and what I think investors can get excited about at a given revenue level. And so my question is -- we're now in August. Is there a way you can assess the probability for us just in terms of getting a contract signed before year-end of equal size to or roughly equal size to what you guys did last year? And I have one follow-up.

Okay. So first, we answer the question then. We are ready to carry out the work. And there is a high probability that we will get the contract and we'll start executing this year. Anything you want to add, Rashid?

Yes. So Peter, like we were very active during Q1 this year where we were discussing a potential project in African region, as George mentioned during his speech. So due to COVID, that's why we went from like active then towards remote. But remotely, we were following up. And know, because when we left in Q1, we were at almost always close to the final stages where we could negotiate and finalizing the contractual part. So now we are remotely handling that. And hopefully, in September, we will be able to face-to-face meet them and then conclude some of that. And by -- so probability is high to have a similar size of contract we can get signed.

All right. That's -- that'd be great. Next question is just -- Rashid and maybe Enrique as well, just with regards to -- there's a lot to kind of take in regarding -- it sounds like you guys made a lot of progress on the technology front, and it sounds great in terms of moving from like a qualitative to a quantitative. But I was hoping you'd be able to actually quantify that on a couple of fronts for us. One is, what in terms of efficiencies, doing this -- we've been up there. We've seen the process of the team of interpreters going through the signals. How much does this speed that up? Does it make it more efficient? And is there a way to quantify that in terms of what your stake is, 3 months is now 2 or what have you? And then secondly, as geophysicists, it sounds like, from George's comments, that this is something that's more industry standard and something that people like yourselves would understand with your background. Do you find that to be true? And any color you could provide on that would be really helpful.

Go on the first 2, first of all.

Okay. So Peter, so first, I'll add a little bit of what we have done just as a quick summary, and then Enrique and Rashid can add on how this helps the cause with the industry. So what we've done essentially is that we have now managed to put down or put forward at least a working model on how mathematically to represent the SFD data. And as George mentioned in his comments there, this will allow us to move from a purely qualitative approach to at least a semiquantitative approach. Now having this definition in place allows us to map the data in a way that is very familiar to the industry out there. So in the past, SFD has been a 1-dimensional data set, and we are now -- we are going to be presenting it. Hopefully, if everything completes successfully, we are going to be presenting it as 2D or 3D -- in a 2D or 3D manner. So we'll be treating it as a surface much like the industry expects rather than a data set. Now in terms of speed, what's going to happen is that it's going to reduce the upfront QA time significantly. So rather than a person doing the interpretation from scratch, most of the interpretation would be done at the algorithmic level and the interpreters would provide final oversight collaboration across teams and so forth. So most of the routine work should get offloaded to the output of this new process.

How is it going to look like?

That's -- how the data is going to look like, we'll probably let Enrique and Rashid answer as to how or how close or how far it is from the standard industry expectation.

Well, we -- Peter, thank you for the question. We have made an effort to make it suitable as possible to the processes that we, geoscientists, do during our exploration class. In general, we see this as a workflow to get at the final time when you're selecting your prospect and doing the risk analysis. And you need -- for those, you need information and maps. So the maps will give you laterally, let's say, the picture of the idea what SFD is telling you not only in the place that you think that is interesting, but laterally, such things as fairways, trends or exploration boundaries and stuff like that. So it really gets into the workflow directly with the geoscientists. And this will open the door for us to get into the applications of geoscientists for any seismic interpreter or subsurface interpreter when watching or analyzing a well log as well as they will be able to look at the SFD signal and have a comment on it. So this will be intended to build a community of SFD users that will allow NXT to continue one of the deals not only stop it and then wait for the next survey, but to have a survey to help our explorers to find more oil or to work on the subsurface. So that's basically what we see, what we ambition to have.

Rashid said he doesn't have to add anything.

So Peter, I will just -- like Enrique covered very, very nicely, and it's -- it will definitely fill that, the gap, which was before -- like before it was more qualitative, and we give -- we only always talk about SFD signal attributes. But now geoscientists can themselves run these algorithm and talk about those algorithm. So that's -- the gap is filled now. So they can see what we were seeing earlier qualitatively. Now they can quantify those attribute through these algorithms.

Mr. Chairman, would you like me to add a few comments just to...

Yes. Charles, thank you. Can you just hold up for 1 second before you say it? I would like to mention that this can be patented, this process, so NXT will have a tremendous value. Many of these processes are patentable and patented and being used in the industry. And the other thing that -- I would just wait for Charles, if Charles doesn't cover some of the points. He's very familiar with the work so is the Board. So please, Charles, go ahead.

Thank you. So it's Charles Selby. I'm the Lead Director for NXT. And George has just asked me to make a few additional comments from an industry perspective. I've been engaged in exploration and development work for more than 40 years in the oil and gas business. And I believe that the progress that the company has made recently is truly revolutionary and will allow the technology to be more effective and more readily sold across the industry. And there's a number of elements to this. So as they've indicated, they've introduced mathematical rigor, if you will, to a process through these transformations. And many of these transformations are well understood in other forms of data analysis, although they've developed some that are unique to this data. And it has allowed them to find more meaning in the data, that is they can now see meaning in the noise associated with the data so that they can go deeper into the data that comes and much more rapidly. But even more significant, at the end of the day, when they're talking about giving a presentation, this presentation looks very much like what you might expect if somebody was going to provide the result of a 3D seismic presentation. And others on the call may or may not have seen this but typically, a 3D seismic survey is presented as really a topography in colors where you can see where formations are and where prospective porosity is. What is being displayed here is a probabilistic distribution of prospectivity. So really, it's something that could overlay conventional 3D surveys. And that's a great advantage to the industry, which is used to looking at data presented in that manner. And so as this has proven up and demonstrated over areas, you can imagine that geophysicists used to looking at conventional analysis can now look at this and see its direct relationship with the data that they're used to seeing. I think that's just fundamental for the future success of the company. And hopefully, that helped you.

