Q3 2024 Cenovus Energy Inc Earnings Call
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I would like to remind everyone that this conference is being recorded today. I would now like to turn the meeting over to Mr. Patrick Reed, Vice President and Investor Relations. Please go ahead, Mr. Reed.
Patrick Reed: Thank you operator.
Good morning everyone and welcome to Sonobus's 2024 third quarter results conference call.
On the call this morning, our CEO John McKenzie will take you through our results.
and we'll open the line for John and other members of the Novus Management team to take your questions.
Before getting started, I'll refer you to our advisories, look at it at the end of today's newsroom.
Be it described the forward looking information, non-gap measures, and oil and gas terms referred to today.
They also align the risk factors and assumptions relevant to this discussion.
Patrick Reed: Additional information is available on Sonobus' Annual and DNA at our most recent AIF and Form 40M.
and as a reminder, all figures we referenced on the call today will be in $80 in my otherwise in the case.
You can view ourselves at synone.com.
For the question and answer portion of the call, please keep the one question for the maximum of one follow-up.
You're welcome to rejoin the queue for any other follow-up questions you may have.
Patrick Reed: We also asked the holder and any detailed modeling questions.
Patrick Reed: You can follow up on those directly with our investor relations team after the call.
John, please go ahead.
John: Great and thank you Patrick and good morning everyone.
As always I'd like to start these calls by highlighting our safety performance in the quarter.
The third quarter was a very heavy maintenance period for the company and we have safely completed three major plan turnaround on our head of schedule across the upstream of the downstream.
I'd like to thank all of our people for their continued commitment to safety and our core values as we accomplish these tasks.
Completing this work effectively and on time with an excellent safety record is critical to maintaining safe and reliable operations and positions as well for the remainder of the year and ends 2025.
Our third quarter results highlight the strength of our operations. Our continued focus on execution, as well as our commitment to shareholder returns and to maintaining our strong balance sheet.
Our upstream business continued to deliver strong operating results with production of approximately 771,000 B o e per day and an operating margin of 2.7 billion.
Patrick Reed: In a row of sand segment, the volumes impacted by the turnaround of Christine the Lake were restored well ahead of schedule. As work on some of the faces was completed early.
and the full scope of the turnaround was completed eight days ahead of plan. As a result, we delivered Christina Lake production in the third quarter that exceeded our forecast by 15 to 20,000 barrels per day. This achievement is a testament to our operating team.
Patrick Reed: who's detailed planning and exceptional focus on execution, drove incremental value to Sonobus. As a result, a Royal San segment delivered 586,000 barrels well in the third quarter, barrels per day in the third quarter.
and an operating margin of 2.5 billion.
Christina Lake was brought back online through September and is for performing very well through October
During the turnaround we completed pipeline time where it will support new production from Narrows Lake next year.
This pipeline is now 93% constructed and the project remains on track to 20 to 30,000 barrels a day to Christine O'Lake with first production in mid-25.
Combine with the continued development activities at Sunrise and Foster Creek Optimization Project, we expect to see material growth in the old-sand's business over the next two years. We expect all these projects to be highly profitable, even at the bottom of the site for pricing.
Patrick Reed: and they collectively add significant incremental value, very low capital costs.
In all, I'm very pleased with the performance of our industry leading oil stands assets so far this year. And expect the operation will mention to continue to the rest of the year and ends 2025.
The third quarter was also the first full period of operations at the TMX pipeline.
which is provided additional egress capacity and access.
to new global markets for our crude.
Patrick Reed: This has had a positive impact not only for Snobis
But for the whole Canadian economy, we are seeing the benefits of a narrow less volatile WCS differential, which strengthens the realized price for all Canadian open-oxy.
TMX segments have gone well and we have successfully ramp up to full contract and rates.
Patrick Reed: In our conventional gas business production volumes, we're going to 118,000 B.O.E. per day.
