Q2 2022 Suncor Energy Inc Earnings Call
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
[music].
Yeah.
Good day, ladies and gentlemen, and thank you for standing by walk them through the Suncor Energy second quarter 2022 results conference call. At this time, all participants are in a listen only mode.
The speaker's presentation, there will be a question and answer session to ask a question. During the session you will need to press star one one on your telephone keypad.
At this time I would now like to hand, the conference over to your host today, Mr. Trevor Bell Vice President of Investor Relations. Please go ahead.
Thank you operator, and good morning, welcome to Suncor second quarter earnings call with me. This morning are Christmas interim President and Chief Executive Officer, and Alister Cowan Chief Financial Officer. Please note that today's comments contain forward looking information actual results may differ materially from the expected results.
Because of various risk factors and assumptions that are described in our second quarter earnings release as well as in our current annual information form.
Both of those are available on SEDAR, Edgar and our website Suncor dot com certain financial measures referred to in these comments are not prescribed by Canadian GAAP for a description of these financial measures. Please see our second quarters earnings release following formal remarks, we'll open up the call to some questions now I'll hand, it over to Chris for his opening.
Remarks.
Great. Thanks, Trevor Yeah, and thanks to everyone for joining us today for our quarterly results call.
As previously announced I've been asked by our board to lead our company forward during this period of transition.
With Suncor for 22 years, and I told various operational and business roles across the company.
But since this is my first time speaking on some quarters earnings call I would like to briefly introduce myself and discuss my priorities.
During my time with the company I've worked in our oil sands downstream and corporate division as well as in both our Canadian and U S businesses.
And for the past 10 years I've led the company's downstream business, which is the most profitable in North America on a per barrel basis.
Have a great appreciation and understanding of suncor the assets.
And people and we'll be drawing on that experience to lead the company through this period.
On rebuilding confidence in Suncor.
To be clear as interim CEO my mandate is not to simply maintain the status quo, but to work with our board executive team and all of our employees to make the changes necessary to improve our performance and deliver the value you expect.
I believe it's important to step back and clearly assess where we are confirm what is going well identify what needs to be different and keep the momentum moving forward through executing the changes necessary to accelerate our progress towards improved performance.
Safety is the most important suncor and our safety record is unacceptable and improvements must be made.
This was brought home by the recent catheter based plant sites in the mine area.
I want to express how deeply saddened we are by this loss.
Fully committed to doing everything necessary to build a better safety culture and improved performance. So that everyone at Suncor goes home safely each and every day.
Without an <unk>.
Number one priority is improving our safety and operating performance.
To me safety and operating performance are strongly connected we cannot have great operating performance without great safety and simply non negotiable.
Safety is not only living up to our core values, but integral to delivering the industry, leading operating and financial performance we expect.
I'll speak to this in a bit more detail later in our call.
In addition to driving improvement in our safety and operating performance I want to be clear, our strategy and debt reduction and shareholder return commitments and priorities are not changing.
Suncor strategy, which is fully endorsed and supported by our board and to optimize our sustain our base business, while increasing shareholder return.
Our carbon footprint and prudently investing in lower carbon energy.
The capital allocation framework as outlined last quarter will support increasing shareholder returns.
We announced a 12% dividend increase in the first quarter and by quarter end, we've already repurchased half the target buyback of 10% of our public float.
And once net debt reached to $12 billion.
Which we expect in the second half of the year.
We remain committed to further increasing shareholder returns to 75% of excess funds after capital expenditures and dividends.
Physical integration and Suncor is unparalleled integrated asset base will continue to be an area of strength that we will optimize unlocked incremental shareholder value.
As demonstrated by our second quarter results.
However, we are reviewing options for our retail business to ensure that we're maximizing the long term value of that business for our shareholders.
We will disclose the results of this process in the fourth quarter.
Yes.
We also remain focused on delivering on our free funds flow growth initiative and unlocking synergies at Syncrude.
