Q4 2024 Suncor Energy Inc Earnings Call
Our financial results call at this time, all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one one on your telephone you walked in here an automated message advising your hand is raised to.
Withdraw your question simply press Star one again, please be advised that today's conference is being recorded.
I'd now like to hand, the conference over to your Speaker, Some curse energy Senior Vice President of external Affairs, Mr. Troy Little Please go ahead.
Troy Little: Thank you operator, and good morning, welcome to Suncor Energy's fourth quarter earnings call. Please.
Please note that today's comments contain forward looking information.
Troy Little: Actual results may differ materially from the expected results because of various risk factors and assumptions that are described in our fourth quarter earnings release as well as in our annual information form both of which are available on SEDAR, Edgar and our website Suncor Dot com.
Troy Little: Certain financial measures referred to in these comments are not prescribed by Canadian generally accepted accounting principles for a description of these financial measures. Please see our fourth quarter earnings release.
Speaker Change: We will start with comments from rich Kruger, President and Chief Executive Officer, followed by Chris Smith, <unk> Chief Financial Officer.
Speaker Change: Also on the call are Peter Zebedee Executive Vice President oil Sands, Dave <unk> Executive Vice President of downstream and Shelly Powell Senior Vice President operational improvement and support services.
Speaker Change: Following the formal remarks, we'll open up the call to questions now I'll hand, it over to rich to share his comments.
Speaker Change: Good morning, Suncor is fourth quarter was about <unk> 2024, strong and building momentum for 2025.
Speaker Change: I believe we accomplish both objectives I'll focus my comments on key aspects of the full year 2020 for Chris will primarily focus on the fourth quarter results. Let me start with personnel safety our top priority as you've heard before 2023 was our safest year ever I am pleased to report 2024 as performance was as good.
Speaker Change: <unk> were better than 2023, some statistics the number of lost time injuries were down 30% year on year and down 60% over the last two years. Our lost time incident rate is tied for our best ever.
Speaker Change: <unk> recordable injuries were down 16% year on year or 30% over the last two years and our recordable incident rate in 2024 was indeed best ever.
Speaker Change: Process safety, a function of our people our work management processes and our facilities 2020 fours performance was best ever a significant 30% better than our previous best and it positions us within the first quartile in North America.
Speaker Change: Dream production full year 828000 barrels a day far and away the best year in company history, 51000 barrels a day or 6% six 5% higher than our previous best and 82000 barrels a day or 11% higher than last in 2023 and 18000 barrels of.
Speaker Change: A day above the high end of guidance full year, upgrader utilization, 98%, our highest annual average ever 6% higher than our previous best three or four quarters in 2024 had utilization of 99% or higher in both the base plant and Syncrude achieved best ever performance.
Speaker Change: Added perspective on the 82000 barrel a day increase from 2023 to 2024 about half of it is related to the fourth quarter 'twenty three acquisition impact of totals 31% interest in Fort Hills. The other half is straight up performance within the exact same asset base.
Speaker Change: This monthly quarterly and annual records were set across the company led by fire bag at 234000 barrels a day and 24.
Speaker Change: 17000 barrels a day or 8% year on year.
Speaker Change: Over the last two years <unk> added 35000 barrels a day or 18%. It is our most profitable asset and internally known as the gift that keeps on giving rift.
Speaker Change: Refining throughput full.
Speaker Change: Full year 465000 barrels a day again far and away the best year in our history 24000 barrels a day or five 5% better than our previous best and 44000 barrels a day or 10, 5% higher than 2023.
Speaker Change: And again 20000 barrels a day above the high end of guidance full year refining utilization, 100%, our highest annual average ever 5% higher than our previous best all four refineries were outstanding ranging from 94% to 105% utilization Edmonton.
Speaker Change: Our most profitable refinery led the pack with a record 105%.
Speaker Change: Fact for you every major asset companywide upstream and downstream operated at greater than a 100% utilization for the entire fourth quarter. This is extraordinary performance and a credit to suncor teams companywide.
Speaker Change: <unk> product sales full year 600000 barrels a day again far and away the best year in company history, 46000 barrels a day or 8% higher than our previous best and 47000 barrels a day or eight 5% higher than 2023 20000 barrels a day above the high end of guidance.
Speaker Change: All four quarters in 2024 were the highest quarters in company history. In fact, it was back to back to back to back quarterly Records Suncor, we call that a four peat even Pat Reilly former coach of the La Lakers would be jealous.
Speaker Change: Total lowest in G $13 1 billion down $324 million in absolute dollars year on year and this is despite 11% higher upstream production and 10, 5% higher refining throughput, let that soak in 10%, 11% higher volumes and two five <unk>.
Speaker Change: <unk> lower absolute costs every major operated asset upstream and downstream delivered lower absolute <unk> unit cost in 'twenty three.
Speaker Change: 24 versus 23.
Speaker Change: Offer another perspective on year on year cost management, let's assume that that fourth quarter 'twenty three acquisition of hotels, 31% working interest in Fort Hills never happened take out all the impacts of the additional ownership production costs apples to apples 2024 versus 2023 <unk>.
Speaker Change: <unk> with the exact same asset base <unk> would have been down $1 billion, yet upstream production would have been up 37000 barrels a day and refining throughput 44000 barrels a day.
Speaker Change: My message here is operating leverages, creating tremendous value companywide volumes, delivering asset utilization and cost management each require discipline determination attention to detail and a mindset that every barrel and every dollar matter that is the mindset.
Speaker Change: <unk> culture of today's Suncor total capital $6 $2 billion more than $200 million below the midpoint of guidance again disciplined attention to detail and rigor and execution.
Speaker Change: Free funds flow seven 4 billion in 2024, essentially flat with 2023, however, the business environment decreased free funds flow by about 1 billion and a half dollars year on year downstream cracks sweet sour synthetic differential to.
Speaker Change: Capital was $500 million.
Speaker Change: Higher as planned in 24 versus 23 Youll recall the two drivers there were Peter's 55, new 400 ton haul trucks and opening two pits versus one fit in the Fort Hills North mine and in addition.
Speaker Change: Mission, we had the absence of fourth quarter 'twenty three tax pools from the Fort Hills acquisition of about $750 million. If you do the math organizational self help what suncor teams delivered in volumes cost margins added $2 75 billion.
Speaker Change: In free funds flow year on year.
Speaker Change: Essentially offsetting the headwinds dollar for dollar.
Speaker Change: Of that we returned $5 $7 billion in cash to shareholders buybacks of $2 9 billion four 3% of shares and dividends of $2 8 billion.
Speaker Change: Take you back nine months at our Investor Day May 2024.