Williams, a room packed by turnaround activity at Rainbow Lake and other facilities, which was successfully completed through the quarter. With weak natural gas prices continuing through the third quarter, we have deferred completion of some of our gas-related wells towards the end of the year.
Our new wells are primarily targeting liquids rich opportunities.
In our offshore business segment, production was approximately 66,000 B oi per day in line with a prior quarter.
Asian Pacific production continues to exceed our forecast, even with successful completion of the planned maintenance of both the offshore Lee-1 platform and the offshore gas plan.
Operating margin from this business was 242 million and we expect to see benefit from strong regional gas demand going forward.
Patrick Reed: In the Atlantic region, we've completed the asset-like extension work on the CEROZF PSO at DryDoc in Bellfast. The vessel is now returning to the field, with production from the existing white-rowed field expected to resume by year end.
Patrick Reed: Completing this work will extend the light for the vessel to 2038 and is a major milestone for the Atlantic Business and a very important staff in the delivery of the West White Rose Project.
Patrick Reed: The entire West White Rose Project now stands at 85% complete and remains on track for first oil in 2026.
Turning to Canadian refining, our Lloyd-Mens Director and refinery ran a combined utilization of 92% for the quarter. Utilization was impacted by the turnaround activity of the operator that was completed in early July.
Patrick Reed: Since the completion of the turnaround boat, the operator in the required area have run at or near full range.
In the U.S. refining segment, crude utilization was 89% in the quarter. Our crude throughput was 544,000 barrels per day and was impacted by the major turnaround at the Limer of Blindary.
The turnaround starting in September was successfully completed on schedule 1 late October.
The operating margin shortfall of 303 million in the quarter included inventory timing losses of about 210 million in about 100 million of turnaround expenses and related expense projects executed during the while I'm a turnaround.
In both the line of turnaround and the Lloyd operator turnaround completed our year. We make targeted investments to address historically historical reliability issues.
Patrick Reed: We have addressed co-current integrity issues at both sites and completed equipment renewal work on our fluid catalytic cracker and limo positioning both sites for improved operating performance and profitability.
Patrick Reed: Our ability to capture available margin in the U.S. Refinance segment was also impacted by the line to turn around where the co-cur and fluid catalytic track readiness were taken offline in September as part of the turn around scope.
Patrick Reed: Now, this plan made this at line with all of our equineries are on line.
We are firmly committed and focused on improving the competitiveness of our U.S. refining business by improving asset reliability, lowering our cost, structure, and capturing more value from the commercial opportunity across the network.
This work is progressing in pace with an absolute sense of urgency.
and I'd like to highlight our corporate and financial performance.
We generated 2.4 billion operating margin in the third quarter, approximately 2 billion of adjusted funds flow in about 600 million of free funds flow.
Patrick Reed: Capital Investment in the third quarter was 1.3 billion. As plans spending on our growth and optimization project has ramped up in the second half of the year.
Our annual guide for capital spending, 4.5 to 5 billion remains unchanged.
In the month of July we achieved our net debt target of 4 billion and at the end of the third quarter net that was approximately 4.2 billion.
We are aiming to return 100% of our access-free funds blow to share holders over time, while continuing to store it to net debt of about $4 billion.
and the Chair of the Act Program, we returned to approximately 1.1 billion.
of Cast to our shareholders in the corner, far exceeding 100% of our access-free funds flow. Shareholders benefited from the access-free funds flow, as well as the working capital release of approximately $600 million, allowing us to return more cast to share holders than its failure.
Patrick Reed: and closing week delivered strong operational results through a heavy maintenance period in the third quarter and continue to make meaningful progress on a growth project across the portfolio.
With our major projects behind us, we expect to see increased upstream production and increased reliability from our downstream in the fourth quarter.
We remain focused on maintaining strong operational performance in the upstream, improving the competitiveness of our downstream and delivering on our growth projects.
Patrick Reed: We have a clear view in the focus of the work in front of us and will continue to progress both our short and long-term goals for some of us.
and with that we're happy to take your questions.
