Q1 2025 Canadian Natural Resources Ltd Earnings Call
Dr. Paret, Dr. Paret, John Royall
As always I'd like to remind you of our forward looking statements and it should be noted that in our reporting disclosures everything is in Canadian dollars unless otherwise stated.
And we report our reserves and production before royalties.
Also I would said yesterday in Europe, the advisory section in our financial statements that include comments on non-GAAP disclosures.
Speaking on today's call, we Scottsdale, our president and Victor Derail, our Chief Financial Officer. Additionally, in the room with US This morning, as Robin's APAC C O M P J.
Speaker Change: <unk> C O of oil Sands, and Mark <unk> Executive advisor.
Speaker Change: Scott will first provide details of our top tier operational performance and effective and efficient operations that are driving strong results.
Victor: Victor will then summarize our financial results, including strong financial position and return to shareholders.
Victor: Clothes, Scott will summarize prior to opening up the line for questions with that over to you Scott.
Scott: Thank you Lance and good morning, everyone.
Scott: We have a long track record of being a safe industry, leading effective and efficient producer, while constantly delivering top tier operational and financial performance.
Scott: All of our employees our shareholders focused on doing it right driver.
Scott: Driving strong results and always working on continuous improvement opportunities.
Scott: We achieved record quarterly production during the first quarter of 2025 of approximately $1 5 million Boe's per day, which is <unk>, which included a record quarterly liquids production of approximately $1 174 million barrels per day, 79% of which was long life low decline production and rec.
Scott: Quarterly natural gas production of 2451 Bcf per day.
Scott: During the first quarter, our oil our world class oil sands mining and upgrading assets achieved a record quarterly production of approximately 595000 barrels per day of SCO.
Scott: This was an increase of 34% or approximately 150000 barrels per day compared to the first quarter of 2024.
Scott: Gross production of approximately 630000 barrels per day in the first quarter of 2025.
Scott: With upgrader utilization of 106% was the highest quarterly oil sands mining and upgrading gross production in the company's history.
Scott: This was achieved through successes and the recently completed reliability enhancement project.
Scott: <unk> upgrade or Debottleneck work, which drove the strong performance.
Scott: These achievements were anchored by industry, leading SCO operating cost of $21 88 per barrel, which drove significant free cash flow in the quarter.
Scott: Importantly, when comparing to peers in 2024, our annual oil sands mining and upgrading operating costs were in the range of seven to $10 per barrel lower than our peer average.
Scott: This equates to incremental annual margin of approximately one two to $1 $7 billion.
Scott: Based on our 2020 for annual production.
Scott: Our record natural gas production in the quarter includes the recently acquired <unk> assets that closed in December of 2024.
Scott: We are achieving strong production results and cost reductions on these assets. We are confident we will add even more value than what we have planned at the time of the acquisition. This.
Scott: This is made possible through our commitment to continuous improvement and a strong team culture that focuses on improving our already top tier operating costs driving execution of organic growth opportunities and maximizing value for our shareholders.
Scott: Additionally.
Scott: As a result of good work by our teams finding inefficiencies, we are reducing our 2025 capital budget.
Scott: $100 million and are now forecasting capital for 2025 at 650 5 billion excluding abandonments.
Scott: Certainly this reduction will have no impact on our planned activities are targeted production volumes for 2025.
Scott: I will now run through the remaining first quarter operational results.
Scott: On the conventional side of the business primary heavy oil production averaged approximately 85600 barrels per day for the first quarter, an increase of 9% over the first quarter of 2024, reflecting strong drilling results from our multilateral well programs, which offset natural field declines.
Scott: Primary heavy oil operating cost averaged $18 13 per barrel, which is down 5% from the first quarter of 2024, primarily reflect reflecting higher production and lower energy costs.
Scott: Pelican Lake production averaged just over 43000 barrels per day in the first quarter of 'twenty five a decrease of 4% from the first quarter of 2024, reflecting low natural gas declines for this long life low decline asset.
Scott: Operating costs at Pelican, Pelican averaged $9 77 per barrel in the first quarter, which is comparable to last year.