Speaker Change: We communicated several big objectives over a three year period from 2024 through 2026 upstream production growth of 108000 barrels a day.
Speaker Change: Dollar a barrel reduction in our corporate breakeven.
Speaker Change: $3 3 billion increase in annual free funds flow and an $8 billion net debt target at which time, we would shift to a 100% buybacks. We told you. We would report on our progress. So here. We go 108000 barrel a day production growth our target in 2024 with 60000 barrels a day.
Speaker Change: We achieved 82.
Speaker Change: $10, a barrel reduction in our breakeven our target in 2024 was $4 a barrel we achieved seven three.
Speaker Change: <unk> three $3 billion increase in annual free funds flow our target in 2024 was $1 3 billion, we achieved $2 3 billion.
Speaker Change: $8 billion net debt our target was mid 2025, we achieved it at the end of the third quarter 2024, delivering on commitments again, the culture of today's Suncorp, we've uploaded a presentation on the events and presentations page under the investors section of our website, where we detail.
Speaker Change: The free funds flow update in the materials shows the progress or the three year plan. We will continue to provide this to help save folks some analytical time.
Speaker Change: Bottom bottom line one year into a three year plan, we're exceeding every target established in fact, we've essentially achieved targeted improvements for 2024 and 25 in the first year, we're accelerating capture of shareholder value and that will continue this year now with the full year.
Speaker Change: Planned at 100% buybacks our objective in 2025 is just.
Speaker Change: Solidify the 2024 games and proceed to capture the next tranche of value.
Speaker Change: My final comments.
Chris Smith: 24, as the results are a credit to our people across the company their expertise their dedication their determination suncor teams delivered and personally I am so proud to work with these people each day with that I'll turn it over to Chris.
Chris Smith: Thanks, Rich good morning, everyone.
Chris Smith: 24, what a great year for the company and our shareholders.
Chris Smith: So much happened across our business last year.
Chris Smith: The operational and cost performance that rich just highlighted which allowed us to generate substantial free funds flow retire $1 1 billion in principal of our debt.
Chris Smith: Our $8 billion net debt target early.
Chris Smith: Move to returning 100% of excess funds to our shareholders and of course raise our dividend.
Chris Smith: All of which resulted in substantial return of cash to our investors in 2024 to the tune of $5 7 billion.
Chris Smith: And dividends and share buybacks.
Chris Smith: And we are set up for continued improvement in 2025, but.
Chris Smith: But let's first talk about the fourth quarter as we closed out the year very strongly as you saw from our operational update in early January.
Chris Smith: So first with respect to the business environment in the quarter, we saw crude oil prices continue to weaken during the quarter with WTO, averaging use $70 a barrel the light heavy differential steady at $13, a barrel U S and synthetic crude averaging at $85 a barrel premium TWC.
Chris Smith: On the refining side, we saw a cracking margins decreased driven by weaker gasoline cracks. However, our 5221 refining index remained strong at $24 and 25 U S. A barrel, which is a $1 80 below Q3, driven primarily by lower cracks offset by lower crude oil pricing.
Chris Smith: Finally, natural gas prices increased by 80, GJ, averaging $1 45 in the quarter, but obviously remains attractively price for natural gas consumers like our business.
Chris Smith: Turning to our operational performance in the quarter and building on Rich's comments, you just heard we closed the year with exceptionally strong operational performance across the board.
Chris Smith: Total upstream production averaged 875000 barrels a day in the quarter, including almost 818000 barrels per day and oil sands at almost 58000 barrels per day and E&P.
Chris Smith: This was the highest ever quarterly production in our history.
Chris Smith: Fire bag averaged a record 250000 barrels a day in the quarter.
Chris Smith: Fort Hills was above plan at a 162000 barrels per day and continues to deliver on its improvement plan.
Chris Smith: And upgrader utilization at base plant and Syncrude were very strong at 102% and 105% respectively.
Chris Smith: Refinery throughput averaged 486000 barrels per day or 104% utilization in the quarter.
Chris Smith: This is the second quarter in a row with all four refineries are operating at or above 100% utilization yes.
Chris Smith: Yet another first.
Chris Smith: Refined product sales averaged a record 613000 barrels a day and margin capture averaged 90% on a LIFO basis, when compared to our 5221 index.
Chris Smith: This sales performance, which was up 38000 barrels per day quarter over quarter reflects both the high reliability of our refining assets and the strength of our integrated supply and marketing channels.
Chris Smith: We also continued to demonstrate operating leverage with total <unk> expense of $3 4 billion.
Chris Smith: Which was flat quarter over quarter, while production and sales were up significantly in both the upstream and the downstream.
Chris Smith: Also in the quarter, we successfully completed the base plant cogeneration facility, which is now ramping up.
Chris Smith: This project will provide integrated steam and power to our base plant operations and the capability to export up to 800 megawatts of Baseload electricity to Alberta power grid.
Chris Smith: This strong operational performance led to strong financial results in the quarter. Despite a drop in crude prices and refining cracks from Q3.
Chris Smith: We generated $3 5 billion and adjusted funds from operations or $2 78.
Chris Smith: <unk> per share in the quarter and adjusted operating earnings of $1 6 billion.
Chris Smith: A $1 25 per share.
Chris Smith: In the quarter, Suncor returned $1 $7 billion to shareholders, including $713 million in dividends, which reflects a 5% increase in our quarterly dividend to <unk> 57 per share underpinned by sustained operational improvements across the business and progress on our free funds flow growth initiatives.
Chris Smith: This is consistent with our commitment to a steadily growing and sustainable dividend.
Chris Smith: Share buybacks in the quarter totaled $1 billion.
Chris Smith: Reflecting a step up in share repurchases with the shift to retain 100% of excess funds to shareholders now that we're at our net debt target.
Chris Smith: Speaking of which we were very pleased that we hit our $8 billion net debt target early and it is down $3 billion from end of 'twenty, three and $10 billion from our high watermark in 2020 and under five years, we've more than cut our net debt in half, while expanding our free funds flow.
Chris Smith: As I indicated last quarter, you should expect our net debt to move up and down around that target from quarter to quarter as we manage working capital movements. In Q4, we saw a large release of working capital related to receivables inventory and taxes and expect to have a working capital increase in Q1.
Chris Smith: But rest assured we are fully committed to returning maximum cash to shareholders per our capital allocation framework, while prudently managing our business and balance sheet.
Chris Smith: Overall fourth quarter performance as a result of our relentless focus on the fundamentals of our business and demonstrate our continued execution and acceleration of our $3 3 billion free funds flow growth target set out at our May Investor day, and as Rich mentioned, we've uploaded a slide on our website, specifically highlighting our progress towards that.