Thank you. If you want to know what you want, please ask a question. Please press star 1.
First question is Dennis Fong from CBC World Markets. Please go ahead.
Patrick Reed: The End.
Hi, good morning and thanks for taking my questions.
Dennis Fong: The first one is just related and I get to appreciate your comments just around the work that you're doing on the downstream side. I understand again through the investor day and through conference calls.
Patrick Reed: Keith has maybe highlighted some bad actors and frankly what you're focusing on and understanding that you are a you've already installed kind of you management systems as well as personnel at your refineries. But would you mind highlighting some of the specific we'll call it.
and Titan that you're changing, fixing, replacing.
and in the next year that you believe can help drive stronger utilization and help kind of drive more consistent operational uptime from your US manufacturing business.
Yeah Dennis, maybe I'll take the first part of that question and Keith may want to chime in. But we've really attacked the downstream on a lot of different fronts. We've made a lot of changes on personnel.
We've been doggedly going after our reliability issues, both in Canada and the U.S. and I think we're making reasonable progress, and one of the things you'll notice this quarter.
is at well, the throughput numbers are up to profitability is down to. In our primary refining units for making good progress, what we didn't see in the second quarter, for sort of third quarter.
was the same level of reliability in some of our secondary units.
Patrick Reed: As we work through some of these major maintenance outages that we had in Lyma and we had in Lloyd Minister this year we can get at some of the reliability issues inside some of those units that require full plan shutdowns.
Coming out of the turnaround in Lloyd Minister, we've seen excellent reliability in Lloyd Minister. We expect to see the same.
and coming out of the hydrogen lima.
Patrick Reed: i
Speaker Change: Thank you. The next question is Greg Party from RBC Capital Markets. Please go ahead.
Just I guess a couple of things. First one has probably just a basic one, but on the capture direction, getting some questions right now, just on the...
Greg Party: on the press. How they kind of fit in your capture structure is something you'd look at, redeeming at some point in time. I know it's not that get number, just curious how to kind of think about those right now.
Jerry Spader kind of click the book once we're done.
Hey, Greg, it's camp. So a couple things I would just say on the press, I think, first off you're right in your characterization of.
They are not included as part of our net debt calculation because we typically just take gross debt plus cash. You know, we've got a number of, I think, five series of preffs of standing first of which.
As our very recent on December 31st of this year.
for 250 million. So, you know, I think when you think of all of them, inclusive of the one in December here.
You know, we'll look at various aspects of whether it makes sense to hold.
to continue to extend those or pay the maladin mark conditions will.
really dictate whether we do that or not, but I think at the end of the day we're going to make the best decisions for the company. You know, if we do decide to take those out, there's a 30 day notice period required on any of the press.
and they are typically taking out at par. So we've got some time to think about whether we do that, but we'll do what's best for the organization in terms of either extending those or acquiring them and outright and retiring them.
Okay, thanks very much on that and I believe that you're such a good question to take the question from the last one. So I'm getting an actual line here that's why I'm sent a last and bi-bladed.
When it comes to the refining.
and initially right the thinking was...
The inclusion of the downstream that dampens your cash flow volatility, presumably that's just a more stable business and so forth. But obviously with what we've seen to be the U.S. that it actually worked in the other direction, it's probably amplified volatility. And some of that is obviously the inventory movement.
I'm just curious as to whether you're thinking internally around.
Whether it's presentation or how you present it or how you kind of think about the business I know you gave up you know hedging in the downstairs some time ago. How does that business segment even say when it's running operationally as to how you wanted how does it start to become a contributor to your evaluation as opposed to a detractor?
Speaker Change: Yeah, and it got Greg, I'll start again and if a father's want to chime in, they can't remember that our refined areas that we have.