Scott: North American light crude oil and NGL production averaged approximately 147800 barrels per day in the first quarter, which is up 30% from the first quarter of 2024, primarily driven by our recently acquired Duvernay assets and strong drilling results at our liquid rich natural gas assets.
Scott: Operating costs are light crude oil and Ngls operations averaged $13.15 per barrel, a decrease of 14% compared to the first quarter of 2024, reflecting higher production and lower energy costs.
Scott: On the recently acquired Duvernay assets, our effective and efficient operations areas synergies and expertise in similar plays such as the Montney have resulted in both capital and operating cost efficiencies.
Scott: Additionally, we are on track to achieve the two.
Scott: 2025 budget production of approximately 60000 barrels per day.
Scott: By optimizing well lengths and completion designs in the Duvernay.
Scott: And where their top tier execution, we are drilling longer wells with improved reservoir access at lower cost.
Scott: On a linked normalized basis combined drilling and completion cost for 2025, we're targeting an improvement of approximately 14% or $1 $8 million per well compared to 2024.
Scott: We're targeting to drill 43 gross wells in the Duvernay as part of the 2025 capital development program. Additionally.
Scott: Additionally, operating cost in the Duvernay and during the first quarter of 2025 were strong averaging approximately $9 52 per Boe.
Scott: North American natural gas production for the first quarter was a record averaging more than 2.45 Bcf per day, an increase of 14% over the first quarter of 2020 for.
Scott: Operating cost on a north American natural gas averaged $1 16 per Mcf, which is down 9% compared to the first quarter of 2024.
Scott: Primarily resulting from higher production volumes.
Scott: And our thermal in situ operations, we achieved strong thermal production in the first quarter, averaging approximately 284700 barrels per day. This is up 6% approximately 16500 barrels per day from the first quarter of 2024, resulting from our capital efficient thermal pad development program.
Scott: First quarter thermal and central operating cost averaged $11 23 per barrel, which is down 20% compared to the first quarter of 2024, primarily reflecting higher production volumes and lower energy costs.
Scott: Our Primrose following strong results from the recently drilled CSS pad, we are planning to reallocate a portion of Pat add capital in 2025 to Primrose from Kirby to maximize returns.
Scott: We now target to Gerald Ccs pad DSS pad in the fourth quarter. This year with production targeted to come on in 2026.
Scott: At Jackfish, we finished drilling our safety pad in the fourth quarter of 2024 with production targeted to come on in the third quarter of this year.
Scott: At Pike, we completed drilling one Sag D pad and we're currently drilling our second pad.
Scott: Both of which will be tied into existing jackfish jackfish facilities.
Scott: These two pads are targeted to come on production in 2026, and keep the jackfish plants at full capacity.
Speaker Change: At Kirby, we recently finished drilling our safety pad, which is targeted to come on production in the fourth quarter of this year.
Scott: At our commercial scale solvent Sag D pad at North Kirby North.
Scott: He began solvent injection in June of 2024, and solvent recoveries continue to meet expectations exceeding 80% as we continue to build out the successes we identified several work over opportunities targeting that had seen injection liner steam and steam solvent distribution <unk> and production.
Scott: These workovers are targeted to be completed in the second quarter. We will continue monitoring over the second half of 2025.
Scott: Canadian Natural's advantage is our ability to effectively allocate cash flow to our four pillars.
Scott: We have a well balanced diverse and large asset base of which is a significant portion is long life low decline assets, requiring less capital to maintain our volumes.
Scott: We will continue to allocate cash flow to our four pillars in a disciplined manner.
Scott: <unk> value for our shareholders, which is all driven by effective capital allocation effective and efficient operations and by our team we deliver top tier results.
Victor: Now I will turn it over to Victor for our first quarter financial review.
Victor: Thanks, Scott and good morning, everyone in the first quarter of 2025, we delivered excellent financial results on the strong operational performance that Scott just discussed.
Victor: And this is highlighted by adjusted funds flow in the quarter of approximately $4 5 billion and adjusted net earnings of $2 4 billion.
Victor: Shareholders in the quarter were $1 7 billion, including $1 2 billion of dividends.
Victor: And an additional $500 million of share repurchases, which continue to increase shareholder value on a per share basis.
