Q3 2023 Imperial Oil Ltd Earnings Call

October 27, 2023

Speaker 1: transcript

Speaker 1: Eight.

Yes.

[music].

Operator: Good day, and welcome to the Imperial Oil Q3 2023 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Dave Hughes, Vice President, Investor Relations. Please go ahead.

Please standby.

Speaker 2: transcript

Speaker 2: Good day and welcome to the Imperial Oil 3Q23Earnings call. Today's conference is being requested.

Good day and welcome to the Imperial oil <unk> 23 earnings call. Today's conference is being recorded at this time I would like to turn the conference over to Dave Hughes, Vice President Investor Relations. Please go ahead.

Speaker 2: transcript

Speaker 2: At this time, I would like to turn the conference over to Dave Hughes, Vice President and Vester Relations. Please go ahead.

Dave Hughes: Good morning, everybody. Welcome to Our Q3 Earnings Conference Call. I'm joined this morning by Imperial's senior management team, including Brad Corson, Chairman, President, and CEO, Dan Lyons, Senior Vice President, Finance and Administration, Sherri Evers, Senior Vice President of Sustainability, Commercial Development, and Product Solutions, and Simon Younger, Senior Vice President of the Upstream. We're also joined today by the new Vice President of Investor Relations, Peter Shaw. Today's comments include reference to non-GAAP financial measures. The definitions and reconciliations of these measures can be found in attachment six of our most recent press release and are available on our website with the link to this conference call. Today's comments may also contain forward-looking information. Any forward-looking information is not a guarantee of future performance, and actual future performance and operating results can vary materially depending on the number of factors and assumptions.

Speaker 3: transcript

Speaker 3: Good morning everybody. Welcome to our third quarter earnings conference call.

Good morning, everybody welcome to our third quarter earnings Conference call.

Speaker 3: transcript

Speaker 3: I'm joined this morning by Imperial Senior Management team, including Brad Corson, Chairman, President and CEO , Dan Lyons, Senior Vice President, Finance, Administration, Sherry Evers, Senior Vice President, Sustainability, Commercial Development, and Product Solutions, and Simon Younger, Senior Vice President of the upstream. I'm also joined today by the new Vice President Investor Relations Peter Shaw.

Joining me this morning by Imperial Senior management team, including Brad Corson, Chairman President and CEO.

Dan Lyons Senior Vice President Finance administration.

Jerry <unk> senior Vice President of sustainability commercial development and product solutions, and Simon younger senior Vice President of the upstream.

Joined today by the New Vice President of Investor Relations Peter Shaw.

Speaker 3: transcript

Speaker 3: Today's comments include reference to non-gape financial measures. The definitions and reconciliations of these measures can be found in attachment six of our most recent press release and are available on our website with fully-to-this conference call. Today's comments may also contain forward looking information. Any forward looking information is not a guarantee of future performance and actual future performance and operating results can vary materially depending on the number of factors in assumptions.

Todays comments include reference to non-GAAP financial measures definitions and reconciliations of these measures can be found in the attachment six of our most recent press release and are available on our website with pulling to its conference call.

Operator: Please stand by. The day I welcome to the Imperial Oil 3Q23 earnings call. Today's conference is being recorded.

Todays comments may also contain forward looking information any forward looking information is not a guarantee of future performance and actual future performance and operating results can vary materially depending on a number of factors and assumptions.

Dave Hughes: At this time, I would like to turn the conference over to Dave Hughes, Vice President Investor Relations. Please go ahead.

Dave Hughes: Forward-looking information and the risk factors and assumptions are described in further detail in our Q3 earnings release that we issued this morning, as well as our most recent Form 10-K. All these documents are available on SEDAR, EDGAR, and on our website. Please refer to those. Brad will start with opening remarks, and then Dan will provide us with a financial update, and then he'll go back to Brad for an operations update. Once that's done, Peter will take over and take us through the Q&A period. With that, I'll turn it over to Brad.

Speaker 3: transcript

Speaker 3: Forward-looking information and the risk factors and assumptions are described in further detail in our third quarter earnings release that we issued this morning as well as our most recent form 10k. All these documents are available on Cedar Edgar and on our website. So please refer to those.

Forward looking information and the risk factors and assumptions are described in further detail in our third quarter earnings release that we issued this morning as well as our most recent Form 10-K. All of these documents are available on SEDAR Edgar and on our website. So please refer to those.

Dave Hughes: Good morning, everybody. Welcome to our third quarter earnings conference call. I'm joined this morning by Imperial senior management team, including Brad Corson, Chairman, President, and CEO. Dan Lyons, Senior Vice President, Finance, Administration, Chair Evers, Senior Vice President, Sustainability, Commercial Development, and Product Solutions, and Simon Younger, Senior Vice President of the upstream.

Speaker 3: transcript

Speaker 3: Rob will start with Oping remarks and then Dan will provide us with a financial update and then he'll go back to Brad for an operations update. And once that's done, Peter will take over and take us through the Q&A periods. So if that'll turn it over to Brad.

I will start with opening remarks, and then Dan will provide us with a financial update and then I'll go back to Brad for an operations update and once that's done Peter will take over and take us through the Q&A periods, so with that I'll turn it over to Brad.

Dave Hughes: I'm also joined today by the new Vice President Investor Relations Peter Shaw. Today's comments include reference to non-gap financial measures. The definitions and reconciliations of these measures can be found in the attachment six of our most recent press release, and are available on our website, but fully to this conference call. Today's comments may also contain forward-looking information. Any forward-looking information is not a guarantee of future performance. In actual future performance and operating results can vary materially, depending on the number of factors and assumptions.

Brad Corson: All right. Thanks, Dave. Well, good morning, everybody, and welcome to our Q3 earnings call. Hope everyone's doing well. I'm really pleased to report another strong quarter for Imperial. We saw strong performance across both our Upstream and Downstream businesses, and we are seeing continued strength as we move into the Q4. Notwithstanding some tempering of demand, the overall macro environment remains quite positive for our financial performance. We're continuing to experience high commodity prices driven by continued robust demand and lower than normal inventories. Our unrelenting focus on safety and reliability enables our strong operating performance in this environment and underpins the results which we will be talking about this morning. We remain committed to delivering reliable, affordable, and lower emission energy to Canadians. Now, let's talk about our Q3 performance.

Speaker 4: transcript

Speaker 4: All right, thanks Dave. Well, good morning everybody and welcome to our third quarter earnings call. Hope everyone's doing well. I'm really pleased to report another strong quarter for Imperial. We saw strong performance across both our upstream and downstream businesses, and we are seeing continued strength as we move into the fourth quarter.

Thanks, Dave.

Everybody and welcome to our third quarter earnings call I Hope everyone is doing well I'm really pleased to report another strong quarter for Imperial we saw strong performance across both our upstream and downstream businesses and we are seeing continued strength as we moved into the fourth quarter.

Dave Hughes: Forward-looking information and the risk factors and assumptions are described in further detail in our third quarter earnings release that we issued this morning, as well as our most recent form 10k. All these documents are available on Cedar Edgar and on our website. So please refer to those.

Speaker 4: transcript

Speaker 4: Notwithstanding some tempering of demand, the overall macro environment remains quite positive for our financial performance.

Notwithstanding some tempering of demand the overall macro environment remains quite positive for our financial performance.

Speaker 4: transcript

Speaker 4: We're continuing to experience high commodity prices driven by continued robust demand and lower than normal inventory.

We're continuing to experience high commodity prices driven by continued robust demand and lower than normal inventories.

Speaker 4: transcript

Speaker 4: Our unrelenting focus on safety and reliability enables our strong operating performance in this environment and underpins the results, which we will be talking about this morning.

Our unrelenting focus on safety and reliability enables our strong operating performance in this environment and underpins the results, which we will be talking about this morning.

Dave Hughes: Rob will start with a little ping remarks, and then Dan will provide us with a financial update, and then I'll go back to Brad for an operations update.

Speaker 4: transcript

Speaker 4: And we remain committed to delivering reliable, affordable, and lower emission energy to Canadians. Now let's talk about our...

And we remain committed to delivering reliable affordable and lower emissions energy to Canadians.

Dave Hughes: And once that's done, Peter will take over and take us through the Q&A periods.

Now, let's talk about our third quarter performance the.

Brad Corson: So if that'll turn it over to Brad. All right, thanks Dave.

Brad Corson: The results we will review over the next several minutes are reflective of a quarter that saw lower planned maintenance relative to the Q2. We completed a turnaround at Cold Lake safely and consistent with our plans. We also began planned turnaround work at Syncrude and also at Sarnia that continued into the Q4. As of today, the turnaround at Sarnia is mechanically complete, and the facility is in the process of starting up. Syncrude is expected to complete in the coming weeks. The Q3 also saw continued strength in the commodity price environment, with benchmark oil prices such as Brent, WTI, and WCS all improving versus last quarter. While we saw lower motor gasoline cracks toward the end of the quarter, diesel cracks strengthened throughout. Overall, refining margins remain solid.

Speaker 4: transcript

Speaker 4: The results we will review over the next several minutes are reflective of a quarter that saw lower plan maintenance relative to the second quarter. We completed a turnaround at cold lake safely and consistent with our plan.

Brad Corson: Well, good morning everybody and welcome to our third quarter earnings call. Hope everyone's doing well. I'm really pleased to report another strong quarter for Imperial. We saw strong performance across both our upstream and downstream businesses, and we are seeing continued strength as we move into the fourth quarter. Notwithstanding some tempering of demand, the overall macro environment remains quite positive for our financial performance. We're continuing to experience high commodity prices driven by continued robust demand and lower than normal inventories.

The results we will review over the next several minutes are reflective of a quarter that saw lower planned maintenance relative to the second quarter. We completed the turnaround at cold Lake safely and consistent with our plans. We also began planned turnaround work at Syncrude.

Speaker 4: transcript

Speaker 4: We also began plan turnaround work at SIMCOOT.

Speaker 4: transcript

Speaker 4: and also at Sarnia that continued into the fourth quarter. As of today, the turnaround at Sarnia is mechanically complete and the facility is in the process of starting up. And Sincrude is expected to complete.

And also at Sarnia that continued into the fourth quarter.

As of today the turnaround at Sarnia is mechanically complete and the facility is in the process of starting up.

And Syncrude is expected to complete in the coming weeks.

Brad Corson: Our unrelenting focus on safety and reliability enables our strong operating performance in this environment, and underpins the results, which we will be talking about this morning. And we remain committed to delivering reliable, affordable and lower emission energy to Canadians.

Speaker 4: transcript

Speaker 4: The third quarter also saw continued strength in the commodity price environment with benchmark oil prices such as...

The third quarter also saw continued strength in the commodity price environment with benchmark oil prices such as.

Speaker 4: transcript

Speaker 4: We have Grant WTI and WCS all improving versus last quarter.

Brent <unk> and WCS, all improving versus last quarter.

Speaker 4: transcript

Speaker 4: While we saw lower motor gasoline cracks toward the end of the quarter, diesel cracks strengthened throughout. And overall, refining marks.

While we saw lower motor gasoline cracks towards the end of the quarter diesel cracks strengthened throughout.

Brad Corson: Now let's talk about our third quarter performance. The results we will review over the next several minutes are reflective of a quarter that saw lower plan maintenance relative to the second quarter. We completed a turnaround at cold lake safely and consistent with our plans. We also began plan turnaround work at Syncrood and also at Sarnia that continued into the fourth quarter. As of today, the turnaround at Sarnia is mechanically complete, and the facility is in the process of starting up, and Sin Crude is expected to complete in the coming weeks.

And overall refining margins remained solid.

Brad Corson: Over the next few minutes, Dan and I will detail the results of this very strong Q3. Now let's review those Q3 results specifically. Earnings for the quarter were CAD 1,601 million, with cash from operating activities of CAD 1,946 million when excluding working capital impacts. These results reflect continued strong operational performance, and lower levels of planned maintenance across the Upstream and Downstream. We achieved total Upstream production of 423,000 gross oil equivalent barrels per day. The quarter was highlighted by the highest ever quarterly production at Kearl of 295,000 total gross oil barrels per day. In late September, Syncrude began work on its planned hydrotreater turnaround, which is expected to complete in the middle of Q4.

Speaker 4: transcript

Speaker 4: Over the next few minutes, Dan and I will detail the results of this very strong third quarter.

Over the next few minutes, Dan and I will detail the results of this very strong third quarter.

Speaker 4: transcript

Speaker 4: So now let's review those third quarter results specifically. Earnings for the quarter.

So now let's review those third quarter results, specifically earnings for the quarter.

Speaker 4: transcript

Speaker 4: We're 1,601 million with cash from operating activities of 1,946 million when excluding working capital impacts. These results reflect continued strong operational performance and lower levels of planned maintenance across the upstream and downstream.

We're $1 billion and $601 million with cash from operating activities of 1 billion at 946 million when excluding working capital impacts. These results reflect continued strong operational performance and lower levels of planned maintenance across the upstream and downstream.

Brad Corson: The third quarter also saw continued strength in the commodity price environment with benchmark oil prices such as grant WTI and WCS all improving versus last quarter. While we saw lower motor gasoline cracks toward the end of diesel cracks strengthened throughout and overall refining margins remained solid.

Speaker 4: transcript

Speaker 4: We achieved total upstream production of 423,000 gross oil equivalent barrels per day.

We achieved total upstream production of 423000 gross oil equivalent barrels per day.

Speaker 4: transcript

Speaker 4: The quarter was highlighted by the highest ever quarterly production in curl of 295,000 total gross oil.

The quarter was highlighted by the highest ever quarterly production hurdle of 295000 total gross.

Oil barrels per day.

Brad Corson: Of the next few minutes, Dan and I will detail the results of this very strong third quarter. So now let's review those third quarter results specifically. Earnings for the quarter were 1,601,000,000 with cash from operating activities of 1,946,000,000 when excluding working capital impacts. These results reflect continued strong operational performance and lower levels of planned maintenance across the upstream and downstream. We achieved total upstream production of 423,000 gross oil equipment barrels per day.

Speaker 4: transcript

Speaker 4: In late September , Thincrew began work on its planned hydro-treater turnaround, which is expected to complete in the middle of the fourth quarter.

In late September Syncrude began work on its planned hydro treater turnaround.

Which is expected to complete in the middle of the fourth quarter.

Brad Corson: This turnaround will have a smaller impact on volumes and costs in comparison to the much larger coker turnaround completed earlier this year. I'll talk about each asset in more detail in a few minutes. In the downstream, we continue to see very strong operating performance. Refining throughput averaged 416,000 barrels per day, which equates to a refinery utilization in the quarter of 96%, which includes the Sarnia site turnaround, which began in mid-September. As a reminder, the Sarnia turnaround included maintenance at our chemical facility as well. We ended Q3 with year-to-date refining utilization of 94%, which is consistent with our guidance for our refining business. On share buybacks, I'm very pleased to report that by mid-October, we had fully executed our accelerated normal course issuer bid.

Speaker 4: transcript

Speaker 4: This turnaround will have a smaller impact on volumes and costs in comparison to the much larger copier turnaround completed earlier this year. I'll talk about each asset in more detail in a few minutes.

This turnaround we will have a smaller impact on volumes and costs in comparison to the much larger coker turnaround completed earlier this year.

I'll talk about each asset in more detail in a few minutes.

Speaker 4: transcript

Speaker 4: In the downstream we continue to see very strong operating performance. Refining throughput average 416,000 barrels per day, which equates to a refinery utilization in the quarter of 96%, which includes the Sarnia site turnaround which began in mid-September. And as a reminder, the Sarnia turnaround included maintenance at our chemical facility as well.

In the downstream, we continue to see very strong operating performance.

Finding throughput averaged 416000 barrels per day, which equates to a refinery utilization in the quarter of 96%, which.

Which includes the Sarnia site turnaround, which began in mid September and as a reminder, the Sarnia turnaround included in maintenance at our chemical facilities as well.

Brad Corson: The quarter was highlighted by the highest ever quarterly production and curl of 295,000 total gross oil barrels per day. In late September, Sin Crude began work on its planned hydro-treater turnaround, which is expected to complete in the middle of the fourth quarter. This turnaround will have a smaller impact on volumes and costs in comparison to the much larger copper turnaround completed earlier this year. I'll talk about each asset in more detail in a few minutes.

Speaker 4: transcript

Speaker 4: We ended the third quarter with year to date refining utilization of 94% which is consistent with our guidance for our refining business.

We ended the third quarter with year to date refining utilization of 94%, which is consistent with our guidance for our refining business.

Brad Corson: On share buybacks, I'm very pleased to report that by mid-October, we had fully executed our accelerated normal course issuer bid. These buybacks represented an additional CAD 1,342 million of cash returned to our shareholders during the quarter, and another CAD 958 million in October, for a total return of CAD 2.3 billion, representing 5% of our shares. Earlier today, we announced our intention to initiate another substantial issuer bid to return an additional CAD 1.5 billion to our shareholders in Q4. With that, I'll pass things over to Dan.

Speaker 4: transcript

Speaker 4: I'm sure by backs. I'm very pleased to report that by mid-October, we had fully executed our accelerated normal course issue or been.

On share buybacks.

Very pleased to report that by mid October we had fully executed our accelerated normal course issuer bid.

Brad Corson: These buybacks represented an additional CAD 1,342 million of cash returned to our shareholders during the quarter, and another CAD 958 million in October, for a total return of CAD 2.3 billion, representing 5% of our shares. Earlier today, we announced our intention to initiate another substantial issuer bid to return an additional CAD 1.5 billion to our shareholders in Q4. With that, I'll pass things over to Dan.

Speaker 4: transcript

Speaker 4: These buybacks represented an additional $1,342,000,000 of cash returned to our shareholders during the quarter and another $958,000,000

These buybacks represented an additional $1.342 billion of cash returned to our shareholders during the quarter and another $958 million.

Brad Corson: In the downstream, we continue to see very strong operating performance, refining throughput average 416,000 barrels per day, which equates to a refinery utilization in the quarter of 96%, which includes the Sarnia site turnaround which began in mid-September. And as a reminder, the Sarnia turnaround included maintenance at our chemical facility as well. We ended the third quarter with year-to-date refining utilization of 94%, which is consistent with our guidance for our refining business.

Speaker 4: transcript

Speaker 4: in October for a total return of $2.3 billion, representing 5% of our shares. And earlier today, we announced our intention to initiate another substantial issuer bid to return an additional $1.5 billion to our shareholders in the fourth quarter. So with that, I'll pass.

In October for a total return of two $3 billion, representing 5% of our shares and earlier today, we announced our intention to initiate another substantial issuer bid to return an additional $1 5 billion.

To our shareholders in the fourth quarter.

So with that I'll pass things over to Dan.

Dan Lyons: Thanks, Brad. Getting into the financial results for Q3, we reported net income of CAD 1,601 million, down about CAD 400 million from Q3 of 2022. We're down about CAD 200 million when we exclude the impact of the XTO Canada sale in the prior year. The decrease is primarily driven by lower refining margins in our Downstream business. Looking sequentially, our Q3 net income of CAD 1,601 million is up over CAD 900 million from Q2, reflecting stronger realizations and improved volumes, along with the absence of significant Q2 turnaround activity in both the Upstream and Downstream.

Speaker 3: transcript

Speaker 3: Thanks, Brad. Getting into the financial results for the third quarter, we recorded net income of $1,601,000,000, down about $400,000,000 from the third quarter of 2022. We're down about $200,000,000 when we exclude the impact of the XTO Canada sale in the prior year.

Thanks, Brad getting into the financial results for the third quarter, we reported net income of $1 billion and $601 million down about $400 million from the third quarter of 2022 were down about $200 million when we exclude the impact of the <unk>, Canada sale in the prior year the <unk>.

Brad Corson: On share bybacks, I'm very pleased to report that by mid-October, we had fully executed our accelerated normal course issue or bid. These bybacks represented an additional 1,342 million of cash return to our shareholders during the quarter and another 958 million dollars in October for a total return of $2.3 billion representing 5% of our shares.

Speaker 3: transcript

Speaker 3: The decrease is primarily driven by lower refining margins in our downstream business. Looking sequentially, our third quarter net income of $1,601,000,000 is up over $900,000,000 from the second quarter, reflecting stronger realizations and improved volumes along with the absence of significant second quarter turnaround activity in both the upstream and downstream.

Decrease is primarily driven by lower refining margins in our downstream business looking sequentially, our third quarter net income of $1 $601 million is up over $900 million from the second quarter, reflecting stronger realizations and improve volumes along with the absence of significant.

Brad Corson: And earlier today, we announced our intention to initiate another substantial issuer bid to return an additional 1.5 billion dollars to our shareholders in the fourth quarter.

Quarter turnaround activity in both the upstream and downstream.

Dan Lyons: Looking at each business line, the Upstream reported net income of CAD 1,028 million, up CAD 644 million from Q2, reflecting higher realizations and improved volumes post-plan turnaround activity at Kearl and Syncrude. The Downstream net income was CAD 586 million, up CAD 336 million from Q2, reflecting the absence of planned turnaround activities at the Strathcona refinery and stronger refinery margins. Finally, our Chemicals business generated net income of CAD 23 million, down CAD 48 million from Q2, reflecting weaker margins as well as impacts from the gas cracker turnaround that commenced in September. Moving on to cash flow. We ended the quarter with more than CAD 2.7 billion of cash on hand.