And while we have to acknowledge headwinds from higher commodity costs and inflation, including in our mining costs. We continue to make very good progress on our initiatives.
We continue to optimize our portfolio to ensure our business is set up to deliver superior long term returns to our shareholders.
To that end we.
We have a site we assigned a sales agreement for the Norway assets for gross proceeds of approximately $400 million, which.
Which we expect to receive upon closing later this year.
As well, we have moved into the final round and our sale of our wind assets and we're seeing very strong market interest.
And we have begun the sales process for our U K North sea assets.
All of these actions are to improve fit and focus in our portfolio aligned with our strategy.
And finally, we will continue to advance our strategy to meet our long term carbon reduction objectives and.
New low carbon businesses and <unk>.
In summary.
You should expect me to drive improvement in a safe and reliable execution of our operation.
Our strategy.
<unk> our balance sheet.
And growing returns to our shareholders.
Now, let's take a look at our second quarter results.
In the second quarter of 2020 to Suncor reported the highest quarterly adjusted funds from operations in its history at approximately $5 3 billion or $3 85 per share.
As well as free funds flow after capital expenditures of $4 1 billion.
Our $2 88 per share.
And we returned record adjusted fund flow right back to our shareholders.
Upstream realizations were on par with WTO.
In downstream Catherine strong product market valuable near 100% market capture.
Both of these things highlight the strength and competitive advantage of our integrated model and our focus on higher value products beyond Benjamin.
Our upstream production of 720000 barrels per day reflects both planned and unplanned events in the quarter.
Oil Sands operations production of 365000 barrels per day included planned maintenance at fire bag and upgrade or two.
While the significant 10 year turnaround at fire back, which was the largest in its history with completed with solid execution and a smaller production impact and expected our production from this area of the business was below our expectations due to unplanned events at our Mackay River in Central operations and base plant upgrade at one.
At the same time, we achieved 189000 barrels per day production at Syncrude, which exceeded our plan for the quarter and we produced 87000 barrels per day of Fort Hills, which is in line with our plan and reflects planned maintenance at that asset.
And we produced 79000 barrels per day, and our offshore segment.
Looking at our downstream results.
<unk> had record adjusted funds from operations on both a LIFO and FIFO basis.
Our throughput of 389000 barrels per day reflects planned maintenance activities across all our Canadian refineries as well as unplanned events with Commerce City refinery, which had approximately a 15000 barrel per day impact on the quarter.
And we have no further planned major maintenance at our downstream segment for the balance of the year.
Now, let me turn to our full year guidance.
After careful review, we have update our annual production guidance to $740 to 760000 barrels per day, reflecting the performance year to date July and our expectation for the remainder of the year.
As well, we've updated our capital guidance to a range of four 9% to $5 2 billion for 2022.
This increase in capital reflects the white rose offshore project restart and our increased working interest in that project.
As well as increased spend during turnarounds and maintenance to improve safety and reliability.
And general inflationary pressures that we're seeing across the portfolio.
And with that I will pass to Alastair to walk through the financial highlights.
Thanks, Chris as you just noted this quarter was the highest of our adjusted funds from operations quarter for the company of approximately $5 $3 billion of result in EBIT per share.
Second quarter adjusted funds flow was strong on the record and Oilsands enzymes.
Approximately 25% and 30% better than prior periods.
Near record respectively.
We returned $3 2 billion or nearly 60% of adjusted funds from operations through dividends and share buybacks back to shareholders.
This quarter, we focused on share buybacks over debt reduction a ballpark I mean, we're 4% of the public float.
Our net debt did increase due to the FX translation loss of a weaker Canadian dollar. However, our second half 2022 cash generation will allow us to achieve our $12 billion net debt target this year and continue to execute on our share buyback program.
While the market conditions were exceptionally strong during the quarter. It is our cell analysis based on the physical integration between the drive industry, leading realization on margin capture.
Thanks.
<unk> price realized was 141 Canadian dollars per bottle of debates or an average price realized was 120 community bills per bottle I know, it's a realization on both crude types trended above headline benchmarks due to investments in our marketing and logistics capabilities.
