Q2 2025 Suncor Energy Inc Earnings Call
Oh, From the Ashes.
I will rise.
No Satisfaction.
Good day and thank you for standing by. Welcome to the Suncor Energy. Second quarter 2025 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 1. 1 on your telephone. You will then hear an automated message. Advising. Your hand is raised to withdraw your question. Press star 1 1 again.
Please be advised that today's conference is being recorded, I would now like to hand the conference over to your speaker, Suncor Energy, senior vice president of external Affairs, Mr. Toy little
Thank you, operator, and good morning.
Welcome to suncore energy, second quarter earnings call.
Please note that today's comments contained, forward-looking information,
Actual results may differ materially from the expected results because of various risk factors and assumptions that are described in our second quarter earnings release as well as in our current annual information form, both of which are available on SEDAR, EDGAR, and our website oncor.com.
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 second quarter earnings release.
We will start with comments from Rich Krueger president, and chief executive officer, followed by Chris Smith Suncor, Chief Financial Officer.
Also on the call are Peter zebedy Executive Vice President of oil, sands and Dave Aldridge Executive Vice President Downstream
Following the formal remarks will open the call up to questions.
Now, I'll hand it over to Rich to share his comments.
Thanks Troy. Our second quarter was about completing major maintenance and project activities, and positioning for a strong, second half, we successfully accomplished both, I'll highlight operational performance, Chris will cover a financial. But let me first start with personnel and process, safety following our 2, safest years ever. In 2023 and 2024, I'm pleased to report the first half of 2025 has been even safer in all categories across the board, a credit to our employees and our contractors.
Upstream production.
Our highest second quarter in our highest first half in company history.
Around activity. Over 2 years, the first half of 25 versus the first half of 23. We've achieved a production increase of 89,000 barrels a day.
This increase alone would rank as Canada's 10th largest oil producer.
Highest second quarter.
Company history.
First half at 462,000 barrels a day. Beat our previous best also set last year by 20,000 barrels a day like the Upstream, our past 4 quarters have all set quarterly throughput records. First half refining utilization 99% here again despite major turnaround activity. Over 2 years, the first half of 25 versus the first half of 23. We've achieved a throughput increase of 81,000, barrels a day.
This increase the loan would rank as essentially Canada's 10th largest refinery.
Product sales, same story. Hi a second, quarter and highest first half in company history. First half at, 603,000 barrels, a day, beat our previous best once again set last year by 15,000 barrels a day, like refining. And Upstream, our past 4 quarters, have all sick quarterly sales records, we've had 30.
13 months in our history with sales greater than 600,000 barrels a day. 9 of the 13 have been in the past 12 months. Over 2 years. First half of 25 versus first half of 23 achieved a product sales increase of 72,000 barrels a day. This increase alone equivalent to 5% of Canada's entire refined product sales.
Operating costs per cap OS and G 6.46 billion dollars down 135 million versus the first half of 24, despite higher production, higher refining, throughput and higher product sales. Over 2 years, the first half of 25, versus the first half of 23 OS. And G is down 765 million. Despite 89,000 barrels a day higher production.
81,000, barrels, a day, higher refining, throughput and 72,000 barrels a day. Higher products. Sales the message. We continue to achieve higher performance significantly, higher volumes significantly. Lower costs setting records, raising the bar quarter on quarter year on year operating, leverage, creating value.
Through our people, their expertise commitment and determination focused on what we can control. Embracing a culture that every barrel and every dollar matter
Let me move to turnarounds historically greater than 20% of our Capital 1.25 billion per year has been spent on turnarounds for 2 years. We've been focused on improving cost and schedule performance. The, a benchmarking risk based work, selection work planning, and execution in May of last year at our investor day, we committed to reduce turnaround costs by 250 million dollars per year. Over 3 years with that backdrop. I'll highlight second quarter performance Edmonton, Refinery large work scope, including major crude units previous turnaround of the same unit was 44 days. Our 2025 plan was 41 days. We completed it in 36, improving from the fourth quarter tile in North America. The second quartile previous cost 159 million this year.
142 17 million or 11% lower.
Edmonton team.
Sarnia, Refinery also several units.
Including major crude previous turnaround of the same scope 44 days. Our 2025 plan was 40 days. We completed it in 28 improving from fourth quartile to first quartile.
Previous cost, 108 million this year, 94 14% lower credit to Lesley the careless and the Sarnia team.
Plan required to turnaround completion in less than 91.
We completed it in 67.
Planned cost 259 million. We completed it for 231 28 million or 11% lower improving from fourth quartile performance to Second. Well, done to Bruce durnford and the big black team.
2025, turnaround schedule is split between the second and third quarter. With third quarter of events, including
Firebag plant, 92.
Montreal Refinery, Edmonton, Refinery and sin crude 81 Coker.