You know, serve a couple of different purposes for the company. There are fine areas that we own or pipeline connected to Western Canada and they give us a speedgrass out of Western Canada. Our wholly owned refinery is given us about 300,000 rows of eggs.
of Egrass through Lloyd Menster, Toledo, Blimeah, and Superior. That's extremely important to this company, versus backing up those barrels, coincide, hardest to install again, at the prevailing differential of the day.
Speaker Change: Second thing I do is they give us insulation against the heavy oil differential and convert that heavy oil into transportation products. They give us some margin over the above on heavy oil prices and pad too.
Most of things are incredibly important to this company and it's incredibly important to the integrated value chain. So what we've always said is we would capture more of the value chain having the integration with the refliners.
Speaker Change: There will always be volatility in the U.S. refining business. We're always going to be subject to differentials and widening and contracting of cracks, breads.
Speaker Change: The real key to making it predictable, which I think is at the root of your questions getting out to this reliability issues. If we can run with reliability that we think we can, you're going to see much.
Speaker Change: from more predictable cat crack or crack capture.
Speaker Change: and you're also going to see a little more cost. So getting after the reliability is when we've really been focusing on.
Speaker Change: to demonstrate the value of the value change that we've built. But these refineries are incredibly important at this business model, and nothing can be higher priority than getting a reliability to a place where you can see that value.
and just did. Thanks a lot, guys.
Speaker Change: Thanks for your time.
Thank you. The next question is John Royale from JP Morgan. Please go ahead.
Hi, good morning. Thanks for taking my question.
So my first question is in the C-Rose FESO just maybe a little more detail on
The timing and some of the milestones between here and getting to start up a year end.
John Royale: When do you expect it to actually be on site and then what are the steps to getting to start up from there? And maybe any of you on how production will ramp and when it could get to fall.
Hey John, Keith here, thanks for a question. Pretty significant milestone for us finishing the LACE Extension Project in Ireland.
Currently, the C-Roses on route to the same week's expected to arrive in the next couple of days.
from there, it's really just reconnecting to the production system and that can take 30 to 45 days.
Speaker Change: which kind of lines the John indicating wrapping up production at the back end of the year and into the new year.
You know, two things obviously with the zero-slip extension, you know, one is going to be the 2025 production that comes with it.
But as importantly is the fact that we now have the vessel ready for
Speaker Change: The West White Rose Project which you know in basically it enables this vessel to produce and receive.
Production for an additional 14 to 15 years from today. So pretty excited about having this.
This completed its another big check mark and milestone on the overall Westway Rose project as well as anticipating some production in 2025 which will align as we come over there budget here in the back end of this year.
Speaker Change: Thanks Keith and then my follow up is on Christina Lake and just operationally there kind of what's going right it seems like the turn around came back a little bit early And you also had really strong production I think going into the turn around so maybe just any commentary on kind of that early completion of the turn around and just generally what's going right with Christina Lake operations
Speaker Change: Yeah, John, thanks for the question. You know, really, really good performance from the team on two fronts.
Speaker Change: and John's opening remarks. He talks about the overall turnaround being done eight days ahead of what we had planned, which is a pretty significant achievement.
But also the team was able to optimize through the turnaround and bring production on earlier Through one of the phases that was able to complete earlier than we originally planned And we were able to optimize production through that phase
The get a lot of volume back in a time period. Now the other key thing for us in that turnaround was the tie into the narrow-like pipeline. So we were able to complete that tie-in, which sets us up.
Speaker Change: or that growth project which...
We would anticipate starting the steam in the first half.
of 2025 and start to see production in mid 2025. So, couple of really big milestones.
Through the Christina Lake, but as you indicated the performance at that aspect continues to it will perform and to the upside, which is obviously good news.
Speaker Change: Thank you.
Thank you. The next question is, Menoholsoff from TD Securities. Please go ahead.
Thanks and good morning everyone. I'll start with a high level question on securing new takeaway capacity. How much of a priority is that given your growth aspirations and maybe we could also get a refresh on where you're currently.
and I'm focusing your efforts including any thoughts on improved refined products. Be aggressive and do. Thank you.