As an integral part of our $2 billion of free funds flow improvements.
For downstream this has been an exceptional business environment, which is reflected in our results are before tax $2 $1 billion of tendency of adjusted funds from operations includes approximately $500 million of FIFO gains on.
On a LIFO basis, the $1 6 billion as a result of a significant increase from the prior quarter.
Reflect nearly 100% margin capture will be.
Exceptional market conditions, despite the planned maintenance across all our Canadian refineries.
These margins are captured by prioritizing the highest margin channel on the flexibility within our network.
To place in the second quarter performance in perspective, we beat our prior adjusted funds from operations record by over 30%.
This was achieved even with our planned maintenance and whatnot.
Mark travel are driving season is yet to occur.
Again, I have to credit the performance of our logistics and marketing cheaper assets in achieving this performance.
Lastly, I would also like to reiterate that our capital allocation policy remains on track to increase to 75% of excess funds towards share buybacks. Once a $12 billion net debt target is achieved.
All of them and achieve that leads into the second half of this year.
I'll now pass it back to Chris for some closing remarks.
Thanks, very much Alistair.
As I mentioned earlier my number one focus is improving suncor safety and operating performance.
I've been deeply engaged with the management team and our improvement plan and its execution is to drive that improvement and strengthen our safety culture.
We completed independent safety assessment last year, and we're clear on what we need to do to improve our safety performance.
We do not need more diagnosis, but what we do need to do with execute and Mike OLED to deliver on this execution with focus and at an accelerated pace.
I'll be working with my team on delivering a clear accelerates a improvement plan that is focused on building a stronger safety culture, strengthening our risk management systems and improving contractor safety performance.
And in my view foundational to this will be engaging in enabling our frontline to deliver safe work each and every day.
I'll also be working with my team to make sure we have the right organizational structure capabilities and talent in place across the business to drive operational excellence.
We've already taken many steps in this regard, including assembling a strong central operational risk management team and staff by experienced operating people as.
As well as making key senior leadership changes within our oil sands and downstream businesses.
We will continue to make sure that we have the right people systems and structure to drive our performance forward.
And I will be focused on reducing complexity and driving organizational focus across the company company to deliver operating excellence capital discipline, and our free funds growth commitments.
And as you know our compensation systems are tied strongly to our performance, including environmental safety operating and cost performance.
Going to be working with the board and our executive team to further strengthen the connection between safety performance and compensation. According our organizational focus on reducing serious injuries and eliminating fatalities.
Again to be clear my commitment is to guide our company effort and focus on improving our safety and operating performance, while executing our long term strategies strengthening our balance sheet and growing long term returns to shareholders.
To put it simply we need to do is get back to basics with focus and follow through and that's exactly what we're going to do.
Finally, we plan to hold the recently deferred industrial operational day in the fall at which time, we will describe our safety and operational improvement plans and actions in more detail.
Announcement of the data that presentation will be coming out shortly.
And with that Trevor I'll turn it back over to you.
Thank you, Chris and Alastair I'll turn the call back to the operator to take some questions operator.
Ladies and gentlemen, once again, if you have a question or comment at this time. Please press star one one on your telephone keypad.
Standby, while we compile the Q&A roster.
Our first question or comment comes from the hiring of <unk>.
Greg Pardy from RBC capital markets. Mr. Part of your line is open.
Hey, Thanks, Thanks, Good morning, and Chris Good to connect again, thanks for the thanks for the rundown I know you're going to talk in more depth around the safety initiatives, but can you perhaps to shed some light on maybe what you've uncovered whether it's from a causality perspective.
And perhaps just what some of the safety reset initiatives.
We are underway right now.
Yes, thanks for the question, Greg and good to connect as well too.
As I mentioned in the remarks, we did we did some in depth safety assessment last year, and particularly related to the fatality that we had in the mine tailings areas of our business.
And out of that safety assessment and took a number of recommendations and started a number of actions and so theres been a number of things underway.
