Q2 2026 Imperial Oil Ltd Earnings Call

July 31, 2026

Operator: Good day, welcome to the Imperial Oil Q2 2026 earnings call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Peter Shaw, Vice President of Investor Relations. Please go ahead, sir.

Speaker #1: Good day. And welcome to the IMPERIAL OIL second quarter 2026 earnings call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Peter Shaw, Vice President of Investor Relations.

Speaker #1: Please go ahead, sir.

Speaker #2: Good morning, everyone. Welcome to our second quarter earnings conference call. I am joined this morning by IMPERIAL Senior Management Team, including John Whelan, Chairman, President, and CEO; Dan Lyons, Senior Vice President, Finance and Administration; Carol Gomez-Smith, Senior Vice President of the Upstream; and Scott Maloney, Vice President of the Downstream.

Peter Shaw: Good morning, everyone. Welcome to our Q2 earnings conference call. I am joined this morning by Imperial's senior management team, including John Whelan, Chairman, President, and CEO; Dan Lyons, Senior Vice President, Finance and Administration; Cheryl Gomez-Smith, Senior Vice President of the Upstream; and Scott Maloney, Vice President of the Downstream. Today's comments include reference to non-GAAP financial measures. The definitions and reconciliations of these measures can be found in attachment six in our most recent press release and are available on our website with a link to this conference call. Today's comments may contain forward-looking information. Any forward-looking information is not a guarantee of future performance, and actual future performance and operating results can vary materially depending on a number of factors and assumptions.

Speaker #2: Today's comments include reference to non-GAAP financial measures, the definitions and reconciliations of these measures can be found in Attachment 6 of our most recent press release, and are available on our website with a link to this conference call.

Peter Shaw: The definitions and reconciliations of these measures can be found in attachment six in our most recent press release and are available on our website with a link to this conference call. Today's comments may contain forward-looking information. Any forward-looking information is not a guarantee of future performance, and actual future performance and operating results can vary materially depending on a number of factors and assumptions.

Speaker #2: Today's comments may contain forward-looking information. Any forward-looking information is not a guarantee of future performance, and actual future performance and operating results can vary materially depending on a number of factors and assumptions.

Speaker #2: Forward-looking information and the risk factor and assumptions are described in further detail on our second quarter earnings release, that we issued this morning. As well as our most recent Form 10-K.

Peter Shaw: Forward-looking information and the risk factor and assumptions are described in further detail on our Q2 earnings release that we issued this morning, as well as our most recent Form 10-K. All these documents are available on SEDAR+, EDGAR, and our website. I would ask you to reference those. John is going to start with some opening remarks, then hand it over to Dan, who's going to provide a financial update. John will provide an operations update. Once that is done, we will follow with a Q&A session. With that, I will turn it over to John for his opening remarks.

Speaker #2: All of these documents are available on CDAR+, EDGAR, and our website, so I would ask you to reference those. John is going to start with some opening remarks and then hand it over to Dan, who is going to provide a financial update.

Speaker #2: And then John will provide an operations follow-up with the Q&A session. So, with that, I will turn it over to John for his opening remarks.

Speaker #3: Thank you, Peter. Good morning, everybody, and welcome to our second-quarter earnings call. I hope everybody is doing well, and, as always, we appreciate you taking the time to join us this morning.

John Whelan: Thank you, Peter. Good morning, everybody, and welcome to our Q2 earnings call. I hope everybody is doing well, and as always, we appreciate you taking the time to join us this morning. Since our last earnings call, we've seen ongoing volatility in commodity markets, driven by geopolitical events, reinforcing the strategic importance of commodity and product supply from Canada to the rest of the world. For Imperial, our advantaged, longstanding business model uniquely provides significant leverage to upside conditions while also protecting against downside scenarios. This is a substantial long-term structural benefit that allows us to return additional surplus cash to shareholders at higher prices while adhering to our investment plans and strategic priorities over a range of price scenarios.

Speaker #3: Since our last earnings call, we've seen ongoing volatility in commodity markets, driven by geopolitical events, reinforcing the strategic importance of commodity and product supply from Canada to the rest of the world.

Speaker #3: For IMPERIAL, our advantage to longstanding business model uniquely provides significant leverage to upside conditions while also protecting against downside scenarios. This is a substantial long-term structural benefit that allows us to return additional surplus cash to shareholders at higher prices while adhering to our investment plans and strategic priorities over a range of price scenarios.

John Whelan: For Imperial, our advantaged, longstanding business model uniquely provides significant leverage to upside conditions while also protecting against downside scenarios. This is a substantial long-term structural benefit that allows us to return additional surplus cash to shareholders at higher prices while adhering to our investment plans and strategic priorities over a range of price scenarios.

Speaker #3: As you will have seen, with the recent trilateral MOU signing, governments and industry, through the oil sands alliance, continue to collaborate on creating the conditions needed to support a more competitive, growing, and lower-emissions Canadian oil sands sector.

John Whelan: As you will have seen with the recent trilateral MoU signing, governments and industry, through the Oil Sands Alliance, continue to collaborate on creating the conditions needed to support a more competitive, growing, and lower emissions Canadian oil sands sector. The MoU is a positive step, and while there's definitely more work to do, I'm encouraged and optimistic about the potential for Canadians, for Albertans, for the industry, and for Imperial. With a supportive fiscal and regulatory framework, Imperial has the potential to double our gross operated upstream production over time with the development of our high-quality oil sands leases using our advantaged technology. Consistent with that, we continue to construct the Enhanced Bitumen Recovery Technology pilot at our Aspen lease, which is scheduled to start up early next year.

Speaker #3: The MOU is a positive step, and while there's definitely more work to do, I'm encouraged and optimistic about the potential for Canadians, for Albertans, for the industry, and for IMPERIAL.

Speaker #3: With a supportive fiscal and regulatory framework, IMPERIAL has the potential to double our gross operated upstream production over time with the development of our high-quality oil sands leases, using our advantage technology.

John Whelan: With a supportive fiscal and regulatory framework, Imperial has the potential to double our gross operated upstream production over time with the development of our high-quality oil sands leases using our advantaged technology. Consistent with that, we continue to construct the Enhanced Bitumen Recovery Technology pilot at our Aspen lease, which is scheduled to start up early next year.

Speaker #3: Consistent with that, we continue to construct the enhanced bitumen recovery technology pilot at our Aspen lease, which is scheduled to start up early next year.

Speaker #3: We also continue to maximize the value of our existing assets, leveraging our competitive advantages. Of technology, scale, integration, execution excellence, and most importantly, our people.

John Whelan: We also continue to maximize the value of our existing assets, leveraging our competitive advantages of technology, scale, integration, execution excellence, and most importantly, our people. From a financial perspective, cash flows from operating activities were over CAD 2.7 billion in the quarter. Excluding the impact of working capital, cash flows from operating activities were over CAD 2.5 billion. Moving to operations, I want to highlight several key achievements. At Kearl, production was in line with our second-best Q2 ever. We also successfully completed our planned turnaround work ahead of schedule and below budget. At Cold Lake, we continue to see strong results from our Grand Rapids solvent-assisted SAGD project and the ramp-up of our Leming SAGD project. These projects support our strategy of transforming Cold Lake with advantaged technology.

Speaker #3: From a financial perspective, cash flows from operating activities were over $2.7 billion in the quarter. Excluding the impact of working capital, cash flows from operating activities were over $2.5 billion.

Speaker #3: Moving to operations, I want to highlight several key achievements. At CURL, production was in line with our second-best second quarter ever. We also successfully completed our planned turnaround work ahead of schedule and below budget.

John Whelan: At Kearl, production was in line with our second-best Q2 ever. We also successfully completed our planned turnaround work ahead of schedule and below budget. At Cold Lake, we continue to see strong results from our Grand Rapids solvent-assisted SAGD project and the ramp-up of our Leming SAGD project. These projects support our strategy of transforming Cold Lake with advantaged technology.