Speaker 3: transcript

Speaker 3: Looking at each business line, the upstream recorded net income of $1,028,000,000, up $644,000,000 from the second quarter, reflecting higher realizations and improved volumes post-plan turnaround activity at Perl and Syncrete.

Looking at each business line, the upstream reported net income of $1 $28 million up $644 million from the second quarter, reflecting higher realizations and improve volumes post planned turnaround activity at Pearl and Syncrude.

Daniel Lyons: So with that, I'll pass things over today. Thanks, Brad. Getting into the financial results for the third quarter, we recorded net income of $1,601 million down about $400 million from the third quarter of 2022. We're down about $200 million when we exclude the impact of the XCO Canada sale in the prior year. The decrease is primarily driven by lower refining margins in our downstream business.

Speaker 3: transcript

Speaker 3: The downstream net income was $586 million, up $336 million from the second quarter, reflecting the absence of planned turnaround activities at the Strathcona Refinery and Stronger Refinery margins.

The downstream net income was $586 million.

$336 million from the second quarter, reflecting the absence of planned turnaround activities at this draft Kona refinery and stronger refining margins.

Speaker 3: transcript

Speaker 3: Finally, our chemicals business generated net income of $23 million, down $48 million from the second quarter, reflecting weaker margins as well as impacts from the gas cracker turnaround that commenced in September .

Daniel Lyons: Looking sequentially, our third quarter net income of $1,601 million is up over $900 million from the second quarter, reflecting stronger realizations and improved volumes along with absence of significant second quarter turnaround activity in both the upstream and downstream. Looking at each business line, the upstream reported net income of $1,028,000,000 up $644,000,000 from the second quarter, reflecting higher realizations and improved volumes post-plan turnaround activity at Curl and Syncree. The downstream net income was $586,000,000, up $336,000,000 from the second quarter, reflecting the absence of planned turnaround activities at the Strathcona refinery and stronger refinery margins. Finally, our chemicals business generated net income of $23,000,000 down $48,000,000 from the second quarter, reflecting weaker margins as well as impacts from the gas cracker turnaround that commenced on September.

Our chemicals business generated net income of $23 million.

Down $48 million from the second quarter, reflecting weaker margins as well as impacts from the gas cracker turnaround that commenced in September.

Moving on to cash flow.

Speaker 3: transcript

Speaker 3: We ended the quarter with more than 2.7 billion dollars of cash on hand. In the third quarter, we generated almost 2.4 billion dollars in cash flows from operating activities and improvement of almost one and a half billion dollars over the second quarter, reflecting stronger earnings and favorable working capital impact.

We ended the quarter with more than $2 $7 billion of cash on hand.

Dan Lyons: In Q3, we generated almost CAD 2.4 billion in cash flows from operating activities, an improvement of almost CAD 1.5 billion over Q2, reflecting stronger earnings and favorable working capital impacts. Excluding favorable working capital impacts of CAD 413 million, cash flow from operating activities for Q3 was CAD 1.946 billion, up about CAD 800 million from Q2. Cash flows from operating activities were also impacted by unfavorable LIFO WAC deferred tax impacts, driven by higher commodity prices in Q3 as compared to Q2. As a U.S. GAAP LIFO reporter, we tend to see negative inventory-driven deferred tax impacts when prices rise and positive impacts when prices fall. Now we'll discuss CapEx.

In the third quarter, we generated almost $2 $4 billion in cash flows from operating activities an improvement of almost one $5 billion over the second quarter, reflecting stronger earnings and favorable working capital impacts excluding favorable working capital impacts of 413 million.

Speaker 3: transcript

Cash flow from operating activities for the third quarter was $1 $946 million up about $800 million from the second quarter.

Cash flows from operating activities were also impacted by unfavorable LIFO whack deferred tax impacts driven by higher commodity prices in the third quarter as compared to the second quarter.

Speaker 3: transcript

Speaker 3: As a U.S. GAAP LIFO reporter, we tend to see negative inventory-driven deferred tax impacts when prices rise and positive impacts when prices fall.

Daniel Lyons: Moving on to cash flow, we ended the quarter with more than $2.7 billion of cash on hand. In the third quarter, we generated almost $2.4 billion in cash flows from operating activities and improvement of almost $1.5 billion over the second quarter, reflecting stronger earnings and favorable working capital impacts. Excluding favorable working capital impacts of $413 million cash flow from operating activities for the third quarter was $1,946 million, up about $800 million from the second quarter.

As a U S. GAAP LIFO reporter, we tend to see negative inventory driven deferred tax impacts when prices rise and positive impacts when prices fall.

Now I will discuss capex.

Dan Lyons: Capital expenditures totaled CAD 387 million in Q3, down slightly from CAD 392 million in Q3 of 2022, but remain in line with our current year plans and full-year guidance of CAD 1.7 billion. In the upstream, Q3 spending focused on smaller projects to sustain and grow production at Kearl, Cold Lake, and Syncrude, as well as progressing the in-pit tailings project at Kearl and the SAGD Grand Rapids project at Cold Lake. In the downstream, Q3 spending mainly included progressing our renewable diesel project at Strathcona. Facility construction continues with project startup planned for 2025. Shifting to shareholder distributions. In Q3 of 2023, we paid CAD 292 million in dividends.

Speaker 3: transcript

Speaker 3: Capital expenditures totaled $387 million in the 3rd quarter, down slightly from $392 million in the 3rd quarter of 2022, but remain in line with our current year plans and full year guidance of $1.7 billion.

Capital expenditures totaled $387 million in the third quarter down slightly from $392 million in the third quarter of 2022, but remain in line with our current year plans and full year guidance of $1 7 billion.

Speaker 3: transcript

Speaker 3: In the upstream, third quarter spending focused on smaller projects to sustain and grow production at Curl, Cold Lake and Syncrude, as well as progressing the In-Pit Tailings Project at Curl and the S.A. Sag-Gee Grand Rapids Project at Cold Lake.

In the upstream third quarter spending focused on smaller projects to sustain and grow production at girl Cold Lake and Syncrude as well as progressing the in pit tailings project at Kearl.

Daniel Lyons: Cash flows from operating activities were also impacted by unfavorable LIFO-WAC deferred tax impacts driven by higher commodity prices in the third quarter as compared to the second quarter. As a US gap LIFO report, we tend to see negative inventory driven deferred tax impacts when prices rise and positive impacts when prices fall.

And the SA Saggy Grand Rapids project at Cold Lake.

Speaker 3: In the downstream third quarter spending mainly included progressing our renewable diesel project at Strathcona. Facility construction continues with project startup plan for 2025.

In the downstream third quarter spending mainly included progressing our renewable diesel project that scrap Kona facility construction continues with project startup plan for 2025.

Shifting to shareholder distributions.

Daniel Lyons: Now we'll discuss capital expenditures total $387 million in the third quarter, down slightly from $392 million in the third quarter of 2022, but remain in line with our current year plans and full year guidance of $1.7 billion. In the upstream, third quarter spending focused on smaller projects to sustain and grow production at Curl, Cold Lake, and Syncrood, as well as progressing the input tailings project at Curl and the SA SAG-G Grand Rapids project at Cold Lake. In the downstream, third quarter spending mainly included progressing our renewable diesel project at Strathcona, facility construction continues with project start-up plan for 2025.

Speaker 3: In the third quarter of 2023, we paid $292 million in dividends.

In the third quarter of 2023, we paid $292 million in dividends.

Dan Lyons: Beyond base dividends, we continue to demonstrate our long-standing commitment to return surplus cash to shareholders. As Brad noted, we completed our most recent accelerated NCIB program on 19 October, returning a total of CAD 2.3 billion to shareholders over the last four months. As Brad also noted, given our robust free cash flow generation, we intend to launch a substantial issuer bid, returning up to an additional CAD 1.5 billion to shareholders in Q4 2023. The terms and pricing will be determined, and the bid is expected to commence within the next two weeks. Lastly, this morning, we announced a Q4 dividend of CAD 0.50 per share, consistent with our Q3 dividend. Now I'll turn it back to Brad to discuss our operational performance.

Speaker 3: transcript

Speaker 3: Beyond base dividends, we continue to demonstrate our longstanding commitment to return surplus cash to shareholders. As Brad noted, we completed our most recent accelerated NCIB program.

<unk> base dividends, we continue to demonstrate our long standing commitment to return surplus cash to shareholders as Brad noted we completed our most recent accelerated NCI program on October 19th returning a total of $2 $3 billion to shareholders over the last four months and as Brad also.

Speaker 3: transcript

Speaker 3: on October 19th, returning a total of $2.3 billion to shareholders over the last four months.

Speaker 3: transcript

Speaker 3: And as Brad also noted, given our robust free cash flow generation, we intend to launch a substantial issuer bid, returning up to an additional $1.5 billion to shareholders in the fourth quarter of 2023. The terms and pricing will be determined and the bid is expected to commence within the next two weeks.

Noted given our robust free cash flow generation, we intend to launch a substantial issuer bid returning up to an additional $1 $5 billion to shareholders in the fourth quarter of 2023, the terms and pricing will be determined and the bid is expected to commence within the next two weeks lastly this.

Speaker 3: transcript

Speaker 3: Lastly, this morning, we announced the fourth quarter dividend of 50 cents per share consistent with our third quarter dividend. Now, I'll turn it back to Brad to discuss our operational performance.

We announced a fourth quarter dividend of <unk> 50 per share consistent with our third quarter dividend now I'll turn it back to Brad to discuss our operational performance.

Daniel Lyons: Shifting to shareholder distributions. In the third quarter of 2023, we paid $292 million in dividends. Beyond base dividends, we continue to demonstrate our longstanding commitment to return surplus cash to shareholders. As Brad noted, we completed our most recent accelerated NCID program on October 19, returning a total of $2.3 billion to shareholders over the last four months. And as Brad also noted, given our robust free cash flow generation, we intend to launch a substantial issue or bid, returning up to an additional $1.5 billion to shareholders in the fourth quarter of 2023.

Brad Corson: All right. Thanks, Dan. Now let's talk about our operating results for the quarter. Upstream production for the quarter averaged 423,000 oil equivalent barrels per day, which is up 60,000 barrels per day versus Q2 2023, and down 7,000 barrels per day versus Q3 last year. When adjusting for the sale of XTO that closed in Q3 last year, we are actually up around 5,000 barrels per day year on year. This higher production was driven primarily by strong performance at Kearl and the absence of Q2 turnaround work at both Kearl and Syncrude. This was partly offset by planned maintenance at Cold Lake and the commencement of Syncrude's hydrotreater turnaround in late September.

Speaker 4: transcript

Speaker 4: All right, thanks, Dan. So now let's talk about our operating results for the quarter upstream production for the quarter average 423,000 oil equivalent barrels per day, which is up 60,000 barrels per day versus the 2nd quarter of 2023 and down 7000 barrels per day versus the 3rd quarter of last year.

Alright, Thanks, Dan So now let's talk about our operating results for the quarter.

Upstream production for the quarter averaged 423000 oil equivalent barrels per day, which is up 60000 barrels per day versus the second quarter of 2023 and.

And down 7000 barrels per day versus the third quarter of last year.

Speaker 4: transcript

Speaker 4: When adjusting for the sale of XTO that closed in the third quarter last year, we are actually up around 5,000 barrels per day year on year.

When adjusting for the sale of <unk> that closed in the third quarter last year, we are actually up around 5000 barrels per day.

Year on year.

Daniel Lyons: The terms and pricing will be determined, and the bid is expected to commence within the next two weeks. Lastly, this morning, we announced a fourth quarter dividend of $0.50 per share, consistent with our third quarter dividend.

Speaker 4: transcript

Speaker 4: This higher production was driven primarily by strong performance at Curl and the absence of the second quarter turnaround work at both Curl and Syncrude. This was partly offset by planned maintenance at Cold Lake and the commencement of Syncrude's hydrotreater turnaround in late September .

This higher production was driven primarily by strong performance at Kearl and the absence of the second quarter turnaround work at both Karl and Syncrude. This was partly offset by planned maintenance at Cold Lake and the commencement of some crudes hydro treater turnaround in late September.

Brad Corson: Now I'll turn it back to Brad to discuss our operational performance. All right. Thanks, Dan. So now let's talk about our operating results for the quarter upstream production for the quarter average 423,000 oil equipment barrels per day, which is up 60,000 barrels per day versus the second quarter of 2023 and down 7,000 barrels per day versus the third quarter of last year. We are actually up around 5,000 barrels per day year on year.

Brad Corson: In the quarter, we saw WTI and WCS prices rise to the highest level in a year, leading to substantial strengthening of bitumen realizations. Going into Q4, we have seen a recent widening of the WTI, WCS differential, but the overall commodity environment remains strong, and the industry outlook for egress is positive. Now let's move on and talk specifically about Kearl. Kearl's production in Q3 averaged 295,000 barrels per day gross, which was up 78,000 barrels per day versus Q2 and up 24,000 barrels per day from Q3 of last year. I'm excited to highlight that this represents another production record and the best ever quarterly performance at Kearl, surpassing the previous record, which was set in Q4 of 2020 by 11,000 barrels per day gross. There's more.

Speaker 4: transcript

Speaker 4: In the quarter we saw WTI and WCS prices rise to the highest level in a year, leading to substantial strengthening of vitamin realization.

In the quarter, we saw at <unk> and WCS prices rise to the highest level in a year leading to substantial strengthening of bitumen realizations.

Speaker 4: transcript

Speaker 4: Going into the fourth quarter, we have seen a recent widening of the WTI-WCS differential, but the overall commodity environment remains strong and the industry outlook for egress is positive.

Going into the fourth quarter, we have seen a recent widening.

Of the <unk> WCS differential, but the overall commodity environment remains strong and the industry outlook for egress is positive.

Speaker 4: transcript

Speaker 4: So now let's move on and talk specifically about curl.

So now let's move on and talk specifically about Carl.

Speaker 4: transcript

Speaker 4: Curls production in the third quarter averaged 295,000 barrels per day gross, which was up 78,000 barrels per day versus

<unk> production in the third quarter averaged 295000 barrels per day, gross which was up 78000 barrels per day versus.

Brad Corson: This higher production was driven primarily by strong performance at Curl and the absence of the second quarter turnaround work at both Curl and Sincrew. This was partly offset by planned maintenance at Cold Lake and the commencement of Sincrew's hydro-treater turnaround in late September. In the quarter, we saw WTI and WCS prices rise to the highest level in a year, leading to substantial strengthening of vitamin realizations. Going into the fourth quarter, we have seen a recent widening of the WTI WCS differential.

Speaker 4: transcript

Speaker 4: the second quarter and up 24,000 barrels per day from the third quarter of last year.

The second quarter and up 24000 barrels per day from the third quarter of last year.

Speaker 4: transcript

Speaker 4: I'm excited to highlight that this represents another production record and the best ever quarterly performance at Curl.

I'm excited to highlight that this represents another production record and the best ever quarterly performance at Kearl, surpassing the previous record, which was set in the fourth quarter of 2020 by 11000 barrels per day gross and Theres more curl has also set a number of other.

Brad Corson: But the overall commodity environment remains strong and the industry outlook for egress is positive.

Speaker 4: transcript

Speaker 4: surpassing the previous record, which was set in the fourth quarter of 2020 by 11,000 barrels per day gross. And there's more. PERL has also set a number of other production records in the quarter, including the highest ever single month production of 322,000 barrels per day in September .

Brad Corson: Kearl has also set a number of other production records in the quarter, including the highest ever single-month production of 322,000 barrels per day in September. Also, the highest ever August production of 283,000 barrels per day, and a new daily production record of 360,000 barrels a day, which was set on 5 September. With a record performance at Kearl in Q3, we remain positioned to meet our full year guidance of 265,000 to 275,000 barrels per day. Turning now to cash operating costs for Kearl, which is another positive achievement.

<unk> records in the quarter, including the highest ever single month production of 322000 barrels per day in September.

Brad Corson: So now let's move on and talk specifically about Curl. Curl's production in the third quarter average 295,000 barrels per day gross, which was up 78,000 barrels per day versus the second quarter and up 24,000 barrels per day from the third quarter of last year. I'm excited to highlight that this represents another production record and the best ever quarterly performance at Curl, surpassing the previous record, which was set in the fourth quarter of 2020 by 11,000 barrels per day gross.

Speaker 4: transcript

Speaker 4: also the highest ever August production of 283,000 barrels per day and a new daily production record of 360,000 barrels a day which was set on September 5th.

Also the highest ever August production of 283000 barrels per day.

Brad Corson: And there's more. Curl has also set a number of other production records in the quarter, including the highest ever single month production of 322,000 barrels per day in September. Also, the highest ever august production of 283,000 barrels per day and a new daily production record of 360,000 barrels a day, which was set on September 5th. With a record performance at Curl in the third quarter, we remain positioned to meet our full year guidance of 265 to 275,000 barrels per day.

And a new daily production record of 360000 barrels a day, which was set on September five.

Speaker 4: transcript

Speaker 4: With a record performance at Curl in the third quarter, we remain positioned to meet our full year guidance of 265 to 275,000 barrels per day.

With our record performance at curl in the third quarter, we remain positioned to meet our full year guidance of 265 to 275000 barrels per day.

Speaker 4: transcript

Speaker 4: Turning now to cash operating costs for curl, which is another positive achievement. Unit cash operating costs in the quarter were just over $20 US per barrel. A decrease of over $7 US per barrel versus the second quarter due primarily to the absence of the plan turnaround.

Turning now to cash operating cost for curl, which is another.

Brad Corson: Unit cash operating costs in the quarter were just over $20 per barrel, a decrease of over $7 per barrel versus Q2, due primarily to the absence of the planned turnaround and the higher volumes. We also saw a decrease of almost $5 per barrel versus Q3 of last year. Year-to-date, cash operating costs at Kearl are just below $24 per barrel, which is about $5.75 per barrel lower than the same period in last year. This is the trending cost we are expecting to see as we continue to work towards our target of sustainable unit cash operating costs at or below $20 per barrel at Kearl. I'm very pleased to see these results and congratulations to the Kearl team.

Positive achievement unit cash operating costs in the quarter were just over $20 per barrel a decrease of over $7 per barrel versus the second quarter due primarily to the absence of the planned turnaround.

Speaker 4: transcript

Speaker 4: and the higher volumes. We also saw a decrease of almost $5 US per barrel versus the third quarter of last year. Your today cash operating costs at Curl are just below $24 US dollars per barrel, which is about $5.75 US dollars per barrel lower than the same period in last year.

And the higher volumes. We also saw a decrease of almost $5 U S.

Per barrel versus the third quarter of last year.

Year to date cash operating cost accrual or just below 24 U S dollars per barrel, which is about $5 75.

U S dollars per barrel lower than the same period last year.

Speaker 4: transcript

Speaker 4: This is the trending cost we are expecting to see as we continue to work towards our target of sustainable unit cash operating costs at or below US $20 per barrel at Curl. I'm very pleased to see these results and congratulations to the Curl team.

This is the trend in costs, we are expecting to see as we continue to work towards our target of sustainable unit cash operating costs at or below U S $20 per barrel at Carl I am very pleased to see these results and congratulations to the <unk> team.

Brad Corson: Turning now to cash operating costs for Curl, which is another positive achievement, unit cash operating costs in the quarter were just over 20 US dollars per barrel, a decrease of over seven US dollars per barrel versus the second quarter. Do primarily to the absence of the plan turnaround and the higher volumes. We also saw a decrease of almost $5 US per barrel versus the third quarter of last year. Year-to-day cash operating costs at Curl are just below 24 US dollars per barrel, which is about $5.75 US dollars per barrel lower than the same period in last year. This is the trending costs we are expecting to see as we continue to work towards our target of sustainable unit cash operating costs at or below US $20 per barrel at Curl.

Brad Corson: During Q3, we also completed the autonomous haul truck program, with all 81 of our Caterpillar 797F heavy haul trucks now fully converted to autonomous operation. With this, we now operate the largest autonomous fleet in our industry and one of the largest autonomous mining fleets in the world, which enables us to capture improvements in truck productivity, further enhance our safe operating environment, and also reduce operating costs. I'm very proud of what we have achieved to date with this program, and we continue to look at other potential opportunities to expand our autonomous concept to other areas of our mine fleet. This program reflects our commitment to safety, technology, and innovation and becoming the lowest cost operator.

Speaker 4: transcript

Speaker 4: During the third quarter, we also completed the Autonomous Hall Program with all 81 of our Cata Pillar 797F heavy hall trucks now fully converted to Autonomous Operations.

During the third quarter. We also completed the autonomous haul program with all 81 of our Caterpillar 797 as heavy haul trucks now fully converted to autonomous operation.

Speaker 4: transcript

Speaker 4: With this, we now operate the largest autonomous fleet in our industry and one of the largest autonomous mining fleets in the world, which enables us to capture improvements in truck productivity, further enhance our safe operating environment, and also reduce operating costs.

With this we now operate the largest autonomous fleet in our industry and one of the largest autonomous mining fleets in the world, which enables us to capture improvements in truck productivity further enhance our safe operating environment and also reduce operating costs.