Chris Smith: <unk> target.
Chris Smith: Now before handing it back to Troy I would like to take a few moments a few comments on our 2025 guidance released in December.
Chris Smith: We expect upstream production to average 810 to 840000 barrels per day with continued strong production performance across our assets, including increased bitumen sales to market and factoring in planned maintenance specifically planned downtime at base plant with the 91 day Coke drum replacement project schedule.
Chris Smith: To start in the second quarter.
Chris Smith: <unk> annual Coker turnarounds at both upgrade or two at base plant and Syncrude, both of which will be starting in the third quarter and.
Chris Smith: And Fort Hills has small plant turnarounds in both the second and fourth quarters.
Chris Smith: Downstream, we are guiding to an average refinery utilization of 93% to 97%, which is higher than our 2024 guidance to reflect higher reliability offset by planned maintenance activities at our Sarnia refinery starting in Q1 at our Edmonton refinery starting in Q2.
Chris Smith: Our capital guidance for 2025 of six 1% to $6 3 billion is consistent with the plan outlined in our at our May Investor day, including asset Sustainment and maintenance capital largely consistent with 2020 for guidance and economic investment capital, which is comprised of selective high value investments.
Chris Smith: The UN Coke drum replacement that I mentioned, just a moment ago.
Chris Smith: 2025 is all about building on the incredible momentum sparked by the success that we saw in 2024.
Chris Smith: We've only begun to see the impact of the initiatives. We have started in the last year to have and like we said during our May Investor day. Our focus is on growing the bottom line pre funds flow, which will ultimately drive increased returns for our shareholders.
Chris Smith: And rest assured the entire organization is focused on not only delivering on our commitments, but beating them.
Chris Smith: And with that.
Chris Smith: I'll hand, it back over to you.
Chris Smith: Thank you, Chris I'll turn the call back to the operator to take some questions. Thank.
Chris Smith: Thank you so much and as a reminder to ask a question simply press star one on your telephone and wait for your name to be announced to withdraw your question Chris start Rolling again.
Chris Smith: Momentum, while we compile the Q&A roster.
Speaker Change: Our first question is from Greg Pardy with RBC capital markets. Please proceed.
Greg Pardy: Yes, thanks, good morning, and thanks for the rundown rich when you when you look at 2024.
Greg Pardy: The organization drove huge operational equivalent both upstream and downstream and when you look at 25 days, it's either segments shine more brightly or is that still expected to be fairly clear.
Greg Pardy: The balance between the two.
Greg Pardy: Greg.
Speaker Change: Let me start out answering your question I am going to turn it over to Mike to all Star linebackers here on the left Peter and Dave.
Greg Pardy: Supplemented.
Speaker Change: The philosophy, we're bringing about the business with getting the most out of our existing asset base that is that it's companywide looking at what are the constraints what are the default bottlenecks how can we structurally change not only the performance, but the potential of the organization. So that will go on we got a good.
Speaker Change: Taste to success in 'twenty, four, but we're not done yet in 'twenty five, but maybe if I could ask Peter and Dave to comment from each of your business is kind of your own thoughts on that.
Speaker Change: Going forward, yes, sure. Thanks rich.
Speaker Change: The way to think about it is on a daily basis on a ship by ship basis, we're really looking at where the constraints are in our in our production units and so when we find those bottlenecks when we find those pads, where I'm looking to see what technical work, we can do to reengineer that to unlock additional barrels.
Speaker Change: I move those barrels into the upgrading ecosystem. So I would say in the oil Sands segment, we absolutely have more potential that we're looking at but these are low or no cost to bottlenecks.
Speaker Change: So we're looking at consistently across the board.
Speaker Change: Okay.
Speaker Change: Thanks, Peter and Greg Great question, we were actually just talking about this at our downstream leadership team meeting just yesterday, where the team was saying do we need to re rate or not and really the conclusion. We drew was we don't think we're done yet. So it is not really the right time to go re rate because there is still some more potential.
Speaker Change: Our capacities.
Speaker Change: The way, we've been gaining increased capacity in the downstream similar to theaters kind of informs how we might think about 2025 as well, we're seeing shorter turnarounds as we drive for competitiveness in our turnaround area, where youre seeing optimization better optimization jewelry turnarounds are joining other outages for example.
Speaker Change: Our in our Q2 turnaround in Sarnia, we took some intermediate components for the first time ever moved them from Sarnia to Montreal that allowed more crude rate in Sarnia and more conversion capacity of Montreal, We did that again during a short maintenance outage in Sarnia and all so we see more opportunities like that to help our integration and like Peter said constrained Boston, we have a result.
Speaker Change: It's focused mindset with our engineers and operators looking at constraints everyday following our Oems systems and.
Speaker Change: And really within our operating envelope trying to Debottleneck, we find a constraint we removed the constraint and then we'd look for the next one or two examples of that in 2024 and look we don't know what 2025 will bring but we think we'll see more of the same kind of examples we modified some air registers in our crude furnaces of Montreal to get about 13 Abd rating.
Speaker Change: Sarnia replace to control valve on the crude unit three K BD at Edmonton, We're working with Peter's team to optimize the crude slate into Edmonton.
Greg Pardy: To optimize every draw on a crude unit every day and that gave us three or four <unk> in the year. So we're going to continue to look for more opportunities like that and I think there is potentially some upside in 25, So I think Greg if I just circle back to the start of your question.
Greg Pardy: We see these opportunities still across the enterprise in upstream and downstream.
Greg Pardy: Is it more one or another I don't I don't look at it like that.
Greg Pardy: I think just the overriding message is we're not done yet.
Speaker Change: Okay. Thanks for that very very complete and then related to that but I know Peter you have talked a lot about just the ability to source across the organization can you talk about maybe what I would almost refer to as multi dimensional integration within suncor they get established.
Peter: Yeah, absolutely, Greg and I think increasingly it's good to think about our upgrading our capabilities are more like we do refining. So we can source bitumen from multiple sources within our bitumen production units in the region and we can move those barrels to whenever upgrade errors.
Speaker Change: Requiring them when they are needed.
Speaker Change: And largely the volumes that are required our goal at the end of the day is to maintain and keep those upgrades fall and be relatively bitumen diagnostics softly syncrude needs more bitumen, we can move fire bag barrels over there at the base plant upgrade or needs topped up with additional beds. We can move fireback barrels in there we can move forward.
Speaker Change: <unk> barrels in there and so we have a team that looks after value optimization move in the right barrels of bitumen to the right places at the right time to generate.
Speaker Change: Maximum.
Speaker Change: Yes, I'd just add to that.