Speaker #3: At Coal Lake, we continued to see strong results from our Grand Rapids, solvent-assisted SAG-D project, and the ramp-up of our lemming SAG-D project. These projects support our strategy of transforming Coal Lake with advantaged technology.

Speaker #3: In the downstream, we completed the planned turnaround at our Strathcona refinery, following a record 10-year interval for the crude unit. We expect the turnaround to be ranked in the first quartile for cost and duration against industry benchmarks.

John Whelan: In the downstream, we completed the planned turnaround at our Strathcona refinery following a record 10-year interval for the crude unit, and we expect the turnaround to be ranked in the first quartile for cost and duration against industry benchmarks. Overall, we feel really good about our strategy and the investments we're making to grow free cash flow and to continue to deliver unmatched industry-leading total shareholder return. However, we have had some short-term challenges in the downstream that I'll talk to in a bit more detail as we go through the operations. As a result, we've lowered our downstream throughput guidance by approximately 6%. That said, I would highlight that we still expect higher volumes and throughput across our entire business in the H2 now that our significant turnaround activity is behind us.

Speaker #3: Overall, we feel really good about our strategy and the investments we're making to grow free cash flow and to continue to deliver unmatched, industry-leading total shareholder return.

Speaker #3: However, we have had some short-term challenges in the downstream, and I'll talk to that in a bit more detail as we go through the operations.

John Whelan: However, we have had some short-term challenges in the downstream that I'll talk to in a bit more detail as we go through the operations. As a result, we've lowered our downstream throughput guidance by approximately 6%. That said, I would highlight that we still expect higher volumes and throughput across our entire business in the H2 now that our significant turnaround activity is behind us.

Speaker #3: And as a result, we've lowered our downstream throughput guidance by approximately 6%. That said, I would highlight that we still expect higher volumes and throughput across our entire business in the second half, now that our significant turnaround activity is behind us.

Speaker #3: In terms of capital allocation, our approach remains consistent with our longstanding priorities. This begins with investing in the business to sustain and grow value. Next, a reliable and growing dividend remains a key priority; our annual dividend has now grown for 31 consecutive years.

John Whelan: In terms of capital allocation, our approach remains consistent with our long-standing priorities, which begins with investing in the business to sustain and grow value. Next, a reliable and growing dividend remains a key priority. Our annual dividend has now grown for 31 consecutive years. Then, as we generate surplus cash above and beyond our commitments, we look to return that to shareholders in a timely manner. As you've seen in the release, given our strong financial performance and confidence going forward, we plan to accelerate the share repurchases under the NCIB program and anticipate repurchasing all remaining allowable shares prior to year-end. On that note, I'll pass it over to Dan to talk about our financial performance.

Speaker #3: And then, as we generate surplus cash above and beyond our commitments, we look to return that to shareholders in a timely manner. As you've seen in the release, and given our strong financial performance and confidence going forward, we plan to accelerate the share repurchases under the NCIB program and anticipate repurchasing all remaining allowable shares prior to year-end.

John Whelan: As you've seen in the release, given our strong financial performance and confidence going forward, we plan to accelerate the share repurchases under the NCIB program and anticipate repurchasing all remaining allowable shares prior to year-end. On that note, I'll pass it over to Dan to talk about our financial performance.

Speaker #3: And on that note, I'll pass it over to Dan to talk about our financial performance.

Speaker #4: Thanks, John. Starting with financial results for the second quarter, we recorded net income of $2 billion, $191 sorry, $2 billion, $190 million up, $1 billion, $241 million from the second quarter of 2025, driven primarily by higher commodity prices.

Dan Lyons: Thanks, Sean. Starting with financial results for the Q2, we recorded net income of CAD 2,190,000,000, up CAD 1,241 million from the Q2 2025, driven primarily by higher commodity prices. Similarly, when comparing sequentially, Q2 net income is up CAD 1,250,000,000 from the Q1 2026, primarily driven by higher commodity prices. Shifting our attention to each business line and looking sequentially, Upstream earnings of CAD 1,299,000,000 are up CAD 829 million from the Q1, primarily due to higher crude prices. Downstream earnings of CAD 787 million are up CAD 176 million from the Q1 due to higher margins, partially offset by planned turnaround impacts at the Strathcona refinery. Our Chemical business generated earnings of CAD 65 million, up CAD 41 million from the Q1 due to higher polyethylene margins. Moving to cash flow.

Speaker #4: Similarly, when comparing sequentially, second quarter net income is up $1 billion, or $250 million from the first quarter of 2026, primarily driven by higher commodity prices.

Speaker #4: Now, shifting our attention to each business line and looking sequentially, upstream earnings of $1 billion, $299 million are up $829 million from the first quarter, primarily due to higher crude prices.

Dan Lyons: Shifting our attention to each business line and looking sequentially, Upstream earnings of CAD 1,299,000,000 are up CAD 829 million from the Q1, primarily due to higher crude prices. Downstream earnings of CAD 787 million are up CAD 176 million from the Q1 due to higher margins, partially offset by planned turnaround impacts at the Strathcona refinery. Our Chemical business generated earnings of CAD 65 million, up CAD 41 million from the Q1 due to higher polyethylene margins. Moving to cash flow.

Speaker #4: Downstream earnings of $787 million are up $176 million from the first quarter, due to higher margins partially offset by planned turnaround impacts at the Strathcona refinery.

Speaker #4: Our chemical business generated earnings of $65 million, up $41 million from the first quarter, due to higher polyethylene margins. Moving to cash flow—in the second quarter, we generated about $2.7 billion in cash flows from operating activities.

Dan Lyons: In the Q2, we generated about CAD 2.7 billion in cash flows from operating activities. Excluding working capital effects, cash flows from operating activities for the Q2 were CAD 2,522,000,000, up about CAD 1.1 billion from the Q2 2025. We ended the quarter in a strong cash position with over CAD 2.8 billion of cash on hand. Shifting to CapEx. Capital expenditures in the Q2 totaled CAD 531 million, CAD 58 million higher than the Q2 2025, and CAD 53 million higher than the Q1 2026. In the Upstream, Q2 spending of CAD 359 million focused on sustaining capital at Kearl, Cold Lake, and Syncrude. In the Downstream, Q2 CapEx was primarily spent on sustaining capital projects across our refinery network. Shifting to shareholder distributions.

Speaker #4: Excluding working capital effects, cash flows from operating activities for the second quarter were $2 billion, up about $1.1 billion from the second quarter of 2025, at $522 million.

Speaker #4: We ended the quarter in a strong cash position with over $2.8 billion of cash on hand. Shifting to CapEx, capital expenditures in the second quarter totaled $531 million, $58 million higher than the second quarter of 2025, and $53 million.

Speaker #4: Higher than the first quarter of 2026. In the upstream, second quarter spending of $359 million focused on sustaining capital at Kearl, Cold Lake, and Syncrude.

Dan Lyons: In the Upstream, Q2 spending of CAD 359 million focused on sustaining capital at Kearl, Cold Lake, and Syncrude. In the Downstream, Q2 CapEx was primarily spent on sustaining capital projects across our refinery network. Shifting to shareholder distributions. In the Q2, we paid CAD 421 million of dividends, and earlier this morning, we declared a Q3 dividend of CAD 0.87 per share.

Speaker #4: In downstream, second quarter CapEx was primarily spent on sustaining capital projects across our refinery network. Shifting to shareholder distributions in the second quarter, we paid $421 million in dividends and, earlier this morning, we declared a third quarter dividend of $0.87 per share.

Dan Lyons: In the Q2, we paid CAD 421 million of dividends, and earlier this morning, we declared a Q3 dividend of CAD 0.87 per share. As John noted, we also announced plans to accelerate our NCIB with a target of completing the program by year-end, in line with our longstanding philosophy of returning surplus cash to our shareholders. I'll turn it back to John to discuss the company's operational performance.