Speaker 4: transcript

Speaker 4: I'm very proud of what we have achieved to date with this program. And we continue to look at other potential opportunities to expand our autonomous concept to other areas of our mind-fleet.

I am very proud of what we have achieved to date with this program and.

And we continue to look at other potential opportunities to expand our autonomous concept to other areas of our mining fleet.

Speaker 4: transcript

Speaker 4: This program reflects our commitment to safety, technology, and innovation, and becoming the lowest cost operates.

This program reflects our commitment to safety technology, and innovation and becoming the lowest cost operator.

Brad Corson: I'm very pleased to see these results and congratulations to the Curl team.

Brad Corson: During the third quarter, we also completed the Autonomous Hall Program with all 81 of our Caterpillar 797F Heavy Hall trucks now fully converted to autonomous operation. With this, we now operate the largest autonomous fleet in our industry and one of the largest autonomous mining fleets in the world, which enables us to capture improvements in truck productivity further enhanced our safe operating environment and also reduced operating costs. I'm very proud of what we have achieved to date with this program and we continue to look at other potential opportunities to expand our autonomous concept to other areas of our mine fleet. This program reflects our commitment to safety, technology, and innovation and becoming the lowest cost operator.

Brad Corson: In addition to completing the conversion of our haul trucks to autonomous operation, we also started up the sixth and final boiler flue gas waste heat recovery unit at Kearl. This technology recovers waste heat from a boiler's exhaust to pre-heat process water, resulting in less steam usage and lower greenhouse gas emissions, and is one of the key initiatives underpinning our 30% greenhouse gas intensity reduction target by 2030. The six units are expected to eliminate a total of 220,000 tons of CO₂ per year and also capture significant cost savings of approximately CAD 40 million per year. Wrapping up Kearl, I wanted to provide an update on the environmental protection order.

Speaker 4: transcript

Speaker 4: In addition to completing the conversion of our hall trucks to autonomous operation, we also started up the sixth and final boiler, flu gas waste heat recovery unit at Curl.

In addition to completing the conversion of our haul trucks to autonomous operation. We also started up the sixth and final boiler flue gas waste heat recovery unit at Kearl. This technology recovers waste heat from our boilers exhaust to preheat process water, resulting in less steam usage and lower greenhouse.

Speaker 4: transcript

Speaker 4: This technology recovers waste heat from a boiler's exhaust to preheat process water, resulting in less steam usage and lower greenhouse gas emissions.

Speaker 4: transcript

Speaker 4: And as one of the key initiatives underpinning our 30% greenhouse gas intensity reduction target by 2030.

Gas emissions and is one of the key initiatives underpinning, our 30% greenhouse gas intensity reduction target by 2030.

Speaker 4: transcript

Speaker 4: The fixed units are expected to eliminate a total of 220,000 tons of CO2 per year and also capture significant cost savings of approximately $40 million per year.

The six units are expected to eliminate a total of 220000 tons of Cotwo per year, and also capture significant cost savings of approximately $40 million per year.

Speaker 4: transcript

Speaker 4: Rapping up curl, I wanted to provide an update on the environmental protection order.

Wrapping up Carl I wanted to provide an update on the environmental protection order.

Brad Corson: With respect to the work at our site, as we have previously shared, key construction work was completed in June, and we continue to assess and conduct monitoring to determine if any further mitigations are required. Our initial data shows that the mitigations are working as intended and preventing further offsite migration of impacted water. We continue to engage with the Indigenous communities to ensure they are aware of the progress and to address any questions or concerns. To date, there is no indication of adverse impacts to wildlife or fish populations or risks to drinking water for local communities. With that, let's shift now to Cold Lake.

Speaker 4: transcript

Speaker 4: With respect to the work at our site, as we have previously shared, key construction work was completed in June , and we continue to assess and conduct monitoring to determine if any further mitigations are required. Our initial data shows that the mitigations are working as intended and preventing further offsite migration of impacted water.

Brad Corson: In addition to completing the conversion of our hall trucks to autonomous operation, we also started up the sixth and final boiler flu gas waste heat recovery unit at Curl. This technology recovers waste heat from a boiler's exhaust to pre-heat process water, resulting in less steam usage and lower greenhouse gas emissions and is one of the key initiatives underpinning our 30% greenhouse gas intensity reduction target by 2030. The six units are expected to eliminate a total of 220,000 tons of CO2 per year and also capture significant cost savings of approximately $40 million per year.

With respect to the work at our site as we have previously shared key construction work was completed in June and we continue to assess and conduct monitoring to determine if any further mitigation are required. Our initial data shows that the mitigation are working as intended and preventing.

Further off site migration of impacted water.

Speaker 4: transcript

Speaker 4: We continue to engage with the indigenous communities to ensure they are aware of the progress and to address any questions or concerns. And today there is no indication of adverse impacts to wildlife or fish populations or risks to drinking water for local communities. So

We continue to engage with indigenous communities to ensure they are aware of the progress and to address any questions or concerns and to date. There is no indication of adverse impacts to wildlife or fish populations or risks to drinking water for local communities.

So with that let's shift now to cold Lake.

Brad Corson: Wrapping up Curl, I wanted to provide an update on the environmental protection order. With respect to the work at our site, as we have previously shared, key construction work was completed in June, and we continued to assess and conduct monitoring to determine if any further mitigations are required. Our initial data shows that the mitigations are working as intended and preventing further off-site migration of impacted water. We continue to engage with the indigenous communities to ensure they are aware of the progress and to address any questions or concerns. And today, there is no indication of adverse impacts to wildlife or fish populations or risks to drinking water for local communities.

Brad Corson: Cold Lake production for Q2 averaged 128,000 barrels per day, which was 4,000 barrels per day lower than the Q2 and 22,000 barrels per day lower than the Q3 of last year. The lower Q3 production was primarily the result of steam cycle timing and the plant turnaround at the Nabiye plant, which was completed last month. With the maintenance work behind us, we expect Cold Lake to trend higher on volumes and are reiterating our guidance and expect to deliver full-year production in the range of 135,000 to 140,000 barrels per day. Moving to the Grand Rapids Phase One project, I'm pleased to share that the critical equipment tie-ins were completed during the recent Cold Lake turnaround.

Speaker 4: transcript

Speaker 4: Code Lake production for the second quarter, average 128,000 barrels per day, which was 4,000 barrels per day lower than the second quarter, and 22,000 barrels per day lower than the third quarter of last year.

Cold Lake production for the second quarter averaged 128000 barrels per day, which was 4000 barrels per day lower than the second quarter and 22000 barrels per day lower than the third quarter of last year.

Speaker 4: transcript

Speaker 4: The lower third quarter production was primarily the result of steam cycle timing and the plan turned around at the NABIA plan, which was completed last month.

The lower third quarter production was primarily the result of steam cycle timing and the planned turnaround at the <unk> plant, which was completed last month.

With the maintenance work behind us.

Speaker 4: transcript

Speaker 4: We expect co-lake to trend higher on volumes and are reiterating our guidance and expected deliver a full year production in the range of 135 to 140,000 barrels per day.

We expect cold lake to trend higher on volumes.

And are reiterating our guidance and expect to deliver full year production in the range of 135 to 140000 barrels per day.

Speaker 4: transcript

Speaker 4: Moving to the Grand Rapids Phase One project, I'm pleased to share that the critical equipment tie-ins were completed during the recent cold lake turnaround. The project is nearing completion and remains on track to achieve the accelerated startup timing with theme injection expected prior to year end.

Moving to the Grand Rapids Phase one project I am pleased to share that the critical equipment tie ins were completed during the recent cold Lake turnaround. The project is nearing completion and remains on track to achieve the accelerated startup timing with steam injection expected prior to year.

Brad Corson: So with that, let's shift now to cold lake. Cold lake production for the second quarter averaged 128,000 barrels per day, which was 4,000 barrels per day lower than the second quarter and 22,000 barrels per day lower than the third quarter of last year. The lower third quarter production was primarily the result of steam cycle timing and the plan turned around at the NABIA plan, which was completed last month, with the maintenance work behind us.

Brad Corson: The project is nearing completion and remains on track to achieve the accelerated startup timing with steam injection expected prior to year-end. Once fully up and running, phase one of this project is expected to deliver profitable production volumes of 15,000 barrels per day and support our emissions reduction strategy. Now a few comments on Syncrude. Imperial share of Syncrude production for the quarter averaged 75,000 barrels per day, which was up 9,000 barrels per day versus Q2 and up 13,000 barrels per day versus Q3 2022. Higher production in Q3 was primarily due to timing of the annual planned coker turnarounds. In 2022, Syncrude's coker turnaround began in Q3, and in 2023, work was primarily completed in Q2.

And.

Speaker 4: transcript

Speaker 4: And once fully up and running, phase one of this project is expected to deliver profitable production volumes of 15,000 barrels per day and support our emissions reduction strategy.

And once fully up and running phase one of this project is expected to deliver profitable production volumes of 15000 barrels per day and support our emissions reduction strategy.

Speaker 4: transcript

Speaker 4: So now a few comments on St. Crude. Imperial Sheriff's Include production for the quarter averaged 75,000 barrels per day, which was up 9,000 barrels per day versus the second quarter and up 13,000 barrels per day versus the third quarter of 2022.

So now a few comments on <unk>.

Syncrude.

Imperial share of Syncrude production for the quarter averaged 75000 barrels per day, which was up 9000 barrels per day versus the second quarter and up 13000 barrels per day versus the third quarter of 2022.

Brad Corson: We expect cold lake to trend higher on volumes and are reiterating our guidance and expected deliver full year production in the range of 135 to 140,000 barrels per day. Moving to the Grand Rapids Phase 1 project, I'm pleased to share that the critical equipment tie-ins were completed during the recent cold lake turnaround. The project is nearing completion and remains on track to achieve the accelerated startup timing with theme injection expected prior to year end.

Speaker 4: transcript

Brad Corson: And once fully up and running, Phase 1 of this project is expected to deliver profitable production volumes of 15,000 barrels per day and support our emissions reduction strategy.

Higher production in the third quarter was primarily due to timing of the annual planned coker turnarounds.

Speaker 4: transcript

Speaker 4: In 2022, Simgrew's Coker turn around began in the third quarter, and in 2023, work was primarily completed in the second quarter.

In 2022, Syncrude Coker turnaround began in the third quarter and in 2023 work was primarily completed in the second quarter.

Brad Corson: In late September, work began on Syncrude's planned hydrotreater turnaround, which is expected to be complete by mid-November. The impact in Q4 is expected to be around 4,000 barrels per day and around CAD 12 million in operating costs. Lastly, the interconnect pipeline continued to add value, enabling 9,000 barrels per day of Syncrude sweet premium production, which was imported over the quarter, helping to maintain high upgrader utilization when bitumen production experienced reliability and ore blend challenges throughout the quarter. Now let's move on and talk about the downstream. In Q3, we refined an average of 416,000 barrels per day, which was up 28,000 barrels a day versus Q2 and down 10,000 barrels per day versus Q3 2022, reflecting a utilization of 96%.

Speaker 4: transcript

Speaker 4: In late September work began on Syncroods plan hydro-treat or turnaround, which is expected to be complete by mid-November. The impact in the fourth quarter is expected to be around 4,000 barrels per day and around $12 million in operating costs.

In late September work began on Syncrude planned hydro treater turnaround, which is expected to be complete by mid November the impact in the fourth quarter is expected to be around 4000 barrels per day and around $12 million and operating costs.

Brad Corson: So now a few comments on St. Crude. Imperial share of St. Crude production for the quarter averaged 75,000 barrels per day, which was up 9,000 barrels per day versus the second quarter and up 13,000 barrels per day versus the third quarter of 2022. Higher production in the third quarter was primarily due to timing of the annual plan colder turnaround. In 2022, St. Crude's colder turnaround began in the third quarter and in 2023 work was primarily completed in the second quarter.

Speaker 4: transcript

Speaker 4: Lastly, the Interconnect Pipeline continued to add value, enabling 9,000 barrels per day of synchrored, sweet premium production.

Lastly, the interconnect pipeline continue to add value, enabling 9000 barrels per day of Syncrude sweep premium production.

Which was imported over the quarter.

Speaker 4: transcript

Speaker 4: helping to maintain high-upgrader utilization when vitamin production experience reliability and or blend challenges throughout the world.

Helping to maintain high upgrader utilization when bitumen production experience reliability and ore blend challenges throughout the quarter.

Okay.

Speaker 4: transcript

Speaker 4: Now let's move on and talk about the downstream. In the third quarter, we refined an average of 416,000 barrels per day, which was up 28,000 barrels a day versus the second quarter and down 10,000 barrels per day versus the third quarter of 2022, reflecting a utilization of 96%.

Now, let's move on and talk about the downstream in the third quarter. We refined an average of 416000 barrels per day, which was up 28000 barrels a day versus the second quarter and down 10000 barrels per day versus the third quarter of 2022, reflecting a utilization.

Brad Corson: In late September work began on St. Crude's plan hydro-treater turnaround, which is expected to be complete by mid-November. The impact in the fourth quarter is expected to be around 4,000 barrels per day and around $12 million in operating costs. Lastly, the interconnect pipeline continued to add value, enabling 9,000 barrels per day of St. Crude's sweet premium production, which was imported over the quarter, helping to maintain high-upgrader utilization when vitamin production experienced reliability and or blend challenges throughout the quarter.

<unk> of 96%.

Brad Corson: Coming off a Q2 that was impacted by the major turnaround at Strathcona, the Q3 has seen lower planned maintenance with a major turnaround at Sarnia only impacting the final few weeks of the quarter. The turnaround in our Sarnia refinery and chemical plant began in mid-September, and as I mentioned, is now mechanically complete with the facility startup underway. The costs are expected to be in line with guidance of CAD 165 million. Year-to-date utilization of our refinery sits at 94%, so we are right on track to deliver our full-year guidance of 92% to 94%, with the Sarnia turnaround being completed per our plans in the Q4. I recently visited our Strathcona refinery and am pleased to share that the renewable diesel project team is making great progress, with construction currently focused on completing below-ground infrastructure and above-ground tankage.

Speaker 4: transcript

Speaker 4: Coming off a second quarter that was impacted by the major turnaround in Stratcona. The third quarter has seen lower planned maintenance with the major turnaround at Sarnia, only impacting the final few weeks of the quarter. The turnaround in our Sarnia refinery and chemical plant began in mid September . And as I mentioned, there's now mechanically complete with the facility start up underway.

Coming off of second quarter that was impacted by the major turnaround at stress Kona the.

The third quarter has seen lower planned maintenance with a major turnaround at Sarnia only impacting the final few weeks of the quarter.

The turnaround at our Sarnia refinery and chemical plant began in mid September and as I mentioned is now mechanically complete with the facility startup underway.

Speaker 4: transcript

Speaker 4: The costs are expected to be in line with guidance of $165 million. Year-to-date utilization of our refineries fits at 94%. So we are right on track to deliver our full year guidance of 92 to 94% with a certain, sorry, a turnaround being completed per our plans in the fourth quarter.

The costs are expected to be in line with guidance of $165 million.

Brad Corson: Now let's move on and talk about the downstream. In the third quarter, we refined an average of 416,000 barrels per day, which was up 28,000 barrels a day versus the second quarter and down 10,000 barrels per day versus the third quarter of 2022, reflecting a utilization of 96%. Coming off a second quarter that was impacted by the major turnaround in Stratcona, the third quarter has seen lower planned maintenance with the major turnaround at Sarnia, only impacting the final few weeks of the quarter.

Year to date utilization of our refineries sits at 94%. So we are right on track to deliver our full year guidance of 92% to 94% with a certain sarnia turnaround being completed per our plans in the fourth quarter.

Speaker 4: transcript

Speaker 4: I recently visited our Strathcona refinery, and I'm pleased to share that the Renewable Diesel Project team is making great progress.

I recently visited our strategy Kona refinery and I'm pleased to share that the renewable diesel project team is making great progress.

Speaker 4: transcript

Speaker 4: The construction currently focused on completing below ground infrastructure and above ground tankage. Overall, the project continues to progress on plan with startup targeted for 2025 in line with the outlook we provided at our investor day.

With construction currently focused on completing below ground infrastructure and above ground tankage overall the project continues to progress on plan with startup targeted for 2025 in line with the outlook, we provided at our Investor day.

Brad Corson: Overall, the project continues to progress on plan, with startup targeted for 2025, in line with the outlook we provided at our Investor Day. Also at Strathcona, we have successfully completed a co-processing trial and have now completed similar trials at all of our refineries. This technology has the potential to reduce carbon intensity of fuel as well as plastic products by co-processing vegetable oil and ethanol alongside conventional crude feedstocks. Petroleum product sales in the quarter were 478,000 barrels per day, which is up 3,000 barrels per day versus Q2 and down 6,000 barrels per day versus Q3 2022. We continue to see gasoline demand around 90% to 95% of historical levels and jet at about 110% of historical levels.

Brad Corson: The turnaround in our Sarnia refinery and chemical plant began in mid-September. As I mentioned, it is now mechanically complete with the facility's start-up underway. The costs are expected to be in line with guidance of $165 million. Year-to-date utilization of our refineries fits at 94%. We are right on track to deliver our full-year guidance of 92 to 94% with the Sarnia turnaround being completed per our plans in the fourth quarter. I recently visited our Strascona Refinery and am pleased to share that the renewable diesel project team is making great progress with construction currently focused on completing below ground infrastructure and above ground tankage.

Speaker 4: transcript

Speaker 4: Also at Strathcono, we have successfully completed a co-processing trial and have now completed similar trials at all of our refineries. This technology has the potential to reduce carbon intensity of fuel as well as plastic products by co-processing vegetable oil and ethanol alongside conventional crude feedstocks.

Also at <unk>, we have successfully completed a co processing trial and have now completed similar trials at all of our refineries. This technology has the potential to reduce carbon intensity of fuel as well as plastic products by co processing <unk>.

<unk> oil and ethanol alongside conventional crude feedstocks.

Speaker 4: transcript

Speaker 4: Petroleum products sales in the quarter were 478,000 barrels per day, which is up 3,000 barrels per day versus the second quarter and down 6,000 barrels per day versus the third quarter of 2022.

Petroleum product sales in the quarter were 478000 barrels per day, which is up 3000 barrels per day versus the second quarter and down 6000 barrels per day versus the third quarter of 2022 weeks.

Brad Corson: Overall, the project continues to progress on plan with startup targeted for 2025 in line with the outlook we provided at our investor day. Also at Strascona we have successfully completed a co-processing trial and have now completed similar trials at all of our refineries. This technology has the potential to reduce carbon intensity of fuel as well as plastic products by co-processing vegetable oil and ethanol alongside conventional crude feedstocks. Petroleum products sales in the quarter were 478,000 barrels per day which is up 3,000 barrels per day versus the second quarter and down 6,000 barrels per day versus the third quarter of 2022.

Speaker 4: transcript

Speaker 4: We continue to see gasoline demand around 90 to 95% of historical levels and jet at about 110% of historical levels. On diesel, demand in the quarter was between 80 to 85% of normal as we saw some impacts from the BC port workers strike.

We continue to see gasoline demand around 90% to 95% of historical levels and jet at about 110% of historical levels on diesel demand in the quarter was between 80% to 85% of normal as we saw some impacts from the BC port workers.

Brad Corson: On diesel, demand in the quarter was between 80% to 85% of normal as we saw some impacts from the BC port worker strikes. On crack spreads, diesel margins strengthened quarter-over-quarter and remained on the high end of the five-year band. Motor gasoline cracks softened toward the end of the quarter as we ended the summer driving season, with cracks now sitting around the low end of the five-year band. That brings us to chemicals. The business delivered CAD 23 million in earnings in Q3, which was down CAD 48 million versus Q2 and down CAD 31 million versus Q3 2022. The lower earnings were driven by the gas cracker turnaround that began in mid-September, which is now mechanically complete, as well as was impacted by a softer margin environment.

Strikes.

Speaker 4: transcript

Speaker 4: On crack spreads, diesel margins strengthen quarter over quarter and remained on the high end of the five year ban. Motor gasoline cracks soften toward the end of the quarter as we ended the summer driving season with cracks now sitting around the low end of the five year ban.

On crack spreads diesel margins strengthened quarter over quarter and remained on the high end of the five year ban motor gasoline cracks softened towards the end of the quarter as we ended the summer driving season with cracks now sitting around the low end of the five year band.

And that brings us to chemicals.

Speaker 4: transcript

Speaker 4: The business delivered $23 million in earnings in the third quarter, which was down $48 million versus the second quarter and down $31 million versus the third quarter of 2022. The lower earnings were driven by the gas cracker turnaround that began in mid-September, which is now mechanically complete, as well as was impacted by a softer margin environment.

The business delivered $23 million in earnings in the third quarter, which was down $48 million versus the second quarter and down $31 million versus the third quarter of 2022, the lower earnings were driven by the gas cracker turnaround that began in mid September.

Brad Corson: We continue to see gasoline demand around 90 to 95 percent of historical levels and jet at about 110 percent of historical levels. On diesel demand in the quarter was between 80 to 85 percent of normal as we saw some impacts from the BC port worker strikes. On crack spreads, diesel margins strengthened quarter over quarter and remained on the high end of the five year ban. Motor gasoline cracks soften toward the end of the quarter as we ended the summer driving season with cracks now sitting around the low end of the five year ban.

