Q1 2025 Canadian Natural Resources Ltd Earnings Call
Thank you.
Speaker Change: Good morning. We would like to welcome everyone to Canadian Natural's 2025 first quarter earnings conference call and webcast.
Speaker Change: After the presentation, we will conduct a question and answer session.
Speaker Change: Instructions will be given at that time. Please note that this call is being recorded today, May 8, 2025 at 7am mountain time. I would now like to turn the meeting over to your host for today's call, Lance Casson, Manager of Investor Relations. Please go ahead.
Lance Casson: Thank you, Operator. Good morning, everyone. And thank you for joining Canadian Natural's 2025 First Quarter Earnings Conference Call.
Speaker Change: As always, I'd like to remind you of our forward-looking statements and should be noted then in our reporting schoolers, everything is in Canadian dollars and that's otherwise stated, and we report a reserves in production before royalties.
Speaker Change: Also, I would suggest through your advisory section in our financial statements that include comments on non-gapiscosers.
Speaker Change: Speaking on today's call, we Scott Stauth, our President, and Victor Durrell, our Chief Financial Officer.
Speaker Change: Additionally, in the room with us this morning is Robin Zabek, COO of ENT, J-Frog, COO Oil Sense, and Mark Stainthorpe Executive Advisor.
Speaker Change: Scott will first provide details of our top tier operational performance and effectiveness of operations that are driving strong results.
Speaker Change: Vector will then summarize our financial results, including strong financial position, and returns to shareholders.
Speaker Change: To close, Scott will summarize prior to opening up the line for questions, put that over to you Scott.
Thank you, Lance, and good morning, everyone.
Speaker Change: 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. Our employees, our shareholders, focused on doing it right while driving strong results.
at Always Working on Continuous Improvement Opportunities
Speaker Change: We achieved record quarterly production during the first quarter of 2025 with approximately 1.5
Speaker Change: which included a record quarterly liquid production of approximately 1.174 million barrels per day, 79% of which was long-lived low-declined production and record quarterly natural gas production of 2.451 BCF per day.
Speaker Change: During the first quarter, our world-class oil stands mining and upgrading assets achieved record quarterly SEO production of approximately 595,000 barrels per day of SEO.
Speaker Change: This was an increase of 34% or approximately 150,000 barrels per day compared to the first quarter of 2024.
Speaker Change: Gross production of approximately 630,000 barrels per day in the first quarter of 2025 with the upgrade of utilization of 106% with the highest quarterly oil-transmining and upgrading gross production in the company's history.
Speaker Change: This was achieved through successes in the recently completed Reliability Enhancement Project and Scottford Upgrader D-Bottle Network which drove the strong performance.
Speaker Change: These achievements were anchored by industry-leading SEO operating costs of $21.88 per barrel, which drove significant pre-cash 1.25.
Speaker Change: Importantly, when compared to peers in 2024, our annual oil sounds mining and upgrading and operating costs were in the range of $7 to $10 per barrel lower and our peer average.
Speaker Change: Disequate to incremental annual margin of approximately $1.2 to $1.7 billion based on our 2024 annual production.
Speaker Change: A record natural gas production in the quarter includes the recently acquired duveting assets that closed in December of 2024.
Speaker Change: 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.
Speaker Change: 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.
Additionally,
Speaker Change: As a result of good work by our team, spawning deficiencies [inaudible]
Speaker Change: We're reducing our 2025 capital budget by $100 million dollars and a now forecasting capital for 2025 at $6.05 billion excluding abatements.
Speaker Change: importantly, this reduction will have no impact on our planned activities or retarded production volumes for $0.25.
Speaker Change: I will now run through the remaining first quarter operation results.
For more information visit www.FEMA.gov
Thank you.
Speaker Change: On the conventional side of the business, primary heavy oil production average approximately 85,600 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 fuel declines.
Speaker Change: Primary heavy oil operating cost averaged $18.13 per barrel, which is down 5% from the first quarter of 2024, primarily reflecting higher production and lower energy cost.
Speaker Change: Calculate production, average just over 43,000 barrels per day in the first quarter of 25, a decrease of 4% from the first quarter of 2024, reflecting low natural gas declines for this long-life, low decline asset.