Victor: Free cash flow in the quarter contributed to a reduction in net debt by approximately $1 4 billion and further strengthening our balance sheet metrics for debt to EBITDA was at one times and debt to book capital came in at 30% at quarter end.
Victor: Liquidity remains strong and including Undrawn revolving bank facilities and cash liquidity at the end of the quarter was approximately $5 1 billion.
Victor: We increased our quarterly dividend twice in 2024 and subsequently in March of 2025.
Victor: Given our strong financial position and significant and sustainable free cash flow generation. Our board of directors approved a further 4% increase to our quarterly dividend to <unk> $58 75 per common share or $2 35 per common share annualized marketing 2025, as the 25th consecutive year of dividend increases.
Victor: Canadian natural with.
Victor: With a compound annual growth rate of 21% over that time.
Victor: Subsequent to quarter end. The board has approved a quarterly dividend of <unk> $58 75 per common share payable on July three 2025 to shareholders of record at the close of business on June 13th 2025.
Victor: Our industry, leading cost structure predictable long life low decline assets and reserve base combined with the consistent commitment to continuous improvement.
Victor: And use to drive significant value at Canadian natural.
Victor: This all contribute to our top tier U S. Dollar wty breakeven that remains in the low to mid $40 <unk> range.
Victor: Which we define as the WTO price required to generate the adjusted funds flow.
Victor: To cover maintenance capital.
Victor: And dividends.
Victor: Our focused and dedicated teams across our business are aligned with shareholders and have the drive to do things right every day.
Victor: This is part of Canadian natural is a unique competitive advantage and facilities driving strong long term return on capital.
Speaker Change: Those are my comments, Scott and I will turn it back to you.
Scott Clothes: Thanks, Victor in summary, we continued our focus on safe reliable operations.
Speaker Change: And enhancing our top tier operations.
Speaker Change: We are in very strong position with our low cost structure.
Speaker Change: Ak's long track record of solid execution, and we are nimble, which enhances our ability to create value for our shareholders.
Speaker Change: And with that I will turn it over to questions.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change: Ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by one on your Touchtone phone you will hear a pump your Jan has been a rate should you wish to decline from the polling process. Please.
Speaker Change: Press the star followed by the number too.
Speaker Change: If you are using a speaker phone please lift the handset before pressing any key.
Speaker Change: One moment. Please for your first question.
Speaker Change: Your first question comes from.
Greg Pardy: Greg Pardy RBC capital market.
Greg Pardy: Thanks. Thanks, Good morning, Scott It was maybe hoping to start with you I mean, you have new autonomous haul trucks at horizon AOSP or Opex is is kind of crazy low and then if I look at your performance in the first quarter.
Greg Pardy: Strong despite the cold snaps. So the question is is can humans.
Greg Pardy: Output form autonomous haul, especially the extreme conditions, we certainly saw in the first quarter.
Greg Pardy: Thanks, Greg.
Greg Pardy: I think the way to look at it first off.
Speaker Change: I can't really comment on the impacts of cold weather to autonomous.
Speaker Change: But what I can say is historically that the longer the duration of the extreme cold weather the more challenging things Ken can become over time.
Speaker Change: But.
Speaker Change: Really I can't comment on on the autonomous part of it I just know that our teams are focused on.
Speaker Change:
Speaker Change: A lot of works through their cold weather weather issues, but.
Speaker Change: It's really just a matter of the duration and the length of the cold snap.
Speaker Change: Okay. Okay. Thanks for that and then maybe just switching over to the Penny.
Speaker Change: So I think with Victor.
Speaker Change: I'm curious as to whether you are prioritizing net debt reduction here as we go through the first half.
Speaker Change: What we should sort of think about I'm curious of shareholder returns like do you expect.
Speaker Change: <unk> more of a balance as we go between the buybacks and debt reduction or are you really trying to get after the debt there.
Speaker Change: Yes, Thanks, Greg very good question Jeff.
Speaker Change: <unk> seeing that strong operational performance here in the quarter contributing to cash flow generation in a really meaningful reduction in net debt overall.
Speaker Change: Back to the free cash flow allocation policy, though to your point at the current allocation of 60% to share buybacks.