Which is now mechanically complete.

As well as was impacted by a softer margin environment.

Brad Corson: There are a couple of additional accomplishments from the quarter that I'd like to highlight. First, we released our annual Advancing Climate Solutions report, a progress report highlighting our efforts to grow shareholder value and play a key role in a transformation to a lower emission future. The need for effective strategies and solutions to supply affordable, accessible, reliable energy while reducing emissions in support of a net zero future is paramount. We also established a low carbon solution organization during the quarter. This team is focused on leveraging Imperial and ExxonMobil's unique capabilities to bring lower emission technologies like renewable fuels, hydrogen, and carbon capture and storage to markets, helping customers meet their sustainability goals. Next, I would like to highlight a long-standing partnership focused on Indigenous education.

Speaker 4: transcript

Speaker 4: There are a couple of additional accomplishments from the quarter that I'd like to highlight. First, we released our annual Advancing Climate Solutions Report, a progress report highlighting our efforts to grow shareholder value and play a key role in a transformation to a lower emission future.

There are a couple of additional accomplishments from the quarter that I'd like to highlight.

First we released our annual advancing climate solutions report a progress report highlighting our efforts to grow shareholder value and play a key role in the transformation to a lower emission future.

Speaker 4: transcript

Speaker 4: The need for effective strategies and solutions to supply affordable, accessible, reliable energy while reducing emissions in support of the NET Zero Future is paramount.

The need for effective strategies and solutions to supply of affordable accessible reliable energy.

Brad Corson: And that brings us to chemicals. The business delivered 23 million dollars in earnings in the third quarter which was down 48 million dollars versus the second quarter and down 31 million dollars versus the third quarter of 2022. The lower earnings were driven by the gas cracker turnaround that began in mid-September which is now mechanically complete as well as was impacted by a softer margin environment. There are a couple of additional accomplishments from the quarter that I'd like to highlight.

While reducing emissions in support of a net zero future is paramount.

Speaker 4: transcript

We also established a low carbon solution organization during the quarter. This team is focused on leveraging imperial and Exxon mobil's unique capabilities to bring lower emission technologies like renewable fuels hydrogen and carbon capture and storage to markets helping.

Customers meet their sustainability goals.

Brad Corson: First, we released our annual advancing climate solutions report, a progress report highlighting our efforts to grow shareholder value and play a key role in a transformation to a lower emission future. The need for effective strategies and solutions to supply affordable, accessible, reliable energy while reducing emissions in support of the net zero future is paramount. We also established a low carbon solution organization during the quarter. This team is focused on leveraging imperial and Exxon mobiles unique capabilities to bring lower emission technologies like renewable fuels, hydrogen and carbon capture and storage to markets, helping customers meet their sustainability goals.

Speaker 4: transcript

Speaker 4: Next, I would like to highlight a longstanding partnership focused on indigenous education.

Next I would like to highlight a long standing partnership focused on indigenous education.

Brad Corson: We're excited to share that this year marks 20 years of partnership between Imperial and Indspire, an Indigenous national charity that invests in the education of First Nations, Inuit, and Métis people for the long-term benefit of these individuals, their families, and communities across Canada. Since 2003, we have provided more than CAD 1.8 million in funding to Indspire, most of which has supported their Building Brighter Futures bursary, scholarships, and awards program. Through this program, Imperial has provided more than 500 Indigenous students with scholarships or bursaries. We are very proud to play a role in helping break down barriers for Indigenous youth as they pursue education to achieve their highest potential. I also want to thank Indspire for being a great partner and for all they do for Indigenous youth in Canada.

Speaker 4: transcript

Speaker 4: We're excited to share that this year marks 20 years of partnership between Imperial and Inspire, an Indigenous national charity that invests in the education of First Nations, Inuit and Métis people for the long-term benefit of these individuals, their families and communities across Canada.

We're excited to share that this year March 20 years of partnership between Imperial and inspire and indigenous national charity that invest in the education of first nations.

In May <unk> people for the long term benefit of these individuals their families and communities across Canada.

Speaker 4: transcript

Speaker 4: Since 2003, we have provided more than $1.8 million in funding to inspire, most of which has supported their Building Brighter Futures, the bursaries, scholarships and awards program. Through this program, Imperial has provided more than 500 indigenous students with scholarships or bursaries.

Since 2003, we have provided more than $1 $8 million in funding to inspire most of which has supported there bill.

Building brighter futures.

Bursaries scholarships and awards program through this program Imperial has provided more than 500 indigenous students with scholarships are bursaries.

Speaker 4: transcript

Speaker 4: We are very proud to play a role in helping break down barriers for Indigenous youth as they pursue education to achieve their highest potential. I also want to thank Inspire for being a great partner and for all they do for Indigenous youth in Canada.

Brad Corson: Next, I would like to highlight a long-standing partnership focused on Indigenous education. We're excited to share that this year marks 20 years of partnership between Imperial and Inspire and Indigenous National Charity that invests in the education of First Nations, Inuit and Mati people for the long-term benefit of these individuals, their families and communities across Canada. Since 2003, we have provided more than $1.8 million in funding to Inspire, most of which has supported their building brighter futures, the bursary scholarships and awards program.

We are very proud to play a role in helping breakdown barriers for indigenous youth as they pursue education to achieve their highest potential.

Brad Corson: Through this program, Imperial has provided more than 500 Indigenous students with scholarships or bursaries. We are very proud to play a role in helping breakdown barriers for Indigenous youth as they pursue education to achieve their highest potential. I also want to thank Inspire for being a great partner and for all they do for Indigenous youth in Canada.

I also wanted to thank inspire for being a great partner and for all they do for digitally fused in Canada.

Brad Corson: To quickly wrap up, this was a strong quarter underpinned by reliable operations and a favorable commodity price environment. With a major turnaround at Sarnia wrapping up, our focus is on a strong finish to the year. We remain confident in our overall guidance for the year across all of our assets. As you can see from the accelerated completion of the NCIB and the announcement today of the CAD 1.5 billion substantial issuer bid, our commitment to shareholder returns remains a priority. We're also committed to delivering our plans to reduce emissions and generate value. I'm pleased to have shared our progress on Grand Rapids, the Kearl boiler flue gas, and our Strathcona renewable diesel projects, and would also note our ongoing work with the Pathways Alliance.

Speaker 4: transcript

Speaker 4: So to quickly wrap up, this was a strong quarter underpinned by reliable operations and a favorable commodity price environment.

So to quickly wrap up.

This was a strong quarter underpinned by reliable operations and a favorable commodity price environment with.

Speaker 4: transcript

Speaker 4: With the major turnaround at Sarnia wrapping up, our focus is on a strong finish to the year. We remain confident in our overall guidance for the year across.

With the major turnaround at Sarnia wrapping up our focus is on a strong finish to the year, we remain confident in our overall guidance.

For the year across all of our assets.

Speaker 4: transcript

Speaker 4: And as you can see from the accelerated completion of the NCIB and the announcement today of the $1.5 billion substantial issuer bid, our commitment to shareholder returns remains a priority.

And as you can see from the accelerated completion of the NCI.

And the announcement today of the $1 $5 billion substantial issuer bid our commitment to shareholder returns remains a priority.

Speaker 4: transcript

Speaker 4: We're also committed to delivering our plans to reduce emissions and generate value. I'm pleased to have shared our progress on Grand Rapids, the Curl Boiler, FluGAS and our Stratcona Renewable Diesel Projects. And would also note our ongoing work with the Pathways Alliance.

We're also committed to delivering on our plans to reduce emissions and generate value I am pleased to have shared our progress on Grand Rapids.

Pearl boiler flue gas and our stress Kona renewable diesel projects and would also note our ongoing work with the pathways Alliance.

Brad Corson: So to quickly wrap up, this was a strong quarter underpinned by reliable operations and a favorable commodity price environment. With the major turnaround at Sarnia wrapping up, our focus is on a strong finish to the year. We remain confident in our overall guidance for the year across all of our assets. And as you can see from the accelerated completion of the NCIB and the announcement today of the $1.5 billion substantial issue bid, our commitment to shareholder returns remains a priority.

Brad Corson: I look forward to continuing to bring you updates on these attractive opportunities as we continue to focus on maximizing the value of our existing businesses, while at the same time responding to the changing needs of our customers and communities. I would also like to take a moment to thank Dave Hughes, our Vice President of Investor Relations, for all of his contributions to Imperial over his 34-year career, and wish him and his wife, Denise, all the best with his upcoming retirement. Of course, welcome Peter Shaw to his new role. As always, I'd like to thank you once again for your continued interest and support in Imperial. Now we'll move to the Q&A session, so I'll pass it back to Peter.

Speaker 4: transcript

Speaker 4: I look forward to continuing to bring you updates on these attractive opportunities as we continue to focus on maximizing the value of our existing businesses while at the same time responding to the changing needs of our customers and communities.

I look forward to continuing to bring you updates on these.

Attractive opportunities as we continue to focus on maximizing the value of our existing businesses. While at the same time responding to the changing needs of our customers and communities.

Speaker 4: transcript

Speaker 4: I would also like to take a moment to thank Dave Hughes, our vice president of investor relations, for all of his contributions to Imperial over his 34 year career.

I would also like to take a moment to thank Dave Hughes, our vice President of Investor Relations for all of his contributions to imperial over his 34 year career.

Speaker 4: transcript

Speaker 4: and wish him and his wife, Denise, all the best with his upcoming retirement. And of course, welcome Peter to his new role.

And wish him and his wife, Denise all the best with his upcoming retirement.

And of course, welcome Peter to his new role.

Brad Corson: We're also committed to delivering our plans to reduce emissions and generate value. I'm pleased to have shared our progress on grand rapids, the curl boiler, flu gas, and our Strathcona renewable diesel projects and would also note our ongoing work with the pathways aligned. I look forward to continuing to bring you updates on these attractive opportunities as we continue to focus on maximizing the value of our existing businesses while the same time responding to the changing needs of our customers and communities.

Speaker 4: transcript

Speaker 4: As always, I'd like to thank you once again for your continued interest and support and imperial.

As always I'd like to thank you once again for your continued interest and support in Imperial.

Speaker 4: transcript

Speaker 4: And now we'll move to the Q&A session, so I'll pass it back to Peter.

And now we'll move to the Q&A session. So I'll pass back to Peter.

Speaker 3: transcript

Speaker 3: Thank you, Brad. And as Brad said, we'll move into the Q&A session. As always, we'd appreciate it if you could limit yourself to one question plus a follow-up so that we can get to as many questions as possible. So with that, operator, could you please open up the following line for questions.

Peter Shaw: Thank you, Brad. As Brad said, we'll move into the Q&A session. As always, we'd appreciate it if you could limit yourself to one question plus a follow-up so that we can get to as many questions as possible. With that, operator, could you please open up the phone line for questions?

Thank you, Brad and as Brad said, we'll move into the Q&A session as always be depreciated you can limit yourself to one question plus a follow up so that we can get to as many questions as possible. So with that operator could you. Please open up the phone line for questions.

Speaker 2: transcript

Speaker 2: Yes, sir. If you would like to ask a question, please signal by pressing star 1 on your telephone.

Operator: Yes, sir. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, it is star one to ask a question. We'll pause for just a moment. We'll go to our first question from Greg Pardy with RBC Capital Markets.

Yes, Sir if you would like to ask a question. Please signal by pressing star one on your telephone keypad.

Brad Corson: I would also like to take a moment to thank Dave Hughes, our vice president of investor relations for all of his contributions to Imperial over his 34-year career and wish him and his wife Denise all the best with his upcoming retirement. And of course, welcome Peter to his new role.

Speaker 2: transcript

Speaker 2: If you're using a speaker bone, please make sure your meat function is turned off to allow your signal to reach your equipment. Again, it's...

The speaker phone. Please make sure your mute function is turned off to allow your signal to reach our equipment.

Again, it is star one to ask a question, we'll pause for just a moment.

Speaker 2: transcript

Speaker 2: We'll go to our first question from Greg Party with RBC Capital.

We'll go to our first question from Greg Pardy with RBC capital markets.

Brad Corson: As always, I'd like to thank you once again for your continued interest and support in Imperial.

Greg Pardy: Hey, thanks. Good morning, and Brad, thanks very much for the rundown. I guess you're letting Mr. Hughes go, but Dave, listen, all the very best, and don't be a stranger when you come into Toronto, and welcome Peter. There was really just one area I wanted to dig in because obviously it's a pretty strong quarter. Well, actually two areas. I guess the first is how much of an inventory impact did you feel in the Downstream as a result of the inventory changes that you referred to earlier? And then completely shifting gears as it relates to Kearl, how is that working mechanically now that you've moved to autonomous haul? Does that mean that you're redeploying drivers, or have you been redeploying drivers, or how does it work on different shifts?

Speaker 4: transcript

Speaker 4: Hey, thanks. Good morning and Brad, thanks very much for the run down. I guess you're letting Mr. Hughes go, but Dave listen, all the very best and don't be a stranger when you come into Toronto and well-computer. There was really just one area I wanted to dig in because obviously it's a pretty strong quarter. Well, actually two areas. I guess the first is.

Hey, Thanks, good morning, and a breath and thanks very much for the rundown I guess.

Peter Shaw: And now we'll move to the Q&A session, so I'll pass it back to Peter. Thank you, Brad.

We're letting Mr. Hughes go, but Dave listen all the all the very best in don't be a stranger when you come into Toronto and welcome Peter.

Peter Shaw: And as Brad said, we'll move into the Q&A session. As always, we'd appreciate it if you could limit yourself to one question plus a follow-up so that we can get to as many questions as possible.

There was really just one area I wanted to dig in because obviously, it's a pretty strong quarter.

Operator: So with that, operator, could you please open up the phone line for questions? Yes, sir. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speaker phone, please make sure your mute function is turned off till I use signal. Secretary Joe Equipment. Again, it is Star One to ask a question. We'll pause for just a moment.

Two areas I guess, the first is <unk>.

Speaker 4: transcript

Speaker 4: How much of an inventory impact do you feel in the downstream as a result, just the inventory changes that you referred to earlier? And then completely shifting gears as it relates to curl. How is that working mechanically now that you've moved to autonomous halls? Does that mean that you are redeploying drivers or have you been redeploying drivers or how does it work on different shifts? Or are you actually reducing headcount there? So a lot of questions, but any color would be great.

How much of an inventory impact do you feel on the downstream.

As a result of the inventory changes that you referred to earlier and then completely shifting gears as it relates to curl.

Hum.

How is that working mechanically now that you've moved to autonomous haul does that mean that you're redeploying drivers or have you been redeploying drivers or how does it work on different shifts or are you actually reducing head count there. So a lot of questions, but any color would be great.

Greg Pardy: We'll go to our first question from Greg Pardy with RBC Capital Markets. Hey, thanks. Good morning, and Brad. Thanks very much for the rundown.

Greg Pardy: are you actually reducing headcount there? A lot of questions, but any color would be great.

Brad Corson: Yeah. Thanks, Greg. First, you know, I appreciate you acknowledging the strong quarter we had. You know, in terms of your specific questions, you know, on inventory, you know, that's been an ongoing factor now for several quarters with regard to diesel margins and spreads. You know, I don't know that we have an explicit quantification on that, but it's clearly a factor as we've seen reducing you know inventory levels globally.

Yes, Thanks, Greg.

Brad Corson: I guess you're letting Mr. Hughes go, but Dave listen all the very best and don't be a stranger when you come into Toronto and well-computer. There was really just one area I wanted to dig in because obviously it's a pretty strong quarter. Well, actually two areas. I guess the first is how much of an inventory impact do you feel in the downstream as a result of the inventory changes that you referred to earlier?

Speaker 4: transcript

Speaker 4: And first, I appreciate you acknowledging the strong quarter we had. In terms of your specific questions.

And first.

I appreciate you acknowledging the strong quarter, we had.

In terms of your specific questions.

Speaker 4: transcript

Speaker 4: you know, on inventory, you know, that's been an ongoing factor now for several quarters with regard to diesel margins and spreads. And...

Yes.

On inventory.

That's been an ongoing factor now for several quarters with regard to diesel margins and spreads.

Speaker 3: transcript

Speaker 3: You know, I don't know that we have a an explicit quantification on that, but it's clearly a factor as we've seen reducing, you know, inventory levels globally. Yeah. Yeah. Yeah. And maybe I think you're referring to kind of the deferred tax impact. Is that right? I think so.

I don't know that we have a an explicit quantification on that but it's but it is clearly a factor as we've seen reducing.

Brad Corson: And then completely shifting gears as it relates to curl. How is that working mechanically now that you've moved to autonomous hall? Does that mean that you are redeploying drivers or have you been redeploying drivers or how does it work on different shifts? Or are you actually reducing headcount there? So a lot of questions, but any color would be great. Yeah, thanks, Greg. And first, you know, I appreciate you acknowledging the strong quarter we had.

Inventory levels globally, yes, yes, yes, they may be great I think youre, referring to kind of the deferred tax impact that right.

Dan Lyons: Yeah. Yeah. Yeah.

Brad Corson: You wanna say something?

Dan Lyons: Maybe, Brad, I think you're referring to kind of the deferred tax impact. Is that right?

Brad Corson: I think so. Yeah. Exactly.

Dan Lyons: I assume it's right. Yeah. Yeah.

I think so.

Right.

Brad Corson: Sorry.

Speaker 5: transcript

Speaker 5: Yeah, it's a pretty big number $168 million. And

Dan Lyons: It's a pretty big number, CAD 168 million. You know, I would characterize it as noise. You know, if you look at, you know, we report on a LIFO basis, sort of historical inventory in our earnings, but we pay tax on a weighted average cost basis, and the tax value of inventory will go up and down with prices, right? If you look at, you know, not to get too technical, you look at the price increase quarter to quarter, maybe $10. But you look at the last month of each quarter, which more matters for inventory valuations, about $20. There's a pretty big price movement in the inventory valuation, and inventory levels increased somewhat due to turnaround activity. You see this kind of big factor driven by those increases.

Yes.

A pretty big number $168 million and.

Speaker 5: transcript

Speaker 5: you know, I would characterize it as noise, you know, if you look at, you know, you know, we report on a life-boat basis sort of a historical inventory in our earnings, but we pay tax.

I would characterize it.

As noise, if you look at.

We reported on a LIFO basis sort of historical inventory in our earnings, but we pay tax on a weighted average cost basis and the tax value of inventory will go up and down with prices right in and if you look at that to get to tactically look at the price increase quarter to quarter, maybe 10 box, but you look at.

Brad Corson: You know, in terms of your specific questions, you know, on inventory, you know, that's been an ongoing factor now for several quarters with regard to diesel margins and spreads. And, you know, I don't know that we have an explicit quantification on that, but it's clearly a factor as we've seen reducing, you know, inventory levels globally. Yeah, yeah, yeah, say something. And maybe, Greg, I think you're referring to kind of the first tax impact.

Speaker 5: transcript

Speaker 5: On a weighted average cost basis and the tax value of inventory will go up and down with prices. Right? And and if you look at, you know, not to get too technical, you look at the price increase quarter to quarter, maybe 10 bucks, but you look at.

Speaker 5: transcript

Speaker 5: The last month of each quarter, which more matters for inventory valuations about 20 bucks. So there's a pretty big price movement in the inventory valuation and inventory levels increase somewhat due to turnaround activity.

At the.

The last month of each quarter, which more matters for inventory valuations about 'twenty box. So there is a pretty big price movement in the inventory valuation and inventory levels increased somewhat due to turnaround activity. So you see this kind of a big factor.

Speaker 5: transcript

Speaker 5: So you see this kind of big factor driven by those increases primarily. I mean, we only do deferred taxes for Imperial as a whole, but it's primarily driven by impact.

Dan Lyons: Primarily, I mean, you know, we only do deferred taxes for Imperial as a whole, but it's primarily driven by impacts in the downstream because they hold most of the inventory. It really is the price increase from June versus September, as well as some temporarily higher inventory levels. You know, at today's prices, you'd expect to see that reverse out. That's where that CAD 168 million comes from. It's a deferred tax impact. There's other things in there, but primarily this, you know, tax valuation inventory at weighted average cost and our normal LIFO that we use for earnings. You know, I hope that answers your question.

Driven by those increases primarily I mean, we only do deferred taxes for imperial as a whole, but it's primarily driven by impacts in the downstream because they hold most of the inventory, but it really is the price increase from June and June versus September as well as some temporarily higher inventory levels.

Brad Corson: Is that right? I think so. Yeah, it's a pretty big number 168 million dollars. And, you know, I would characterize it as noise. You know, if you look at, you know, you know, where we report on a life basis sort of historical inventory in our earnings, but we pay tax on a weighted average cost basis. And the tax value of inventory will go up and down with prices, right? And, and if you look at, you know, about to get to text you look at the price increase quarter to quarter, maybe 10 bucks.