And examples would be.
We've talked about this in the past investments in technologies to make operations in that part of the business inherently safer collision avoidance technology to keep management technologies as well as team has been working doing full reviews of high risk.
Areas in that part of the business to validate controls and working with the with the teams are working in those areas as well and in addition, we're strengthening our risk management systems from the center working with those areas of the company.
As I look at it hasnt been working with the team that we need to continue the momentum on those things we need to see where we can accelerate the pace quite frankly, but the other part in my view. That's really important is we have to engage to enable our front line. We have to work with the frontline because vascular work happens, that's where the decisions happen each and every day around the work we do.
And managing risks and that's working with the people managing the frontline the people doing work at the frontline and so thats going to be a big focus not that it wasn't but I see that as an area that we can accelerate further because in my view Greg at the end of the day safety conscious about the work, we do and how we do that work and we really want to strengthen how we are doing work at the frontline.
<unk>.
Okay. Thanks for that second question is maybe could you provide us.
With a current status update not long, but just maybe just a quick hits on.
Where base oil Sands Fort Hills, and Syncrude would sort of be sitting right now like are they at full rates are there any issues, we should be aware of.
Yeah, and maybe I'll cover a little bit of Q2, and then in talking to where we are right now Greg consensus bridge into it but as we looked at the second quarter. We saw strong performance in Syncrude and we're continuing to see that as we move into the quarter and they're obviously have moved into their large turnaround event and it's off to a very good start.
Fort Hills.
In line with plans to plant maintenance last year end and coming out of that maintenance continuing with our expectations on plan.
And as well or is that your operations have returned from the incident at Mackay River in the second quarter, and then fire bag.
Completed its turnaround and have moved forward into the third quarter at capacity.
The issue has been an based plan that's what we saw in the second quarter, we saw it and you weren't upgrading.
With some reliability issues and we saw it in the front end and mine extraction.
<unk> issued some of them are persisting into the second quarter.
In Q1, they're going to get addressed in the upcoming maintenance events.
We've also pulled some of the work from Q4 into that event. So we can create a really clean fourth quarter as well and then the front end issues that we're seeing in mine extraction, while we've been resolving them. They are persisting into the third quarter, they will get resolved as well.
So the way I would think about it Greg is our Q3.
So we have large maintenance and syncrude as you know we.
We have maintenance going on in Q1.
Other operations as I mentioned are on plan and so we're going to be you can expect Q3 to look similar to Q2, and then we're going to be setting up we have no maintenance in front of us going into Q4.
Okay understood. Thanks, very much Chris and good luck.
Thanks, very much Greg.
Thank you. Our next question or comment comes from the line of Manav Gupta from Credit Suisse. Mr. Gupta. Your line is open.
Good morning, guys. My question is one.
The slight increase in Capex does it looks like more of an adjustment can you help us understand what part of it was some inflation and then what part of the decision to go back into West White Rose if you could give us some clarifying comments.
Yes, no. Thanks, thanks very much for that question. So, yes, we did adjust our capital guidance up.
And as I mentioned in my remarks, there's really three factors driving that the west White Rose project restart and our increased.
Working interest in that project recall as well that when we took the increased working interests. We did get proceeds from the operator for taking that on.
Offset a good portion of our capital in this year from that project this year.
As well, we have increased spend related to turnarounds and maintenance year to date and that relate to found work as well as decision to undertake other work. So that we could ensure we're improving safety and reliability are strengthening.
And then thirdly is the general inflationary pressures so to give you some sense of sort of the magnitude about half the forecast are guided increases inflationary pressures and the other half is related to those other two buckets.
Perfect and a quick follow up here.
<unk> been very clear that once you kind of get to that 12 billion then 75% of the free cash would be moving towards buyback when we look at the second quarter. It looks like you had already on that run rate there.
75% of the free cash is moving towards buyback could you just comment on the pace of buybacks, which was very strong in the second quarter.
Yes, Thanks, Bob I'll take that one.