I'll start that and I know Jeff Murray's gonna want to chime in on this.
Speaker Change: As it relates to heavy oil production, we produce somewhere around 800 to 150,000 barrels a day of blend. And today we've got take-week pastie for both 600,000 barrels of that. That would include the amount that we processed.
and the Providence Development Award. We're reasonably happy.
with that number. With the expansion projects we've got that 800 should grow to something north of 900.
So, about two thirds of our production has ability to get outside the province or process in the province.
with the existing Egress we've got. You'll also remember that we have rail capacity at Breeder Himes, we always have an option to move up to two units, transit day of rail capacity should we see?
You know, differentials widen and we're always watching the market in terms of additionally grass that have made come available for us.
Speaker Change: But suffice it to say we're reasonably happy being somewhere between 75 and 66% covered with the aggress with the idea that we have the ability, you know, our option to move another 120 by a route.
Comments in terms of add to, I'll let Jeff talk about that because there have been some elements around Broadway, but we are looking to push product beyond add to and talk to the way about it.
The need to get into pad one and potentially Canada as well, but expanding our area for product placement beyond the immediate Ohio Valley has always been a priority for us as well.
Jeff: Thanks, John. Then I'll just check, Murray. I've just done indicated we've been looking at ways to move volume from our fine products out of our existing orbits generally heading east.
Rod Wade, three as a project we've worked on with partner and recently signed into commitment there, which we anticipate will turn into volume-blowing ease.
by late next year and that's going to work both for us and for other industry partners.
in the areas well.
We also have other opportunities which we are continuing to progress.
Jeff: Looking both north and south possibly with refined products on water. You need opportunity at our Toledo facility to be able to load barges and new product out of the orbit as well. And I think that's going to be a great friend of the center for us through the balance next year.
Thanks for that guys.
Speaker Change: Thank you, next question is Neil Matter from Goldman Sachs
Please go ahead. Good morning, John. Team first question is just on early flavor for 2025 capital recognizing you're getting through the heart of West White Rose here. And so the capital improvement should be in the viewfinder, but you're just your perspective on.
How 25 cap it'll just trick out.
Yes, Neil is John and thanks for the question. Nothing's really changed on Capitol expectations, talking in the 2025.
We laid out a capital program, a five-year program, at our investor day earlier this year, where we talked about the growth projects that we've got underdevelopment now being largely completed.
Speaker Change: and 2025. I think we steer you towards 4.5 to 5 billion.
42025, it's being a good number.
Jeff: Welcome on with a formal budget in December. But that's a good number to put into your models for 2025. And then we see a capital ramp down following that with the growth projects coming on to production.
Yeah, that's kind of the follow-up that's you talk about Westway, and you spend a little bit of time talking about offshore, but that's going to be such a big contributor to the uplift and free cash flow capital rules off and then that project.
and contribute to cash flow in a couple of years. What are the biggest risks that you need to derisk as we go into next year and I'm thinking the top side being part of it, but just your perspective on a couple of those movin' pieces.
You precast flowing in material quantities for this company and sort of mid-cycle pricing and anticipate.
Casplo from the field being well and access to the billion dollars a year. So a huge inflection point from consuming something close to a billion a year to producing something close to a billion a year. But we should start seeing the 20s, 20s, 7 times a year.
But, Keith, maybe you can talk a little bit about where we are in the project and some of the risks that you see bringing this on from first to. Yeah, thanks, John. You know, really, yeah.
We look at this in several components and a couple of them were completed this quarter. So pretty excited about that. We talked about the asset life extension work finishing up in Ireland.
The boat is on its way back and what that does is make sure that we have a FPSO that allows us for the 14 to 15 years as we bring out most of the weight loss production.
The other thing that we have completed in the quarter is our concrete gravity structure. We're starting to flood the graving dock.
in our Gensheff in anticipation of towing that out in kind of the second quarter of 2025. So really good progress on the gravity-based structure. You have a third component and you alluded to it as our top side.