Speaker Change: Operating costs, it's a Pelican, average 977 per barrel in the first quarter.
which is comparable to the last year. [inaudible]
Speaker Change: North American Lake Crude Oil and NGL production average approximately 147,800 barrels per day in the first quarter, which is up 30% from the first quarter of 2024, primarily driven by a recently acquired duvern assets and strong throwing results in our liquor-to-rich natural
Speaker Change: Operating costs are light crude oil and NGL's operations average $13.15 per barrel, a decrease of 14% compared to the first quarter of 2024, reflecting higher production and lower energy costs.
Speaker Change: on the recently acquired DuBernie assets, our effective and efficient operations, various synergies and expertise in similar plays such as the Monney have resulted in both capital and operating cost efficiencies.
Speaker Change: Additionally, we are on track to achieve the 2025 budget production of approximately 60,000 barrels per day.
Speaker Change: by optimizing well-length and completion designs in the Durbanay. Combined with a top-tier execution we are joining longer wells with improved reservoir access at lower cost.
Speaker Change: On a length normalised basis, combined drilling and completions cost for 2025, retargeting and improvement of approximately 14 per cent, a $1.8 billion per well compared to 2024.
Speaker Change: Retargeting to Drill, 43 Gross, Wells in the Duvenate as part of the 2025 Council Development Program.
Speaker Change: Additionally, operating costs from the Deuteron age are in the first quarter of 2025 for strong averaging approximately 9.52 per BUE.
Speaker Change: North American Natural Gas Production for the first quarter was a record, average meaning more than 2.45 BCF per day and increased of 14% with first quarter of 2024.
Speaker Change: Operating Costs, North American Natural Gas, averaged $1.16 per MCF, which is down 9% compared to the first quarter of 2024.
Primarily resulting from higher production lines.
Thank you.
Speaker Change: In our thermal and situ operations, we achieve strong thermal production in the first quarter, averaging approximately 284,700 barrels per day. This is up 6%, approximately 16,500 barrels per day from the first quarter of 2024, resulting from a capital efficient thermal pad out of development program.
Speaker Change: First Quarter Thermal and Situ 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.
Speaker Change: A Primrose, following strong results from the recently drilled CSF pad, we are planning to reallocate a portion of pad ad capital in 2025 to Primrose from Kirby to Maximize Returns.
Speaker Change: We now target material CCS pad, DSF pad in the fourth quarter this year with production targeted to come on in 2026.
Speaker Change: At Jackfish, we've finished drilling a SAG D-pad in the fourth quarter of 2024 with production targeted to come on in the third quarter of this year.
Speaker Change: At Pike, we completed drawing one safety pad, and we're currently drawing a second safety pad. Both of which will be tied into existing jackfish facilities.
Speaker Change: YouTube ads are targeted to come on production in 2026 and keep the Jack Fish plants a full capacity.
Speaker Change: The Kirby, we recently finished drawing a SAGI pad which is targeted to come on production on the fourth quarter of this year.
at our Commercial Scale Solventry, D-Pad in North Kirby North.
Speaker Change: We began a solvent injection in June of 2024 and solvent recovery continued to meet expectations exceeding 80 percent As we continue to build up the successes we have identified several workover opportunities targeting and enhancing injection, liner steam and steam solvent distribution, SORs and production.
Speaker Change: These workovers are targeted to be completed in the second quarter and we will continue monitoring over the second half of 2025.
Speaker Change: Canadian Natural's Advantage is our ability to effectively allocate cash flow to our four pillars.
Speaker Change: We have a well-balanced, diverse and large asset base of which is a significant portion as long-life low-declined assets requiring less capital to maintain our volumes.
Speaker Change: We will continue to allocate cash flow to our four pillars in a disciplined manner, maximize value for shareholders, which is all driven by effective capital allocation, effective and efficient operations, and by our team who deliver top to your results.
Victor Durell: Now I will turn it over to Victor for our first quarter financial review.
Victor Durell: 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 Durell: and this is highlighted by adjusted funds low in the quarter of approximately $4.5 billion and adjusted net earnings of $2.4 billion.
Victor Durell: Returns to shareholders in the quarter, 1.7 billion, including 1.2 billion of dividends.
and an additional 500 million of shared repurchases. [inaudible]
which continue to increase shareholder value on a per share basis.
Victor Durell: Free cashflow 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 with it one time, and debt to book capital came in at 30% at quarter end.
Victor Durell: liquidity remained strong, and including undrawn revolving bank facilities and cash, liquidity at the end of the quarter was approximately 5.1 billion.
Victor Durell: We increased our quarterly dividend twice in 2024 and subsequently in March of 2025.
Victor Durell: 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 58.75 cents per common share, or 235 per common share annualized.