Speaker Change: It's not only the maximum volumes and things within with Dave's team looking at what is the market demand at points in time, and what products the ability to whether it's upgrading but the slate of products. We can we can produce whether it's crude or products. We're very tied in there. So that integration goes way beyond just simply the physical.
Speaker Change: Integration of that asset base, but it all is about ultimate valued all the way through the customer and so how the teams work together I would say is that.
Speaker Change: At increasingly uniquely integrated manner and here again my overriding message is we're not done yet.
Speaker Change: Excellent thanks very much.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Dennis Fong with CIBC. Please proceed.
Dennis Fong: Hi, good morning.
First congratulations on the significant progress you've made to date on your plans and frankly looking forward to 2025.
Dennis Fong: My first question here.
Dennis Fong: Relates to Fort Hills, I was actually hoping if you could provide a bit of an update in terms of mine progression.
Dennis Fong: I know in the last call you discussed a little bit or Peter discussed a little bit around moving from self pay at the center and then obviously centers in North just wanted to understand a little bit more about that as well as the heavy equipment deliveries and how youre, making progress on the two cuts.
Dennis Fong: Thank you.
Dennis Fong: Thanks Dennis.
Dennis Fong: Really pleased with the developments.
Dennis Fong: Doubtless a center pad in our north pit at Fort Hills, maybe to give you a bit of perspective right now things are well underway. We have 10 big mining shovels in the north pit right now moving both overburden and or to the crushers, there's five shovels on it.
Speaker Change: Pat and Theres only one left in the south pit.
Dennis Fong: Is kind of doing that last final cleanup.
Dennis Fong: The pit walls and the last one a bit of ore and there will be out of there in the next couple of months. So I would say really pleased with the transition ore delivery is predominantly from the center and North pets right now north of it one is up and established north pit two is in the queue for later this year.
Dennis Fong: So I'm feeling really good about that and obviously Fort Hills continues to meet the commitments that we set out in our three year reset plan in terms of our production and our improvement in mine health. So.
Dennis Fong: I'm pleased with that on the equipment delivery to the second part of your question and Richard mentioned in mind 55 trucks starts.
Dennis Fong: Show their mind, but we did receive 45 of those trucks.
Dennis Fong: Through 2024 exactly on schedule from our supplier.
Dennis Fong: Happy with those they went to both Fort Hills, but also to our base plant received four more by the end of January and the remainder will be come in by the end of this month in February so exactly on track with the equipment deliveries and we're really starting to see the productivity from the mines come up with that it's a boat.
Dennis Fong: Getting the right class of equipment Ultra class equipment.
Dennis Fong: And in the right places in our minds, we would generate maximum efficiency and move those tons at a lowest unit cost that we can't impossible. So we're starting to see that you'll see that show up in the cost performance of the company through 2024, it's showing up in the bottom line, it's about mining efficiency at scale to deliver.
Dennis Fong: Big production volumes, but also to do it in the most efficient way Peter also comment on autonomous implementation Thats kind of the other.
Dennis Fong: Your strategy, where are you on that we'd set out in our plan last year to have.
Dennis Fong: All of the ore delivery based plants under our autonomous trucking that was completed in December so hot.
Dennis Fong: Happy to see all of your <unk>.
Dennis Fong: Liver to the crushers are big plant by the end of 2024 is done by autonomous trucking. We also set an objective to have 91 trucks converted over to autonomous operation by the end of the year and that was also accomplished and now sets base plant.
Dennis Fong: Millennium mine in North Sea Bank is the single largest deployment of autonomous trucks anywhere in the world.
Dennis Fong: And so we're really pleased with the implementation of our technologies, but perhaps even more so our ability to really fine tune all of the variables to make sure that we're moving those tons as efficiently as possible. It is it is really next level on the team has done some fantastic work again similar to what we're doing in production.
Dennis Fong: Whereas the bottleneck, how can we overcome that with engineering solutions with operational techniques and procedures and really getting a delivery out of that system that we expect and the way I would ask you to look at that as in our May Investor Day, we had the.
Dennis Fong: Fewer trucks bigger trucks autonomous trucks, where kind of core of Peter's improvement strategy 2024 was we had the buildup curves the trucks arrived throughout the year as the conversion to autonomous arrived throughout the year. So now as we get into 2025, particularly here in the first month or so all of that will be in place.
Dennis Fong: And Youll see a full year of the value creation from that whereas in 2024, you only saw a partial year as that buildup occurred.
Speaker Change: Great No I really appreciate that color in that context as well.
Speaker Change: My second question.
Speaker Change: Frankly focuses more on turnaround. So you have some obviously some major planned turnarounds coming up later this year, including the Yuan Coke drum replacement program can you talk towards some of the steps or measures you've put in place that drive cost controls as well as moderate downtime risk, especially as it relates to this.
Speaker Change: Very significant project.
Speaker Change: And related to the 91 day turnaround.
Speaker Change: Certainly Dennis I'm going to turn it over to Shelly here in a second but I think it's one of the things is we put out our guidance and look at the year 25. It is a heavier planned maintenance here both in the upstream and then of course some material turnarounds at.
Speaker Change: In Edmonton in particular, so how 25 shapes out is we will have much better sense as the year goes on and some of this work is completed.
Speaker Change: The coke drum of placements at the base plant are probably perhaps the biggest event of the year.
Speaker Change: Last time, we did it was kind of the same year Moses part of the Red Sea. This was a long time ago. These things last 50, plus years, but Shelly and her team are leading that driving that so shall we offer some some specific comments on that work, yes for sure. So we've been working on the German sites that project actually for quite a few years.
Speaker Change: This client just to give you a sense of the size of that project in total.
About $2 8 million hours to complete the entire project, we've already completed $2.3 million of those hours so coming into 2025, it's actually a small scope. There is only about 500000 hours left, albeit it's the critical scope of the actual drummer.
Speaker Change: Placement in the turnaround.
Speaker Change: So to your point, we've had extensive reviews, we've had extensive protect.
Speaker Change: Lanning sessions, we bought our own internal experts deeply involved in the project and we've also brought in external called EIS folks who have done this type of work for our people that have experience, replacing coke drums, and other plants around the world. So we're really bringing the best of the best.
Speaker Change: What we have internally as well as externally just to crawl all over this project and make sure we're set up and ready to go.
Speaker Change: In terms of actual kind of protect readiness. We're in really good shape, we're really happy with how we exited last year. We're slightly ahead of plan all the Coke drums are on site now we've put our hands on them all the major equipment is on site and we've also gone so far as to build some.
Speaker Change: Kind of practice mockup structures, so that our maintenance personnel.
Speaker Change: Practicing on them as well as our operations personnel are also able to kind of train and practice on new equipment. So we feel like we're in good shape, it's definitely a big critical piece of work for us this year.