Speaker #4: And as John noted, we also announced plans to accelerate our NCIB with a target of completing the program by year-end in line with our longstanding philosophy of returning surplus cash to our shareholders.

Dan Lyons: As John noted, we also announced plans to accelerate our NCIB with a target of completing the program by year-end, in line with our longstanding philosophy of returning surplus cash to our shareholders. I'll turn it back to John to discuss the company's operational performance.

Speaker #4: Now, I'll turn it back to John to discuss the company's operational performance.

Speaker #3: Thanks, Dan. I want to take the next few minutes to share key highlights from our operating results. Upstream production for the quarter averaged $414,000 gross oil-equivalent barrels per day.

John Whelan: Thanks, Dan. I want to take the next few minutes to share key highlights from our operating results. Upstream production for the quarter averaged 414,000 gross oil equivalent barrels per day, down 5,000 oil equivalent barrels per day versus the Q1 2026. This was driven by planned turnaround activity at Kearl, some unplanned maintenance at Cold Lake in May, and extreme rainfall at Syncrude, partially offset by higher overall reliability and the absence of the third-party regional gas supply outage. While our gross production guidance for 2026 still stands, given the results of the H1 of the year, we expect full-year Upstream production to be towards the low end of the guidance range. I'll now cover highlights for each of the assets, starting with Kearl.

Speaker #3: Down 5,000 oil-equivalent barrels per day versus the first quarter of 2026. This was driven by planned turnaround activity at Kearl, some unplanned maintenance at Cold Lake in May, and extreme rainfall at Syncrude.

Speaker #3: This was partially offset by higher overall reliability and the absence of the third-party regional gas supply outage. While our gross production guidance for 2026 still stands, given the results of the first half of the year, we now expect full-year upstream production to be toward the low end of the guidance range.

John Whelan: While our gross production guidance for 2026 still stands, given the results of the H1 of the year, we expect full-year Upstream production to be towards the low end of the guidance range. I'll now cover highlights for each of the assets, starting with Kearl. Kearl's quarterly production was 257,000 barrels per day, down 2,000 barrels per day versus Q1 2026, primarily driven by the successful execution of the planned turnaround work, partially offset by the absence of the third-party regional gas supply outage.

Speaker #3: I'll now cover highlights for each of the assets, starting with Kearl. Kearl's quarterly production was 257,000 barrels per day, down 2,000 barrels per day versus the first quarter of 2026.

John Whelan: Kearl's quarterly production was 257,000 barrels per day, down 2,000 barrels per day versus Q1 2026, primarily driven by the successful execution of the planned turnaround work, partially offset by the absence of the third-party regional gas supply outage. Kearl also experienced extreme rainfall in early June, I'm pleased to say our team was able to significantly limit the overall impact on site performance through robust severe weather protocols and contingency plans. Turning to the completed turnaround on the K-1 train, the team delivered the work ahead of schedule and under budget. This achievement completes the program to extend Kearl's turnaround intervals to an industry-leading four years, and advances plans to reduce maintenance costs and lower downtimes. With this work now complete, our next planned turnaround is not until 2029, when we return to the K-2 train, where we successfully executed a planned turnaround last year.

Speaker #3: Primarily driven by the successful execution of the planned turnaround work, partially offset by the absence of the third-party regional gas supply outage. CURL also experienced extreme rainfall in early June, but I'm pleased to say our team was able to significantly limit the overall impact on site performance through robust, severe weather protocols and contingency plans.

John Whelan: Kearl also experienced extreme rainfall in early June, I'm pleased to say our team was able to significantly limit the overall impact on site performance through robust severe weather protocols and contingency plans. Turning to the completed turnaround on the K-1 train, the team delivered the work ahead of schedule and under budget. This achievement completes the program to extend Kearl's turnaround intervals to an industry-leading four years, and advances plans to reduce maintenance costs and lower downtimes.

Speaker #3: Turning to the completed turnaround on the K-1 train, the team delivered the work ahead of schedule and under budget. This achievement completes the program to extend CURL's turnaround intervals to an industry-leading four years.

Speaker #3: An advance is planned to reduce maintenance costs and lower downtimes. With this work now complete, our next planned turnaround is not until 2029, when we return to the K-2 train where we successfully executed a planned turnaround last year.

John Whelan: With this work now complete, our next planned turnaround is not until 2029, when we return to the K-2 train, where we successfully executed a planned turnaround last year. When I think about maximizing value at Kearl, this is exactly it. Higher volumes with less downtime and lower absolute costs, resulting in materially lower unit cash costs. Consistent with the approach we shared at our 2025 Investor Day, we continue to advance multiple growth initiatives at Kearl, including recovery, productivity, and reliability enhancements.

Speaker #3: When I think about maximizing value at Kearl, this is exactly it—higher volumes with less downtime and lower absolute costs, resulting in materially lower unit cash costs.

John Whelan: When I think about maximizing value at Kearl, this is exactly it. Higher volumes with less downtime and lower absolute costs, resulting in materially lower unit cash costs. Consistent with the approach we shared at our 2025 Investor Day, we continue to advance multiple growth initiatives at Kearl, including recovery, productivity, and reliability enhancements. For example, construction continues on the flotation columns, which is one of the secondary recovery projects we are advancing to support incremental capital-efficient production by capturing additional bitumen from ore already processed through the plant. With construction nearing completion, commissioning activities will be starting in Q3, and production is expected to start up in Q4 of this year. Moving next to Cold Lake highlights.

Speaker #3: Consistent with the approach we shared at our 2025 Investor Day, we continue to advance multiple growth initiatives at Curl, including recovery, productivity, and reliability enhancements.

Speaker #3: For example, construction continues on the flotation columns, which is one of the secondary recovery projects we are advancing to support incremental, capital-efficient production by capturing additional bitumen from ore already processed through the plant.

John Whelan: For example, construction continues on the flotation columns, which is one of the secondary recovery projects we are advancing to support incremental capital-efficient production by capturing additional bitumen from ore already processed through the plant. With construction nearing completion, commissioning activities will be starting in Q3, and production is expected to start up in Q4 of this year. Moving next to Cold Lake highlights.

Speaker #3: With construction nearing completion, commissioning activities will be starting in the third quarter, and production is expected to start up in the fourth quarter of this year.

Speaker #3: Moving next to Cold Lake highlights, Cold Lake's quarterly production averaged $149,000 barrels per day, down $6,000 barrels per day versus the first quarter of 2026 due to unplanned maintenance that was completed in May.

John Whelan: Cold Lake's quarterly production averaged 149,000 barrels per day, down 6,000 barrels per day versus Q1 2026 due to unplanned maintenance that was completed in May. This quarter, we completed a key planned optimization at Cold Lake, transferring volumes from the Leming plant, our oldest plant, which processed approximately 5% of Cold Lake's production into existing spare capacity at Maskwacis and Maskwacis plants. This optimization of infrastructure allows us to decommission the Leming plant, reducing our cost structure and further advancing our strategy to maximize value of our existing assets. In addition, we remain focused on continued ramp-up of our Leming SAGD project through the balance of the year. Now looking to the future, we have three high-quality in situ opportunities in our portfolio, where we are focused on solvent technology to maximize value.

Speaker #3: This quarter, we completed a key planned optimization at Cold Lake. Transferring volumes from the Lemming plant, our oldest plant, which processed approximately 5% of Cold Lake's production, into existing spare capacity at Masqua and Mahesis plants—this optimization of infrastructure allows us to decommission the Lemming plant.