Speaker Change: 40% of the balance sheet.
Speaker Change: We look at that on a forward looking annual basis, and so we're taking a balanced approach here over the course of the coming year and so I think you'll see that continue over the next 12 months just as we try to manage within the program. Overall, so I think youll see a really strong program here in 2025, and you saw that in April and May as well when you look at the results. This morning.
Speaker Change: Okay. Thanks very much.
Speaker Change: Hello.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Next question is from Manav Gupta of UBS financial Please go ahead.
Manav Gupta: Good morning, guys. So we no track record on acquired assets. We all saw what you did the Jackfish and then just.
Manav Gupta: Wondering now that you've acquired these additional assets from Chevron are they meeting your expectations and where could we see.
Manav Gupta: Upsize synergies from these assets and also if you could help me understand when can we expect the shell swap to close because I think that were greenfield volume guidance for the year. So if you could talk to those thanks. Thank you.
Manav Gupta: Yeah. Thanks, Matt So first off on the swap I think you could expect that.
Manav Gupta: <unk>.
Manav Gupta: By the end of the second quarter here, that's what we're anticipating.
Manav Gupta: In terms of the acquisitions on the Duvernay assets.
Manav Gupta: They are meeting our expectations continue to work the assets reviewing all the costs looking for every opportunity that we can to become more effective and more efficient and without obviously optimizing the production. So we are they are meeting our expectations.
Speaker Change: Perfect. My quick follow up here is a number of our peers that actually loading that capital because of lower commodity price. It looks at the $100 million reduction you did had had nothing to do with the commodity price. It does just youre getting a lot more efficient. So if you could confirm that and then how would these efficiencies.
Speaker Change: Realizing your assistant which allowed you to lower the Capex and is there scope for more such reductions in outer years at 26 and 27. Thank you.
Speaker Change: Yeah. Good question I have and your assumption is correct.
Speaker Change: Not so much related to pricing just more related to the continuous improvement efforts that our teams put into looking at ways to optimize and reduce the cost and so an example of that would be.
Speaker Change: If you looked at the Duvernay.
Speaker Change: We commented about the reduced.
Speaker Change: Cost at 14%, so we're seeing lower.
Speaker Change: Drilling cost per meter, we're seeing lower completion cost.
Speaker Change: And then across the board part of other components that made up the $100 million.
Speaker Change: Roughly about 60 of that is in the conventional E&P and about <unk> of it in the thermal and mining.
Speaker Change: We're seeing lower costs on our facility builds out our new well completion build outs.
Speaker Change: All kind of across the board.
Speaker Change: Including in our mall and then in the oil Sands mining it's.
Speaker Change: It's made up of multiple.
Speaker Change: Dana capital components, where the teams have gone back review with the cost look to ways to optimize.
Speaker Change: Finding opportunities to to shave off costs through efficiencies and that's where the $100 million comes from.
Speaker Change: Thank you so much and congrats again on a strong quarter the Bod as long as high for you guys, but somehow you managed to beat it every time so congratulations.
Speaker Change: You.
Speaker Change: Thank you very much next question is from Dennis Fong of.
Speaker Change: CIBC capital market. Please go ahead.
Dennis Fong: Hi, good morning, and thanks for taking my questions. The first one is the focus just around oil sands mining.
Speaker Change: I know.
Speaker Change: You just highlighted you are close to completing that swap between you.
Speaker Change: Your mining exposure versus the upgrader I was hoping you could talk towards the opportunities that exist from owning a 100% of mining capacity and touch close to capacity, obviously between horizon and Albion and are there ways to further integrate those operations whether it be through.
Speaker Change: Kind of a shared services or even an interconnection between the two facilities.
Speaker Change: Potentially all of those are very good.
Speaker Change: <unk>.
Speaker Change: If you looked at it.
Speaker Change: We have 100%.
Speaker Change: Across both sites allows us the opportunities to better utilize our equipment.
Speaker Change: <unk> times in the year, if we have to transport some trucks from one site to another we can do that very efficiently and very quickly we'll take advantage of those opportunities and it didn't just limited to heavy equipment. It's related to it's also includes our.
Speaker Change: Inventory at warehouse inventory.