We need to be ready to be able to transport those up to the region.
in the second quarter of 2025.
Currently, they're sitting around 95% mechanically complete.
and the efficiency of that we've already commenced commissioning on the top side. So the construction work is nearing an end.
and we'll be getting that ready.
Jeff: for Transport and C Fastening in the first quarter of 2025. So these are progressing well there.
Jeff: The last two components are showing the top side up.
and meeting it with the Gravity Bay structure and then commencing a drilling in the back end of 2025 for the production, the start in 206. So, excited about kind of the rate of change going from spending the 700, 800,000 in a year for the past.
and the 25th producing significant free-found flow in 2026 beyond.
Speaker Change: Thanks, Keith, thanks, John.
and the next year.
Thank you. Next question is, I'm going to help group death from UBS. Please go ahead.
Good morning guys. I wanted to ask you because this is a question we always get when crude starts to tumble little. First, what's your break even without growth capex in terms of poor WTI price would allow you to pay a dividend without the growth capex and then again what's the WTI price with the growth capex and the reason I'm asking is my hunch is that the second number with the growth capex is around 50 or maybe slightly lower. So even if crude is at 65, you should still be able to return cash or shareholders through buy-back. So if you could give us some idea on those numbers.
Yeah, I'm an avid's cam here, so you're actually directly correct numbers, you just quoted. So if you look at
How we look at our sustaining capital and our base dividend, we typically have said, you know, we really want to make sure that that's fully funded in a $45 WTI environment.
and that would say that is absolutely the case today.
When you look at our base dividend, which we would say continues to have room for growth as you execute on the growth plan keep in John and talked about. We should be able to continue to show base dividend growth and maintain that sustaining capital in and around that three to three and a half billion dollar range.
When you do factor in the growth capital that we've got planned, you know, this year and you talk, you know, high level directionally that 4.5 to 5 billion dollars in ever good spend.
and Unknown Business for 2024 and 2025. You do try and emulate your round that sort of a load $50 WTI price.
Speaker Change: from a total break even point of view. So, you know, I think what's important there is, you know, we're contained or managed our capital.
Speaker Change: in a world that's significantly lower than today. And so, I think what that should point you towards is, you know, we want to be making minimal changes in stopping and starting these projects.
Jeff: which John Keith of alluded to and that's, you know, the program we highlighted for you back at Investor Day, you know, this shouldn't be any material deviations from the projects that are part of that plan. I'm going into 2025.
Speaker Change: My quick follow up is a little bit on the, you know, you're looking at drilling multilateral in manvo versus traditional wells and this could allow you to raise like a heavy oil production on the 10-wrenched side. Can you talk about that opportunity set?
Yes, sure, pretty exciting opportunity for us in our best or day fact. We talked about growth that we should see from our conventional heavy oil business.
We are very active in the region, you know, as we speak with numerous drilling rigs executing those multi-lateral wells.
really opens up the resource for us and as you may know that we're one of the largest landowners in the region.
In addition to that, it's also connected.
Through our midstream business into our downstream upgrade or our own refinery. So, we actually have a pretty integrated value chain.
All contained within a very tight geographical region. So pretty excited about what's happening in our conventional heavy oil. You know, we're active in drilling.
Speaker Change: You should start seeing production ramping from that region in the back after this year and into 2025 as for one of the opportunities that we laid out for growth across our portfolio.
Thank you so much for taking my questions.
Thank you. Next question is Travis Wood, Provinational Bank Financial, please go ahead.
Yeah, thanks for taking my question. I just wanted to get a sense of what's left for the the narrow's tieback You're more than 90% complete. I think it's said in
is it more weather dependent just as we head into the winter time frame or their other kind of supply chain issues and in front of you?
Yeah, Travis, no, we're essentially mechanically complete on the pipeline and your assumption is...