Overall, we project 2025 performance to be approaching industry. Second quartile with second quartile in North America representing best-in-class in Canada.
Bottom line, we are exceeding our Improvement targets initially focused on duration and cost now interval extensions, in fact our 2026 business plan which is under development includes interval extensions on future base plan and syncrude cokers.
Edmonton and Sarnia refineries and all firebag plant turnarounds therefore based on our improvement in our confidence. We are raising our annual turnaround Capital reduction Target by 100 million dollars from 250 million per year to 350 million per year. This does not include the added benefit of higher uptime and Associated volumes.
I want to talk about 2 capital projects completed in the second quarter, based plant U1 Coke, drum replacement.
The most extensive Coke drum replacement project in Industry, History, 8, 100 foot tall, 26 foot, diameter drums. Weighing nearly 300 tons. Each new drums foundations, cutting decks and ciliary systems 40. Heavy lifts with 1 of the world's largest cranes. The heaviest equivalent to 620 Ford F-150 pickup trucks.
We funded it at $1.2 billion, initially scoped at more than 100 days. We committed to 91 days in guidance, reviewed by third-party experts for validity. Well, Ryan Jackson and his team completed it in an astounding 67 days.
24-day Improvement versus guidance, 165 million or 14% below funding. The project was literally executed flawlessly. Every detail was mapped out. Every scenario was contemplated. We built full-scale models to practice the most critical steps. Bottom line, we systematically de-risked the entire event world class performance by any standard. Now Decades of benefits. Modernized design, upgraded Metallurgy automated controls, enhanced Safety Systems lower, maintenance costs and higher reliability. I would urge you to check out our website for a 3-minute video on the project.
Mildred Lake West, mine extension. 1.5 billion gross project to develop 730 million barrels of bumin, replacing the north mine project. Involved a new mine haul roads transport Bridge, power lines and pipeline. The oil. Sands lease is literally the size of Manhattan.
We developed it without a new tailings Pond or processing plant.
We achieved first or in April 6 months ahead of schedule at a cost 100 million below funding kudos to niaz, Ahmed and Adrien Larkin and their teams.
Our 2025 project in turnaround performances illustrate that today's suncourt delivers beating. Ambitious Benchmark, based performance Improvement targets.
Guidance. Last December, we issued a 2025 Capital guidance range of 61 to 63 billion.
Since then we have accelerated, turnaround improvements.
Executed major capital projects under budget and performed better across a wide range of base business activities, with an intense organization-wide focus on capital and capital efficiency as a result. Today, we issued a revised lower 2025 capital range of $5.7 to $5.9 billion, a midpoint reduction of $400 million.
Free funds will go to BuyBacks.
And although it's too early in the year to update volumes year-to-date performance points to the high-end of all guidance ranges.
Institutionalizing operational excellence 15 months ago, on our first quarter 2024 earnings call, I described Suncor's long-standing system to manage risk, reliability, and overall operational performance. A system that provided sites with operational requirements or expectations, but a system that left it up to each site to determine how to meet those expectations. I shared with you that we judged that system to be too complex and insufficient in meeting our high-performance standards of today.
As a result, we designed an entirely new system to achieve operational excellence based on work processes processes. Such as managing reliability and managing maintenance 21 standards detailing how to achieve operational excellence based on industry best practice.
Was developed by subject matter experts and Frontline employees for more than a year. Our objective to ensure Clarity consistency and quality in how we operate.
Conversion from the old system to our new system started in Earnest in late 2024.
Pleased to report. We achieved our ambitious timeline with all sights. Now, fully converted to our new system.
The new system is literally a game-changer, institutionalizing operational excellence, reducing site-by-site variation, and elevating overall performance. I personally reviewed page by page all 21 work processes and practices, and based on my 40 years of experience, I can attest it's best-in-class. A special callout to Sylvie, Tran, and her team who had this work, and to our site leaders for embracing the change with that. I'll turn it over to Chris. Great. Thanks, Rich. And good morning, everyone.
Well, it definitely was a stellar turnaround quarter and a Showcase of operational excellence.
Now, before I review the quarter results, I do want to highlight our exceptional shareholder returns in Q2.
Delivered during a major turnaround quarter and ongoing commodity price volatility.
in Q2, we again, return nearly 1 and a half billion dollars to shareholders, including 697 million in dividends
750 million in share BuyBacks.
Year to date. Our BuyBacks are nearly double those of our nearest oil, sands competitor.
We have repurchased 2.3% of our Equity float so far this year or nearly 1.2% per quarter, supporting future dividend and free funds flow per share growth.
Since the beginning of 2023, we've returned 13.6 billion dollars to our shareholders via, share BuyBacks and dividends representing 22% of our average market cap through that period.
Our integrated business model coupled with focused operational. Performance delivers high-quality cash flows that are reliable across the commodity cycle.