Speaker Change: Were definitely watching it very closely.
Speaker Change: A little bit more than a year ago. This was more than a 100 day work scope in our estimation, but the turnaround improvements that both shelleyan, Dave or leading across the enterprise have found the ability to further improve that optimize that to this current 91 days schedule. So it's.
Speaker Change: We've built in the improved our improvement we're seeing but it.
Speaker Change: <unk> say, it's a fingers crossed kind of thing, but we got the critical work is ahead of us and there'll be all.
Speaker Change: The high Fives will be later in the year when we complete that.
Speaker Change: Great.
Speaker Change: Thank you for taking my questions I'll turn it back really appreciate those responsible.
Speaker Change: Thank you.
Manav Gupta: Our next question comes from the line of Manav Gupta with UBS. Please proceed.
Manav Gupta: Good morning, guys.
Speaker Change: That conditions on all of their milestones my question here is like nine months ago.
Speaker Change: The target of lowering your all in breakeven by 10 and I think after the first year you were looking to for four to five and then the balance between the remaining two.
Speaker Change: We're already at seven.
Speaker Change: Do they commendable I'm just trying to understand like where do you also look at a situation where this can go more than <unk>. So once you get to year end two could you make it the panel from 10 to cloud and similarly from normalized free cash flow assumptions at almost 70% that you have to all get already at the end of year. One so as you work through the <unk>.
Speaker Change: System could be there could there be upside to these numbers that you gave us about nine or 10 months ago.
Manav Gupta: Manav based on your question you are qualified to be one of my bosses on our board of directors.
Speaker Change: Because they are asking me the same thing.
Speaker Change: I think what's important is when you breakdown. The three year plan had very tangible activities that built up to the $4 in the first year $2 in the second year and $4 in the third year the achieving the seven in the first year, it's a combination.
Speaker Change: We did a few things earlier than we expected, but also be delivered benefit on other things was more than we expected. So are our inventory of continued improvement largely remains I use that tangible example of Peter's trucks, we will now have a full year.
Speaker Change: But of that which we did not have in 2004, so does the 10 grow.
Speaker Change: We haven't quite frankly, we haven't spent a lot of time recalculating that we've spent more time with our head down tail up delivering value and I think time will tell but I.
Speaker Change: What it ultimately as.
Speaker Change: I will tell you I'm encouraged that the value creation that are we're not depleting our inventory of ideas as we capture things we are seeing new new ideas new opportunities to add to the list. So our own ambition I don't have that number for you, but our own ambition as a result of 2020.
Speaker Change: <unk> performance has has been elevated.
Perfect. My quick follow up is you're glad to have a very informed view on refining the started the year on somewhat of a bearish note it.
Speaker Change: It's been very well until now even with some of the global capacity additions about delayed some capacity is already going offline and diesel cracks that moving up which obviously helps you out a lot. So just trying to understand from you like six to nine months outlook that you have for refining.
Dave: Dave you want to you want to offer.
Speaker Change: <unk>.
Speaker Change: A couple of quick comments, I mean, I would say.
Speaker Change: There were a few years over the past few years, where I would say the refining margin.
Above where you would expect kind of unusually high and I would call them, what we call a lower everyones, calling low refining margins now are probably more typical I think theres potentially some upside into the next year, but at the end of the day. We are focused on winning in any environment here at Suncor. Our integrated model helps us helps us win win the cracks are low helps us take advantage of the market when the crop.
Speaker Change: <unk> high and we continue.
Speaker Change: To optimize that integration time, putting more throughput, which is lowering our dollar per barrel costs, we're optimizing our business across across our portfolio. It sounds a marketing business, we're growing that to have more profitable domestic sales were growing our trading business to make more money selling direct to customers and we're really optimizing.
Our integration throughout the downstream, so really where our focus is we want to win in any environment.
Speaker Change: Well, we'll see where the cracks go I can't really speculate on where they'll go but yes.
Speaker Change: As you pointed out there may be a little upside and we're ready to take advantage of that and I made the comment earlier about the the teams the integrated teams whether it's the crude slates, we produce or the products, but I think that that extends further into dave's team that we have kind of a balance of the eastern west in a refinery refining capacity.
Speaker Change: The markets and the growth opportunities vary between east and west, but increasingly Dave's folks are figuring out ways to get product that may be manufactured in the west get it delivered in the east or vice versa, and I think that's going to allow us that what ever the market environment is we're well positioned with market knowhow.
Speaker Change: <unk> with logistics, and then that the capabilities of our asset base to maximize whatever value is there in the market, we're going to get it.
Speaker Change: Yeah.
Speaker Change: Thank you so much.
Speaker Change: Thank you.
Speaker Change: Our next question.
Speaker Change: It comes from the line of mineral host with TD Securities. Please proceed.
Speaker Change: Thanks, and good morning, everyone I'll start with a question on consolidation since we've seen quite a bit of it in recent quarters, including your consolidation of Fort Hills, and <unk> is consolidation of the AOSP through two transactions.
Speaker Change: High level that that leaves syncrude.
Speaker Change: And I understand that you can't speak on behalf of your partners, but how much time do you spend thinking about syncrude consolidation. These days and I suppose along the same vein how active is the least 29 that discussion at the moment.
Speaker Change: We.
Speaker Change: Metal IV for the last year or two we've been heavily focused on that 99% of our workforce that drive trucks operating shovels run refineries and get things right and as we have.
Speaker Change: <unk> achieved that that allows the that 1% of us to think about how do we add shareholder value long term and certainly with the integrated nature of our asset base you mentioned Fort Hills that is a tangible example, so we're going to be continuing to look at those opportunities that can add value based that perhaps the.
Speaker Change: Current owner doesn't have the opportunity to achieve but through our ownership operator ship that we can achieve so we look at any and all of those opportunities. It always comes down to you know do you have a willing buyer willing seller.
Speaker Change: Obviously I can't comment on any specific assets, but it's about creation of a unique level of value, where it's not just about a speculation on what oil prices going to be that's where we're focused.
Speaker Change: Menno, it's Chris here and just on that last part of your question around leased 29, just come back to what we've been talking about to us.
Speaker Change: 1% to 18 months, we've set ourselves up with our business in terms of our bitumen supply.
Speaker Change: With our current assets and leases as well as the leases that we have the opportunities to develop at least 29 is its something thats been talked about in the market a long time.
Speaker Change: Certainly it is an opportunity for a mine extension.
Speaker Change: There's always conversations in the background that have around those types of things, but for US lease 29 is not the focus we have more than ample bitumen supply in our portfolio to keep our upgrader full and lots of bitumen development opportunities going forward.