Thank you very much, Charles. And I don't have anything else to add. So any other questions?

[Operator Instructions] Your next question comes from the line of [ Charles Hakala ].

It sounds like things are progressing in the technology department. But I just have one question. At your current burn rate of cash, you're going to be blowing through your reserves by next year at this time. It would be nice to see some sales. Or are there plans to bolster the cash reserve? Are you looking to sell the company? Or where are you from that perspective?

Eugene, do you want to answer?

Charles, thank you for the question. It's Eugene. We are currently looking at various alternatives to conserve cash and also looking at alternatives to find other sources of cash.

Yes. Secondly, we are planning to have these surveys, Charles. And as you know, once we do the surveys, we are extremely successful in terms of generating significant cash flow and that's basically the answer. The company is probably might be sold down the road, especially now if we can do this work because this mapping is going to allow us to basically become a part of the geoscientists world. But I don't think that anybody wants to sell this company and not even close to this crisis. So we're going to produce a significant revenue and cash flow for this company in the coming months. And I'm very hopeful that you will be very happy. I know that you are a significant shareholder and we really appreciate to have you. And I don't want anything else better than success and have this COVID crisis over with so that we can get going. That's the idea. And I see that there is another Charles coming up. So 3 Charleses in a row are going to be there for us asking questions. Thank you very much, Charles.

Your next question comes from the line of [ Charles Davidson ].

Really, a lot of great news coming out of this, and I think that you're making terrific progress. I've been a shareholder, as you probably know, for quite some time. And I'm happy to hear you have no intention on selling the company because I as well think that we've got a great future here. I have just a short-term logistical question. As it's very likely that this COVID pandemic will last through the end of the year, logistically, do we have any trouble flying sites, getting the airplane out of the country and -- to Africa or Mexico or whoever it is. Question number one. And then question number two, you had mentioned that you're looking forward to face-to-face meetings in the fall, and I'm really wondering whether it's going to be possible to have these face-to-face meetings this year. Would love to hear your comment on that.

I would like to mention that we also -- 2 things. One, September appears to be a turning point for us in terms of face-to-face meetings. I don't want to go into too much details, but some of the country's representatives are going to be in the U.S. and also plan to be here in Canada, the ministerial level that we are dealing with directly. And also, we have been told that NXT will be able to travel to conclude some of the contracts starting, as I mentioned it in my comments, in September, late September. So that's with respect to the face-to-face meetings and contracts. I now ask Mo, if he would be so kind and talk about the ability for us to mobilize and so on and so forth.

Okay. So with respect to the logistics of getting the airplane to the countries where the survey is going to be, we have verified most of these details with our aircraft provider. And we do not expect that there will be any challenges in getting the aircraft to the country of like, for example, Nigeria. If you were to take it to Nigeria, we would not have too many issues taking the airplane over there primarily due to the fact that it's a private aircraft and it's not subject to the same restrictions as commercial aircraft. When we come back, of course, then there is a standard quarantine requirements, but those are relatively easy to follow when you're coming back to Canada.

Okay. That's great. That's with respect to Nigeria. How about Mexico and South America?

Now the -- the same. Like with respect to the transit of the aircraft to Mexico, again, the same concept applies. We do not expect that there will be any issues transiting the aircraft to Mexico. There are some local quarantine requirements in Mexico that we'll have to follow, but those are very similar in line to Canada. So we -- it's just a matter of getting the plane there and then waiting out the requisite number of days. And then we are ready to begin operations.

Your next question comes from the line of [ Nisha Elic ].

If I remember correctly, you were mentioning in previous discussions on these conference calls with investors the possibility of data sales. Now is there any possibility of any data sale happening anytime soon, is my first question. My second question is, I missed the reference to Southeast Asian contracts. Can you be more specific which country are we talking about here? Or is this still information that you can't release?

I will ask -- thank you very much, [ Nisha ], and thanks for your support. Rashid?

Yes. Thanks, [ Nisha ]. Yes. Rashid is here. So we -- about data purchase, like there is a multiple negotiation what we were doing during Q1 2020 when we were in Nigeria regarding data purchase and some follow-up on some of the potential contract. So those conversation was very at the higher end, more close to the conclusion. And now we are in a situation where because a lot of government authorities like one of the authorities, DPR, they had some changes as well in the -- within organization, and they also have to issue a letter in order to initiate this data purchase. So now we are in a discussion with our agent and our agent is in discussion with DPR to get that letter, and that data purchase will be concluded in the near future that we can see. About Southeast Asia, we are following up with our leads in Malaysia and Indonesia. So some of -- and George can add on that.

In Indonesia, we have an opportunity to work with one of our directors' company who was the Head of Texaco for 25 years internationally, Frank Ingriselli, and his company is very active in Indonesia. And we have been to Indonesia, as you all know. And there is a possibility right now that he's putting together a number of opportunities for NXT to look at and discuss. Also, we are still very active in Malaysia. We have representatives there now, and they are working on meetings, schedules for NXT as soon as the COVID-19 situation is over. And I think that there will be significant changes in September, in my opinion, with respect to COVID-19 as well. You can't hold down the entire world economy, it will create more problems than solutions. Thank you very much, [ Nisha ].

There are no further questions over the phone lines at this time. I turn the call back over to the presenters.

Thank you very much, everybody, for your support, and please make sure that you are safe and healthy, remain healthy. And hopefully, our next conference call, we are going to have some very good and positive things to discuss. Thank you again.

This concludes today's conference call. You may now disconnect.