Which we are deploying to ensure strong returns for our shareholders.
now turning to the second quarter overall performance, it was a quarter marked by continued volatility, in crude oil prices,
WTI range from the high 50s to the mid-70s in Q2.
All within a very short window, averaging $63.70 US per barrel for the quarter.
A drop of almost $8 a barrel from Q1.
Also, the light heavy differential tightened to $2.45 a barrel versus Q1 averaging a $10.20 US per barrel discount relative to WTI, while synthetic crude improved by over $3 a barrel to a $1 per barrel premium versus TII.
211 cracking margins improved in the quarter driven by improving gasoline cracks and very strong distillate cracks. And our 5221 refining index grew to 27.85 us a barrel.
meanwhile, the Canadian dollar strengthened with the cad to USD exchange rate, moving from 70 cents to 72 cents,
And with this headline, crew price volatility, our integration across the value chain allows us to offset those, headwinds delivering, reliable and high-quality cash flows.
Would have about a half a billion dollar impact on quarterly affo all else being equal.
However, our best-in-class integrated model, which captured stronger refining, margins and improved synthetic pricing coupled with strong operational performance, mitigated over, half that impact.
That's equivalent to an extra month of share buybacks at our current pace.
That's the value of our unique integrated business. It enables us to reduce the inherent short-term variability of cash flow, in a commodity business and deliver more stable resilient results.
And cash for our shareholders.
Look into the second half of 2025, we expect continued commodity Market volatility, including ongoing concerns around global, trade and tariffs.
That said, the refining outlook remains constructive for Suncor, with positive supply-demand balances, low product inventories, especially in dollars, and announced refinery closures supporting demand for our exports.
As a 2111 refiner, Suncor benefits from widening distillate cracks, and our Traders are actively pursuing, margin enhancing opportunities, both domestically and leveraging, Sun cor's, export capacity, from both the West and East coasts.
On Q2 operation performance, even though it was a heavy turnaround quarter impacting production and Refinery throughput. We were still able to put a number of Records On The Board.
Upstream production was 808,000 barrels per day in the quarter the highest second quarter in company history oil sands production in the quarter was 748,000 barrels per day reflecting the impact of the turnaround and Coke drum replacement project at base. Plant upgrader 1.
Meanwhile, INTP average 60,000 barrels per day in the quarter which is in line with q1 production.
Also, despite the significant amount of turnaround activity in the downstream, in the quarter, overall refining utilization remained extremely robust at 95% with crude throughput of 442,000 barrels per day.
The highest second quarter in company history.
Refined product sales remained consistently strong at 600,000 barrels per day, thanks to our sales and marketing and supply, and trading teams who ensured continued product Supply to key markets and that we maximize margin across our value chain.
to that point Downstream margin capture relative to our 5221 index average, 96% in the quarter despite the impact of planned maintenance at both Sarnia and Edmonton
Even with all the planned maintenance our focused execution, integrated model and cost and Capital Management delivered. Solid Financial results in the quarter.
We generated 2.7 billion dollars in adjusted funds from operations or 2.20 cents per share in the quarter.
And adjusted operating earnings of 873 million.
Or 71 cents per share.
Total OS and G expense is 3.2 billion, which was down over 130 million versus q1.
Capital expenditures totaled $1.65 billion in the quarter, including $674 million of economic investments and $975 million of sustaining and maintenance capital.
And has Rich has already mentioned. We are reducing our full Capital year, guidance by 00 million to 5.7 to 5.9 billion.
Our balance sheet remains very strong with net debt, at quarter end at 7.7 billion and trailing 12-month, net, debt to afo at well, below 1 time.
The Q2 we realized an expected working capital release of 269 million with a draw down and inventories, following the q1 build and support of turnarounds.
As a reminder, we expect net debt to fluctuate around our $8 billion target as we actively manage working capital and ensure continued deployment of 100% of excess funds to shareholders.
Overall it was a very strong quarter on every front and people across the company. Continued to drive for more Improvement, focusing on delivering industry-leading, reliability and operational uptime along with improving costs and capital efficiency.
As an example of that, after indepth work, by our Technical and operating teams, we're extending all Future. YouTube cocher furnace outages outage intervals by a year.
This move delivers a triple V benefit. It reduces our Capital spend for 2025. It enhances profitability by delivering a greater proportion of higher value, SEO relative to non-upgraded Benjamin and it supports future plans to extend you 2 major turnarounds from 5 year to 6 year intervals.
already enabled us to extend the turnaround interval from 5 to 6 years with minimal maintenance required between turnarounds translating into lower costs, higher reliability, and more production between turnarounds,
Also at Fort Hills, we are extending our primary separation sell outages from every 6 months to Once annually. Moving this Falls turnaround to the spring of 26.
These are tangible examples of the continuous Improvement at Suncor, which marks a step change in our capital and operating profile and our clear. A clear. Illustration of some course disciplined and focused actions on driving, real shareholder value.