Speaker 5: transcript

Speaker 5: in the downstream because they hold most of the inventory. But it really is the price increase from June and June versus September , as well as some temporarily higher inventory levels. So, you know, at today's prices, you'd expect to see that reverse out. So that's, to that 168 million, that's where that comes from. Primarily, it's a deferred tax impact. There's other things in there, but primarily.

So.

At today's prices you would expect to see that reverse out so that's that $168 million.

That comes from primarily its deferred tax impact there is other things in there, but primarily there is.

Speaker 5: transcript

Speaker 5: This, you know, tax valuation, the inventory at weighted average cost and our normal life owe that we use for earnings. I know the answer to the question. Yeah.

Tax valuation of inventory at weighted average cost in our normal LIFO that we used for earnings I hope that answers your question.

Brad Corson: But you look at the last month of each quarter, which more matters for inventory valuations about 20 bucks. So there's a pretty big price movement in the inventory valuation and inventory levels increase somewhat to turn around activity. So you see this kind of big factor driven by those increases primarily. I mean, you know, we only do deferred taxes for imperial as a whole, but it's primarily driven by impacts in the downstream because they hold most of the inventory.

Brad Corson: Yeah, no, Dan, that's great. Thanks a lot.

Greg Pardy: Yeah, no, Dan, that's great. Thanks a lot.

Yes, no Dan Thats, great. Thanks, a lot.

Dan Lyons: Yeah. Thanks for stepping in on that one, Dan. I was clearly on the wrong track thinking more broadly about global market factors impacting diesel. Thanks for that. You know, we gotta say, well, it doesn't reflect an actual cash payment. It's sort of the accrual of what our cash taxes would be at those closing prices. It's a little bit flaky, but you know, it's obvious your number's correct, but we'd expect that to bounce around. This is quite high, and we expect, you know, at current prices, you'd see a reversal. We'll see. Sorry, Brad.

Brad Corson: Yeah. Thanks for stepping in on that one, Dan. I was clearly on the wrong track thinking more broadly about global market factors impacting diesel. Thanks for that.

Speaker 4: transcript

Speaker 4: Yeah, thanks. Thanks for stepping in on that one, Dan. I was clearly on the wrong track thinking more broadly about global market factors.

Yes. Thanks, Thanks for stepping in on that one and I was clear it'll be on the.

The wrong track thinking more broadly about global market factors impacting impacting diesel so thanks for that.

Speaker 4: transcript

Speaker 4: impacting diesel. So thanks for that. Yeah, we got to say, well, it doesn't reflect an actual cash payment. It's sort of the accrual of what our cash taxes would be at those closing prices. So it's a little bit flaky, but you know, it's obviously the numbers correct, but we'd expect that to bounce around. This is quite high and we expect, you know, a current price is you see a reversal, but we'll see. Sorry Brad. Yeah, no, no, where's it all? And out of your second question regarding the economist hall program, it curled, you know, we are, we are super.

Dan Lyons: You know, we gotta say, well, it doesn't reflect an actual cash payment. It's sort of the accrual of what our cash taxes would be at those closing prices. It's a little bit flaky, but you know, it's obvious your number's correct, but we'd expect that to bounce around. This is quite high, and we expect, you know, at current prices, you'd see a reversal. We'll see. Sorry, Brad.

Well it doesn't reflect an actual cash payment at sort of the accrual of what our cash taxes would be at those closing prices. So it's a little bit flaky, but it's off.

Brad Corson: But it really is the price increase from June and June versus September, as well as some temporarily higher inventory levels. So, you know, at today's prices, you'd expect to see that reverse out. So that's to that 168 million that that's where that comes from primarily. It's deferred tax impact. There's other things in there, but primarily this, you know, tax valuation inventory at weighted average cost and our normal life. So that we use for earnings.

These numbers correct, but we would expect that to bounce around this is quite high and we expect at current prices you would see a reversal, but we will say sorry, Brad Yeah, no worries at all.

Brad Corson: Yeah. No, no worries at all. And on your second question regarding the autonomous haul program at Kearl, you know, we are super excited about that. We've been working on this now for several years, and to finally complete all of the conversion of the trucks allows us to really make a step change in all of those kind of beneficiary components that have been driving us, you know. I mean, things around truck productivity, things around unit operating costs, and of course, there is this broader safety benefit that comes with it. You know, specific to your question on staffing, you know, we have definitely worked to deploy staff related to that. But I'll. Simon's here with me. Maybe Simon can talk a little bit more specifically about kind of our strategy there.

And on your second question regarding the autonomous haul program accrual.

We are super excited about that we've been working on this now for for several years and to finally complete all of the conversion of the trucks allows us to really make a step change in all of those kind of benefits beneficiary components that have been driving.

Speaker 4: transcript

Speaker 4: excited about that. We've been working on this now for several years and to finally complete all of the conversion of the trucks allows us to really make a step change in all of those.

Brad Corson: I know that answers your question. Thank you. Yeah, I know, Dan, that's great. Thanks a lot. Yeah, thanks, thanks for stepping in on that one day. And I was clearly on the wrong track thinking more broadly about welfare of market factors impacting, impacting diesel. So thanks for that. Yeah, we got to say, well, it doesn't reflect an actual cash payment. It's sort of the accrual of what our cash taxes would be at those closing prices.

Speaker 4: transcript

Speaker 4: kind of benefit beneficiary components that have been driving us, you know, I mean, things around truck productivity, things around unit operating costs. And of course, there, there is this.

Us.

I mean things around truck productivity things around unit operating costs and of course, there is this broader.

Speaker 6: transcript

Speaker 6: broader safety benefit that comes with it. You know, specific to your question on staffing, you know, we have definitely worked to deploy staff related that, but I'll, Simon's here with me. Maybe Simon can talk a little bit more specifically about kind of our strategy there. Yeah, thanks, Brad. I can give a little bit more color to that. I mean, the milestone that Brad mentioned is reaching the point where we've now converted all of our 81 heavy hull trucks to autonomous.

Safety benefit that comes with it.

Specific to your question on staffing.

Brad Corson: So it's a little bit flaky, but you know, it's obviously the numbers correct, but we'd expect that to bounce around. This is quite high and we expect, you know, a current price as you see a reversal, but we'll see. Sorry, Brad. Yeah, no, no, where's it all. And on your second question regarding the autonomous hall program, Accurl, you know, we are, we are super excited about that. We've been working on this now for for several years and to finally complete all of the conversion of the trucks allows us to really make a step change and all of those kind of benefit.

We are definitely work to deploy staff.

Related to that but ill symons here with me, maybe Simon can talk a little bit more specifically about kind of our strategy. There yeah. Thanks, Brett I can I can give a little bit more color to that I mean, the milestone that Brad mentioned is reaching the point, where we've now converted all of our <unk> inhibitor hold trucks to autonomous but as you would have heard.

Simon Younger: Yeah. Thanks, Brad. I can give a little bit more color to that. I mean, the milestone that Brad mentioned is reaching the point where we've now converted all of our 81 heavy haul trucks to autonomous. As you would have heard, you know, that's taken place over several years. If you think about sort of a significant step change in staffing associated with that's not really the case. As we've autonomized the trucks over several years, there has been a headcount reduction. We've also, as Brad said, redeployed a number of truck drivers onto other mining equipment. Some of them have gone into the autonomous control room and are now delivering value that way.

Speaker 6: transcript

Speaker 6: But as you would have heard, you know, that's taken place over several years.

Taken that's taken place over several years. So if you think about sort of a significant step change in stopping.

Speaker 6: transcript

Speaker 6: So if you think about sort of a significant step change in staffing associated with that, that's not really the case.

Associated with that Thats not really the case.

Brad Corson: Beneficiary components that have been driving us, you know, I mean, things around truck productivity, things around unit operating costs. And of course there is this broader safety benefit that comes with it. You know, specific to your question on staffing, you know, we have definitely worked to deploy staff related that, but I'll assignments here with me. Maybe Simon can talk a little bit more specifically about kind of our strategy there. Yeah, thanks, Brad.

As we.

Speaker 6: transcript

Speaker 6: Autonomised the trucks over several years that there has been a head count reduction. We've also, as Brad said, redeployed a number of truck drivers onto other mining equipment. Some of them have gone into the autonomous control room and are now delivering value that way. So it's kind of a combination, but not a significant step change, no from quarter to quarter or from year to year.

Autonomous the trucks all over several years there has been a a head count reduction we've also as Brad said.

We redeployed a number of <unk>.

Truck drivers onto other mining equipment some of them have gone into that.

Autonomous control room.

Now delivering value that way.

Simon Younger: It's kind of a combination, but not a significant step change, you know, from quarter to quarter or from year to year. Headcount reduction is definitely or headcount efficiencies, I'll call it, is definitely one of the value drivers for autonomous, but it's by no means the most significant. In fact, it's one of the more minor drivers. Really, the bulk of the value comes from productivity improvement that we're able to realize through the autonomous program. If you think about that $1 a barrel plus of cost benefit that we're driving at Kearl through the autonomous haul program, the majority of that comes from improved efficiency and productivity of the equipment.

So it's kind of a combination, but not a not a significant step change from quarter to quarter or from well from year to year, but.

Brad Corson: I can give a little bit more color to that. I mean, the milestone that Brad mentioned is reaching the point where we've now converted all of our 81 heavy haul trucks to autonomous. But as you would have heard, you know, that's taken that's taken place over several years. So if you think about sort of a significant step change in staffing associated with that, that's not really the case. As we've autonomous the trucks over several years that there has been a head count reduction.

Speaker 6: transcript

Speaker 6: Headcount reduction is definitely, or headcount efficiencies I'll call it, is definitely one of the value drivers for autonomous, but it's by no means the most significant. In fact, it's one of the more minor drivers. Really the bulk of the value comes from productivity improvement that we're able to realize.

Head count reduction is definitely or head count efficiencies alcohol. It is definitely one of the one of the value drivers for autonomous but it's by nine millions. The most significantly in fact, it's one of the more minor drivers really the bulk of the value comes from productivity improvement that we're able to realize.

Speaker 6: transcript

Speaker 6: through the Autonomous Program. If you think about that dollar a barrel plus of cost benefit that we're driving at Curl through the Autonomous Hall Program.

Through the autonomous fragrance, if you think about that dollar a barrel plus of of cost benefit that we're driving at co through the autonomous whole program.

Speaker 7: transcript

Speaker 7: that the majority of that comes from improved efficiency and productivity of the equipment. I just said thanks very much for that.

The majority of that comes from improved.

Brad Corson: We've also, as Brad said, redeployed a number of a number of truck drivers onto other mining equipment. Some of them have gone into the autonomous control room and a now delivering value that way. So it's kind of a combination, but not a not a significant step change, you know, from quarter to quarter or from or from year to year, but head count reduction is definitely or head count efficiencies, I'll call it is definitely one of the one of the value drivers for autonomous, but it's by no means the most significant.

<unk> and productivity of the equipment.

Brad Corson: Understood. Thanks very much for that.

Greg Pardy: Understood. Thanks very much for that.

I understood thanks, very much for that.

Dan Lyons: Thanks, Greg.

Thanks, Greg.

Operator: We'll go next to Manav Gupta with UBS.

We will go next to Nandan <unk> with UBS.

Manav Gupta: First, just wanted to thank Dave over the years. Very helpful in helping us with the information modeling and everything. Thank you for that. Welcome, Peter, to the new job. My question here, I'll start with one macro. Your opening statement said that in the near term, we have seen some widening of the WCS differential, but the outlook for egress is positive. If you could elaborate on those two things, what is driving the wider spread right now? And where are we in the process of egress? Because we hear a lot of information. What's the latest on TMX that you have an update on?

Speaker 8: transcript

Speaker 8: First just wanted to thank Dave over the years, very helpful in helping us with the information modeling and everything. So thank you for that and welcome Peter to the new job. My question here, I'll start with one macro. Your opening statement said that in the near term we have seen some widening of the WCS differential.

First just wanted to thank Dave over the years.

Very helpful in helping us.

The inflammation modeling and everything so thank you for that and then compete it to the <unk>.

Your job Mike.

My question here and I'll start with one macro.

Brad Corson: In fact, it's one of the more minor drivers, really the bulk of the value comes from productivity improvement that we're able to realize through the autonomous program. If you think about that dollar, a barrel plus of cost benefit that we're driving at curl through the autonomous haul program that the majority of that comes from improved efficiency and productivity of the equipment. I just said, thanks very much for that. Thanks, Greg.

Opening statement said that in the near term we have seen some widening of the WCS differential but the outlook for AG. Chris is positive if you could elaborate on those two things what is driving the widest spread right now and where are we in the process of aircrafts because he had a lot of information what's the latest on <unk>.

Speaker 8: transcript

Speaker 8: but the outlook for egress is positive. If you could elaborate on those two things, what is driving the wider spread right now? And where are we in the process of egress? Because we hear a lot of information. What's the latest on TMX that you have an update on?

Mix that you have an update on <unk>.

Brad Corson: Yeah. Thanks for those questions, Manav. First, on the widening WCS, you know, when you look back over the quarter, you know, the beginning of the quarter, we're seeing pretty tight differentials. You know, I don't know, $15 a barrel or so. But as we got to the end of the quarter, we have seen those widen. I'd say a couple of factors are driving that. You know, one is, us included, you know, we have completed our major turnarounds for the year, and that is resulting in, you know, more Canadian production available, to move to our customers. And on top of that, we do see that, we're still in a refinery maintenance period, not just in Canada but in the US. Several refineries are undergoing maintenance.

Speaker 4: transcript

Speaker 4: Yeah, thanks for those questions. First on the widening WCS, when you look back.

Yes, thanks for those questions.

First on the widening WCS.

Look back.

Speaker 4: transcript

Speaker 4: Um, over the quarter, you know, the beginning of the quarter, we're seeing pretty tight differentials.

Over the quarter.

Amanda: We're going next, Amanda. Good job with UBS.

The beginning of the quarter, we're seeing pretty tight differentials.

Brad Corson: First, just wanted to thank the over the years, very helpful in helping us with the information modeling and everything. So thank you for that and welcome, Peter to the new job. My question here, I'll start with one macro, your opening statement said that in the near term, we have seen some widening of the WCS differential, but the outlook for aggressive is positive. If you could elaborate on those two things, what is driving the wider spread right now and where are we in the process of aggressive because we hear a lot of information, what's the latest on TMX that you have an update on.

Speaker 4: transcript

Speaker 4: you know, I don't know if $15 or so. But as we got to the end of the quarter, we have seen those wine. And I'd say a couple of factors are driving that. You know, one is...

I don't know.

In dollars.

So.

But as we got to the end of the quarter, we have seen those wine and I'd say a couple of factors are driving that.

One is.

Speaker 4: transcript

Speaker 4: us included, you know, we have completed our major turnarounds for the year and that is resulting in, you know, more Canadian production available to move to our customers. And on top of that.

US included.

We have completed our major turnarounds for the year and that is resulting in.

More Canadian production available.

To move to our customers.

And on top of that.

Speaker 4: transcript

Speaker 4: We do see that we're still in a refinery maintenance period, not just in Canada, but in the US, several refineries are undergoing maintenance. But again, those are, you know, that's kind of a short-term effect and we would expect to see, you know, more of a balance as we move to the end of the year. And then on top of that, um...

We do see that.

Brad Corson: Yeah, thanks for those questions, Menno. First on the widening WCS. When you look back, over the quarter, you know, the beginning of the quarter, we're seeing pretty tight different shows, you know, I don't know if it's $15 or more or so. But as we got to the end of the quarter, we have seen those wine. And I'd say a couple of factors are driving that. You know, one is us included, you know, we have completed our major turnarounds for the year.

Still in a refinery maintenance period.

Not just in Canada, but in the U S. Several refineries are undergoing maintenance.

Brad Corson: You know, that's kind of a short-term effect, and we would expect to see, you know, more of a balance as we move to the end of the year. On top of that, with regard to your second question on egress, you know, we're quite encouraged by the progress that TMX is making. What we've heard is that they expect to start up around the end of Q1 next year. You know, I know from what I've heard, you know, they are over 95% complete. You know, there's relatively small sections of pipeline left for construction, and then they'll be moving into the commissioning line fill mode. We view all that as very positive from an egress standpoint.

But again those are that's kind of a short term effect and we would expect to see.

More of a balance.

As we move to the end of the year and then on top of that.

Speaker 4: transcript

Speaker 4: With regard to your second question on egress, you know, we're quite encouraged by the progress that TMX is making and what we've heard is that they expect to start up around the end of the first quarter next year. And, you know, I know.

<unk>.

With regard to your second question on egress.

We're quite encouraged by the progress that <unk> is making.

And what we've heard is that they expect to start up.

Brad Corson: And that is resulting in, you know, more Canadian production available to move to our customers. And on top of that, we do see that we're still in a refinery maintenance period, not just in Canada, but in the US, several refineries are undergoing maintenance. But again, those are, you know, that's kind of a short-term effect and we would expect to see, you know, more of a balance as we move to the end of the year.

Around the end of the first quarter next year.

And I know.

Speaker 4: transcript

Speaker 4: from what I've heard, they are over 95% complete. There's relatively small sections of pipeline, left for construction, and then they'll be moving into the commissioning line fill mode. So we view all that as very positive from a egress standpoint.

From what I've, what I've heard they are.

Over 95% complete there's relatively small section of pipeline left for construction and then there'll be moving into the <unk>.

Commissioning line fill bulk.

So we view all that as very positive from from the egress standpoint.

Manav Gupta: Perfect. My quick follow-up here is.

Speaker 9: transcript

Speaker 9: Perfect. My quick follow-up is...

Brad Corson: I should say, you know. Sorry, go ahead.

Perfect My quick follow I'll say.

Okay.

Sorry go ahead.

Manav Gupta: No, my second quick follow-up here was, some time back, your operating partner had taken over the Syncrude operations from the entity, and you guys had both expressed confidence in terms of the synergy benefits of that. Where are we in that cycle, in terms of, you know, the benefits that come from your actual operating partner taking over the Syncrude project?

Brad Corson: And then on top of that, with regard to your second question on egress, you know, we're quite encouraged by the progress that TMX is making. And what we've heard is that they expect to start up around the end of the first quarter next year. And, you know, I know from what I've heard, you know, they are over 95 percent complete. You know, there's relatively small sections of pipeline left for construction. And then they'll be moving into the, you know, commissioning line fill mode. So we view all that is very positive from from an egress standpoint.

Speaker 8: transcript

Speaker 8: No, my second quick follow up here was sometime back your operating partner has taken over to Synclude operations from the entity and you guys had both expressed confidence in terms of the synergy benefits of that. Where are we in that cycle in terms of the benefits that come from your actual operating partner taking over the Synclude project?

My second quick follow up here was some time back Keeler operating partner has taken Hulu the syncrude operations from the entity and you guys had bought express confidence in terms of the synergy benefits of that where are we in that cycle in terms of you know.

Brad Corson: Perfect.

The benefits that come from your actual operating partner taking over the Syncrude project.

Brad Corson: Yeah. Thanks for that. Just to close out the other comment I was gonna make on WCS and egress is, as we see that TMX come online, you know, we do see that as favorable, supportive of a tighter differential. As we look to next year, we do expect tightening versus where we are today. Now on Syncrude benefits, you know, as we've said, that's a multi-year journey. You know, we're working closely with Suncor, the operator, to achieve a wide range of benefits, starting with improved reliability, also reduced cost structure. We are seeing progress. You know, you think about last year, last year's production was a record high year for us and for the asset.

Speaker 4: transcript

Speaker 4: Yeah, thanks for that. And just to close out the other comment I was going to make on WCS and egress is as we see that TMX come online, you know, we do see that as favorable, supportive of the tighter differential. So as we look to next year, we do expect tightening versus where we are today.

Yes, thanks for that and just to close out the other comment I was going to make.

On WCS and egress is as we see that <unk> come online.

We do see that as favourable supportive of a tighter differentials. So as we look to next year, we do expect tightening versus where we are today.

Amanda: My quick follow-up here was sometime back your operating partner has taken over the Synclude operations from the entity. And you guys had both expressed confidence in terms of the synergy benefits of that.

Speaker 4: transcript

Speaker 4: Now on Syncro benefits, as we said, that's a multi-year journey. And we're working closely with the SunCore, the Office.

Now on Syncrude benefits as we've said that's up that's a multiyear journey.

And we're working closely with <unk>.

Suncor, the operator to achieve.

Speaker 4: transcript

Speaker 4: to achieve, you know, a wide range of...

Brad Corson: Where are we in that cycle in terms of, you know, the benefits that come from your actual operating partner taking over the Synclude project? Yeah, thanks for that.

Wide range of <unk>.

Speaker 4: transcript

Speaker 4: of benefits, starting with improved reliability.

Benefits, starting with improved reliability.

Speaker 4: transcript

Speaker 4: also reduce cost structure. And we are seeing progress. You think about last year, last year's production was a record high year for us and for the asset. So that's an indication that we are making progress on reliability. We're seeing.

Also reduce cost structure and we are seeing progress you think about last year.

Brad Corson: And just to close out the other time and I was going to make on on WCS and egress as we see that TMX come online, you know, we do see that as favorable, supportive of a tighter differential. So as we look to next year, we do expect tightening versus where we are today. Now on Synclude benefits, you know, as we said, that's a multi-year journey. And, you know, we're working closely with SunCore, the operator, to achieve, you know, a wide range of benefits starting with improved reliability, also reduced cost structure.