Speaker Change: Terrific. Thanks, Thanks for that and then maybe the second question.
Speaker Change: Is is egress related since you often emphasize your marketing and sales and trading capabilities is an advantage. So in the context of tariffs risks with the understanding that you are far less exposed than most how much ability does suncor have to shift cargoes away from the U S and U S markets in West Coast Mark.
Speaker Change: In particular.
Speaker Change: Especially given the potential for an uptick in throughput at the westbridge Marine terminal towards the middle of this year I believe.
Speaker Change: Well I would say that.
Speaker Change: Anyone on the planet knows exactly what's going to happen on tariffs. So we won't do that.
Speaker Change: Won't speculate on that but then if I take it more directly to your question, the kind of who wins and who loses in this and I think when you all Canadian companies Theyre going to experience the impact differently. If you were in <unk>.
Speaker Change: The oil producer that rely moves your crude across the border. That's one thing, but if you get into our situation, probably what 60, 65% of our barrels stay north of the border.
Speaker Change: And they either go to our refining network.
Speaker Change: The other refineries customers <unk> off the coast.
Speaker Change: So that's a high fraction, we have a large Canadian refining footprint and I believe among our peers, we have more capacity to get crude off of either coast than than the other peers, who also have those Canadian.
<unk> footprint et cetera, et cetera to March on down.
Speaker Change: This was it gets back into that fundamental that kind of integrated nature of our asset base gives us more resiliency kind of a natural hedge in whatever the market environment upstream downstream <unk> tariffs would play we believe in free trade, we think the U S needs us we need the U S but.
Speaker Change: If we were in a world of tariffs.
Speaker Change: I like our position relative to our peer group.
Speaker Change: Thanks for the thanks for that rich maybe just on the Westbridge Marine terminal is that is that expansion does that midyear sound about right.
If we can put you on the <unk> that's correct.
Speaker Change: I'm, sorry can you repeat that sorry, you broke up a little bit there.
Speaker Change: Oh, sorry about that.
Speaker Change: In terms of the Westbridge Marine terminal.
Speaker Change: Does that sound in terms of the expansion of throughput does midyear sound about right.
Speaker Change:
Speaker Change: Okay.
Speaker Change: Sorry, you are talking about the westwood's docket.
Speaker Change: Hey, Matt, Yes, Thats right, yes, yes, okay.
Speaker Change: There's a couple of things.
Speaker Change: At Westwood stock with their <unk> is working on one is lighting to allow ships so load at night or dark at night that will help drive some expansion and then and Thats on track to happen very soon and then later in the in the future will be some capability to dredge under the narrows bridge, which will allow.
Speaker Change: Large cargos, we've been pretty happy with it took a little couple months to work out the logistics on the Westwood stock, but it is.
Speaker Change: We knew it was going to be a busy logistics situation. The team has done we've worked with the <unk> team others have worked and we really we think the logistics are working out really well over there.
Speaker Change: Okay. Thank you. Thanks for letting me squeeze in a third I'll turn it back.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of John Royall with Jpmorgan. Please proceed.
John Royall: Hi, good morning, Thanks for taking my question.
John Royall: So my first question is on the production guidance for 25.
John Royall: It's flat at the midpoint with 20.
John Royall: <unk> actual with 24, obviously being a terrific operational year.
Speaker Change: And I know you had some incremental turnaround activity and 45, which rich mentioned.
John Royall: Which is probably why we're not seeing more growth this year.
Speaker Change: Is it fair to think that.
John Royall: The midpoint of the range.
John Royall: Assuming operations and reliability aren't quite as strong as they were in 2004.
John Royall: Where everything kind of seem to go right in if operations do come in similar to 2004 should we be thinking kind of more high end or maybe even above.
John Royall: John I think you called it right.
John Royall: We put out guidance of course, we didn't quite have the fourth quarter and I got to tell you. The team the team kicked <expletive> in December.
John Royall: So it was higher than I thought at the time, we put it out I didn't think you would be right at the mid point quite frankly, I thought 2024 as results would be a little bit lower than they were just just because of where things were tracking but I think the big thing in 2025 is.
John Royall: This is a question once Shelly gets all this coke drum replacement done I'll be I'll be in a much more confident position to answer if that goes as we would hope and expect and all of our teams are focused.
John Royall: Probably right, we're probably towards the high end of that if it doesn't because the last time. It was completed with 50 plus years ago that that would move it around in that so.
John Royall: We've got fundamentally the same asset base, we're assuming continued high performance we have not the company today, we are not saying well we did really good this year.
We're probably not going to do that again next year that is not the mindset. The culture of this organization, but it's really the maintenance work that is kind of gives us a bit more of the unknown.
Speaker Change: Okay. Thank you and then my follow Up's on fire bag.
John Royall: It's been an asset.
Speaker Change: <unk> production pretty significantly can you.
Speaker Change: Talk about the types of things you've done there and is there maybe more kind of low hanging fruit type of potential in that Ahmed from here or maybe even something that could require some capital that could move that production not be even more should we think of it as kind of.
Speaker Change: I mean, because its true potential here.
Adam: Well you know the gentleman I'm going to turn this to didn't know im going to turn this to him because he is now our chief HR officer, but for the last several years. He has been driving the improvement at fire bag. Adam can you can you.
Speaker Change: What they all have you done over the last couple of years of fire bag. That's added 35000 barrels a day in two years.
Speaker Change: The growth investment rich. Thanks for the question, maybe just building on Richard's comments, the mindset and the culture at the fire bag as it is consistent with the rest of the organization.
Speaker Change: So what I mean by that is the teams are constantly looking for what is actually constraining. The production at what can we do in the short term to safely unlock further production that is the focus at fire bank, which is consistent with the rest of the organization. So a couple of examples we had a water constraint small.
Speaker Change: Piping arrangement to unlock water management that was completed we had a PSV constraints. We added a fifth PSV remove that constraint that was completed to unlock further production. We are constantly looking for other opportunities to do that and I am confident that the team has a long list of <unk>.
Speaker Change: Opportunities to further unlock.
Speaker Change: Increased production further and you see that in December with a 250000 barrel per day production rate of fire mix, John just a quick add to that.
Speaker Change: We need to be sure we stay well long in terms of capacity long as we increment the facility capacity. So Shelly has got a drilling team and others that are looking at okay, we're probably going to have to.
Speaker Change: Add some well pads quicker because of the capacity that's a great problem to have in the resource base at fire bag is high quality and long life. So there are a lot of opportunities there. But this is this is a fun one for us because this is our single most valuable asset corporate wide.
Speaker Change: Thank you.
Speaker Change: Thank you Lynn.