We could not be more proud of what the Suncor team continues to achieve, and its Relentless pursuit of continuous Improvement.
And with that rich, I'll turn it back to you.
Thanks, Chris. I'll be quick today's Suncor about delivering operational excellence and high performance. We're sitting here in mid-2025; the year is shaping up to be a good one, but I can assure you we are not done yet. We're operationally focused, financially strong, and determined to compete and win. With that, I'll turn it back to Troy.
Thank you. Thank you Rich. I'll turn the call back to the operator, to take some questions.
as a reminder to ask,
star1 1 on your
To be announced to withdraw your question. Press star 1 1 again please, stand by while we compile the Q&A roster,
and our first question will come from the line of Greg party, with RBC, your line is open,
Yeah. Thanks. Good morning. Thanks for the really engaging, uh, summary. Um, couple of questions. Maybe just the first 1 rich. Is it relates to stream, day capacity now on U1. So with the project having gone well enhancements in place and so forth has has the stream data capacity risen there.
Yeah, I I'll ask Peter to comment in a second great but you know, I I'll just make 1 comment. I the project was not only executed incredibly well but what was equally satisfying was the startup, how we we turned the key and this thing you know, the engine roared in this thing has been humming ever since Peter. You want to comment specifically on what we're seeing.
Yeah, thanks very much Rich. Thanks Greg. Uh, stream de capacity on U1 Remains the Same. Uh, today as it was, uh, historically in around the 140,000 Barrel per day range, the real benefit of uh, the drum replacement on you 1 is the upgraded Metallurgy like Rich referred to earlier and our ability to extend the turnaround intervals. Now, structurally to 6 years. So that's a combination of the the work done to upgrade the Metallurgy on the U1 drums. Plus also some work that we did in the Coker fractionation section specifically around improving, reliability around the trays and some of the flushing in the pump around circuits that we have there to manage filing. Uh, so at the end of the day, it'll be a calendar day increase. But stream day Remains the Same.
Okay, understood. Thanks for that. And then it it's really a financial question but between
The lower capex which from everything. You said, sure sounds like it's going to be a structural reduction of 400 million plus margin enhancement and then when you relate that to your your 8 billion, net debt, Target is is 8 billion. You know, the right number on a go forward basis. Just presumably given better cash flow generation and then is there any consideration or just or discussion amongst you in terms of doing a bigger buyback? In addition to the ncib? Say, like an sib. If you if you did go the route of, um, with a higher allowable debt number,
You know, the very fair question Greg that you know the 8 billion was determined by kind of 1 times coverage in a fifty dollar, a barrel WTI world. And as we put that 3 year plan together, it was it was as we execute and deliver on that 3 year plan, there's no doubt about it. We are ahead of schedule on delivering on that plan and in a number of areas exceeding. It we, um, I think that's something that we will need to examine in as the as the business performance continues to achieve its natural to look at that. We haven't done it yet, but, uh, but I think it's a fair question and something. I would, you know, I would anticipate. We'll talk about more in the future. Chris, you have anything else mute out on that 1? No really too much rich. I, I think, you know, you just hit it on the head that as we're accelerating the pace of our improvements. And we're looking at all dimensions of the business, we're certainly not looking at moving off our net debt Target plan today, but we are generating a lot of cash flow and Grave. You, you really
Got a lot of Tailwinds behind us in terms of that cash generation we are focused on in, on increasing to the maximum amount, possible excess refunds flow, uh, to our shareholders. And so, we'll be looking at all Dimensions. We're just really pleased with how fast we've been moving. When we're not putting our uh, our foot off the pedal. Either we need, we need to continue and focusing on driving uh that TI break even down and and ensuring that we're managing the balance sheet and returning cash to shareholders. Well, 1 1 other point, I'd make and it relates to the buyback is a bit like a dividend in that, we've, you know, we've talked about a reliable and growing dividend a commitment to our shareholders is of the utmost priority to us and Chris commented in his remarks, about the, our ability because of the nature of our business and the integration on it to really kind of uh, dampen out the volatility in a commodity in it each month. This year that dividend has been 200. Or excuse me, the BuyBacks have been 250 million a month, and we kind of look
Look aside and say, oh yeah what is oil price? It's it's not it's not something that we wring our hands or fret on so that that predictability that confidence that quality and cash flows that not only the dividend but the buyback provides are both High priorities for us. And if and as we can ratchet up that continued buyback.
Based on the performance of the Enterprise, that will certainly be something we will evaluate.
Thanks very much.
Thank you. One moment for our next question.
That will come from the line of Dennis Fong with CIBC. Your line is open.
Hi. Good morning. Uh, thanks for taking my questions and congratulations on a record. Uh, Q2. Um, Richard opening comments in relation to obviously the uh, oems implementation. Um, I was actually hoping you could talk a little bit more towards how you're really driving the, the stronger turnaround performance and reducing uh the we'll call it the variation um around kind of the performance of all of your individual assets and how that translates through into again that higher confidence around uh Stronger turnaround performance.