Last year's production was a record high year for us and for the asset.

Brad Corson: That's an indication that we are making progress on reliability. We're seeing less unplanned downtime events, which I think is positive. We still see a big opportunity with operating costs, and that's probably the biggest challenge ahead of us, and we're working closely with Suncor to continue to look for opportunities to drive those cost structures down so that the asset can be more competitive on a cost basis. But we are seeing progress, but there's still a long ways to go.

So that's an indication that we are making.

Progress on the liability.

We're seeing less unplanned downtime events, which I think is positive.

Speaker 4: transcript

Speaker 4: unplanned downtime events, which I think is positive.

Speaker 4: transcript

Speaker 4: we still see a big opportunity with operating costs.

We still see a big opportunity with operating costs and Thats, probably the biggest challenge ahead of us and we're working closely with Suncor to continue to look for opportunities to drive those cost structures down so that the asset could be more.

Speaker 4: transcript

Speaker 4: And that's probably the biggest challenge ahead of us. And we're working closely with SunCord to continue to look for opportunities.

Brad Corson: And we are seeing progress, you know, you think about last year, last year's production was a record high year for us and for the asset. So that's an indication that we are making progress on reliability. We're seeing less unplanned downtime events, which I think is positive. We still see a big opportunity with operating costs. And that's probably the biggest challenge ahead of us. And we're working closely with SunCore to continue to look for opportunities to drive those cost structures down so that the asset could be more competitive on a cost basis. But we are seeing progress, but there's still a long ways to go.

Speaker 4: transcript

Speaker 4: to drive those cost structures down, so that the asset could be more competitive on a cost basis. But we are seeing progress, but there's still a long ways to go.

Competitive on it.

Cost basis.

But we are seeing progress, but theres still a long ways to go.

Manav Gupta: Thank you so much for the responses.

Thank you so much for the responses.

Amanda: Thank you so much for the responses.

Brad Corson: Thank you.

Speaker 2: transcript

Speaker 2: Thank you. We'll go next to Dennis Fong with CIBC World Markets.

Operator: We'll go next to Dennis Fong with CIBC World Markets.

Thank you we'll go next to well go next to Dennis Fong with CIBC World markets.

Operator: We'll go next to Dennis Fong with CIBC World Markets.

Dennis Fong: Hi, good morning, and thanks for taking my questions. Again, also, first off, congrats, Dave, on your retirement and welcome, Peter, to the new role. The first question I have is more focused around Kearl. Obviously, that's great to hear that the full deployment of autonomous haul has been completed across that asset. When we think about things, I know at your Investor Day, you outlined a bunch of digital technology, including shovel and truck analysis, as well as other aspects that likely help support or are supported by AHS. How do we think about where production and productivity could potentially get to, and how far have you, or how much have you captured of that $1 a barrel thus far?

Speaker 10: transcript

Speaker 10: Bye, good morning and thanks for taking my questions. Again, also, first off, congrats Dave on your retirement and welcome Peter to the new role.

Hi, and good morning, and thanks for taking my questions again also first off congrats Dave on your retirement and welcome Peter to the new role.

Speaker 10: transcript

Speaker 10: The first question they have is more focused around curl. Obviously, that's great to hear that the fold of the woman to the autonomous hall.

The first question I have is.

Is more focused on kearl.

Obviously, that's great to hear that the full deployment of autonomous haul has been quite.

Speaker 10: transcript

Speaker 10: has been quite has been completed across that asset. When we think about things, I know at your investor day, you outlined a bunch of digital technology, including shovel and truck analysis, as well as other aspects that likely help support or are supported by a chat. How do we think about where production and productivity could potentially get to and how far have you or how much have you captured of that 1 dollar barrel thus far?

It has been completed across that asset when we think about things I know at your Investor Day, you outlined a bunch of digital technology, including shovel and truck analysis as well as other aspects that likely help support are supported by Hs, how do we think about where.

Production and productivity, you could potentially get to and how far have you or how much have you captured all of that $1 a barrel thus far.

Dennis Fong: Thank you. We're going next to Dennis Fong with CIVC world markets. Hi, good morning and thanks for taking my questions.

Okay.

Brad Corson: Yeah. I'll make a couple comments and then I'll let Simon maybe add a little more color to it. You know, first of all, in terms of the journey we're on, you know, as you're aware from our Investor Day and other discussions, our guidance for this year is 265 to 275 thousand barrels per day. We're on path to achieve that, you know, which is great recovery from some of the operational challenges we had last year, and puts us back on track to this journey to 280 thousand.

Speaker 4: transcript

Speaker 4: Yeah, I'll make a couple of comments and then I'll let Simon maybe add a little more color to it.

Yes, I'll make a couple of comments and then I'll, let Simon maybe add a little more color to it.

Brad Corson: Again, also first off, congrats Dave on your retirement and welcome Peter to the new role. The first question I have is more focused around curl. Obviously, that's great to hear that the full deployment of autonomous hall has been quite, has been completed across that asset. When we think about things, I know at your investor day, you outlined a bunch of digital technology, including shovel and truck analysis and laws, other aspects that likely help support or are supported by AHS.

<unk>.

Speaker 4: transcript

Speaker 4: You know, first of all, in terms of the journey we're up.

First of all in terms of the journey we're on.

Speaker 4: transcript

Speaker 4: You know, as you're aware from our investor day and other discussions, our guidance for this year is 265 to 275,000 barrels per day. We're on path to achieve that.

As you are aware from our Investor day, and other discussions our guidance for this year is 265 to 275000 barrels per day.

Were on path to achieve that.

Speaker 4: transcript

Speaker 4: you know, which is great recovery from some of the.

Which is great recovery from some of the.

Speaker 4: transcript

Speaker 4: You know, the operational challenges we had last year and puts us back on track to this journey to 280,000 and as we said at our investor day, we expect to achieve 280,000 barrels a day next year.

The operational challenges, we had last year.

And puts us back on track to this journey to 280000 and as as we said at our Investor Day, We expect to achieve 280000 barrels a day next year and then looking beyond that although we haven't put a specific timeline, we do see the potential to achieve.

Brad Corson: How do we think about where production and productivity could potentially get to and how far have you or how much have you captured of that $1 barrel that's far? Yeah, I'll make a couple comments and then I'll let Simon maybe add a little more color to it. First of all, in terms of the journey we're on, you know, as you're aware from our investor day and other discussions, our guidance for this year is 265 to 275,000 barrels per day.

Brad Corson: As we said at our Investor Day, we expect to achieve 280,000 barrels a day next year. Then looking beyond that, although we haven't put a specific timeline, we do see the potential to achieve 300,000 barrels a day. Certainly, things like autonomous haul, leveraging technology are all, you know, integral components to achieving those higher volumes. But maybe Simon can add a little more detail around some of the other autonomous things we're doing and other technology applications, you know, at the mine or elsewhere in the asset.

Speaker 4: transcript

Speaker 4: And then looking beyond that, although we haven't put a specific timeline, we do see the potential to achieve.

Speaker 4: transcript

Speaker 4: 300,000 barrels a day and certainly things like Autonomous Hall.

<unk>.

300000 barrels a day and certainly things like autonomous haul leg.

Speaker 4: transcript

Speaker 4: leveraging technology are all, you know, integral components to achieving those higher volumes.

Bridging technology are all.

<unk>.

Integral components to achieving those higher volumes, but maybe Simon can add a little more detail around some of the other autonomous things we're doing.

Speaker 4: transcript

Speaker 4: add a little more detail around some of the other autonomous things we're doing and other technology applications.

Brad Corson: We're on path to achieve that, which is great recovery from some of the operational challenges we had last year and puts us back on track to this journey to 280,000. And as we said at our investor day, we expect to achieve 280,000 barrels a day next year and then looking beyond that, although we haven't put a specific timeline, we do see the potential to achieve 300,000 barrels a day. And certainly things like autonomous hall, leveraging technology are all, you know, integral components to achieving those higher volumes.

And other technology applications.

Speaker 4: transcript

Speaker 4: you know, at the mind or elsewhere in the asset. Yeah, yeah, happy to be thanks, but I think, um,

The mind or elsewhere, and the asset yeah happy to thanks, Brett I think.

Simon Younger: Yeah. Yeah, happy to. Thanks, Brad. I think, actually earlier in the year, I shared one example of where we're looking elsewhere for the benefits of autonomy, and I foreshadowed that we were gonna do a trial of autonomous dozers. In fact, we've now done some of that trial work and got really encouraging results, particularly in our tailings area. We think remote control dozing has some significant potential. We just continue to see enormous potential in this part of the business. Sort of bigger picture, just to build a bit more on what Brad was sharing, you know, that journey to 280,000 barrels a day next year for Kearl is really driven through two main levers.

Speaker 6: Actually earlier in the year, I shared one example of where we're looking elsewhere for the benefits of autonomy and I foreshadowed that we were going to do a trial of autonomous doses and in fact we've now done some of that trial work and got really encouraging results particularly now in our tailings area. We think remote control dosing has some significant potential.

Actually earlier in the year I'll share. One example of where we're looking elsewhere for the benefits of autonomy and I foreshadowed that we would we're going to do a trial of autonomous doses and in fact, we've now done some of that trial work and got really encouraging results, particularly now in our tailings area.

We think remote control dosing.

There's some significant potential.

Speaker 6: We just continue to see enormous potential in this part of the business.

We just continue to see enormous potential in this part of the business, but sort of bigger picture just to build a bit more on what Brad was sharing.

Speaker 6: transcript

Speaker 6: But sort of bigger picture just to build a bit more on what Brad was was sharing.

Speaker 6: transcript

Speaker 6: You know, that journey to 280,000 barrels a day next year for curl is really driven through two main levers. But the first is reliability.

<unk>.

Brad Corson: But maybe Simon can add a little more detail around some of the other autonomous things we're doing and other technology applications, you know, at the mind or elsewhere in the asset. Yeah, happy to thanks, but I think actually earlier in the year I shared one example of where we're looking elsewhere for the benefits of autonomy. And I fortunate that we were going to do a trial of autonomous doses. And in fact, we've now done some of that trial work and got really encouraging results, particularly now in our tailings area.

That journey to 280000 barrels a day next year for coal is really driven through two main levers the first is reliability.

Simon Younger: The first is reliability and uptime, and mainly there it's optimizing the scheduled work that we do and minimizing, you know, reducing the amount of scheduled work that we do to just continue to increase incrementally the annual capacity and production of the plant. Then the other key lever is productivity. I would tell you that an enormous underpinning of that is our digital efforts. You know, our digital efforts really are focused in three areas. It's analytics, what can we glean from and do with the data, the vast amounts of data that we have. Analytics is a huge driver. Productivity improvements, as we've talked about, making our workers more productive, more effective by putting digital tools in their hands.

Speaker 6: transcript

Speaker 6: and uptime and mainly there it's optimizing the scheduled work that we do and minimizing you know reducing the amount of scheduled work that we that we do to just continue to to increase incrementally the the annual capacity and production of the plant and then the other key lever is productivity and I'll tell you that an enormous underpinter of that is our digital efforts.

Uptime and mainly there it's optimizing the scheduled work that we do of minimizing reducing the amount of scheduled work that we do to just continue to increase incrementally be the annual capacity and production of the plant and then the other K labor is productivity and all I would tell you that an enormous.

Underpinning all of that is our digital efforts and our digital efforts really are focused in three areas.

Speaker 6: transcript

Speaker 6: You know, and our digital efforts really are focused in three areas. It's analytics, what can we glean from and do with the data, the vast amounts of data that we have. So analytics is a huge driver. Productivity improvements, as we've talked.

<unk> analytics, what what can we glean from and do with the date of the vast amounts of data that we have so analytics is a huge driver productivity improvements as we've talked about.

Brad Corson: We think remote control dosing has some significant potential. So we just continue to see enormous potential in this part of the business. But sort of bigger picture just to build a bit more on what Brad was was sharing. That journey to 280,000 barrels a day next year for curl is really driven through two main levers. But the first is reliability and uptime. And mainly there it's optimizing the scheduled work that we do and minimizing, you know, reducing the amount of scheduled work that we do to just continue to increase incrementally the annual capacity and production of the plant.

Speaker 6: transcript

Speaker 6: making our work as more productive, more effective by putting digital tools in their hands.

<unk>.

Because more.

<unk> more effective by putting digital tools in their in their hands and then applying digital technology like the remote does that I mentioned, but using drawings for internal vessel inspections things like that which are making maintenance.

Simon Younger: Applying digital technology like the remote dozing that I mentioned, but you know, using drones for internal vessel inspections, things like that, which are making maintenance and scheduled work more efficient and quicker to do. That's the continued focus of our digital program. It's a huge driver of us getting, you know, achieving our journey to 280 KBD at the asset next year. Of course, as Brad said, looking beyond that. You know, specifically to the autonomous haul, there was a question. I think part of the question was on that. I would say we haven't yet achieved all of the $1 a barrel, but we're. I'd say we've achieved the majority of that.

Speaker 6: transcript

Speaker 6: And then applying digital technology like the remote dosing that I mentioned, but using drones for internal vessel inspections, things like that, which are making maintenance and and schedule work more efficient and and quicker to do so.

Unscheduled work more efficient and quicker to do so.

Speaker 6: transcript

Speaker 6: That's the continued focus of our digital program. It's a huge driver of us getting, you know, a journey, achieving our journey to 280 KBD at the asset next year. And then of course, this is Brad said, looking beyond that.

The continued focus of our digital program.

It's a huge driver of us getting at journey, achieving that journey to 290 <unk>. The asset next year and then of course as Brad said looking beyond that.

Brad Corson: And then the other key lever is productivity. And I would tell you that an enormous underpinter of that is our digital efforts. You know, now digital efforts really are focused in three areas. It's analytics. What can we glean from and do with the data, the vast amounts of data that we have? So analytics is a huge productivity improvements as we've talked about making our workers more productive, more effective by putting digital tools in their hands.

Speaker 6: transcript

Speaker 6: you know specifically to the autonomous hall there was a question I think part of the question was on that I would say

Specifically to the autonomous haul, though there was a question I think part of the question was on that I would cite.

Speaker 6: transcript

Speaker 6: We haven't yet achieved all of the $1 barrel, but we've, aside, we've achieved the majority of that.

We haven't yet achieved all of the $1 a barrel.

I'd say, we've achieved the majority of that.

Simon Younger: There's a little bit more to go, but I would also suggest there's upside relative to that as well. You know, I'm sure you can tell we're very bullish on the autonomous technology.

Speaker 6: transcript

Speaker 6: And it was a little bit more to go, but I would also see if there's upside relative to that as well. So, you know.

And so there is a little bit more to go but I would also.

There is upside relative to that as well.

Sorry.

Speaker 6: transcript

Speaker 6: I'm sure you can tell we're very bullish on the autonomous technology.

I'm sure you can tell we're very bullish on the autonomous technology.

Brad Corson: And then applying digital technology like the remote dosing that I mentioned, but you know, using drones for internal vegetable inspections, things like that, which are making maintenance and and and schedule work more efficient and quicker to do. So that's that's the continued focus of our digital program. It's a huge driver of us getting, you know, our journey, achieving our journey to 280 KBD at the at the asset next year. And then of course, as Brad said, looking beyond that, you know, specifically to the autonomous fall, there was a question, I think part of the question was on that.

Dennis Fong: No, great. Great. Appreciate that color and context. I guess a quick follow-up there on Kearl specifically. As we enter the winter season, I know you've highlighted a multitude of strategies to improve the winterization of the facility. Is there anything further that you've kind of gleaned or applied or added to the asset that could help again kind of continue the strength of operations that you've seen thus far in obviously better temperatures, and as we kind of get into December, January, and February, which are obviously challenging months, how are you gonna further help moderate any, we'll call it, negative impacts around extreme colder temperatures? Thanks.

Speaker 10: transcript

Speaker 10: No, great, great. Appreciate that, that color and context.

Great Great I appreciate that color and context.

Speaker 10: transcript

Speaker 10: I guess a quick follow up there on curals specifically. As we enter the winter season, I know you've highlighted a multitude of strategies to improve the winterization of the facility. Is there anything further that you've kind of gleaned or applied or added to the asset that could help again, kind of continue the strength of operations that you've seen thus far, and obviously,

I guess, a quick follow up there on on Karl specifically.

We entered the winter season, I know you highlighted a multitude of strategies to improve the winter Ization of the facility is there anything further that you've kind of gleaned or applied or added to the asset that can help again.

Kind of continue the strength of operations that <unk> seen thus far and obviously.

Brad Corson: I would say we haven't yet achieved all of the $1 barrel, but but but we're we're I'd say we've achieved the majority of that. And there's a little bit more to go, but I would also see there's upside relative to that as well. So, you know, I'm sure you can tell we're very bullish on on the autonomous technology. No, great, great, appreciate that, that color and context. I guess a quick follow-up there on on curl specifically.

Speaker 10: transcript

Speaker 10: better temperatures and as we kind of get into December , January and February , which are obviously challenging months, how are you going to further help moderate any, we'll call it, negative impacts around extreme colder temperatures? Thanks.

Better.

Temperatures and as we kind of get into December January and February which are obviously challenging months. How are you going to further help moderate any we'll call it negative impacts around extreme colder temperatures.

Brad Corson: I'll let Simon kind of discuss that in more detail.

Speaker 6: transcript

Speaker 6: I'll let Simon kind of discuss that in more detail. Yeah, I mean, I guess the key message there is we again feel well positioned going into this winter.

I'll, let Simon.

Kind of discuss that in more detail, yeah, I mean, I guess the key message. There is we again feel well positioned.

Simon Younger: Yeah. I mean, I guess the key message there is we again feel well positioned, going into this winter, based on the learnings that we had from the prior, you know, two winters ago and then the successful application of those learnings and mitigations this past winter. There's not a huge amount new or different that we plan to do, this year, although we do have some additional equipment deployed. We've got an additional shovel in the mine that has stronger capability in the colder temperatures, and digging through the frozen ore. I think that'll be a help.

Going into this winter.

Speaker 6: transcript

Speaker 6: based on the learnings that we had from the prior two winters ago and then the successful application of those learnings and mitigations this past winter. There's not a huge amount new or different that we plan to do this year, although we do have some additional equipment deployed. We've got an additional shovel in the mine that we that has stronger capability in the the

Brad Corson: As we enter the winter season, I know you've highlighted a multitude of strategies to improve the winterization of the facility. Is there anything further that you've kind of gleaned or applied or added to the asset that could help again kind of continue the strength of operations that you've seen thus far in obviously better temperatures. And as we kind of get into December, January and February, which are obviously challenging months, how are you going to further help moderate any, we'll call it negative impacts around extreme colder temperatures.

Based on the learnings that we had from the <unk>.

Sure.

Two winters ago, and then and then the successful application of those learnings and litigations.

This past winter theres, not a huge amount of new or different that we plan to do this year, although we do have.

Some additional equipment deployed we've got an additional shovel.

In the in the mind that that.

That has stronger capability in the in the colder temperatures.

Speaker 6: transcript

Speaker 6: and digging through the frozen ore. So I think that'll be a help. We're trialing what's known as grizzly bars on top of our crushes, one of the crushes to better handle the frozen lumps that come at us during the winter months.

And digging through the frozen or so I think that'll be that'll be a help.

Simon Younger: We're trialing what's known as grizzly bars on top of our crushers at one of the crushers to better handle the frozen lumps that come at us during the winter months. There are a few things additional that we've got in our armory versus last winter, but by and large, it'll be a repeat dose of just applying all the learnings and the cold temperature protocols and the maintenance equipment preparedness that we applied last winter.

We're trialing.

Whats known as grizzly bonds on top of our crushes, but one of the crushers to to better handle the frozen lumps that come at us during the winter.

Brad Corson: Thanks. I'll let Simon kind of discuss that in more detail. Yeah, I mean, I guess the key message there is we again feel well positioned going into this winter based on the learnings that we had from the prior two winters ago and then the successful application of those learnings and mitigations this past winter. There's we do have some additional equipment deployed. We've got an additional shovel in the mine that we that has stronger capability in the colder temperatures and digging through the frozen ore.

Speaker 6: transcript

Speaker 6: So there are a few things additional that we've got in our Armory versus last winter, but by and large, it'll be a repeat dose of just applying all the learnings and the cold temperature protocols and the maintenance equipment preparedness that we applied last winter.

Months.

There are a few things additional that we've got in our armory versus last winter, but by and large it will be a repeat dose of just applying all the all the learnings and the cold temperature protocols and the maintenance equipment preparedness that we applied last winter.

Brad Corson: Maybe just one reminder, you know, after kind of experiencing those challenges and then, you know, applying the organization's capability and kind of can-do mindset, and putting some new procedures in place and other mitigations, Q1 of this year was a record Q1 for the Kearl asset. Again, demonstrating that, you know, we had addressed, you know, those challenges and we're back on track.

Speaker 4: transcript

Speaker 4: and maybe just one reminder, you know, after...

And maybe just one reminder, after.