John Whelan: This optimization of infrastructure allows us to decommission the Leming plant, reducing our cost structure and further advancing our strategy to maximize value of our existing assets. In addition, we remain focused on continued ramp-up of our Leming SAGD project through the balance of the year. Now looking to the future, we have three high-quality in situ opportunities in our portfolio, where we are focused on solvent technology to maximize value.

Speaker #3: We are reducing our cost structure and further advancing our strategy to maximize the value of our existing assets. In addition, we remain focused on the continued ramp-up of our Leming SAGD project through the balance of the year.

Speaker #3: Now, looking to the future, we have three high-quality in-situ opportunities in our portfolio, where we are focused on solvent technology to maximize value. Our Aspen, Clark Creek, and Corner assets, together with our advantage technology, underpin our long-term growth opportunity, with the potential over time to double our gross operated upstream production.

John Whelan: Our Aspen, Clark Creek, and Corner assets, together with our advantage technology, underpin our long-term growth opportunity with the potential, over time, to double our gross operated Upstream production. As mentioned, we continue to progress the Enhanced Bitumen Recovery Technology pilot with startup remaining on track for 2027. To round out the Upstream, I'll now cover Syncrude. Imperial's share of Syncrude production for the quarter averaged 73,000 barrels per day, up 1,000 barrels per day versus Q1 2026, mainly due to the absence of the Coker 8-3 unplanned downtime, which was largely offset by extreme rainfall impacts. Syncrude continued to utilize the Interconnect Pipeline to import bitumen and gas oil to ensure high upgrader utilization. This enabled approximately 11,000 barrels per day, our share of additional Syncrude Sweet Premium production.

Speaker #3: As mentioned, we continue to progress the enhanced bitumen recovery technology pilot, with startup remaining on track for 2027. To round out the Upstream, I'll now cover Syncrude.

Speaker #3: Imperial's share of Syncrude production for the quarter averaged 73,000 barrels per day, up 1,000 barrels per day versus the first quarter of 2026. This was mainly due to the absence of the Kocher 8.3 unplanned downtime, which was largely offset by extreme rainfall impacts.

John Whelan: Imperial's share of Syncrude production for the quarter averaged 73,000 barrels per day, up 1,000 barrels per day versus Q1 2026, mainly due to the absence of the Coker 8-3 unplanned downtime, which was largely offset by extreme rainfall impacts. Syncrude continued to utilize the Interconnect Pipeline to import bitumen and gas oil to ensure high upgrader utilization. This enabled approximately 11,000 barrels per day, our share of additional Syncrude Sweet Premium production.

Speaker #3: Syncrude continued to utilize the interconnect pipeline to import bitumen and gas oil to ensure high upgrader utilization. This enabled approximately 11,000 barrels per day our share of additional Syncrude suite premium production.

Speaker #3: As a reminder, due to the unplanned maintenance required on Kócher 8.3 at Syncrude last quarter, the decision was made to defer the planned second-quarter turnaround work on Kócher 8.2.

John Whelan: As a reminder, due to the unplanned maintenance required on Coker 8-3 at Syncrude last quarter, the decision was made to defer the planned Q2 turnaround work on Coker 8-2. We expect that turnaround to now start in the latter half of August and take approximately 50 days to complete. Let's move to the downstream. In the Q2, we refined an average of 331,000 barrels per day, representing a utilization of 76%. Compared to the Q1 2026, refinery throughput was down 53,000 barrels a day, mainly driven by the planned turnaround work at Strathcona. Our team successfully completed the planned turnaround on the Strathcona crude unit, which had achieved its longest-ever run length of 10 years. We forecast the turnaround to rank in the first quartile when compared against industry benchmarking.

Speaker #3: We expect that turnaround to now start in the latter half of August and take approximately 50 days to complete. Now, let's move to the downstream.

Speaker #3: In the second quarter, we refined an average of 331,000 barrels per day, representing a utilization of 76%. Compared to the first quarter of 2026, refinery throughput was down 53,000 barrels a day, mainly driven by the planned turnaround work at Strathcona.

John Whelan: Compared to the Q1 2026, refinery throughput was down 53,000 barrels a day, mainly driven by the planned turnaround work at Strathcona. Our team successfully completed the planned turnaround on the Strathcona crude unit, which had achieved its longest-ever run length of 10 years. We forecast the turnaround to rank in the first quartile when compared against industry benchmarking.

Speaker #3: Our team successfully completed the planned turnaround on the Strathcona crude unit, which had achieved its longest-ever run length of 10 years. We forecast the turnaround to rank in the first quartile when compared against industry benchmarking.

Speaker #3: Our renewable diesel facility at Strathcona, the largest in Canada, continues to generate highly attractive economics relative to more costly imports. Now, as we discussed in our earnings press release this morning, we have lowered our downstream throughput guidance by approximately 6%.

John Whelan: Our renewable diesel facility at Strathcona, the largest in Canada, continues to generate highly attractive economics relative to more costly imports. As we discussed in our earnings press release this morning, we've lowered our downstream throughput guidance by approximately 6%. This is due to three key factors. First, and while behind us now, we had higher unplanned downtime in the H1. Second, at Strathcona, we have prioritized renewable diesel production due to strong economics. This has improved margins but reduced crude throughput. As we ramped up renewable diesel, we also identified congestion in some areas of our rail yard. We are now adding additional rail handling capacity to alleviate that congestion and are targeting completion by year-end. Finally, in mid-July, Nanticoke experienced unplanned downtime, impacting crude units. Other units continue to run, and we expect to resume full operation by early August.

Speaker #3: This is due to three key factors. First, and while behind us now, we had higher unplanned downtime in the first half of the year.

Speaker #3: Second, at Strathcona, we have prioritized renewable diesel production due to strong economics. This has improved margins but reduced crude throughput. And as we ramped up renewable diesel, we also identified congestion in some areas of our rail yard.

John Whelan: This has improved margins but reduced crude throughput. As we ramped up renewable diesel, we also identified congestion in some areas of our rail yard. We are now adding additional rail handling capacity to alleviate that congestion and are targeting completion by year-end. Finally, in mid-July, Nanticoke experienced unplanned downtime, impacting crude units. Other units continue to run, and we expect to resume full operation by early August.

Speaker #3: We are now adding additional rail handling capacity to alleviate that congestion and are targeting completion by year-end. And finally, in mid-July, Nanticoke experienced unplanned downtime, impacting the crude unit.

Speaker #3: Other units continue to run, and we expect to resume full operations by early August. These items have now been fully factored into the updated downstream guidance range.

John Whelan: These items have now been fully factored into the updated downstream guidance range. The overall downstream outlook remains positive for the balance of the year, with higher volumes, structural advantages, and a supportive market environment. Petroleum product sales were 446,000 barrels per day, down 5,000 barrels per day compared to the Q1 2026. Overall, across our Canadian network, we saw very similar demand for each of our primary petroleum products in the Q2 2026 relative to 2025. Turning now to chemicals, earnings in the Q2 were CAD 65 million, up CAD 41 million from the Q2 2025 due to higher product pricing. In closing, while the external environment continues to be dynamic, our priorities remain unchanged. We are focused on capturing the full value of our advantaged integrated business, growing profitable volumes, advancing structural cost improvements, and increasing cash flow generation.

Speaker #3: The overall downstream outlook remains positive for the balance of the year, with higher volumes, structural advantages, and a supportive market environment. Petroleum product sales were 446,000 barrels per day.

Speaker #3: Down 5,000 barrels per day compared to the first quarter of 2026. Overall, across our Canadian network, we saw very similar demand for each of our primary petroleum products in the second quarter of 2026 relative to 2025.

Speaker #3: Turning now to Chemicals, earnings in the second quarter were $65 million, up $41 million from the second quarter of 2025 due to higher product pricing.

John Whelan: Turning now to chemicals, earnings in the Q2 were CAD 65 million, up CAD 41 million from the Q2 2025 due to higher product pricing. In closing, while the external environment continues to be dynamic, our priorities remain unchanged. We are focused on capturing the full value of our advantaged integrated business, growing profitable volumes, advancing structural cost improvements, and increasing cash flow generation.