Sure thanks. Dennis you know and just a little bit of an turn it over to Dave here in a second but just as a little bit of a recall literally 2 years ago on this exact call, I flagged to you, how we would be putting an acute focus on turnaround performance. We saw the size of the prize in terms of our capital and then what it does for DayZ offline and particularly in the second and third quarters, where we have, you know, annual lows and our vision at that time is we want to reduce that variability. Be a more rateable manufacturing organization across the year.
So we made some structural changes in terms of how we support turnarounds. Uh, leadership, I put Dave and Shelley Powell, Shelley's not with us today in charge from a senior most executive uh level in terms of driving turnarounds and today we're exceeding the targets we set but it's not just luck and it's not just well try harder. It has been a very systematic comprehensive approach to achieving best-in-class performance. Dave, why don't you kind of comment on you know what what what are the magic? What what constitutes? How do you achieve best-in-class turnaround performance?
Thanks Rich. And I think you set up well, and and and Dennis, you pointed out that, you know, we've had uh, you know, we've safely executed our turnarounds with significant improvements over historical performance and you know, that's not by accident that all starts 2 years ahead of a turnaround, uh, execution. And and we've been executing the plan for the last couple years to deliver consistent world-class turnaround performance.
Uh, world-class tournament performance really begins two years prior to the event. It starts with benchmarking, knowing what the best of the best to deliver, and rallying the site teams to hit the competitive target. Um, it's a challenging target, but a target that they all need to believe in if they're going to be successful. And once we have that, then we follow our disciplined processes, risk-based work selection to get the right work scope, detailed planning following our OEMs' work processes that reduce variability, as Rich mentioned, and then finally strong execution.
Yushen in the field.
Sounds simple. There are a lot of details that have to go in and make that happen. The most exciting part is, I think we still have room to improve. We initially focused on our benchmarking, our work selection, and our field execution. But now we're expanding our approach to extend turnaround intervals.
We're we're trying to lock down the materials management that we need to have the labor strategy and requirements 2 years in advance. We can now talk about that where previously we were focused on what was immediately in front of us. The next 3 months, 6 months, it, it's a rigorous approach, quite frankly, it's what world class organizations do and that is increasingly what we are.
Great, uh, really appreciate that that color. And and kind of the fullness of the planning uh, looking forward. Um, my my second question, if you could switch gears a little bit, uh, is towards Fort Hills, um, understandably you've you've gone through, um, some turnaround and maintenance there. Um, just from the work that we've done, it seems like, uh, progress has been made, uh, on the North Pitt as well. Can you provide us a little bit of an update as to where that's at and how you think about the assets performance as you kind of go forward specifically as it relates to access to Resource and uh and or
Yep, sure, thanks. Dennis. Uh, yes. Ford Hills is actually delivering exactly on the superior plan that we set out. Uh in fact I think it's 13 months in a row. Now they've had their budget. They've actually Beat It 15 months in a row, beat it.
Uh, you know, audit that and see what's going on. What are they leaving in the back? We want more.
Reliable.
Managing the geological risks of manifest themselves, a number of years ago. Uh, and we have that well on our radar screen, with controls and mitigations going forward, uh, North Pitt development is, uh, progressing, uh, per plan. We're well established out there, uh, in the North Pitt now, uh, doing, uh, lots of stripping activities and dewatering activities, uh, and I would say, I'm, I'm confident in our ability to develop that resource, uh, for the plan and incrementally, increase, uh, production, uh, from Fort Hills, in the coming years. Maybe I'd add just Peter 1, other comment to that is, you know, we have a name plate on Fort Hills of 194,000 barrels a day, the 2 plants, and we've we've mentioned before, how, when we have maintenance work, we're testing the capacity of each plant, and I think some of the numbers we've shared is each plant. We have confidence, we can get 110,000 barrels a day or more through each plant, what people?
Peter and his team are doing now though, is they're looking at that entire from the very front end through it. The sustainability of that are, are there any things we would need to do to achieve a, a higher rate, on a sustainable level with Metallurgy with processing capabilities? Anything, and that work is still ongoing, but I think it it
It exemplifies the not only striving to achieve our commitments, but then looking at, okay. And how can we make it better in Fort Hills is a is a classic example of we want to achieve that plan but then it's what's next? How can we get for Hills? Create more value through, uh, further debottlenecking. And, and I think we're, uh, we're early on, but I think we're pretty encouraged, uh, by what we're what, we're finding.
Thank you very much. All I'll turn it back and congrats again.
Thanks, Dennis.
1 moment for our next question.