Victor Durell: Marking 2025 as a 25th consecutive year of dividend increases by Canadian Natural, with a compound annual growth rate of 21% over that time.
Victor Durell: Subsequent to Quarter End, the board has approved the quarterly dividend of 58.75 cents per common share, table on July 3rd, 2025, the shareholders of record at the close of business on June 13th, 2025.
Victor Durell: Our industry-leading cost structure, predictable long-lite loaders line assets and reserve base, combined with a consistent commitment to continuous improvement, continues to drive significant value at Canadian Natural.
Victor Durell: This all contributes to our top-tier US dollar WTI breakeven that remains in the low to mid-40 dollar WTI US range which we define as the WTI price required to generate the adjusted funds flow.
to cover maintenance capital and dividend.
Victor Durell: Our focused and dedicated teams across our business are language shareholders and have the drive to do things right every day. This is part of Canadian Natural Unique competitive advantage and facilitates driving strong, long-term return on capital.
Victor Durell: Those are my comments, Scott, and I'll turn it back to you.
Scott Stauth: Thanks, Victor. In summary, we continue to focus on safe reliable operations.
and then half-themed our top tier operations.
Scott Stauth: We are in very strong position with our low cost structure, a decades-long track record of solid execution and we are nimble which enhances our ability to create value for our shareholders.
and with that, I will turn it over to questions.
Thank you.
Speaker Change: Ladies and gentlemen, we will now begin the question and answer session. Should you have a question please press the star followed by one on your touchtone phone. You will hear a prompt that your head has been laced.
Speaker Change: Should you wish to decline from the polling process, please press the star followed by the number two. If you are using a speaker phone, please lift the handset before pressing any keys.
One moment, please for your first question.
Your first question comes from Greg Pardy, RBC Capital Markets.
Thank you.
Speaker Change: Thanks. Thanks. Morning. Scott, I was maybe hoping to start with you. I mean, you have no autonomous whole trucks that are eyes and AOSP and yet you're off X's is kind of crazy low. And then if I look at your performance in the first quarter, very strong despite the cold scenario. So the question is, is can humans, you know, outperform autonomous hall, especially in the extreme conditions we are in saw in the first quarter?
Speaker Change: Thanks, Greg. You know, I think the way we look at it, first off, I can't really comment on the impact of cold weather to autonomous.
Speaker Change: But when I can't say it's historically that the longer the duration of the extreme cold, whether the more challenging things can become over time,
Speaker Change: A lot of work through the cold weather issues, but it's really just a matter of the duration and the length of the colds now.
Speaker Change: Okay. Okay. Thanks for that and then maybe just switching over to to the financial solidity with Victor.
Speaker Change: I'm.
Speaker Change: Curious as to whether you're prioritizing net debt reduction here as we go through the first half.
Speaker Change: What we should sort of think about in terms of shareholder returns like do you expect you know perhaps more of a balance as we go between the buybacks and debt reduction or are you really trying to get out to the debt there.
Speaker Change: Yeah, I don't think Greg very good question definitely seeing that strong operational performance here in the quarter contributing to our 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 and 40% of the balance sheet. 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.
Speaker Change: Within the program overall, so I think you'll 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: Okay.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Next question is from Manav Gupta of UBS financial Please go ahead.
Manav Gupta: Good morning, guys. So we know you are correct correct color on acquired assets. The answer I'll walk 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: Upside 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 things. Thank you.
Speaker Change: Yeah. Thanks, Matt So first off on the swap I think you could expect that Oh.
Speaker Change: By the end of the second quarter here, that's what we're anticipating.
Speaker Change: In terms of the acquisitions on the Duvernay assets. 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 where they are meeting our expectations.
Speaker Change: Uh huh.
Speaker Change: My quick follow up here is a number of our peers that actually loading that capital because of lower commodity price. It looks that the hundred million reduction you did hadn't had nothing to do with the commodity prices. It does just youre getting a lot more efficient. So if you could confirm that and then how would these efficiencies realizing your assistant which allow.
Speaker Change: Would you to lower the Capex and is there scope for more sorts reductions in out there. He was at 26% 27. Thank you.
Speaker Change: Yeah. Good question I have and your assumption is correct I'm 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 if you looked at the Durant.
Speaker Change: Hey, 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 roughly about 60 of that is in the conventionally paying about 40 of it in the third ball and mining we're.
Speaker Change: We're seeing lower costs on our facility builds out our new well completion build outs.
Speaker Change: Are all kind of across the board and including in our mall and then in the oil Sands mining it's made up of multiple.