Speaker #3: In closing, while the external environment continues to be dynamic, our priorities remain unchanged. We are focused on capturing the full value of our advantaged, integrated business, growing profitable volumes, advancing structural cost improvements, and increasing cash flow generation.

Speaker #3: Further to that, we continue to advance our restructuring plans. We are firmly in the implementation phase, guided by a robust and disciplined approach, and things are progressing well.

John Whelan: Further to that, we continue to advance our restructuring plans. We are firmly in the implementation phase, guided by a robust and disciplined approach, things are progressing well. As shared previously, we will capture significant long-term efficiency and effectiveness benefits as we further transform our business, leveraging rapidly advancing technology and ExxonMobil's global capability centers. Through disciplined implementation, we will continue to strengthen the competitiveness of our operations, maximize the value of our asset base, and deliver superior long-term returns to shareholders. Operationally, our focus remains on execution excellence and being the most responsible operator. This includes the safe and effective execution of upcoming planned turnaround activities at Cold Lake and Sarnia. Given global supply challenges, the external environment continues to support strong cash flow generation with notable tightness in refined product markets.

Speaker #3: As shared previously, we will capture significant long-term efficiency and effectiveness benefits as we further transform our business, leveraging rapidly advancing technology and ExxonMobil's global capability centers.

Speaker #3: Through disciplined implementation, we will continue to strengthen the competitiveness of our operations maximize the value of our asset base and deliver superior long-term returns to shareholders.

John Whelan: Through disciplined implementation, we will continue to strengthen the competitiveness of our operations, maximize the value of our asset base, and deliver superior long-term returns to shareholders. Operationally, our focus remains on execution excellence and being the most responsible operator. This includes the safe and effective execution of upcoming planned turnaround activities at Cold Lake and Sarnia. Given global supply challenges, the external environment continues to support strong cash flow generation with notable tightness in refined product markets.

Speaker #3: Operationally, our focus remains on execution excellence and being the most responsible safe and effective execution of upcoming planned turnaround activities at Coleg and Cernia.

Speaker #3: Given global supply challenges, the external environment continues to support strong cash flow generation, with notable tightness in refined products markets. With the heaviest turnaround quarter behind us, we are well positioned to deliver higher volumes and throughput in the second half.

John Whelan: With the heaviest turnaround quarter behind us, we are well positioned to deliver higher volumes and throughput in H2, capturing significant value and continuing to deliver industry-leading shareholder returns. As noted earlier, we also announced today our intention to accelerate share repurchases under the renewed NCIB and expect to repurchase all remaining allowable shares before year-end. As always, I want to thank our employees for their commitment, expertise, professionalism, and teamwork. Their dedication to safe operations, execution excellence, and customer and community service is what makes our achievements possible. I would like to thank all of you once again for your continued interest and confidence in Imperial. With that, we will move to the Q&A portion of the call, and I will hand it back to Peter.

Speaker #3: Capturing significant value and continuing to deliver industry-leading shareholder returns. As noted earlier, we also announced today our intention to accelerate share repurchases under the renewed NCIB and expect to repurchase all remaining allowable shares before year-end.

Speaker #3: As always, I want to thank our employees. For their commitment, expertise, professionalism, and teamwork. Their dedication to safe operations, execution excellence, and customer and community service is what makes our achievements possible.

John Whelan: Their dedication to safe operations, execution excellence, and customer and community service is what makes our achievements possible. I would like to thank all of you once again for your continued interest and confidence in Imperial. With that, we will move to the Q&A portion of the call, and I will hand it back to Peter.

Speaker #3: And I'd like to thank all of you once again for your continued interest and confidence in Imperial. And with that, we'll move to the Q&A portion of the call, and I'll hand it back to Peter.

Speaker #1: Thank you, John. We'd appreciate it if you could limit yourself to one question, plus a follow-up, so that we can get to all the questions.

Peter Shaw: Thank you, John. We would appreciate it if you could limit yourself to one question plus a follow-up so that we can get to all the questions. With that, operator, could you please open up the line for questions?

Speaker #1: So with that, operator, could you please open up the line for questions?

Speaker #2: Thank you. And if you are dialed in via the telephone and would like to ask a question, please signal by pressing star one on your telephone keypad.

Operator: Thank you. If you are dialed in via the telephone and would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question. We will now go with your first question coming from the line of Greg Pardy with RBC Capital Markets.

Speaker #2: If you are using a speakerphone, please make sure you mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question.

Speaker #2: We will now go with your first question. Coming from the line of Greg Party, with RBC Capital Markets.

Speaker #4: Yeah, thanks, Courtney. Hey guys, thanks for the rundown. Just in the release, probably what jumped out is that curl and just not only the downtime impacting production rates, but also just I think you referred to it as the lack of exceptional work rates.

Greg Pardy: Thanks. Good morning, guys. Thanks for the rundown. Just in the release, probably what jumped out is at Kearl and just not only the downtime impacting production rates, but also just, I think you referred to it as the lack of exceptional ore grades. Just curious there as to whether you are moving into a different area of the mine or a new pit or what have you, and then whether you expect to move back into, I guess, higher ore grades as we move along.

Speaker #4: So just curious there, is as to whether you're moving into a different area of the mine or a new pair or what have you, and then whether you expect to move back into I guess higher org rates as we move along.

Speaker #1: Good morning, Greg, and thanks for your question. It was really interesting. It isn't a case of moving into a lower org rate. We remain extremely confident of our org quality.

John Whelan: Good morning, Greg, and thanks for your question. It was really interesting. It is not a case of moving into a lower ore grade. We remain extremely confident of our ore quality. It really was in Q2 2025 had we experienced exceptional ore grade material. The exception was Q2 and a little bit into Q3 2025. We hit the highest, sweetest portion of the mine at that time. That was the anomaly, was last year's Q2 and Q3. We are now back into really the ore grade that we have been seeing over the last 2 or 3 years. On average, I would just really stress that we have very high relative oil sands ore grade compared to other oil sands mines, and we benefit from that going forward.

Speaker #1: It really was at the second quarter of 2025 that we experienced exceptional org grade material. So the exception was the second quarter, and a little bit into the third quarter of 2025.

Speaker #1: We hit the highest sweetest portion of the mine at that time. That was the anomaly, was last year's second quarter and the third quarter.

John Whelan: That was the anomaly, was last year's Q2 and Q3. We are now back into really the ore grade that we have been seeing over the last two or three years. On average, I would just really stress that we have very high relative oil sands ore grade compared to other oil sands mines, and we benefit from that going forward. Again, the exception really was truly Q2 2025 and not where we are now and not where we see ourselves going in the future.

Speaker #1: We're now back into really the ore grade that we've been seeing over the last two or three years. And on average, I would just really stress that we have very high relative oil sands ore grade compared to other oil sands mines.

Speaker #1: And we benefit from that going forward. So again, the exception really was truly the second quarter of ‘25, and not where we are now, and not where we see ourselves going in the future.

John Whelan: Again, the exception really was truly Q2 2025 and not where we are now and not where we see ourselves going in the future.

Speaker #4: Okay. Okay, understood. Thanks for the clarification there. And John, as I look at our model, right, in 2027, even if we don't really make big changes on volumes, like the margins get so much better.

Greg Pardy: Okay. Understood. Thanks for the clarification there. John, as I look at our model, right, in 2027, even if we do not really make big changes on volumes, the margins get so much better. I guess this comes back to your, and just correct me if I am wrong, but your 2025 Investor Day, and then you have got different unit OPEX targets. I think it is $18 US at Kearl and $13 at Cold Lake. I am just curious, are those numbers achievable and am I working with the right numbers in the right timeframe?