And that will come from the line of Neil Mehta with Goldman Sachs, your line is open. Yeah, good morning, Richardson's team. Uh you know, and I wanted to really unpack this Upstream production volumes this year and the guide is, of course, 8:10 to 8:40. Uh, but yeah, a lot of Maintenance and Q2, so the back half, it feels to us like you can get to the top end of this range, uh, full year or maybe even exceed the top end just your perspective.
On on that. And maybe you can break it down between oil, sands sport Hills and thin crew.
You know, Neil if, if you go back, if you look at, I'm going to offer you a couple of numbers here. If you look at 202122 and 23 during the second quarter, we averaged about 720,000, barrels a day while we did a lot of the turnaround work.
We have um, work going on at the in the base plant mine for example that we can keep upgraders full or while we're taking down upgraders, we can divert bmen to Market. So we're continuing to find ways and approaches that increase overall performance. And if we go back to, when we said guidance, we uh, we knew this was a heavy turnaround year. The U1 was the the really the, you know, the 800 pound gorilla in that. We completed it, early, it's up and running and the teams keep finding ways to do better. I'll feel more comfortable when we get to the work that we have ongoing now over the next month or 2. But I think, you know, you rightfully point out. When I say, all all indicators are pointing to the high end of guidance, I could have said that either the high-end or above guidance. Um it uh, it it's the organization, it's our people continuing to find ways.
To do things better when we provide those clear priorities. And what's most important? What we're seeing is an organization and an asset based delivered. And I I'll literally comment that there are repeatedly exceeding my expectations
And I think it's been said a couple of times we're not done yet.
That's great, rich and then not only on volumes, but also capex. But so the 57 the bottom end of the new capex. Sky range is a year ahead of the 26th schedule. So is it fair to say that? We have achieved a new normal for capex in that the sub 6?
Is what we should now start to Anchor 2 on a go forward.
Well you rightfully flagged. It is what you're seeing this year is structural in nature. We are looking at whether it's turnarounds whether it's it's our base risk management and compliance Capital every dollar matters. And we have different teams expert-led. Teams of people looking at how we spend our money and and we've known that for us to achieve our financial objectives to achieve the resiliency, we want to we needed to be more frugal thoughtful.
In capex. And I think this, uh,
we're putting the, the plan together for 26 and Beyond but the, uh, you're, you're really looking at the, the new Norm. We're not going to have these years where that Capital blows out by, you know, blows up by a billion or less. We want to spend within our means be very, very thoughtful on it so that we can not only, you know, uh, reliably increase that dividend year on year, but we can also reliably
Continue to return Capital to shareholders via buyback. So I I don't have a number yet for you for 26 2728, but you're you accurately said we are ahead of our plan to structurally lower the capital spending of this Enterprise.
Thank you, rich.
1 moment for our next question.
That will come from the line of Doug Leggett with Wolf Research. Your line is open.
Good morning. This is John Abbott on the Dive In.
Want to go back to the cast discussion earlier on Capitol returns and...
Really, I mean, just you know what you're doing on the cost side and here's what I think about your corporate break even going lower, how do you think about the future dividend capacity of the firm? I know you wanted a reliable dividend. You want the future. I said you reliable dividend growth, but how do you think about your ability to grow your dividend in overtime? And how do you see that future capacity?
John it may be you but you sound an awfully lot like Doug on this 1. So it's it's for years. I think he's, I think he's primed the pump on this question, but Chris Chris, why don't you talk about it? Yeah, you bet. Hey John, um listen we and we laid this out during our investor day. Our our view is is that we're setting up this company for consistent, reliable DIC dividend growth. Um, and that's, that's how we're
Back to our shareholders, you know and and John if I just kind of add to that, this is not hardwired but if you look back over the last several quarters, as we uh improved our financial performance, through the operation, the we have been able to you know, lower that net debt drive down the break, even create a resilience that allows us to feel comfortable in whatever World we're in. And so as we've been buying back shares in increasing the dividend, the total dividend payments have really essentially remained the same.
so as we continue to improve performance,
Buyback shares that allows us to grow on a dividend per share basis, even faster without growing, the overall dividend expenditure or burden.
Keeping our resilience High, our break even low and growing the dividend. So I think these are very interrelated but they're all, they're all driven by improving the fundamental performance of the Enterprise. And then it's the sources and uses of funds kind of, you know, come thereafter. But I feel quite good about what we're achieving in being able to buy back shares and enable a very competitive you know growing per share dividend year on year on year. That's the construct. We've been uh, after and if you look back over multiple quarters. Now you, you see that occurring in the bottom line numbers?
Appreciate that. It is just a quick file. Uh just another quick 1 from us.
I mean how are you sort of looking at portfolio?
Clean up in this, in this environment here. I mean I get some particular banana non enough assets on the in the Northeast.
On the East Coast.