Speaker Change: Danny 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 <unk>.
Speaker Change: <unk> capital market.
Speaker Change: Please go ahead.
Speaker Change: Hi, good morning, and thanks for taking my question.
Speaker Change: The first one is the focus just around oil sands mining I know as you just highlighted you are close to completing the swap between.
Speaker Change: Our 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 kind of a shared services or even.
Speaker Change: And and interconnection between the two facilities.
Speaker Change: Potentially all of those are that's a very good question I think if you looked at it.
Speaker Change: The fact that we would have 100% 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 isn't just limited to heavy equipment. It's related to it's also includes our.
Speaker Change: Inventory warehouse inventory being.
Speaker Change: At the same percentages.
Speaker Change: Much quicker much more efficient and effective to be able to utilize our equipment.
Speaker Change: Our parts.
Speaker Change: At both sites and services at both sites so Ah it ranges from.
Speaker Change: Small parts Dennis to cranes to trucks.
Speaker Change: Those are the types of opportunities.
Speaker Change: <unk> dot.
Speaker Change: There in abundance.
Speaker Change: In 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 toward our Wolf Lake Primrose.
Speaker Change: You highlighted in the press release, some available capacity within your thermal in situ business I believe kind of this might be referring a little bit to the latent oil handling capacity of what like Primrose and understanding that you are drilling an incremental ccs or sorry, CSS well pad.
Speaker Change: There 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 the.
Speaker Change: The potential March to kind of I think it's a 130 odd thousand barrel a day capacity that fits in and what Blake Primrose are which is a little bit more under utilized today.
Speaker Change: No.
Speaker Change: So good question, Dennis and and you know one of the reasons that we move to pad from Kirby.
Speaker Change: <unk> moved capital from Kirby to promos this year with good results, we saw from the latest DSS patent promos.
Speaker Change: We continue to see those strong results coming out of the North terminal area will continue to make these repeatable.
Speaker Change: And maximize the opportunity that we have for the related capacity both on the oil side and on the steam side, certainly objective will be to ensure that the steam but are running at 100% capacity.
Speaker Change: Hum on a year over year basis, and so we will adjust our development plans.
Speaker Change: According to that availability deaths.
Speaker Change: Great. Thanks, really appreciate the color and I'll turn it back.
Speaker Change: Thank you our next.
Speaker Change: Yeah.
Speaker Change: The next one.
Speaker Change: <unk> will be mono how sharp of TD Securities. Please go ahead.
Speaker Change: 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>.
Speaker Change: 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 that on a full cycle returns basis.
Speaker Change: So a lot of powder to part of your question first.
Speaker Change: Hum.
Speaker Change: It will be very competitive with a high liquids content montney.
Speaker Change: And in terms of the.
Speaker Change: The opportunities there.
Speaker Change: I I can mention that we are seeing a reduced drilling cost per meter we've optimized.
Speaker Change: The.
Speaker Change: Completions in terms of tonnage is and looking at those kinds of efficiencies that also.
Speaker Change: What's getting without getting into much more specifics, we're just really focused on.
Speaker Change: Ensuring as we would in any asset.
Speaker Change: That we are maximizing our 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.
Speaker Change: For opportunities for efficiencies.
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 right all of J P. Morgan. Please go ahead.
John: Hi, Good morning, Thanks for taking my question. So my first question is on break Evens, you've talked about the mid Forty's 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 Gonna 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: That's pretty quickly and that's sort of been the history of the company for for decades, So nothing really different there.
Speaker Change: And I'm sorry, what was the first part of your question.
Speaker Change: Just the break evens on the.
Speaker Change: What price could you see some activity slowing unconventional.
Speaker Change: Yeah.
Speaker Change: We speak Holistically on our breakeven cost.
Speaker Change: And 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 are we're not just focused on one part of the business our business at Canadian natural involves.
Speaker Change: Our thermal oil sands.
Speaker Change: In oil sands and conventional operations, which is significant in terms of in terms of heavy oil our montney and duvernay. So.
Speaker Change: Really a holistic approach, but the focus of our organization and all the staff working at clean Nashville is to ensure that each and every one of those areas is maximizing returns.
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 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've 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 our maintenance activity is is really in the backend of the upgrader.
Speaker Change: So the secondary upgrading where you're introducing the hydrogen for hydro treating.
Speaker Change: We have multiple units.
Speaker Change: That Oh, we used to make the SCO and secondary hydro treating so gaslog harder treaters for example.