Speaker Change: Being at the same percentages.
Speaker Change: Much quicker much more efficient and effective to be able to utilize equipment.
Speaker Change: Our parts.
Speaker Change: At both sites and services at both sites so.
Speaker Change: It ranges from.
Speaker Change: Small parts dentists to cranes to trucks.
Speaker Change: Those are the types of.
Speaker Change: Opportunities that.
Speaker Change: There in abundance.
Speaker Change: Small amounts, but it adds up to significant amount for us in terms of overall efficiencies and being able to be.
Speaker Change: More effective and more efficient so.
Speaker Change: That's where we're at.
Speaker Change: Okay.
Speaker Change: Great really appreciate that incremental color.
Speaker Change: Shifting towards <unk>.
Speaker Change: Primrose.
Speaker Change: You highlighted in the press release.
Speaker Change: Some available capacity within your thermal in situ business I believe kind of this might be referring a little bit to the delinquent oil handling.
Speaker Change: You have what like Primrose and understanding that you are drilling an incremental tcs.
Speaker Change: So acsf's well pad.
Speaker Change: There are later this year can you talk towards or at least characterize the opportunity of back filling that oil handling capacity or the capacity in those facilities and kind of how you think about.
Speaker Change: The potential March to kind of I think it's a 130000 barrel a day capacity that fits in Wolf Lake Primrose, which is a little bit more underutilized today.
Speaker Change: Yeah.
Dennis Fong: So good question, Dennis and one of the reasons that we move to pad from Kirby.
Dennis Fong: <unk> moved capital from Kirby to for most of this year with good results. We saw from the latest DSS patent Primrose, we continue to see those strong results coming out of our terminals area will continue to make these repeatable and maximize the opportunity that we have.
Dennis Fong: For the related capacity, both on the oil side and on the steam side, certainly objective will be to ensure that the steam.
Dennis Fong: Are running at 100% capacity.
Dennis Fong: <unk>.
Dennis Fong: On a year over year basis, and so we will adjust our development plans.
Dennis Fong: <unk> two that availability to us.
Dennis Fong: Great. Thanks, really appreciate the color and I'll turn it back.
Dennis Fong: Thank you our next.
Dennis Fong: The next one.
Dennis Fong: Shannon will be mono <unk> of TD Securities. Please go ahead.
Shannon: Good morning, everyone and thanks for taking my question I just have one maybe a quick follow up on Matt's question on the on the Duvernay would you just would you be willing to elaborate on what is getting done differently relative to <unk>.
Dennis Fong: Chevron and with the understanding that it's early days for <unk> in the play if we were to assume that strip.
Speaker Change: Prices are correct. How do you think the duvernay is going to compete for capital with the Montney on a full cycle returns basis.
Dennis Fong: The latter part of your question first.
Speaker Change: Hum.
Speaker Change: It will be very competitive with high liquids content montney.
Speaker Change: And in terms of the.
Speaker Change: The opportunities there.
Speaker Change: I can mention that we are seeing.
Speaker Change: <unk> drilling cost per meter we've optimize.
Speaker Change: The.
Speaker Change: Completions in terms of.
Speaker Change: Tonnage is.
Speaker Change: And looking at those kinds of efficiencies metals. So.
Speaker Change: What's getting without getting too much more on specifics, we're just really focused on.
Speaker Change: Ensuring as we would in any asset.
Speaker Change: That we are maximizing.
Speaker Change: The efficiencies of the capital expenditures to ensure that we're getting the best returns and all of those areas. So I don't think I would look at the Duvernay is anything different than any other acquisition that we've ever done or our internal organic growth that we've done we're always looking for opportunities for efficiencies.
Scott Clothes: Thanks, Scott I'll turn it back.
Speaker Change: Thank you as a reminder, if you wish to ask a question. Please press star and the number one.
Speaker Change: Next question will come from John <unk> of Jpmorgan. Please go ahead.
John: Hi, good morning, Thanks for taking my question.
John: So my first question is on break Evens, you've talked about the mid <unk> breakeven for the company as a whole.
John: But how should we think about it for a conventional production and at what price could we see a slowing of activity on the conventional side.