Yep. You know, a couple of things we've, we put such well priority on getting the most out of the asset base we have. I think, you know, Commerce City is a great poster child on that Commerce. City had, uh, operational incident in late 2022. The first half of 23 was a difficult recovery, period. And since then that Refinery has been performing at an extremely high level and the east coast is a little bit of you know it's a tale of 2 cities there. You've got the the non-operated platforms have run in hyperia and then the 2 uh 1 operated in 1 non operated floaters. And what we've been our Focus has been completing the work that we had targeted at teranova for us participating in the work on West White Rose. And then as we look at the relative contribution and value of those assets, it it's the same question we asked, uh, really of kind of anything. Are they worth more to us or are they worth more to someone else? But we're not, you know, at at suncorp.
We want to be sure we get, um, best value for anything. We might either choose to buy or sell and you, when an asset is performed at its highest level. That, you know, you don't, you don't put a for sale sign up or hold, uh, you know, a garage sale, when you're not performing at at your best. And I think that's exactly what we're starting to do across our asset base and then we'll make the judgments. You know, do they do, they are, are they worth more to us or worth more to others? You know, asset sales is always an interesting conversation because, you know, we've got the outside world listening, but I have a lot of our internal World listening to in terms of uh oh are we on the block or not? And the message we give always to our employee base perform at the highest level possible, and all the rest of it will take care of itself.
Thank you very much for taking our questions.
Thanks John.
1 moment for our next question.
And that will come from the line of manav Gupta with UBS. Your line is open.
Good morning. I I wanted to ask you that something which is somewhat underappreciated in your portfolio because there was so much focus on this turnaround is the growth potential. At what point will you guys start talking a little more or giving us more details about you know multi-stage Lewis Institute project or fire back the bottleneck or fireback expansion, all of which could actually add to your volumes on a go forward basis. So
When can we start expecting you to talk about those growth projects?
So, so manava. I'm I'm a, I'm an I I know it's just you and I on the phone. So I'm going to let you inside the tent.
And so then the question becomes what next? And that's not a commitment. We're going to do that. But, you know, the vectors are pointing in the in the right direction and it's at that time, I feel we will have re earned the credibility to talk about the long term and I'm spending. And this leadership team is spending a lot of time on that right now. And I like it, I like how it looks. In fact, we spent, uh, 2 days with our board last week, looking at longer term, plans and options in different business environment, and 1 of the things, I will tell you that I don't, I, I didn't appreciate. And I don't think we've done as good a job. As we can, as we could do, is helping the outside world. Understand the internal options that this company has for either. Certainly for Value growth value over volume, uh, for the long term. So I see that as something in the first half,
Of 2026. We'll give, we'll give you a very folsome longer term outlook on, you know what, what is this company going to look like 5, 10, 15 years from now? But it is a work in progress right now and I like what I'm seeing
Perfect. My quick follow-up is. If you could provide us some comment on the refining macro it looks like some of the global capacity additions have come to you know, an end and Outlook is better. So if you could help us understand how you're looking at both the diesel and the gasoline market and general refining cracks on a go forward basis. Thank you. Sure. I'll try I'll turn it to Dave here in a second but I think it's important. You know, we're crude is truly a global market and you've got uh price differences based on location and and type of things refining we've got a bit of a different situation here because of some of the structural advantages access to uh uh crude supplies uh des dislocations and pricing from New York and Chicago and then of course the performance of our asset base. So that's all quite good. But Dave you want to come in on kind of a and Chris made some comments in his opening about kind of the fundamentals and what we see for sure. Uh
And thanks for the question. Uh, refining macro environment. We see it being fairly robust over the over the short term as you pointed out. There's some capacity, you know, there's some capacity offline. There's capacity that came on that is is struggling to get the full capacity. Uh, and we're seeing particularly diesel, uh, uh, cracks being very, very strong. Uh, and and, and that's that's in part, a global Trend. That's in part. A US Trend with some, uh,
Uh, Renewables that are offline due to lack of incentives in that space. But in any case it, it provides a pretty robust environment for us. And we, as you know, we are diesel machines in Suncor, we make a lot of diesel and strong diesel, cracks are good for our business going forward. Uh, we completed turnarounds at Edmonton and are any of this past, uh, past quarter on, primarily diesel producing units. And we're now producing record diesel production, moving a little more locally. If we think about our our um, our business in Canada, our our best outlet for our products is through our retail Network and we're seeing retail sales for Petra Canada, brand of 8% year-on-year. Thanks to our retail growth. Um, so we see strong, uh, Global as well as strong local, uh, uh, environment for, uh, for our Downstream business.
Thanks Steve. Thank you so much. Thank you so much.
1 moment for our next question.
And that will come from the line of menow, whole shop with TD cow in your line is open.
Thanks and good. Good morning, everyone. I just have one question on the deployment of Autonomous Hall at SIn. Crude, can we maybe get a refresh on where things stand on that front and whether the economics and cost savings are going to look any different from a deployment?