Directually correct. We're trying to optimize on top of it, but in...
and in fact we will need to wait for warmer weather following the winter for the initial start up with the steam line. So that's what's really driving the timing now for for narrows. The key component that we just executed in the turnaround was a tie-in, but that's now behind us.
and so we have a little bit of insulation to complete a little bit of heat tracing but in general the pipeline and the pads are ready. It's just waiting for the weather window to commence the start of the season.
Okay, perfect. And is that, is there a chance that, or I guess another way, is it budges it on a normal winter?
Yeah, we're looking at kind of starting that system up in the April time period, so and we should be well into whether winter there that will allow us to do that.
Okay, thanks, that's all for me.
Speaker Change: Good, thanks drops.
Thank you. Our next question is Patrick O'Rourke from a 2D Capital Market. Please go ahead.
Hey, good morning guys and thank you for taking my question. I guess just to go back to the strategic nature of the downstream assets, I think one of the things in the past that's worked to your damage.
Speaker Change: is the nomination process. I think it kind of alluded to that as well.
Just wondering, you know, based on your views now, you guys pretty sophisticated view of the base and marketing and you grow so all of that. When you really see that, you know, from a time frame kicking in at this point as an advantage for you again.
Just in terms of the differential, that's the question you're asking.
and you know in terms of your ability to nominate in the mainline system.
Speaker Change: Yeah, so we can nominate today Patrick and we can move barrels to superior.
Speaker Change: for somewhere around $3 to $4 US and farther down the line to wait up for the $5 to $6 range.
So we take advantage of that today. We think that at some point over the next two to three years, differentials will widen and that will become more and more pronounced.
Speaker Change: in terms of the advantage that it gives us, but having access to the end-bridge line of being able to nominate not have to pay for take a pay capacity and not have to make those large.
Financial Commandments may be able to move barrels if and when we choose at those kind of rates we see as being a real strategic advantage.
So having her fine-a-rease along the main line that have short supply chains back to Western Canada.
Speaker Change: and produced projects into strategically advanced, advantage markets, like superior and little do. It gives us, I think, a significant advantage on those values change.
Speaker Change: Okay, thank you and then you know maybe I asked this last quarter but now they've got a you know sort of a full quarter run rate on your belt with TMX here How the netbacks look and what the marketing opportunities have been there for you?
Patrick, it's Jeff and Ray, it's a great question. As you mentioned, we have had a good bit of run rate here with seeing really solid operational performance.
with Trans Mountain. I would say we can continue to see really robust.
Speaker Change: Competition at the dark.
We have ability to see through into some other placement.
Product, it's a little further afield and you know demonstrate to ourselves that pricing is as reflective of global value.
and what we're finding is looking a little bit forward here is the netback associated with that line. I guess I would say the artificial associated with that line.
is getting to the place where it's covering full cost and investment both fixed costs as well as variable. And we think that's an important day as we look forward.
Speaker Change: and I mean, we're seeing things that are covering our costs and full investment in the very future.
Speaker Change: Thank you.
Lake Spadrick.
Thank you, as a reminder, if you're on the phone and we'll ask a question, please press star 1 to join the queue. The next question is mental health stuff from TV securities. Please go ahead.
Speaker Change: Thank you, I just had a really quick one. What is the status of tone negotiation for the uncapped portion of PMX over on?
and what is your best gas in terms of resolution? I think last time this came up in the call, I think it would suggest it, but it was some time in the spring, but any thoughts there would be helpful.
Beno Jeff Murray, I've been into Product Egg, there's no...
Speaker Change: from Last Time.
We are following through the regulatory process.
I think it'd be remiss of anybody to attempt to predict necessarily the outcome of that. There's obviously a lot of work ahead of all sides to get there on it and looking for resolution into the spring.
Speaker Change: Thank you.
Speaker Change: At this time, we have no questions in the queue, so we will wait a minute to give you the chance to connect with us if you do have a question. I would like to remind you that if you are on the phone and wish to ask a question, please press star 1.
Speaker Change: Episode 2
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