Yes, if you look at the second quarter.
We focused on the buybacks our capital allocation policy is really on an annual basis, we will pick and choose revenues that are reduction or buybacks in any particular multipolar you made the decision to focus on buybacks.
Second quarter, you will see us strongly in the third and fourth quarters to see that it's just really a function of cash flow generation.
We think the opportunities are from an economic perspective, you felt we were strongly in the buyback.
We will be rising interest rate developments during the second half will meet bond redemption cheaper than in the first half so economically better and then we have more cash flow generation in the second half, particularly with asset sales coming in.
Thank you for that and we look forward to meeting you again in the fall event. Thank you.
Thank you. Our next question or comment comes from the line of Dennis from from CIBC. Your line is open.
Hi, good morning, and thanks for taking my questions, maybe the first one to build off of what Greg was asking on.
And then a little bit of what Manav with echelon, just with respect to the.
The capex measures associated with.
Improvement in safety and reliability and so forth I was curious as to Hasnt changed necessarily any of the timing I know in our previous conference call. There was a discussion around installation of anti collision technology has that been brought forward at all just given some of the changes with capital spending.
Yes, no. Thanks, Dennis for that question. So yes, we do have these programs underway and they are over a period of time to implement this technology through 2022 and 'twenty three.
We're looking right now at where there's opportunities to accelerate that where it makes sense.
We're going to obviously be limited by the pace at which we can do it just to get the technology out into all of the equipment, but right now we're taking a look to see where are those opportunities arent material it doesn't material capital.
At the end of the day, it's about how at what pace can we get this these investments in place related to those systems.
Great. Thanks, and my second question here is just around the $2 one 5 billion.
Free funds flow growth.
Just as you've outlined a little bit around.
Increased cat.
Can you just mentioned.
The improvement in safety measures, how does that potentially impact some of the initiatives like digital mine optimization.
As well as kind of technology initiatives that you are going forward.
Yes.
Okay. So recall, our free funds flow initiatives. There are a number of projects or initiatives that really fall into three buckets ones that are driving revenue and margin enhancements ones that are driving capital efficiencies and ones that are driving cost reductions and some initiatives will span.
Tumor more of those buckets and and we're seeing certainly really good progress on a number of those fronts and particularly on our projects early on in the program have been focused on margin and revenue enhancement and an example would be the interconnected pipeline that we that we put in place which quite frankly.
It's performing better than our expectations in terms of driving value and cash.
In terms of the cost side of it I mean, we do see headwinds obviously right now on the cost side in.
Inflationary pressures that I was talking about and so thats something that will cause us to take a look at those initiatives and see can we accelerate is there other things we can be doing to offset.
And with respect to the technology piece that is a big play in terms of driving driving efficiency and driving cash and give you just a few examples we just completed.
Our ERP implementation with SBS for it was probably one of the largest ones in industry.
And from stem to stern upstream to downstream we went live in April .
We're now getting get into the mode of sustaining that system.
We can move into starting to optimize and get the benefit. There is an example of using technology to drive efficiencies in the work we do in a standard way as well as our central teams technology and digital teams are working with the business is upstream and downstream on opportunities to use data analytics and digital.
To drive to drive value, particularly through.
Revenue and margin enhancement and just the operation of the business. So I think to get back to you to get back to the end of your question. I think you are asking about the technology and digital part of it we'll look to see where we can accelerate those where it makes sense.
One of the things I'm going to do is.
Take a review of the portfolio of initiatives with the team to look for opportunities to accelerate and also make sure that we're focusing on the highest value one and driving that focus on those and then looking for further opportunities just given the headwinds that we're seeing.
Perfect really appreciate the color that you've provided I'll turn it back thanks.
Thank you. Our next question or comment comes from the line of Doug <unk> from Bank of America.
Good morning, everyone.
From Bank of America, Thanks for asking.
Chris I guess I know you've touched on this already a couple of times, but.
I think you said you don't need more diligence. So more reviews, you just need to execute what if I may have you identified as the key differences between.