Yeah, absolutely. I'll turn to Peter in just a second, but I'll give you a couple of numbers. It was in May of last year, we had 20 trucks that were autonomous. At that time. In May of this year, we had a 120 and we've talked about the savings that go with each truck. Our plan is to be 150 or more by the end of the year. Peter, you want to give a little bit of an update on it.
Uh yeah. Thanks man. Mano um
Uh, 2026. Uh, the economic case, uh, is consistent with that of, uh, the base plan different starting points, just given the different types of operations, uh, but we really see this as a, uh, a strategic move for us. It helps us to improve safety. Uh, again, this is a real kind of systems engineering approach, and we really believe as time goes on our ability to extract a differentiated productivity, relative to our staff lead that remains robust, uh, and will be the basis of our mind plans going forward. So all the expected benefits, uh, safety direct cost productivity, all of those, we are on track to see or achieve all of those or more than we would have. Um, hope for
That's to, uh, take you both. I'll turn it back.
Thank you. 1 moment for our next question.
And that will come from the line of Patrick Oor with ATB Capital Markets. Your line is open.
Hey guys. Good morning and uh, thanks for a very comprehensive and spirited rundown so far. Um, I guess the first question I would have, I think that was feedback from me.
I guess the first question I would have— you kind of touched a little bit on Fort Hills and nameplate capacities there, and some of what you've been achieving. But I guess...
Um when you look at the asset um what do your high output days look like right now? What's the variability? And I guess you know you've pointed to the top end of of production guidance for the full year. But how does that come into play here?
Peter, I didn't put Patrick up to this question because because I want to know, 2 Packers. So Peter you comment on how you're uh some of the testing you're doing and what you're saying, I think I sent 3 years ago when I started here, that that plant is a Ferrari and I think that's uh, proving true steam stream, big capacities. Uh, we have demonstrated stream day capacities in excess of 220,000 barrels a day. Uh, so we know that potential is there. Uh, the work of the team is to ensure that we can do that.
Uh, reliably, uh, going forward, uh, and as well, coupled with the mine plan to, to support those types of rates while still managing all of the risks that I talked about earlier. Uh, so it's a balance.
Uh, but we are quite confident basis. The testing we've had over the last, uh, couple months here that the stream date capacity of that plant is quite robust and a real enabler is going to be when you get both of those, those 2 pits in the north mine, kind of conditioned and ready to go. That that's when we'll rev up that Ferrari. That's right.
Okay, great. And this is uh more of sort of a strategic question, but obviously on the back of the success that you've had with,
Omes, I think you touched on maybe asset disposition side, a little more earlier in the call. But when you look at the success in the implementation there and you think about the potential for Acquisitions and creating shareholder value through implementing that on other assets, what does that sort of look like for you right now? And how is that appetite versus some of the you know, organic Green Field growth opportunities you've talked about earlier?
Well, you know a reiterate I believe we have more internal opportunities than perhaps we understood or certainly than we helped the the outside world understand. So as we look at kind of our base capability to create value with what we have that gives us a better lens to look at external opportunities. Do they?
Add to the Enterprise or are they just make the Enterprise different or bigger? And we're not about being different or bigger, we're about being more valuable. So the more we've sharpened our understanding of our Standalone internal set that really allows us to say is, you know, I I share the example with our board last week. You know, you go by the mall just because there's a for sale sign up, doesn't mean you got to buy and it's all about. Can we create value in a unique way relative to our other opportunities? And, uh, you know, I I'll never say never, but I like a lot of the cards we're holding.
Okay, thanks guys.
Thank you. I'm showing no further questions in the queue at this time. I would now like to turn the call back over to Mr. Rich. Krueger for any closing remarks
Great assets. Great people, strong results team-based results-oriented.
High high performance, a different attitude, a different culture. And I understand, we play a little song at the start of each of these. I listen to the 1 today and my favorite line is you can keep the silver. We came for gold. That is the attitude at this company today and uh, look forward to sharing our future progress and results with you on, uh, subsequent calls. Thank you.
Thank you, everyone for 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 now end the call.
Today's conference call, thank you all for participating. You may now. Disconnect
Oh, From the Ashes. I will rise.
No Satisfaction.
Without the fight has made me. Oh, so they say,
From the Sun. It is my way I'm going to take what? The mind I paid my dues. I dare you to walk a mile in these shoes to beat in my soul just keeps getting louder.
Give me some last time.
Give me some of that.
Show you that I can't be pain. Give me some life.
Wow, so keep your silver.
I can't.
Go no place for quitters, only for the more I'm going to take. What's your mind? I paid my dues going to fool this fire. So like that fuse, the beat in my soul, just keeps getting louder.
Give me. So the last time,
Give me for the last time.
Give me some.
Power.
Give me some of that.
Give me some of that.
Show you that I can't be in pain. Give me so much.