Speaker 4: transcript

Speaker 4: kind of experiencing those challenges and then, you know, applying the organization's capability and kind of can-do mindset and putting some new procedures in place and other mitigations. The first quarter of this year was a record first quarter for the CURL asset. So again, demonstrating that, you know, we had addressed, you know, those challenges and we're back on track.

Kind of experiencing those challenges and then.

Applying the organization's capability.

Can do mindset.

And and putting some new procedures in place and other mitigation. The first quarter of this year was a record first quarter for the curl asset so again demonstrating that.

Brad Corson: So I think that'll be that'll be a help. We're trialing what's known as grizzly bars on on top of our crushes. One of the crushes to better handle the frozen lumps that come at us during the winter months. So there are a few things additional that we've got in our armory versus last winter, but by and large, it'll be a repeat dose of just applying all the all the learnings and the cold temperature protocols and the maintenance equipment preparedness that we applied last winter.

We had.

Addressed.

Those challenges and we're back on track.

Dennis Fong: Great. Really appreciate the color there, and I'll turn it back to you. Thanks.

Speaker 10: transcript

Speaker 10: Great, great. Really appreciate the color there and I'll turn it back to you. Thanks.

Great Great really appreciate the color there and I'll turn it back to you. Thanks.

Brad Corson: Thanks.

Thanks.

Operator: We'll go next to Doug Leggate with Bank of America.

We'll go next to Doug Leggate with Bank of America.

Kalei Akamine: Hey, good morning, guys. This is Kalei for Doug. Thanks again for taking the question. This one goes to the dividend, so maybe Brad or Dan. As we look at it, by any measure, dividend coverage is very robust, and you guys have hiked it recently. To be frank, even if you hike, say, 10% to 15% and do that for a while, we could be asking this question for quite a long time. I guess why not take a bigger step towards rightsizing that dividend coverage and at the same time close the gap versus your Canadian peers?

Speaker 11: transcript

Speaker 11: Hey, good morning guys. This is Kaleon for Doug. So thanks again for taking the question. This one goes to the dividend. So maybe Brad or Dan.

Hey, Good morning, guys. This is clay on for Doug. So thanks again for taking the question.

Brad Corson: And maybe just one reminder, you know, after kind of experiencing those challenges and then, you know, applying the organization's capability and kind of can do mindset and and putting some new procedures in place and other mitigations. The first quarter of this year was a record first quarter for the curl asset. So again, demonstrating that, you know, we had addressed, you know, those those challenges and we're back on track.

This one goes to the dividend, so maybe Brad or Dan.

Speaker 11: transcript

Speaker 11: As we look at it by any measure, dividend coverage is very robust. You guys have hiked it recently, but to be frank, you've been, if you hike, say 10 to 15% and do that for a while, we could be asking this question for quite a long time. So I guess why not take a bigger step towards right sizing that dividend coverage, and at the same time, close the gap versus your Canadian peers.

As we look at it by any measure a dividend coverage is very robust.

Does have hiked recently, but to be Frank if you hike say, 10% to 15% and do that for a while we could be asking this question for quite a long time, so I guess why not take a bigger step towards right sizing that dividend coverage and at the same time close the gap versus your Canadian peers.

Brad Corson: Yeah, thanks for the question. I will let Dan comment, but you know, we'll just emphasize you know, the significant return of surplus cash that you know, we've made last year over CAD 7 billion. You know, we've just kinda summarized what we've done so far. Obviously, our dividend strategy is key and integral to returning surplus cash to shareholders. But maybe I'll let Dan talk a little bit about kinda how we view you know, one mechanism versus another and kind of our long-term philosophy on base dividends.

Speaker 4: transcript

Speaker 4: Yeah, thanks, thanks for the question. And I will not say on comment, but, you know, we would just emphasize.

Yeah. Thanks, Thanks for the question.

I will let Dan comment but.

I would just emphasize.

Simon Younger: Great, great, really appreciate the color there and I'll turn it back to you.

Speaker 4: transcript

Speaker 4: you know, the significant return of surplus cash that, you know, we've, we've made last year over $7 billion, you know, we've just kind of summarized what we've done so far. And obviously, our dividend strategy is key and integral to returning surplus cash to shareholders. But maybe I'll add Dan talk a little bit about kind of how we view, you know, one mechanism versus is a huge Dig.

The significant return of surplus cash that we've made.

Dennis Fong: Thanks.

Brad Corson: Look on next to Doug Luggett with Think of America. Hey, good morning guys. This is Kaleon for Doug. So thanks again for taking the question. This one goes to the dividend. So maybe bread or Dan, as we look at it by any measure, dividend coverage is very robust. You guys have hiked it recently, but to be frank, you've been if you hike say 10 to 15 percent and do that for a while, we could be asking this question for quite a long time.

Last year over $7 billion, we've just kind of summarize what we've done so far and obviously our dividend strategy is key and integral to returning surplus cash to shareholders.

But maybe I'll, let Dan talk a little bit about kind of how we view.

One mechanism versus another and kind of our long term philosophy on base dividends sure. Thanks, Brad Yeah look.

Speaker 4: transcript

Speaker 4: kind of our long-term philosophy on based dividends.

Dan Lyons: Sure. Thanks, Brad. Yeah, look, you know, a reliable and growing dividend is the kind of bedrock of our cash return strategy and where it all starts. We've done, you know, pretty significant increase over the last few years and on a growth basis, I think exceeded most of our peers. Well, on a growth basis, we continue to wanna grow the dividend. Obviously, it's a trade-off. You don't wanna get ahead of yourself and have to cut and things like that. I think fundamentally you're correct. There is room to grow. Obviously, as we deliberate that, we look at our future prospects and everything else, and we set those levels.

Speaker 5: transcript

Speaker 5: Sure, thanks Brad. Yeah, look, a reliable and growing given in is the kind of bedrock of our cash returns strategy and where it all starts.

Brad Corson: So I guess why not take a bigger step towards right sizing that dividend coverage and at the same time close the gap versus your Canadian peers. Thanks for the question. I will let Dan comment, but it would just emphasize the significant return of surplus cash that we've made last year over $7 billion. We've just summarized what we've done so far. Obviously, our dividend strategy is key and integral to returning surplus cash to shareholders, but maybe I'll let Dan talk a little bit about how we view one mechanism versus another and our long-term philosophy on based dividends.

A reliable and growing dividend is the bedrock of our cash return strategy and where it all starts.

Speaker 5: transcript

Speaker 5: And we've done, you know, pretty significant increase over the last few years and on a growth basis, I think.

And we've done pretty significant increase over the last few years and.

Growth basis I think.

Speaker 5: transcript

Speaker 5: caught up with well on a growth base and exceeded most of our peers. And look, we continue to want to grow the dividend. Obviously it's a trade off. You don't want to get ahead of yourself and have to cut and things like that. But I think fundamentally you're correct. There is room to grow and

Caught up with well on a growth basis exceed exceeded most of our peers and look we we continue to want to grow the dividend. Obviously, it's a trade off you don't want to get ahead of yourselves have to cut and things like that but I think fundamentally you are correct. There is there is there is room to grow and.

Speaker 5: transcript

Speaker 5: Obviously, as we deliberate that we look at our future prospects and everything else and we set those levels. So we take your point, you know, looking for more dividend growth and that'll certainly come over time. And we're highly aware of, you know, what our, what our competitors do in terms of increases and yields.

Obviously.

As we deliberate that we look at our future prospects and everything else and we set those levels. So.

Dan Lyons: We take your point, you know, looking for more dividend growth, and that'll certainly come over time. We're highly aware of, you know, what our competitors do in terms of increases and yields, and that obviously reflects our thinking and you know their actions and yields you know affect us in a way that you know probably the way you want that. If they're going higher, you know, we would tend to follow that. Of course, looking at our unique situation and what we see is our future cash flows. You're right, we're very resilient. We put out a $35 and last Investor Day, breakeven, including. I'm sorry.

We take your point.

Looking for more dividend growth and that will certainly come over time, and we are highly aware of what our what our competitors do in terms of increases in yields and that obviously.

Brad Corson: Sure, thanks Brad. Yeah, look, a reliable growing dividend is the bedrock of our cash return strategy, and we're all starts, and we've done, you know, pretty significant increase over the last few years, and on a growth basis, I think, caught up with, well, on a growth basis exceeded most of our peers. And look, we could continue to want to grow the dividend. Obviously, it's a trade-off, you don't want to get ahead of yourself and have to cut things like that, but I think fundamentally you're correct.

Brad Corson: There is room to grow, and obviously, as we deliberate that, we look at our future prospects and everything else, and we step those levels. So we take your point, you know, looking for more dividend growth, and that'll certainly come over time, and we're highly aware of what our competitors do in terms of increases and yields, and that obviously reflects our thinking, and, you know, their actions and yields, you know, affect us in a way that, you know, probably the way you want that if they're going higher, you know, we would tend to follow that.

Speaker 5: transcript

Speaker 5: And that obviously reflects our thinking and their actions and yields.

Reflects our thinking and.

Their actions.

And yields.

Speaker 5: transcript

Speaker 5: You know, affect us in a way that, you know, probably the way you that if they're if they're going higher, you know, we would tend to follow that. Of course, looking at our unique situation and what we see is our future cash flows. But you're right. We're very resilient. We put out a thirty five.

Yes.

Perfect.

In a way that probably the way you want.

If they're going higher.

We tend to follow that of course looking at her unique situation and what we see is our future cash flows, but youre right were very resilient.

We put out of $35.

Speaker 5: transcript

Speaker 5: And last investor day break even day, including, I'm sorry, I had to invest today a $35 WTI break even, which includes sustaining capital and dividend. So our dividend is super secure and you're absolutely correct. We have room to increase.

And last Investor day breakeven data, including.

Dan Lyons: At our Investor Day, a $35 WTI breakeven, which includes sustaining capital and dividends. You know, our dividend is super secure, and you're absolutely correct. We, you know, we have room to increase it.

Sorry at our Investor Day, a 35 dollar WTS breakeven, which includes sustaining capital and dividend so our dividend Super secure and Youre, absolutely correct, we have room to increase it.

Kalei Akamine: Look, it's one of those good problems, and we appreciate the thoughts. My really quick follow-up is on Kearl. Q3 volumes were obviously very strong, and you look on pace for the midpoint of guidance for the full year. Just wondering if you can give a quick update on October volumes and address if there is any tension between volumes and wide differentials as you execute the rest of this quarter.

Speaker 11: transcript

Speaker 11: Look, it's 1 of those good problems and we appreciate the thoughts. My really quick follow up is on curl. So, 3rd quarter volumes were obviously very strong. And you look on pace for the big point of guidance for the full year. Just wondering if you can give a quick update on October volumes and address that there's any tension between volumes and wide differentials as you execute the rest of this quarter.

It's one of those get problems then we appreciate the thoughts by really quick follow up is on <unk>. So third quarter volumes were obviously very strong and you look on page three the midpoint of guidance for the full year. Just wondering if you can give a quick update on October volumes and address if there is any tension between volumes and wide differential.

As you execute the rest of this quarter.

Brad Corson: Yeah, thanks. Well, we continue to be committed to our full-year guidance for Kearl. You know, the Q3 performance, I think, is demonstrative of our capability to achieve that. October has been a strong month for us so far. You know, there's still, I guess, 5, 6 days to go relative to the latest volumes that I've seen. You know, we expect to be somewhere in the 280s for this month, which also reflects you know, on some very minor kind of routine planned maintenance that we executed. We see continued you know, strength as we move into November, December.

Speaker 4: transcript

Speaker 4: Yeah, thanks. Well, we continue to be committed to our four-year guidance for Curl and the third quarter performance, I think, is...

Yes. Thanks.

We continue to be committed to our full year guidance for Karl and <unk>.

Brad Corson: Of course, looking at a unique situation in what we see is our future cash flows. But you're right, we're very resilient. We put out a $35 and last investor-day break-even-day, including, sorry, at our investor-day, a $35 WTI break-even, which includes sustaining capital and dividend, so, you know, our dividend is super secure, and you're absolutely correct, you know, we have room to increase it. Look, it's one of those good problems, and we appreciate the thoughts.

The third quarter performance I think is demonstrative of our capability to achieve that.

Speaker 4: transcript

Speaker 4: demonstrative of our capability to achieve that. October has been a strong month for us so far. You know, there's still, I guess, five, six days to go relative to the latest volumes that I've seen.

October has been a strong month for us so far.

There is still I guess five six days to go relative to the latest volumes that I've seen.

Speaker 4: transcript

Speaker 4: But, you know, we expect to be somewhere in the 280s.

But we expect to be somewhere in the $2 <unk>.

Speaker 4: transcript

Speaker 4: Uh for for this month which also reflects

Brad Corson: My really quick follow-up is on Pearl, so their quarter volumes were obviously very strong, and you look on page for the bid point of guidance for the full year. Just wondering if you can give a quick update on October volumes and address that there's any tension between volumes and wide decorentials as you execute the rest of the score. Yeah, thanks. Well, we continue to be committed to our full year guidance for Pearl, and, you know, the third quarter performance, I think, is demonstrative of our capability to achieve that.

For this month, which also reflects.

Speaker 4: transcript

Speaker 4: You know, some very minor kind of routine plan maintenance.

Some very minor kind of routine planned maintenance.

Speaker 11: transcript

Speaker 11: that we executed and we see continued, you know, strength as we move into November , December . Right. I'll leave it there. See you in Houston next month, Brad.

That we executed.

And we see continued strength as we move into November December.

Kalei Akamine: Great. I'll leave it there. See you in Houston next month, Brad.

Great I'll leave it there for you in Houston next month's Brad.

Brad Corson: Yeah, you bet. Thank you. Look forward to it.

Dan Lyons: Yeah.

Kalei Akamine: Yeah.

You bet. Thank you look forward to it.

Operator: We'll take our next question from Menno Hulshof with TD Securities.

Speaker 2: transcript

Speaker 2: We'll take your next question from Menohar Shals with PD Secure.

We'll take our next question from Menno <unk> with TD Securities.

Menno Hulshof: Thanks, good morning, everyone. I'll start with a question on the 2024 outlook. I do understand that you're in the midst of the budgeting process, but would you be able to give us the broad strokes on planned turnaround activity within Upstream and Downstream for the coming year?

Speaker 4: transcript

Speaker 4: Thanks and good morning everyone. I'll start with a question on the 2024 outlook. I do understand that you're in the midst of the budgeting process. But would you be able to give us the broad strokes on planned turnaround activity within upstream and downstream for the coming year?

Thanks, and good morning, everyone I'll start with a question on the 2020 for outlook.

Brad Corson: October has been a strong month for us so far. You know, there's still, I guess, five, six days to go relative to the latest volumes that I've seen, but, you know, we expect to be somewhere in the 280s for this month, which also reflects, you know, some very minor kind of routine plan maintenance that we executed, and we see continued, you know, strength as we move into November, December.

You understand that you are in the midst of the budgeting process, but would you be able to give us the broad strokes on planned turnaround activity within upstream and downstream for the for the coming year.

Brad Corson: Yeah. We're not, you know, in a position to discuss all those details yet. That'll be part of our normal guidance. We're in the process of finalizing all of our plans for next year. You know, as we think more broadly about it, you know, we're expecting, you know, a pretty typical turnaround year next year. I don't think anything kinda extraordinary. You know, I'd say that'd be the rough planning basis now. You know, as we get to the end of the year, we'll give more specifics on, you know, each of the assets, you know, the target timing, duration, cost. Just a little bit too premature to share those details with you.

Speaker 4: transcript

Speaker 4: Yeah, we're not, you know, in a position to discuss all those details yet. That'll be part of our normal guidance. And, you know, we're in the process of finalizing all of our plans for next year. But, you know, as we think more broadly about it, you know, we're expecting, you know, a pretty typical turnaround year next year. I don't think anything kind of extraordinary.

Yes.

Not.

And on a position to discuss all of those details yet that will be part of our normal guidance and we're in the process of finalizing all of our plans for next year, but.

As we think more broadly about it.

Brad Corson: Great, I'll leave it there. See you in Houston next month, Brad. Thank you, Pat. Thank you. Look forward to it.

We're expecting a.

Pretty typical turnaround year next year, I don't think anything kind of extra ordinary.

Menno Hulshof: We'll take your next question from Menno Hulshof with PD Securities. Thanks, and good morning, everyone. I'll start with a question on the 2024 outlook.

Speaker 4: transcript

Speaker 4: So, you know, I'd say that that'd be the planning, rough planning basis now. And then, you know, as we get to the end of the year, we'll give more specifics on, you know, each of the assets, you know, the target timing duration cost. But just a little bit to premature to share those details with you.

So I would say that'd be the planning rough.

Rough planning basis, now and then.

You get to the end of the year, we will give more specifics on.

Brad Corson: I do understand that you're in the midst of the budgeting process, but would you be able to give us the broad strokes on planned turnaround activity within upstream and downstream for the coming year? Yeah, we're not in a position to discuss all those details yet. That'll be part of our normal guidance, and we're in the process of finalizing all of our plans for next year, but as we think more broadly about it, we're expecting a pretty typical turnaround year next year.

Each of the assets.

The target timing duration cost, but just just a little bit too premature to share those details with you.

Menno Hulshof: Thanks, Brad. Totally understandable. Maybe I'll just follow up on Line 5. It's been pretty quiet on that front for a while. Just going back over some of the comments from past conference calls, you've talked about contingency plans and constantly refreshing the different scenarios. Can you just give us an update on what you're hearing there? What's your best guess on how this plays out?

Speaker 12: transcript

Speaker 12: Thanks, Brad. Totally understandable. Maybe I'll just follow up on line five. It's been pretty quiet on that front for a while and just going back over some of some of the some of the comments from past conference calls. You've talked about contingency plans and constantly refreshing the different scenarios. Can you just give us an update on on what you're hearing there? And what's your your best guess on on how this plays out?

Thanks, Brad totally understandable, maybe I'll just.

Follow up on line five it's been pretty quiet on that front for a while and just going back over some of.

Some of the some of the comments from past conference calls you talked about contingency plans and constantly refreshing the different scenarios can you just give us an update on what you are hearing there and whats your best guess on how this plays out.

Brad Corson: I don't think anything kind of extraordinary. So, you know, I'd say that that'd be the planning rough planning basis now, and then, you know, as we get to the end of the year, we'll give more specifics on, you know, each of the assets, you know, the target timing duration costs, but just just a little bit to premature to share those details with you. Thanks, Brad. Totally understandable.

Brad Corson: Yeah, you know, I think you characterized it right from the beginning. It's been pretty quiet. You know, there's continued progress by Enbridge to, you know, kind of install the new pipe work through all the technical and permitting considerations there. You know, we continue to be optimistic that there won't be any interruptions of service. We do have contingency plans in place, but you know, I'd say, even as I sit here today versus a year ago or two years ago, we're becoming increasingly comfortable that there won't be any interruption. You know, there's obviously things well outside our control, but it has been quite quiet.

Yes.

Thank you.

Speaker 4: transcript

Speaker 4: You characterize it right from the beginning. It's been pretty quiet. There's continued progress by Enbridge to, you know.

You characterized it right from the beginning it's been pretty quiet.

<unk>.

There is continued progress by Enbridge.

Two.

Speaker 4: transcript

Speaker 4: kind of install the new pipe work through all the technical and permitting considerations there.

Kind of install the new pipe worked through all the technical and permitting considerations there.

Speaker 4: transcript

Speaker 4: You know, we we continue to be optimistic that there won't be any interruptions of service. We do have contingency plans in place, but you know, I'd say even as I said here today versus a year ago or two years ago, we're becoming increasingly comfortable.

We continue to be.

Brad Corson: Maybe I'll just follow up on line five. It's been pretty quiet on that front for a while, and just going back over some of some of these, some of the comments from past conference calls you talked about contingency plans and constantly refreshing the different scenarios. Can you just give us an update on what you're hearing there, and what's your best guess on on how this plays out? Yeah, you know, I think you, you characterize it right from the beginning.

Optimistic that there won't be any interruption of service.

We do have contingency plans in place.

I'd say, even as I sit here today versus a year ago or two years ago.

We are becoming increasingly comfortable.

Speaker 13: transcript

Speaker 13: that there won't be any interruption. You know, there's obviously things well outside of control, but it has been quite quiet. Thanks, Brad.

That there won't be any interruption.

Theres, obviously things well outside of our control.

But it has been quite quiet.

Brad Corson: It's been pretty quiet. You know, there's continued progress by Enbridge to, you know, kind of install the new pipe work through all the technical and permitting considerations there. You know, we, we continue to be optimistic that there won't be any interruptions of service. We do have contingency plans in place, but, you know, I'd say, even as I said here today, versus a year ago or two years ago, we're becoming increasingly comfortable that there won't be any interruption. You know, there's obviously things well outside or control, but it has been quite quiet. Thanks, Brad.

Dan Lyons: Thanks, Brad. I'll turn it back.

Menno Hulshof: Thanks, Brad. I'll turn it back.

Thanks, Brian I'll turn it back.

Brad Corson: Okay, thank you.

Okay. Thank you.

Operator: We'll take our next question from Neil Mehta with Goldman Sachs.

We will take our next question from Neil Mehta with Goldman Sachs.