Speaker #4: And I guess this comes back to your, and just correct me if I'm wrong, but your 2025 Investor Day. And then you've got these—you've got different unit OPEX targets.

Speaker #4: So I think it's 18 US at curl and 13 at Coleg. And I'm just curious, are those numbers achievable? And am I working with the right numbers in the right time frame?

Speaker #1: Yeah, absolutely. That is our clear goal for 2027: we're going to get to $18 a barrel. And we've been marching down our unit cost towards that.

John Whelan: Yeah, absolutely. That is our clear goal for 2027, is that we are going to get to $18 a barrel. We have been marching down our unit cost towards that. Last year, we were below $20 a barrel. We expect to be lower again this year and $18 a barrel next year. We continue to be very focused on getting the asset to 300,000 barrels per day of production, and we feel all of our plans that we have put in place around improved recovery, improved reliability and availability, the turnaround going to the 4-year interval that I just spoke about, all those things are on track to get us to 300. As we have talked about before, when we get there, that is not a hard and fast kind of barrier. We are going to look at what opportunities we have beyond that once we get there.

Speaker #1: Last year, we were below $20 a barrel, and we expect to be lower again this year—and $18 a barrel next year. We continue to be very focused on getting the asset to 300,000 barrels per day of production, and with all of our plans that we've put in place around improved recovery, improved reliability, and availability.

John Whelan: We continue to be very focused on getting the asset to 300,000 barrels per day of production, and we feel all of our plans that we have put in place around improved recovery, improved reliability and availability, the turnaround going to the four-year interval that I just spoke about, all those things are on track to get us to 300. As we have talked about before, when we get there, that is not a hard and fast kind of barrier. We are going to look at what opportunities we have beyond that once we get there. No, you can feel good about CAD 18 a barrel for next year.

Speaker #1: The turnaround going to the four-year interval that I just spoke about, all those things around track to get us to 300. And as we've talked about before, when we get there, we don't necessarily that's not a hard and fast kind of barrier.

Speaker #1: We're going to look at what opportunities we have beyond that once we get there. So now you can feel good about $18 a barrel for next year.

John Whelan: no, you can feel good about CAD 18 a barrel for next year.

Speaker #4: Okay, terrific. Thanks very much.

Greg Pardy: Okay, terrific. Thanks very much.

Speaker #1: Thanks, Greg.

John Whelan: Thanks, Greg.

Speaker #2: We will now take your next question. Coming from the line of Minnow, who's off with TD Cowen.

Operator: We will now take your next question coming from the line of Menno Hulshof with TD Cowen.

Speaker #5: Thanks, and good morning, everyone. I'll start with a question on G&A, or selling in general in the financials, which came down a lot quarter on quarter.

Menno Hulshof: Thanks, and good morning, everyone. I will start with a question on G&A or selling in general in the financials, which came down a lot quarter on quarter. Presumably, it falls further from here as you work through the workforce reduction, can you just remind us of what that number could look like on a run rate basis on completion?

Speaker #5: Presumably, it falls further from here as you work through the workforce reduction. But can you just remind us what that number could look like on a run-rate basis upon completion?

Speaker #1: Well, I'm going to hand that over to Dan.

John Whelan: Well, I am going to hand that over to Dan.

Speaker #5: Well, man, what we said is by 2028, once we're through our restructuring program, we expect $150 million lower cash opex going forward. So I think that still holds.

Dan Lyons: Menno, what we said is by 2028, once we are through our restructuring program, we expect CAD 150 million lower cash OPEX going forward. I think that still holds, and as we go through the restructuring, obviously you do not see all that, but once we get mined out by 2028, that is what we expect to see.

Speaker #5: And as we go through the restructuring, obviously you don't see all that. But once we get lined out by 2028, that's what we expect to see.

Speaker #5: Terrific. Thanks, Dan. And then I guess the second question is on growth, just given your reference to having the resources to potentially double production, theoretically, over time.

Menno Hulshof: Terrific. Thanks, Dan. I guess the second question is on growth, just given your reference to having the resources to potentially double production theoretically over time. I think we have a pretty good sense of what is going on at Aspen and with the EBRT pilot. Is anything going on with Corner and Clark Creek right now?

Speaker #5: I think we have a pretty good sense of what's going on at Aspen and with the DRBT pilot—EBRT pilot. But is anything going on with Corner and Clark Creek right now?

Speaker #1: I think, Minnow, this is John here. Thanks for the question. I think there we're doing some delineation drilling, making sure we understand the resource.

John Whelan: I think, Menno, it's John here. Thanks for the question. I think there we're doing some delineation drilling, make sure we understand the resource. We have a very good handle on that. That's the main focus there right now is, understanding the resource that we have there and the best way to develop that. We do anticipate Enhanced Bitumen Recovery Technology is the technology we are looking to prove out and apply to all three of those assets. Of course, we're doing that pilot at Aspen. We see Aspen as the first part of that development. Then depending on the investment climate and everything else, we kind of have a lot of flexibility in how we pace the further developments at Corner and Clark Creek. We'll have done the work to fully understand the resource and move forward there in a timely way.

Speaker #1: We have a very good handle on that. But the main focus there right now is understanding the resource that we have there and the best way to develop that.

Speaker #1: We do anticipate enhanced pitchman recovery technology is the technology we are looking to prove out and apply to all three of those assets. Of course, we're doing that pilot at Aspen.

John Whelan: Of course, we're doing that pilot at Aspen. We see Aspen as the first part of that development. Then depending on the investment climate and everything else, we kind of have a lot of flexibility in how we pace the further developments at Corner and Clark Creek. We'll have done the work to fully understand the resource and move forward there in a timely way.

Speaker #1: We see Aspen as the first part of that development. And then depending on the investment climate and everything else, we have a we kind of have a lot of flexibility in how we pace the further developments at corner and Clark Creek.

Speaker #1: But we'll have done the work to fully understand the resource and move forward there in a timely way.

Speaker #5: Thanks, John. I'll turn it back.

Menno Hulshof: Thanks, John. I'll turn it back.

Speaker #1: Great. Thank you, Minnow. I appreciate it.

John Whelan: Great. Thank you, Menno. Appreciate it.

Speaker #2: Your next question will come from the line of Dennis Fong with CIBC.

Operator: Your next question will come from the line of Dennis Fong with CIBC.

Dennis Fong: Hi, good morning, and thanks for taking my questions. My first one here follows along the line of what Greg Pardy was discussing maybe a little bit on Kearl. As we think about the work that you guys are doing on mine progression, especially to make enough feedstock available for production at a 300,000 barrel a day-plus level, can you talk towards how that is progressing? I am hearing, obviously, from your prepared remarks around the work that you are doing to optimize and improve secondary recovery here. I was hoping to get a little bit of a better sense as to how you think about mine progression and again, maybe going back towards higher grades of ore as you move to the east pit in terms of more full development.

Speaker #6: Hi, good morning, and thanks for taking my questions. My first one here follows along the line of what Greg was discussing, maybe a little bit on curl.

Speaker #6: As we think about the work that you guys are doing on mine progression, especially to make enough feedstock available for production at a 300,000 barrel a day plus level, can you talk towards how that is progressing?

Speaker #6: I'm hearing obviously from your prepared remarks around the work that you're doing to optimize and improve secondary recovery here. But was hoping to get a little bit of a better sense as to how you think about mine progression and again, maybe going back towards higher grades of ore as you move to the east pit in terms of more full development.

Dennis Fong: I am hearing, obviously, from your prepared remarks around the work that you are doing to optimize and improve secondary recovery here. I was hoping to get a little bit of a better sense as to how you think about mine progression and again, maybe going back towards higher grades of ore as you move to the east pit in terms of more full development.

Speaker #1: Yeah, thanks, Dennis. I'll say a few words about that, and I'm going to hand over to Cheryl to share a bit more detail. But the bottom line of that, you're right, we're kind of finishing up in the north pit.