Speaker Change: One moment for our next question comes from the line of Adam <unk> with Goldman Sachs.
Speaker Change: Hey, good morning, Rich and team and thank you for taking my questions maybe want to start on the retail side of the business just going back to the Investor day in May where do we stand as it relates to some of the margin improvement targets. There for this part of the business and then can you comment maybe on what has surprised to the upside or downside versus prior expectations.
Speaker Change: Thanks, Adam I think last time I saw <unk> in Miami, if I remember right Dave.
Speaker Change: Dave you want to comment quickly on how we're doing on the retail growth plan sure absolutely and the retail growth plan is one of the things that underpins, our overall sales and marketing growth and as you know we continue to grow our sales and marketing volumes were 600000 barrels a day for the year.
Speaker Change: We shared in May 'twenty, one plans to high grade, our Petro, Canada network, leveraging strategic partnerships and deliver $200 million by the end of 2000 and.
Speaker Change: We are still on track to do that.
Speaker Change: And in fact, we are evolving our plan as we continue to learn it's a pretty competitive market out there as you see with other folks who were reporting retail earnings.
Speaker Change: It's a competitive market out there and we continue to about to evolve our plans, we're enhancing our quick serve restaurant offerings with new AWS sites, New express format concepts to get more restaurants and more sites.
Speaker Change: And we're seeing the results of our retail pumping costs are actually down year on year and our same site store volumes are up year on year.
Speaker Change: And we're just getting started if you look around major markets in Canada, right now Youll see a bunch of Petro Canada sites with fences around them, that's because we're rebuilding the sites and and really our goal is to offer full offer locations that are just simply better than what our competitors are offering that will give us better margins lower pumping cost and retail sites that will stand the test of.
Speaker Change: Time.
Speaker Change: We're also working on a Canadian tire partnership.
Speaker Change: That's a great. That's a great partnership we're looking at to convert 200 sites over the next couple of years.
Speaker Change: And increase our sales volume by about 1 billion liters of year, so lots going on in the retail side still on track.
Speaker Change: Add to that it's about value and volume and we're getting the volume, but we're also getting it value at the high end of the food chain. The retail the branded sites data won't repeat Dave's examples, but it's kind of that two pronged approach and we had a little bit of a bobble in mid 2023 with the cyber attack that we kind of went through but.
Speaker Change: Ever since then as we've come out of it we're right back on the plan, we've outlined and I.
Speaker Change: And uncertain world that having that retail network and those high value distribution channels that is also a source of competitive advantage.
Speaker Change: Great that's super helpful and yes, rich your memory is correct on Miami, maybe just my follow up is just on when we look at 2024 versus 2023 results see that total operating selling and general expenses were down about $300 million can you touch maybe a little bit on some of the moving pieces there and then any color on expectation.
Speaker Change: <unk> for 2025 as it relates to the rate of change from 2024. Thank you.
Speaker Change: I think expense management is one of those things that I commented on it its attention to detail its rigor.
Speaker Change: Spending money like it's not your own it's someone else's and Youre accountable I think expense management is a much a representation of the culture of an organization as almost any other measure and so what youre seeing here is this.
Speaker Change: <unk> high performance results oriented culture at Suncor being developed both Dave Peter and Adam commented on how how do we.
Speaker Change: Locked capacity without spending money low no cost barrels you saw that the other area I would say is is getting more rigorous about the value of what we spend the risk based assessment of as opposed to going through maintenance at our regularly scheduled interval independent of what the condition of it.
Speaker Change: Use of equipment is critically looking at it and say what do we need to do on it. So it's just it's rigor and discipline and the billion dollars. We took out year on year ex the Fort Hills acquisition.
Speaker Change: It exceeded my expectations that was more than I thought, but here again I think it's kind of you know I'm a broken record here I don't think we're done yet will the rate of change in 'twenty five.
Speaker Change: Absolute cost be the same as 24 and I don't know that Thats, a pretty ambitious objective, but we're not done yet.
Speaker Change: Great. Thank you.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Doug Leggate with Wolfe Research. Please proceed.
Thank you thanks, rich for having me on rich.
Doug Leggate: I don't want to go back to the seven out of 10 question from earlier, but I did want to ask you about the production volumes because.
Doug Leggate: You've already talked about firebug AD nauseum, but you did say 100000 barrels a day you clearly there.
Doug Leggate: Or do you think the volume trajectory can look like from the incremental lengths that you have on what happens next across the asset base.
Doug Leggate: Yes, Thanks, Doug.
Speaker Change: We got 82000 barrels a day out of the 108 in the first year.
Speaker Change: I'll tell you what we're doing kind of a glimpse under where we've got more work going on.
Speaker Change: And you said fire bag Ad-nauseum man I can talk about fire bag all day long that so there is still growth. There. So this whole idea of looking at the constraints, ensuring we have the well capacity looking at the export pipelines, there's more there to be captured some of the other areas as we continue to execute the <unk>.
Speaker Change: Short hills, the three year plan now we're spending more time looking at years four through 44, not one through three so looking at what we can do we know we have a plant or two two trains and that plant that when combined are more than the 194 nameplate capacity. So we're looking at what do we do what do we need to do to have the.
Speaker Change: Ore delivery to feed that beast at the rate at which can eat. So those are probably two areas that offer the greatest potential that if we if we're sitting here.
Speaker Change: Year from now talking about blown past 108000 barrels a day those are probably the two areas that I think my guests today that we would be highlighting that will allow us to drive further.
Speaker Change: Okay I appreciate it I mean, the progress obviously since you've been there has been extraordinary but theres always.
Speaker Change: Some of the Nook.
Speaker Change: The story in some regards and the thing that has come up again as I'm sure. You're aware is this issue of baseline rule liability long term. So I wonder if I could just ask you to frame.
Speaker Change: On an annual basis.
Speaker Change: And in the annual report is probably 400 million Bucks, a year or something like that can you just frame for us how you're thinking about that.
Speaker Change: Do you think about managing it and is it.
Speaker Change: It sounds to me like is relatively modest in the Grand scheme of everything else is going on but you just put some numbers around the floor is on a discounted basis. If you can maybe just a question to ask Chris to comment on the numbers on it but I think theres kind of two dimensions to it is the.
Speaker Change: Long life of the Upgrader is in the long term bitumen supply and part of that at all intertwined together in terms of abandonment reclamation timing and obligations, but Chris comment on you know kind of as you said kind of it.
Speaker Change: Moderately de Minimis spend that goes on each are you bet Hey, Doug.
Speaker Change: Doug and Doug you put your finger on a on a key number that youll see in our financials related to it so think about Aero. This way I mean, we have a number in there that shows the discounted arrow that is over a very very long period of time.