Neil Mehta: Yeah, thank you, I'll add my congratulations, Dave, you will be missed. Peter, wish you lots of luck in the new role. Just a couple questions here. The first is just around the SIB. Can you just go through the thought process behind the decision around the CAD 1.5 billion similar to last year? Just thoughts on whether, if the commodity price stays up here, it's possible to do this again in the spring. Last year was a little tougher, but earlier this year was a little tougher because of the large deferred tax payment. I don't think you have the same thing in Q1 of 2024. Thanks.

Speaker 14: transcript

Speaker 14: yeah thank you and and i'll add my congratulations they will be missed and peter wish you lots of luck in the new role

Yes, Thank you and I'll add my congratulations Dave you will be missed and Peter.

Good luck in the new role.

Speaker 14: transcript

Speaker 14: A couple questions here. The first is just around the SIB. You just go through the thought process behind the decision around the billion half dollars, similar to last year, and just thoughts on whether, if the commodity price stays up here.

Couple of questions here. The first is just around the <unk> side.

Can you just go through the thought process behind the decision.

The 1 billion to $5.

Similar to last year and just.

Thoughts on on weather.

If the commodity price stays up here.

Speaker 14: transcript

Speaker 14: possible to do this again in the spring. Last year was a little tougher. But earlier this year was a little tougher because of the large deferred tax payment.

It's possible to do this again in the spring last year was a little tougher and earlier this year was a little tougher because of the large deferred tax payment but.

And don't forget the same thing in <unk> of 2024.

Yes.

Menno Hulshof: I'll, I'll turn it back.

Brad Corson: Yeah, thanks for the question. You know, I would like to answer that question, but I promised to Dan that I would let him answer all the SIB questions because he loves talking about it.

Speaker 4: transcript

Speaker 4: Yeah, thanks for the question. You know, I would, I would like to answer that question, but I promised to Dan that I would let him answer all the S. I.C. questions because he was talking.

Yes, thanks for the question.

Neil Meadow: Okay, thank you. We'll take our next question from Neil Meadow with Goldman Sachs. Yeah, thank you, and I'll add my congratulations, Dave. You will be missed and Peter will wish you lots of luck in the new role. The couple questions here. The first is just around the SIB and you just go through the thought process behind the decision around the billion half dollars similar to last year and just thoughts on whether if the commodity price stays up here.

I would like to answer that question, but I promise to Dan that I would let him answer all the questions because he loves talking.

Dan Lyons: Absolutely.

Brad Corson: It's all you, Dan.

Speaker 3: transcript

Speaker 3: Absolutely. Over to you, Dan. Sure. Hey, look, you know, our, you know, our philosophy is not, not, not super complicated, you know, as we generate the cash, we, you know, the free cash flow, we return it, you know, so, so that's really, you know, kind of where the 1.5 came from. And I would say, you know, I wish we round, you know, we don't go to a precise number. So 1.5 is a good round number. It makes sense based on our cash balances and cash flow.

Absolutely I'll tell you Dan Shaw in luck.

Dan Lyons: Sure. Hey, look, you know, our philosophy is not super complicated. You know, as we generate the cash, we, you know, the free cash flow, we return it. You know, so that's really, you know, kind of where the 1.5 came from. I would say, you know, obviously we round, you know, we don't go to a precise number, so 1.5 is a good round number. It makes sense based on our cash balances and cash flow. Regarding. You're correct that we do not have a big makeup payment. Like, we had that very unique situation last year. That is not expected to be the case this year. Unless in a good world, prices go to $200 or something, maybe then we'd have that.

And our philosophy is not super complicated as we generate the cash the free cash flow we return it.

So that's really kind of where the one five came from and.

I would say obviously rounds, we don't go to a precise numbers. So one five is a good round number it made sense based on our cash balances and cash flow.

Neil Meadow: It's possible to do this again in the spring. Last year was a little tougher. The earlier this year was a little tougher because of the large deferred tax payment, but I don't think you have the same thing in 1-2 of 2024, so thanks. Hey, look, our philosophy is not super complicated. As we generate the cash flow, we return it, so that's really where the 1.5 came from. I would say, I wish we'd round.

Speaker 5: transcript

Speaker 5: regarding your correct that we do not have a big makeup payment. Like we had that very unique situation last year. That is not expected to be the case this last year. And last year in a good world price, we go to $200 or something. Maybe then we'd have that split, but not likely to happen. So, as we looked next year, you know.

Regarding you are correct that we do not have a big makeup payment like we.

Very unique situations last year that is not expected to be the case this last year and last year and a good world prices go to $200 or something maybe than we would have that but not likely to happen. So.

Dan Lyons: Not likely to happen. As we look to next year, you know, our commodity prices stay strong, our cash generation stays strong. You know, we generate free cash flow. Our base plan is to return that to shareholders. I think, you know, so we'll see where those numbers go. That's really an unchanged philosophy. You know, it's a continuation of what we've been doing for a while.

As we look to next year.

Speaker 5: transcript

Speaker 5: Our commodity prices stay strong, our cash generation stays strong. We generate free cash flow, our base plan is to return that to shareholders. So I think, so we'll see where those numbers go.

Our commodity prices stay strong our cash generation stay strong.

We generate free cash flow our base plan is to return that to shareholders. So I think so.

So, we'll see where those numbers go.

Speaker 5: transcript

Speaker 5: But that's really an unchanged philosophy. It's a continuation of what we've been doing for a while.

But that's really an unchanged philosophy, it's continuation of what we've been doing for a while.

Neil Mehta: Okay. That's helpful. It's good to see the return of capital. Follow-up is on Pathways. It's been quiet from our perspective as an investment community around this. I know, Brad, you spend a lot of time on this, so maybe you can peel back the onion a little bit for us and help us understand, are we getting closer to FID? What are the gating conditions here? Is it fair to assume in the base case this gets to FID in 2024? Thank you.

Speaker 14: transcript

Speaker 14: Okay, that's helpful and it's good to see the return of capital. Follow-up is on pathways. It's been quiet from our perspective as an investment community around this. I know Brad, you spend a lot of time on this, so maybe you can peel back the onion a little bit for us and help us understand, are we getting closer to FID? What are the gating conditions here? And is it fair to...

Okay.

Helpful.

It's good to see the return of capital follow up is on a pathway. That's been it's been quiet from our perspective as an investment community around this.

Neil Meadow: We don't go to a precise number, so 1.5 is a good round number and makes sense based on our cash balances and cash flow. So regarding your correct that we do not have a big makeup payment, like we had that very unique situation last year. That is not expected to be the case this last year, unless in a good world price, we go to $200 or something, maybe then we'd have that, but not likely to happen.

No.

Could you spend a lot of time on this so maybe you can.

Peel back the onion, a little bit for us and help us understand are we getting closer to.

What are the gating conditions here.

Is it fair to.

Speaker 14: transcript

Speaker 14: in the base case, this gets that fight.

Assuming the base case.

Neil Meadow: So as we looked to next year, our commodity prices stay strong, our cash generation stay strong. We generate free cash flow, our base plan is to return that to shareholders, so we'll see where those numbers go. But that's really an unchanged philosophy. It's a continuation of what we've been doing for a while. Okay, that's helpful, and it's good to see the return of capital.

This gets that FID in 2024, thank you.

Brad Corson: Yeah, thanks for that question. Yeah, I guess interesting perspective that it's been quiet, you know, from your standpoint. It sure hasn't been quiet from my standpoint, or the rest of the Pathways team, 'cause there is an extraordinary amount of work underway. You know, maybe I'll break that into a couple of key components that all need to come together to achieve an eventual FID. You know, first of all, there is a lot of work underway to progress the engineering side of the project. This is a big, you know, multi-billion dollar project, and that requires significant pre-engineering work, which we've now essentially completed, and positions us to move into kinda more feed engineering studies.

Speaker 4: transcript

Speaker 4: Yeah, thanks for that question. And yeah, I guess interesting perspective that it's been quiet.

Yes. Thanks for that question then.

Yes, I guess interesting perspective that it's been quiet.

Speaker 4: transcript

Speaker 4: You know, from your standpoint, if your hadn't been quiet from my standpoint, or the rest of the pathways team, because there is an extra ordinary amount of work underway. And, you know, maybe I'll break that into a couple of key components that all need to come together to achieve an eventual FID. You know, first of all.

From from your standpoint, if there hadn't been quiet from my standpoint.

Or the rest of the pathways team because there is an extra ordinary amount of work underway and.

Maybe I'll break that into a couple of key components that all needs to come together.

Brad Corson: Follow up is on pathways. It's been quiet from our perspective as an investment community around this. I know, Brad, you spend a lot of time on this, so maybe you can peel back the onion a little bit for us and help us understand, are we getting closer to FID? What are the gaining conditions here? Is it fair to assume in the base case this gets FID in 2024? Thank you. Yeah, thanks for that question.

Brad Corson: And yeah, I guess interesting perspective that it's been quiet, you know, from from your standpoint, if your hadn't been quiet from my standpoint, or the rest of the pathways team. Because there is an extra ordinary amount of work underway, and you know, maybe I'll break that into a couple of key components that all need to come together to achieve an F and eventual FID. First of all, there is a lot of work underway to progress the engineering side of the project.

To achieve an Nf and eventual FIV.

First of all.

Speaker 4: transcript

Speaker 4: There is a lot of work underway to progress the engineering side of the project. This is a big, you know, multi-billion dollar project.

There is a lot of work underway to progress the engineering side of the project.

This is a big.

Multibillion dollar project.

Speaker 4: transcript

Speaker 4: And that requires significant pre-engineering work, which we now essentially completed, and positions us to move into kind of more feed engineering studies. There's a significant amount of environmental studies that need to be conducted across the pipeline right away route. That's planned. There's, and that works progressing. some.

And that requires significant pre engineering work.

We've now essentially completed and positions us to move into.

Kind of more feed engineering studies, there is significant amount of environmental studies that need to be conducted across the pipeline right away route that's planned.

Brad Corson: There's a significant amount of environmental studies that need to be conducted across the pipeline right-of-way route that's planned. That work's progressing. You know, there's multiple components to capturing the carbon. In our first phase, there's 9 key assets and capture projects across the 6 companies, and each company is doing their own engineering and project planning for that work, and that's progressing. On the sequestration side, you know, we've worked with the Alberta government and been awarded pore space that now we need to do additional technical work, so that we can demonstrate that we can you know safely and reliably store the carbon that we would expect to capture and transport to that site, kind of in the Cold Lake region.

There's the networks progressing.

Speaker 4: transcript

Speaker 4: You know, there's multiple components to capturing the carbon. So...

There's multiple components to capturing the carbon.

Speaker 4: transcript

Speaker 4: In our first phase, there's nine key assets and capture projects across the six companies and each company is doing their own engineering and project planning for that work and that's progressing.

So.

And our first phase, there's nine key assets and capture projects across the six companies and each company is doing their own engineering and project planning for that work and Thats progressing.

Brad Corson: This is a big multi-billion dollar project, and that requires significant pre-engineering work, which we now essentially completed and positions us to move into kind of more feed engineering studies. There's a significant amount of environmental studies that need to be conducted across the pipeline right away route. That's planned. There's, and that works progressing. You know, there's multiple components to capturing the carbon so in our first phase there's nine key assets and capture projects across the six companies and each company is doing their own engineering and project planning for that work and that's progressing.

Speaker 4: transcript

Speaker 4: And then on the cap on the the sequestration side.

And then on the cap on the sequestration side.

Speaker 4: transcript

Speaker 4: You know, we worked with the Alberta government and been awarded poor space that now we need to do additional technical work so that we can demonstrate that we can, you know, safely and reliably store the carbon that we would expect to capture and transport to that site kind of in the in the cold lake region.

We've worked with the Alberta government.

<unk>.

<unk> been awarded.

For space that now we need to do additional technical work. So that we can demonstrate that we can.

Safely and reliably store the <unk>.

Carbon that we would expect to capture and transport to that site kind of in the in the Cold Lake region. So all of that work is progressing and and.

Brad Corson: All that work is progressing. You know, there's a few hundred folks working on that across the six companies. Secondly, I would just say on the Indigenous engagement side, which is critically important for us to have a sustainable partnership with the many Indigenous communities that are along the, you know, the route and part of our operations. In recent months, we've been actively engaging them to understand their needs, their desires, you know, as we look at how we can build, you know, a sustainable partnership with them. We've had engagements with over 20 communities so far.

Speaker 4: transcript

Speaker 4: So all that work is progressing and, you know, there's

Speaker 4: transcript

Speaker 4: a few hundred folks working on that across the six companies. And then...

There is.

A few hundred folks working on that across the six companies.

And then.

Speaker 4: transcript

Speaker 4: And then secondly, I would just say on the Indigenous engagement side, which is critically important for us.

And then secondly, I would just say.

On the indigenous engagement side, which is critically important for us to have a sustainable partnerships with the many indigenous communities that are along the <unk>.

Brad Corson: And then on the cap on the the sequestration side, you know, we worked with the Alberta government and been awarded poor space that now we need to do additional technical work so that we can demonstrate that we can, you know, safely and reliably store the carbon that we would expect to capture and transport. [inaudible] the engineering work completed then we will be looking to place and order for the main pipe that we would need for the trunk line for the you know 300 kilometer and we will be looking to place and we will be looking to place and we will be looking Project.

Speaker 4: transcript

Speaker 4: to have a sustainable partnership with the many indigenous communities that are along the, you know, the route and part of our operation.

The route and part of our operations.

Speaker 4: transcript

Speaker 4: And so in recent months, we've been actively engaging them to understand their needs, their desires, you know, as we look at how we can build, you know, a sustainable partnership with them.

And so in recent months, we've been actively engaging them to understand their their needs their desires.

As we look at how we can build a sustainable partnership with them.

Speaker 4: transcript

Speaker 4: We've had engagements with over 20 communities so far.

We have had engagements with over 20 communities so far.

Brad Corson: Last, I would say that the third other kind of key element of this is, of course, kind of all the fiscal work that we're doing with both the federal government, and the provincial government. That is to ensure that we have the right policies in place, the right funding mechanisms in place so that these projects can be economic for our shareholders to ensure that they deliver the environmental benefits that are consistent with the government's aspirations for net zero by 2050. There are regular engagements now with the Alberta government and the federal government around all the details around those plans. We have yet to finalize those discussions on the fiscal mechanisms, and the fiscal kind of support that will be necessary for these projects to go forward.

Speaker 4: transcript

Speaker 4: And then, and then lastly, I would say that the third other kind of key element of this is of course

And then and then lastly, I would say the third other kind of key element of this is of course.

Speaker 4: transcript

Speaker 4: kind of all the fiscal work that we're doing with both the federal government and the provincial government.

Kind of all of the physical work that we're doing with both the federal government and the provincial government.

Speaker 4: transcript

Speaker 4: And that is to ensure that we have the right policies in place, the right funding mechanisms.

And that is to ensure that we have the right policies in place the right funding mechanisms in place. So that these projects can be economic for our shareholders to ensure that they deliver the environmental benefits that are consistent with the government.

Speaker 4: transcript

Speaker 4: so that these projects can be economic for our shareholders to ensure that they deliver the environmental benefits.

Speaker 4: transcript

Speaker 4: that are consistent with the government's aspirations for net zero by 2050. And so there are regular engagements now with the Alberta government and the federal government around all the details around those plans.

Aspirations for net zero by 2050, and so there are regular engagements now with the Alberta government and the federal government around all the details around those plans.

Speaker 4: transcript

Speaker 4: We have yet to finalize those discussions.

We have yet to finalize those discussions.

Speaker 4: transcript

Speaker 4: on the fiscal mechanisms and the fiscal

On the physical mechanisms.

Physical kind of support that will be necessary for these projects to go forward, but I would say those those discussions have advanced materially over the last couple of months. So I'm quite pleased with the progress we're making there is still a long ways to go as I said at the beginning this is a.

Speaker 4: transcript

Speaker 4: kind of support that will be necessary for these projects to go forward. But I would say those discussions.

Brad Corson: I would say those discussions have advanced materially over the last couple months. I'm quite pleased with the progress we're making. There's still a long ways to go. As I said at the beginning, this is a big project, big investments, you know, has implications for decades to come. It's critically important, you know, for our industry to be sustainable, critically important for Canada to achieve its net zero ambitions. We're all focused on making it a success.

Speaker 4: transcript

Speaker 4: have advanced materially over the last couple months.

Speaker 4: transcript

Speaker 4: So I'm quite pleased with the progress we're making. There's still a long ways to go. As I said, this is a big project. Big investments has implications for decades to come. But it's critically important for our industry to be sustainable, critically important for Canada to achieve its net zero ambition.

A big project Big investments.

As implications for decades to come.

But it is critically important for our industry to be sustainable critically important for Canada to achieve net zero ambitions. So we're all focused on making it a success.

Speaker 4: transcript

Speaker 4: So we're all focused on making it a success. You know, the next key milestone for us would be, you know, once we have all of the fiscal mechanisms in place, once we have.

Brad Corson: You know, the next key milestone for us would be, you know, once we have all of the fiscal mechanisms in place, once we have the engineering work completed, then we will be looking to place an order for the main pipe that we would need for the trunk line for the, you know, 300 kilometer project. You know, we hope to be in a place that we can place that order sometime next year, is kind of our current planning basis.

The next key milestone for us would be.

Once we have all of the physical mechanisms in place once we have the.

Speaker 6: transcript

Speaker 6: The engineering work completed, then we will be looking to place an order for

The engineering work completed then we will be looking to place an order for the main pipe that we would need for the trunkline for the.

Speaker 4: transcript

Speaker 4: the main pipe that we would need for the trunk line, for the 300 kilometer...

300 kilometer.

Speaker 4: transcript

Speaker 4: project. And, you know, we hope to be in a place that we can we can place that order sometime next year is kind of our current planning basis.

Okay.

Project, and we hope to be in a place that we can we can place that order or sometime next year is kind of our current planning basis. Okay.

Peter Shaw: Okay.

Brad Corson: I hope that gives you a little more color and also kind of a reflection of just how much activity is underway.

Speaker 4: transcript

Speaker 4: So I hope that gives you a little more, more color. And so kind of a reflection of just how much activity is underway. That's great.

Okay. So I hope that gives you a little more more color so kind of a reflection of just how much activity is underway.

Peter Shaw: That's great. Thank you, Brad. Always appreciate it.

That's great. Thank you Brad I appreciate it.

Brad Corson: Thank you.

Operator: This does conclude the question and answer portion. I would like to turn the call back over to Peter Shaw, Vice President, Investor Relations, for any closing remarks.

Speaker 2: transcript

Speaker 2: Thank you. This does conclude the question and answer portion. I would like to turn the call over to Peter Shaw, Vice President, Investor Relations for any quiz.

Thank you this does.

Operator: This does conclude the question and answer portion. I would like to turn the call back over to Peter Shaw, Vice President, Investor Relations, for any closing remarks.

This does conclude the question and answer portion I would like to turn the call back over to Peter Shaw, Vice President Investor Relations for any closing remarks.

Peter Shaw: Thank you. On behalf of the management team, I would like to thank everybody for joining us this morning. Also sharing the thanks to Dave as we've worked over the last several weeks for a smooth handover. If you have any further questions or follow-ups, please don't hesitate to reach out to anyone on the investor relations team, and we'll be happy to answer any of your questions. With that, thank you very much and have a great day.

Speaker 15: transcript

Speaker 15: Thank you. So on behalf of the management team, I would like to thank everybody for joining us this morning. Also sharing the thanks to Dave as we've worked over the last several weeks for a smooth handover. If you have any further questions or follow ups, please don't hesitate to reach out to anyone on the investor relations team. We'll be happy to answer any of your questions. And with that, thank you very much and have a great day.

Thank you so on behalf of the management team I would like to thank everybody for joining us This morning and also.

So sharing the thanks to David as we've worked over the last several weeks for a smooth handover if.

If you have any further questions or follow ups. Please don't hesitate to reach out to anyone on the Investor Relations team will be happy to answer any of your questions and with that thank you very much and have a great day.

Brad Corson: And, you know, we hope to be in a place that we can place that order sometime next year is kind of our our current planning basis. Okay. So I hope that gives you a little more more color and so kind of a reflection of just how much activity is underway.

Operator: This does conclude today's conference call. Thank you for your participation. You may now disconnect.

Speaker 2: transcript

Speaker 2: This does conclude today's conference call. Thank you for your participation. You may now.

This does conclude today's conference call. Thank you for your participation you may now disconnect.

Speaker 1: transcript

Speaker 1: main

[music].

Neil Meadow: That's great. Thank you, Brad, for always appreciating. Thank you.

Peter Shaw: This does conclude the question and answer portion.

Peter Shaw: I would like to turn the call over to Peter Shaw Vice President investor relations for any closing remarks. Thank you. So on behalf of the management team, I would like to thank everybody for joining us this morning. I'm also sharing the thanks today, but we've worked over the last several weeks for a smooth handover. If you have any further questions or follow-ups, please don't hesitate to reach out to anyone on the investor relations team. We'll be happy to answer any of your questions.

Peter Shaw: And with that, thank you very much and have a great day.

Operator: This does conclude today's conference call. Thank you for your participation.

Operator: You may now disconnect.

Q3 2023 Imperial Oil Ltd Earnings Call

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