Similar to our operations that your peers on very different safety records is that something you can kind of frame to say this is where we need to address so how would you frame those differences.
Yeah, no. Thanks very much for that so if we go back to the safety assessments and go back to where we've seen these tragic and things happening there primarily there in one area of the business minus <unk> and when I say, we don't need more diagnosis, we've undertaken a very detailed safety assessments with independent analysis.
With independent experts coming in.
Which I've outlined a number of recommendations and as I mentioned, a few of them technology, we've already talked about as well as really understand going in and looking at a high risk activity heavy to heavy vehicle contact light heavy vehicle contact working around what are the big risks that happened in that end of the business and just ensuring that our controls are robust.
And then.
It's not robust enough ensuring that we get those controls in place.
Incidents.
They also come down too.
Two the work that's happening and how the work is happening. So we're really focused on understanding how the work is happening at the frontline how.
Continuing to drive and strengthened safety.
Safety culture throughout the company and so we're not just focused in that one area of the business, we're going to continue to strengthen across the company.
I know, it's not an easy answer easy question to answer Chris. Thank you for the call.
<unk>.
I guess my follow up is for all of the store, but it's a pretty straightforward one I hope I understood why is $9 billion.
Hard floor for net debt is that the right number.
Yes, that's a good question, Doug if you actually look at it.
In a low commodity price environment, and what are you satisfied $40 <unk>.
Look buckler is to be generally at around about $6 billion of cash flow in that environment low commodity price months lower crack spreads. So the $9 billion is derived from.
Yes.
Coverage on.
Barbara.
We would be one five times, our free cash flow of $9 billion.
Thats a reasonable level at a low point in the cycle gives us some scope to take upwards.
In Florida for a shorter period of time, but essentially the rationale for awhile.
Okay fair enough. Thanks, very much thanks, guys.
Okay.
Thank you. Our next question or comment comes from the line of minimal wholesale from TD Securities. Your line is open.
Good morning, Thanks for taking my questions I'll start with one on retail.
I know you can't say too much given the ongoing strategic review, but as the former head of downstream would you be able to give us your high level thoughts on how you.
You would expect a retail sale or spin out to impact your downstream margins and your downstream business more generally.
Yes. Thanks for the question Menno in and as we've outlined we have setup that review process, we have an independent.
Board Committee setup at already underway undertaking that review and the decision will be taken by the board and we are reviewing all the options related to that business from you mentioned some of those options.
And so we're going to pursue that work and support the board in that assessment through the coming months and then be in a position to have a decision and get back to you and with that with that decision in Q4 in terms of your question with respect to how would it affect downstream margin.
Thats exact that.
That's one of the key pieces of doing this work and supporting the decision of the board around the business and look at the different alternatives and what the value they create.
And the impact that they will have on on the integrated model and the business.
To wrap back business as well so that's a that's a key aspect of doing the work and then and then providing that that really.
Good clear unbiased view of both sides of that question to come to the best decision. So that when would you make the decision around the retail business. It's in the best interest of driving long term value for the shareholders.
Perfect. Thanks, Chris and then the second one is for Alister and.
Your expectation that you get to a 75% return on free cash flow by the ended the year and I noticed that that does include that.
Disposition proceeds. So my question is which asset sales are included in that.
Calculation and I'm, probably stretching here, but would you be able to give us a rough sense of how much is being modeled in terms of aggregate proceeds.
Yes, so your custom Menno, obviously, Norway is in there.
Evidence of us around $400 million.
We're looking at.
The wind and solar sale as well I'm not gonna maintenance growth.
Because obviously, we're seeing tremendous some negotiations.
Okay, and so presumably the UK would not be in there.
No no absolutely not but it won't be in there it will be a 2023 number.
Okay perfect. Thanks Alastair.
Thank you.
Next question or comment comes from the line of John Royall from Jpmorgan, Mr. Roy or your line is open.
Good morning, guys. Thanks for taking my question.
So in refining.