John: And I guess, along those lines building on Manav Capex question again, whats the flex we should think about in.
John: In the Capex budget in a lower price environment.
John: I think John the later part of your question first we're going to every week, we monitor our cash flows our management committee to stay on top.
John: And if we have to make.
John: Any changes to our capital program, we can usually make that.
John: Pretty quickly and that's sort of been the history of the company for for decades, So nothing really different there.
Speaker Change: Sorry, what was the first part of your question.
Speaker Change: Just the break evens on the at what price could you see some activity is slowing.
Speaker Change: <unk> yeah.
Speaker Change: Yeah, we speak Holistically on our breakeven cost.
Speaker Change: And really I think what everybody should just be concerned about is the fact that we are working to ensure that we're maximizing our returns in all of our areas on all of the assets that we're working on.
Speaker Change: We're not just focused on one part of the business our business at Canadian natural involves.
Speaker Change: Our thermal oil sands mining oil sands and conventional operations, which is significant in terms of in terms of heavy oil our montney and duvernay, so really holistic approach, but the focus of our organization and all the staff working at Canadian natural is to ensure.
Speaker Change: That each and every one of those areas.
Speaker Change: <unk> seen returns in.
Speaker Change: And the lowest the lowest possible price environments.
Speaker Change: We will make adjustments as necessary in any one of those areas.
Speaker Change: Great. Thank you very much and then my follow up is just on horizon.
Speaker Change: Your first year skipping the turnaround.
Speaker Change: Part one is you mentioned some maintenance work that can be done.
Speaker Change: This year with zero production impact can you just give us a sense for what some of that is and then secondly, when you get to the turnaround in 2026.
Speaker Change: Does the scope of the turnaround change is it different.
Speaker Change: And then would it turnaround would look like in the one year.
Speaker Change: Cadence.
Speaker Change: Yeah. Good question, so the opportunity that exist for our non production lost maintenance activity is is really in the backend of the upgrader.
Speaker Change: So the secondary upgrading where you're introducing the.
Speaker Change: Hydrogen for hydro treating.
Speaker Change: We have multiple units.
Speaker Change: At.
Speaker Change: We used to make the SCO and secondary hydro treating so gaslog harder treaters for example.
Speaker Change: Just to let hydro treaters, we can take one of those offline John without having to.
Speaker Change: Yes.
Speaker Change: The impact to production so.
Speaker Change: That's how it works for us and Thats, how this whole design was coming out of our.
Speaker Change: Our reliability enhancement project was all part of the plan, we look forward to 2026.
Speaker Change: I would say that in terms of the duration of the turnarounds a duration is it within the range.
Speaker Change: As it would have been in previous years, and the 30% to 35.
Speaker Change: Day range for a turnaround so no significant changes there and.
Speaker Change: Yes, that's the plan.
Speaker Change: Thank you very much.
Speaker Change: You bet.
Speaker Change: Yeah.
Speaker Change: Thank you. The next question will come from Neil Mehta of Goldman Sachs. Please go ahead.
Neil Mehta: Good morning team.
Neil Mehta: Really good net backs this quarter relative to Ti pricing I would think that would sequentially improve in terms of.
Neil Mehta: Given where the differentials are in terms of your capture relative to WTS. It just to talk about.
Neil Mehta: The tightness of the WCS market right now how youre thinking about.
Neil Mehta: Relative to <unk>, how are you thinking about that through the calendar of the year through the rest of the calendar year is that a function of turnaround or is that theres something more structural there just your perspective on on.
Neil Mehta: On local pricing versus WTS.
Neil Mehta: Yeah. Good question I think it can ebb and flows based on Turner activity that might happen on the John stream side of it.
Neil Mehta: The differentials that you're seeing.
Neil Mehta: Sort of.
Neil Mehta: Forecasted over the next few quarters in terms of the strip.
Neil Mehta: Thank <unk>.
Neil Mehta: Our estimate would be that those are.
Neil Mehta:
Neil Mehta: Probably directionally, where things will continue to go.
Neil Mehta: Crude is still flowing.
Neil Mehta: Obviously.