John Whelan: Yeah. Thanks, Dennis Fong. I will say a few words about that, and I am going to hand over to Cheryl Gomez-Smith to share a bit more detail. The bottom line of that, you are right, we are finishing up in the north pit. We are getting ready to go into the east pit. Again, the quality of ore that we are in today is what we expect. Again, Kearl does have ore quality that is better than other oil sands mines, so we are blessed with that. The work that is now going on to be prepared to move into the east pit is progressing per plan. We talked about that was a little bit of the reason why we had a little higher capital this year as we started to prepare for that and open up that mine, but it is going as per plan.

John Whelan: Yeah. Thanks, Dennis. I will say a few words about that, and I am going to hand over to Cheryl Gomez-Smith to share a bit more detail. The bottom line of that, you are right, we are finishing up in the north pit. We are getting ready to go into the east pit. Again, the quality of ore that we are in today is what we expect.

Speaker #1: We're getting ready to go into the East Pit. Again, the quality of ore that we're in today is what we expect. And again, Kearl continues to have ore quality that is better than other oil sands mines.

John Whelan: Again, Kearl does have ore quality that is better than other oil sands mines, so we are blessed with that. The work that is now going on to be prepared to move into the east pit is progressing per plan. We talked about that was a little bit of the reason why we had a little higher capital this year as we started to prepare for that and open up that mine, but it is going as per plan. We look forward to getting there into the east pit as well. We feel overall, again, the ore quality is exactly where we expect it to be. I will hand over to Cheryl Gomez-Smith to share a bit more about the east pit.

Speaker #1: So, we're blessed with that. And the work that's now going on to be prepared to move into the East Pit is progressing per plan.

Speaker #1: We talked about that—that was a little bit of the reason why we had a little higher capital this year, as we started to prepare for that and open up that mine.

Speaker #1: But it's going as per plan. We look forward to getting there, into the east pit, as well. But we feel overall, again, the ore quality is exactly where we expect it to be.

John Whelan: We look forward to getting there into the east pit as well. We feel overall, again, the ore quality is exactly where we expect it to be. I will hand over to Cheryl Gomez-Smith to share a bit more about the east pit.

Speaker #1: And I'll hand over to Cheryl to share a bit more about the East Pit.

Speaker #3: Sure. Thanks, John, and thanks, Dennis, for the question. Maybe I'll add a little bit more as I think about the second half of 2026. As John mentioned, we expect higher production in our second half.

Cheryl Gomez-Smith: Sure. Thanks, John Whelan, and thanks, Dennis Fong, for the question. Maybe a little bit more as I think about the H2 2026 that John Whelan mentioned, which is we expect higher production in our H2, and what is going to make that difference? We are increasing the throughput. In short, that means we are sending more ore to the plant. John Whelan mentioned about optimizing our plant recovery, and we have got secondary projects with our KFCC project coming online by the end of this year. Behind that, we have also got some projects, one of them we call this SPA, which is a secondary process aid, really adding some chemical to help us manage fines. This in mind, these projects that are already in motion, we remain confident in our long-term production potential.

Cheryl Gomez-Smith: Sure. Thanks, John, and thanks, Dennis, for the question. Maybe a little bit more as I think about the H2 2026 that John mentioned, which is we expect higher production in our H2, and what is going to make that difference? We are increasing the throughput. In short, that means we are sending more ore to the plant.

Speaker #3: And what's going to make that difference? We're increasing the throughput, so in short, that means we're sending more ore to the plant. John mentioned optimizing our plant recovery, and we've got secondary projects with our KFCC project coming online by the end of this year.

Cheryl Gomez-Smith: John mentioned about optimizing our plant recovery, and we have got secondary projects with our KFCC project coming online by the end of this year. Behind that, we have also got some projects, one of them we call this SPA, which is a secondary process aid, really adding some chemical to help us manage fines. This in mind, these projects that are already in motion, we remain confident in our long-term production potential.

Speaker #3: But behind that, we've also got some projects. One of them we call SPA, which is a secondary process aid—really adding some chemical to help us manage fines.

Speaker #3: So, with this in mind, these projects that are already in motion—we remain confident in our long-term production potential. In terms of ore quality, what I would say is, as we advance mine infrastructure, we continue to comprehend the mix of ore quality as well as haul distance.

Cheryl Gomez-Smith: In terms of ore quality, what I would say is, as we advance mine infrastructure, we are continuing to comprehend the mix of ore quality as well as haul distance. John highlighted we are really in a unique position that Kearl has very good ore quality throughout, and there is going to be variability over time. That being said, we are progressing with the mine pit. We are heading into east pit. We anticipate we are going to start seeing first production in November, December. Based on the delineation information, we would expect to see some of that higher ore quality as we move into east pit. Again, this is what is really underpinning our outlook and the confidence in 300-plus KBD.

Speaker #3: John highlighted we're really in a unique position that Kearl has very good ore quality throughout, and there's going to be variability over time. That being said, we are progressing with the mine pit and heading into the East Pit.

Cheryl Gomez-Smith: We are heading into east pit. We anticipate we are going to start seeing first production in November, December. Based on the delineation information, we would expect to see some of that higher ore quality as we move into east pit. Again, this is what is really underpinning our outlook and the confidence in 300-plus KBD.

Speaker #3: We anticipate we're going to start seeing some first production in November and December. Based on the delineation information, we would expect to see some of that higher ore quality as we move into East Pit.

Speaker #3: So again, this is what's really underpinning our outlook and the confidence in 300 plus KBD.

Dennis Fong: Great. Thank you for the color from both of you. My next question shifts towards the Downstream. In your press release and I think a little bit in your earlier remarks or prepared remarks, you talked a little bit around the short-term rail logistics challenge at Strathcona. Can you talk towards how you are looking to optimize, we will call it, value from the operations of that facility, again, as you work through some of the logistical challenges and then maybe optimize or debottleneck that part of your facility?

Speaker #6: Great. Thank you for the color from both of you. My next question shifts toward the downstream. In your press release, and I think a little bit in your earlier remarks or prepared remarks, you talked a little bit about the short-term rail logistics challenge at Strathcona.

Speaker #6: Can you talk about how you're looking to optimize value from the operations of that facility? As you work through some of the logistical challenges, are you able to optimize or debottleneck that part of your facility?

Speaker #1: Yeah, let me I'll say a few words about that, and then Scott can chime in if there's more to add. But if I step back from this and you think about this our crew throughput and choices we make, first, I would say we've prioritized renewable diesel because of the improved margins that that provides us.

John Whelan: Yeah. I'll say a few words about that, and then Scott can chime in if there's more to add. If I step back from this and you think about our crude throughput and choices we make, first I would say, we've prioritized renewable diesel because of the improved margins that that provides us, and we've prioritized that, and it has required us to reduce crude throughput to some degree. While crude throughput is a very important metric, and we keep a very close eye on that, and of course, we talk about it with all of you externally, our overall goal, our overall metric is maximizing value and improving margin and improving cash flow. When we saw the opportunity to do that through prioritizing renewable diesel over crude throughput, we made that choice. It was an easy choice.

Speaker #1: And we've prioritized that, and it has required us to reduce crude throughput to some degree. But while crude throughput is a very important metric, and we keep a very close eye on that, and of course, we talk about it with all of you externally, our overall goal—our overall metric—is maximizing value, improving margin, and improving cash flow.

John Whelan: While crude throughput is a very important metric, and we keep a very close eye on that, and of course, we talk about it with all of you externally, our overall goal, our overall metric is maximizing value and improving margin and improving cash flow. When we saw the opportunity to do that through prioritizing renewable diesel over crude throughput, we made that choice. It was an easy choice.