Speaker Change: Distillate Hydro treaters, we can take one of those offline John without having to impact.
Speaker Change: Impact the impact of production. So that's how it works for us and that's how this whole design was coming out of our reliability.
Speaker Change: 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. They duration is if within the range as.
Speaker Change: It would have been in previous years, and the 30% to 35 a.
Speaker Change: Day range for turnaround so no significant changes there.
Speaker Change: And.
Speaker Change: Yeah, that's that's the plan.
Speaker Change: Thank you very much.
Speaker Change: Got it.
Speaker Change: Yeah.
Moderator: 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.
Neil Mehta: Your capture relative to WTS It just talk about the.
Neil Mehta: <unk> is the WCS market right now how youre thinking about.
Neil Mehta: Relative to <unk>, how you're 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.
Neil Mehta: On local pricing versus WTS.
Neil Mehta: Yeah. Good question I think it can ebb and flows based on turnaround activity that might happen on the downstream side of it.
Neil Mehta: The differentials that youre seeing sort of.
Neil Mehta: Forecasted over the next few quarters in terms of the strip.
Neil Mehta: Our estimate would be that those are.
Neil Mehta: Hum.
Neil Mehta: Probably directionally, where things will continue to go.
Neil Mehta: Crude is still flowing obviously.
The WTO has come off significantly the differentials have tightened in but not as significantly as much as that as the WJ pricing has come down and that's probably a function of a crude oil movements and continuous flows.
Neil Mehta: <unk> my expectation would be that the differentials are in the range that they are out and the forward months seem to be a realistic to us.
Neil Mehta: Thank you and then just a follow up this is.
Speaker Change: How are you thinking about the recent.
Neil Mehta: Everyone acquisition.
Neil Mehta: How has that asset performed relative to expectations, where are the opportunities to continue to drive value.
Neil Mehta: Yeah.
Neil Mehta: Yeah. Good question I did answer part of that a little bit earlier, but just to reiterate we are seeing.
Neil Mehta: Our opportunities to gain some efficiencies, we talked about a 14% reduction in.
Neil Mehta: In our capital cost over.
Neil Mehta: Over last year again assets are meeting our expectations and I'll.
Just like any acquisition, we will continue to look for any and every opportunity that here is to become more effective and more efficient.
Neil Mehta: I see.
Neil Mehta: Thank you next question is from Patrick O'rourke of ETB capital markets. Please go ahead.
Patrick O'rourke: Hey, good morning, guys and thank you for taking my question.
Patrick O'rourke: First question, just sort of with respect to carbon mitigation emissions carbon emission mitigation strategies, it's been a little bit quiet.
Patrick O'rourke: And the pathways front over the last several quarters here, 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.
Patrick O'rourke: <unk>.
Patrick O'rourke: It's fair to say that both federally and provincially theres a number of items that each one of them have on their agenda.
Patrick O'rourke:
Patrick O'rourke: Or.
Patrick O'rourke: 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 prior right now Patrick but where we're going to be working towards that as quick as we could quickly.
Patrick O'rourke: We can get everyone together.
Speaker Change: Okay, Great and then just on Kirby here.
Patrick O'rourke: I think for the second quarter.
Patrick O'rourke: 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.
Patrick O'rourke: <unk> and the asset performance and.
Patrick O'rourke: If things are generally in line with your expectations or how youre seeing that.
Patrick O'rourke: Yeah, not at steady state yet Patrick we're going to continue to monitor things I did mentioned.
Patrick O'rourke: In the opening that we're looking to do in a few workovers.
Patrick O'rourke: 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>.
Patrick O'rourke: 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.
Patrick O'rourke: The the opportunity there and.
Patrick O'rourke: Looking at a certain wells that need a little bit of intervention.
Patrick O'rourke: To meet the expectations that were looking for but overall.
Patrick O'rourke: We still view the opportunity for solvent injection is very positive we're really watching closely to ensure that we gather the right level of data.
Patrick O'rourke: We know that we can move the solvent for self injection into their pads at Kirby and eventually up at Pike. So we want to make sure that we get it right and we got the right amount of information. So that we can maximize the capital requirements as we move forward onto future pads here.
Speaker Change: Okay. Thank you very much really appreciate the color today.
Patrick O'rourke: Yeah.
Speaker Change: Thank you very much there are no further questions from our phone.
Lance Casson: Long lines I would now like to turn the call back over to Lance <unk>. 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. Thanks 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: Yeah.
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