Neil Mehta: Definitely WTO has come off significantly the differentials have tightened in but not as significantly as much as that as the WTO pricing has come down and that's probably a function of a crude oil movements and continuous flows. So my expectation would be that the differentials are in the range that they are.
Neil Mehta: <unk> now.
Neil Mehta: The forward months seem to be realistic to us.
Neil Mehta: Thank you and then just a follow up this is how.
Neil Mehta: How are you thinking about the recent.
Neil Mehta: The Chevron acquisition power.
Neil Mehta: Has that asset performed relative to expectations, where are the opportunities to continue to drive value.
Neil Mehta: Yes.
Neil Mehta: Yes. Good question did answer part of that a little bit earlier, but just to reiterate.
Speaker Change: Our scene.
Speaker Change: Opportunities to gain some efficiencies, we talked about a 14% reduction.
Speaker Change: In our capital cost.
Speaker Change: Over last year.
Speaker Change: Again.
Speaker Change: The assets are meeting our expectations and I'll.
Speaker Change: Just like any acquisition, we will continue to look for any and every opportunity there is to become more effective and more efficient.
Speaker Change: Thank you.
Speaker Change: Thank you next question is from Patrick O'rourke of ETB capital markets. Please go ahead.
Speaker Change: Hey, good morning, guys and thank you for taking my question.
First question, just sort of with respect to carbon mitigation emissions carbon emission mitigation strategies, it's been a little bit quiet.
Speaker Change: And the pathways front over the last several quarters here.
Speaker Change: We now have a bit of finality in terms of the federal government and some of the policies that they've had out there in their platform. Just wondering when we can expect to hear a little bit of news or sort of an update in terms of the advancement of that particular project.
Speaker Change: Good question, Patrick and we're looking forward to being able to get back to the table with both levels of government to have those types of discussions.
Speaker Change: I think it's fair to say that both federally and provincially theres a number of items that each one of them have on their agenda.
Speaker Change:
Speaker Change: Or.
Speaker Change: The opportunities that they're looking at to move forward post the election and working together. So we're hoping that in the near future, we're going to be able to get back to the to the table to have some discussions and continue on with this don't have a timeframe for you right now Patrick but where.
Speaker Change: We're going to be working towards that as quick as we could.
Speaker Change: Quickly as we can get everyone together.
Speaker Change: Okay, Great and then just on Kirby here I think for the second quarter.
Speaker Change: Our second quarter in a row, you've noted in excess of 80% solvent recovery. There just wondering if if we've sort of hit steady state in terms of it.
Speaker Change: Recoveries in the asset performance and.
Speaker Change: If things are generally in line with your expectations or how youre seeing that.
Speaker Change: Yeah, not at steady state yet Patrick we're going to continue to monitor things I did mentioned.
Speaker Change: In the opening that we're looking to do in a few workovers.
Speaker Change: The summary of it is that we have a number of wells that are performing at expectations in terms of recoveries oil production and <unk>.
Speaker Change: We have other wells, where we need to perform some mechanical intervention to just ensure that we have the consistent distribution and performance across the Wellbore is nothing really that abnormal there. We've seen this in other types of operations and thermal as well, but but it's just a matter of optimizing.
Speaker Change: The the opportunity there and.
Speaker Change: Looking at certain wells that need a little bit of intervention.
Speaker Change: To meet the expectations that were looking for but overall.
Speaker Change: We still view the.
Speaker Change: The opportunity for solvent injection is very positive we're really watching closely to ensure that we gather the right level of data.
Speaker Change: We know that we can move the solvent for self injection to other pads at Kirby and eventually up at Pike. So we want to make sure that we get it right and we've got the right amount of information. So that we can maximize the capital requirements as we move forward on future pads here.
Speaker Change: Okay. Thank you very much really appreciate the color there.
Speaker Change: Okay.
Speaker Change: Thank you very much there are no further questions from our phone lines I would now like to turn the call back over to Lance. Please go ahead.
Speaker Change: Thank you operator, and thank you to everyone for joining our call. This morning, if you have any questions. Please give us call.
Speaker Change: Have a great day.
Speaker Change: Ladies and gentlemen, this concludes our conference call for today. Thank you for participating and we ask that you disconnect Your line.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].