Speaker Change: We have reclamation activities reclamation closure activities going on continually across our asset base up north averaging both that for $500 million a year kind of I'll call. It ratable spend it might go up a little bit more in one year it might actually be a bit lower in another year.
Speaker Change: Can tell you that Peter's ABTS team is doing a terrific job on working our mind and reclamation and closure plans and actually continuing to optimize it is an area of optimization opportunity as well, but think about this as kind of a very long term ratable spend right. It isn't a case, where you get to an end of mine.
Speaker Change: And you've got a big balloon of reclamation activity and costs at all of a sudden shows up if this is an activity which is very ratable over time. So we're very confident in the plans. We've got a lot of a lot of specific plans in place and I think you can kind of just count on that sort of ratable approach to arrow and reclamation that Peter is there anything you want to add or maybe cut.
Speaker Change: All other things from our perspective, Doug it's not.
Speaker Change: Another. Good example of Suncor integration now that we are operating multiple mine sites that we've standardized engineering assumptions in our engineering spending for aero across the asset base. So that certainly helped and making sure we've got our assumptions correct or consistent.
Speaker Change: Second part is.
Speaker Change: Beyond just the immediacy of improving our mining efficiency and the results on our bottom line that also translates into Aero assumptions because arrow at the end of the day, especially for a lot of these big mines is about moving material moving dirt and moving water and we do a lot about today, so the efficiencies that we've driven into those.
Speaker Change: Activities today has ultimately resulted in reducing our aro liability because of our confidence in executing that type of work has increased tremendously.
Speaker Change: Thank you guys.
Speaker Change: Guys. Thank you for the detailed answer.
Speaker Change: Quick follow up if I may Chris cash Capex versus the funding of this does it come out of working capital on the balance sheet, how does it how does it flow through the cash flow statement and I'll leave it there. Thank you.
Speaker Change: Yeah, so you'll see it it does run through that it's an expense and then youll see it obviously as we do the bridge from operating earnings to <unk> Doug.
Speaker Change: Okay got it. Thank you so much guys.
Speaker Change: Thank you.
Speaker Change: And we have a question from the line of Patrick O'rourke with ATB capital markets. Please proceed.
Patrick O'rourke: Good morning, guys. Thanks for the comprehensive rundown, thus far and congratulations on another very strong operational execution quarter. Just a few very quick questions from me first with respect to the balance sheet.
Patrick O'rourke: And the working capital build and release, obviously that works in your favor here, bringing the debt materially down below that $8 billion. I know you talked about some reversal in the first quarter here and then throughout 2025 can you maybe walk through the potential cadence of that.
Patrick O'rourke: And then as you sort of determine what structural versus cyclical how long when you make the determination on returning some of that capital to shareholders.
Speaker Change: Yes, yes, thanks, Patrick Great question, the working capital story I think for the company has been a really good one this year, it's been a tremendous amount of focus on it.
Speaker Change: Certainly see a lot of variability, it's the nature of our business, you'll see that variability quarter to quarter I commented a bit of that in my opening remarks. So we did see a big release in Q4, a lot of that was related to our moves in commodity price, we saw timing of cargo settlements as well as timing and commodity taxes and then a draw.
Speaker Change: Down in inventory I.
Speaker Change: I do expect that to come back as I mentioned in Q1, as we build inventory for turnarounds. We've got some other timing timing in working capital so you'll always see a variability.
Speaker Change: But there is structural change underlying the working capital story here at Suncor.
Speaker Change: <unk>.
Speaker Change: It's been part of the story of actually hitting that net debt target early what I can assure you is we've got huge focus in our organization on our working capital and.
Speaker Change: And we're really managing against that net debt target, we use the words at or near.
Speaker Change: Want to make sure we're comfortable where that net debt is we're very comfortable with it and as we get more confidence in structural releases of working capital that cash is going to be able to be returned to shareholders.
Speaker Change: Okay, Great and then just in terms of the return of capital policy here, having <unk>.
Speaker Change: <unk> outperformed in a lot of your milestones.
Speaker Change: <unk> talked about being ahead on the $10 improvement on breakeven how do you think about.
Speaker Change: Allocating that outperformance between sort of the return of capital mechanisms the dividend, which as you know.
Speaker Change: More.
Speaker Change: The commitment of our structural versus.
Speaker Change: The share buyback program that you've had in place.
Speaker Change: Yes, I mean, I think it's starting we outlined this in the May deck, we had a page that we got to take care of our existing asset base that sustaining capital.
Speaker Change: <unk> division as a reliable and growing dividend over time, and then quality investments and return surplus cash to shareholders.
Speaker Change: In that plan as we were as we got to the eight.
Speaker Change: $8 billion net debt target and the idea. There is we kind of wanted to one times coverage at $50 a barrel world. So that kind of that philosophy of what we're looking to achieve.
Speaker Change: <unk> is still intact and as the business improves we will look at that what is the what the AFL co generation or the pre funds. What is what are we able to deliver but as we want to be strong and resilient and weaker market conditions and then be obviously.
Speaker Change: The ability to be opportunistic in a stronger market condition. So the fundamental philosophy hasnt changed but the commitment to returning cash to shareholders is every bit as high if not higher than that it was a year or year or so ago.
Speaker Change: Okay. Thank you.
Speaker Change: Thank you.
Speaker Change: <unk> no further questions at this time I would like to turn the conference back to Mr Toy Little for closing remarks.
Speaker Change: Thank you operator, I'll actually turn it back over to rich for some closing comments and I'll be brief here guys.
Speaker Change: By now everyone knows I'm, a big sports fan I Love competition I Love the concept of winning I respect admire excellence. The dedication determination anything you want to describe it of being a champion the gretzky as the bradys the Jordan the best of the best the Hall of Famers, We all know they did not get.
Speaker Change: There with one or two good seasons. It takes excellence year. After year that is the objective of today's suncor sustained excellence 2020 for a good year arguably a very good year don't worry about this company reading our headlines drinking the Kool aid, whereas Hungary as we've ever been.
Speaker Change: We want more we started on January 1st of this year to deliver more.
Speaker Change: That's all I have tried to turn it back to you.
Speaker Change: Thank you everyone for joining our call. This morning, if you have any follow up questions. Please don't hesitate to reach out to our team operator, you can end the call. Thank.
Speaker Change: Thank you for participating and you may now disconnect.
Speaker Change: [music].
Speaker Change: Please proceed.
Speaker Change: Oh handy.
Speaker Change: Looking at the latest.
Speaker Change: No.
Speaker Change: Got it.
Speaker Change: Right.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Hey, Matt.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: [music].