Understood that youre done with major maintenance for the year, but just a broader question on turnarounds going forward I'm wondering if.
This year, you'll be fully caught up on any deferrals of turnarounds you might have taken as a result of the pandemic.
And is there anything beyond kind of normal course looking into next year any early look there.
Thanks for the question John .
It's a straightforward answer yes, we don't we're not managing any deferral deferrals out of the pandemic. We are on a regular turnaround cycles and so next year well, our turnarounds will be part of that normal cycle.
Great. Thank you and then.
You had a big working capital headwind in <unk> was just wondering if you could speak to the source of that drag and maybe how much of its price related and should we expect maybe about the turnaround in the back half of the year.
Yes, so price related I mean, it's really a kind of receivable in our inventory valuation.
Mainly for repurchases.
<unk> Street Sadly.
<unk> remain lower as you have seen over the last couple of weeks and we expect to see some of that released in Q3 Q4.
Great. Thank you.
Thank you. Our next question or comment comes from the line of Roger read from Wells Fargo. Mr. Read Your line is open.
Yeah. Thank you good morning.
Good morning back to.
Hey, good morning, Chris I'd like to come back to the safety aspects of the company I mean, it seems like the one factor that really sort of separates what's been going on at Suncorp from the rest obviously the board is looking for a new executive leader before the year's out or early next year.
That person will want to put their stamp on it but what do you feel you can get done between now and then from a safety and from a culture standpoint to get to the.
Company pointed all the ride corrections.
Yeah. Thanks for that question Roger.
And my focus is to drive safety and operational improvement and to really do the things that I talked about earlier.
The board will make a decision in terms of the permanent CEO and probably in that timeframe you just outlined but in the meantime, we can't stand still and I have the full support of the board to drive the changes necessary and to engage to do the things with the executive team and all our employees to get to get the improved performance we're looking for.
I was wondering if I could just dig into that a little bit more.
Do you feel that some of the safety issues.
Is it as simple as technology in an underinvestment or does it feel like it was more of a maybe misplaced.
Goals in other words, focusing on one thing, but forgetting maybe some of the other important aspect. So I'm just trying to get a feel for.
What it really will take to correct. This whether its done in the next six months or it's done over the next 18 months.
Yes, no. Thanks, Thanks Roger.
This isn't about about.
We had some underinvestment or missing second our technology is an enabler.
It's one of the things that we can.
Implement two to improve our ability to manage the risks and if we do fail fail safely and but that's not that's not at its roots. The issue. The fact that those systems work there.
Similarly, this is in my view, it's not about.
Yes.
Put the focus of the organization in the wrong places and when we look at it comes back to what I was describing earlier, it's about it's about the execution of the work and if I go back to the incident that we have had it's been how the works been executing appealed and we have to get and while technology will be a huge enabler and we will implement those.
And while we will absolutely be strengthening our systems and processes and procedures, but we have great systems processes and procedures, it's really enabling and engaging to ensure that that works happening safely each and every day in the field and so that's really I think the area in my view that that needs to focus and attention.
And this isn't.
It's a question of sort.
The thing, we didnt invest in technology, and therefore, we've had safety issues.
Not the case.
No. That's fair I mean, my experience with this is it tends to be more of a cultural issue and just sort of focusing on the right things.
I guess in the future. If you can kind of give us an idea of.
That focus has shifted.
And say.
Safety really being core enough to drive the changes and other processes that would be great. I. Appreciate your comments. Thank you.
Alright, Thanks Roger.
Thank you.
Showing no additional questions in the queue at this time I would like to turn the conference back over to Mr. Trevor Bell Vice President of Investor Relations.
Thank you operator, and thanks, everyone for joining us today.
If you have any follow up questions. Please reach out to myself or my team and we're happy to answer them again, Thank you for attending.
Ladies and gentlemen, thank you for participating in today's program. This concludes the program you may now disconnect everyone have a wonderful day.
The conference will begin shortly to raise your hand during Q&A you can dial one one.
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Okay.
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