Speaker #1: So, when we saw the opportunity to do that through prioritizing renewable diesel over crude throughput, we made that choice. It was an easy choice.

Speaker #1: It was the choice we'd make every day of the week, so that's kind of one piece of it. And then we built out the rail terminal with the anticipation of renewable diesel.

John Whelan: It's a choice we'd make every day of the week. That's one piece of it. Then, we built out the rail terminal with the anticipation of renewable diesel. Of course, it's a very busy rail yard right now, just the way we like it. We want it to be busy. We have more inputs coming in with canola feed coming in, more outputs with renewable diesel going out. What we've seen is, we're having a little higher wait times for the rail cars to load and offload than we would like. What we're really doing, this is actually not very complicated. We're laying some extra track, providing some additional laydown areas so we can more quickly load and offload rail cars.

Speaker #1: But, of course, it's a very busy rail yard right now, just the way we like it. We want it to be busy. We have more inputs coming in, with canola feed coming in, and more outputs, with renewable diesel going out.

Speaker #1: So we have ramped up the activity in the rail yard. With these multiple products coming in and out. And what we've seen is we're having a little higher wait times for the rail cars to load and offload than we would like.

John Whelan: What we've seen is, we're having a little higher wait times for the rail cars to load and offload than we would like. What we're really doing, this is actually not very complicated. We're laying some extra track, providing some additional laydown areas so we can more quickly load and offload rail cars.

Speaker #1: So what we're really doing this is actually not very complicated. We're laying some extra track, providing some additional laydown areas so we can more quickly load and offload rail cars.

Speaker #1: It's not a large project. We have the real estate to do it. It's not going to require us to take the rail yard slow it down or take it offline.

John Whelan: It's not a large project. We have the real estate to do it. It's not going to require us to take the rail yard, slow it down, or take it offline. We can do it while the rail yard is fully operational, and we'll have that work done by the end of the year to relieve some of this congestion that we identified when we had more product coming in and out. Not concerned about it. Project is underway. It's not that complicated, and we'll have it done by the end of the year. Scott, any other color you'd like to add to that?

Speaker #1: We can do it while the rail yard is fully operational, and we'll have that work done by the end of the year to relieve some of this congestion that we identified when we had more product coming in and out.

Speaker #1: So not concerned about it. Project is underway. It's not that complicated, and we'll have it done by the end of the year. Scott, any other color you'd like to add to that?

Speaker #2: Yeah, perhaps just one additional comment on that is, as you get to the mix of products that we're making—John kind of referred to the value and the renewable diesel.

Scott Maloney: Yeah, perhaps just one additional comment on that is, as you get to the mix of products that we're making, John kind of referred to the value in renewable diesel. We're also seeing that across just the distillate products in general. As we've talked about flexibility in our refineries in prior sessions and certainly at our IR day last year. As we see opportunities to ramp up additional diesel and jet production, we certainly are doing that in this higher margin environment, and that's all baked into our plans, even with some of the near-term rail limitations.

Speaker #2: We're also seeing that across just the distillate products in general. As we've talked about flexibility in our refineries in prior sessions, and certainly at our IR Day last year, as we see opportunities to ramp up additional diesel and jet production, we certainly are doing that in this higher-margin environment.

Speaker #2: And that's all baked into our plans, even with some of the near-term rail limitations.

Speaker #6: Great. Thanks for the color from both of you. I'll turn it back.

Dennis Fong: Great. Thanks for the color from both of you. I'll turn it back.

Speaker #1: Thank you, Dennis.

John Whelan: Thank you, Dennis

Speaker #5: Your final question comes from Lydia Gold with Goldman Sachs.

Operator: Your final question is coming from Lydia Erdman with Goldman Sachs.

Speaker #7: Hi, good morning, team, and thanks for taking my question. How are you thinking about shareholder returns given the acceleration of the NCIB, and where commodity prices are, and what your appetite and flexibility is like for a potential future SIB?

Lydia Erdman: Hi, good morning team, thanks for taking my question. How are you thinking about shareholder returns given the acceleration of the NCIB and where commodity prices are and what your appetite and flexibility is like for a potential future SIB?

Speaker #1: Yeah, thank you, Lydia. It's our whole approach around capital allocation is unchanged from a shareholder returns perspective. We're going to continue to prioritize a reliable and growing dividend.

John Whelan: Thank you, Lydia. Our whole approach around capital allocation is unchanged from a shareholder returns perspective. We're going to continue to prioritize a reliable and growing dividend. When it comes to surplus cash beyond our capital needs and dividend, our go-to, based on discussions we've had with investors, has been buybacks via the NCIB. Of course, we just announced the acceleration of the current NCIB, and look to wrap that up by the end of the year. Earlier completion of that by year-end does give us the flexibility for additional share buybacks beyond the 5% that we're limited to in the NCIB via an SIB. Whether or not we're in a position to do that and have the capacity to do that will depend on commodity prices.

Speaker #1: And when it comes to surplus cash beyond our capital needs and dividend, our go-to, based on discussions we've had with investors, has been buybacks via the NCIB.

Speaker #1: And of course, we just announced the acceleration of the current NCIB and look to wrap that up by the end of the year. But earlier completion of that by year-end does give us the flexibility for additional share buybacks beyond the 5% that we're limited to in the NCIB.

John Whelan: Of course, we just announced the acceleration of the current NCIB, and look to wrap that up by the end of the year. Earlier completion of that by year-end does give us the flexibility for additional share buybacks beyond the 5% that we're limited to in the NCIB via an SIB. Whether or not we're in a position to do that and have the capacity to do that will depend on commodity prices.

Speaker #1: Via an SIB. Now, whether or not we're in a position to do that and have the capacity to do that will depend on commodity prices.

Speaker #1: But I would say, from our integrated business model, we have good exposure both to oil prices and refining margins. We feel very good about that.

John Whelan: I would say from our integrated business model, we have good exposure both to oil prices and refining margins. We feel very good about that. We'll have to see how commodity prices play out over the second half of the year here. What I can say is, you can expect from us that we will return surplus cash to shareholders in a timely manner. If you look at 2025, we had a free cash flow of CAD 4.8 billion. We returned CAD 4.6 billion to shareholders. You look back over the last five years, 2020 through 2025, we had free cash flow of CAD 25 billion, and we returned CAD 24 billion to shareholders. That philosophy is unchanged, and you can rely on us to return surplus cash flow to shareholders in a timely manner.

Speaker #1: But we'll have to see kind of how commodity prices play out over the second half of the year here. But what I can say is you can expect from us that we will return surplus cash to shareholders.

Speaker #1: In a timely manner. And if you look at 2025, we had free cash flow of $4.8 billion. We returned $4.6 billion to shareholders. And if you look back over the last five years, 2020 through 2025, we had free cash flow of $25 billion, and we returned $24 billion to shareholders.

John Whelan: If you look at 2025, we had a free cash flow of CAD 4.8 billion. We returned CAD 4.6 billion to shareholders. You look back over the last five years, 2020 through 2025, we had free cash flow of CAD 25 billion, and we returned CAD 24 billion to shareholders. That philosophy is unchanged, and you can rely on us to return surplus cash flow to shareholders in a timely manner.

Speaker #1: So that philosophy is unchanged, and you can rely on us to return surplus cash flow to shareholders in a timely manner.

Speaker #7: Thanks.

Lydia Erdman: Thanks.

Speaker #1: Thank you, Lydia.

John Whelan: Thank you, Lydia.

Speaker #5: That concludes today's question and answer session. At this time, I will turn the conference back to Mr. Peter for any additional closing remarks.

Operator: That concludes today's question and answer session. At this time, I will turn the conference back to Mr. Peter for any additional closing remarks.

Speaker #3: Well, thank you very much. And on behalf of the management team, I'd like to thank everyone for joining us this morning. If there are any further questions, please don't hesitate to reach out to the Investor Relations team, and we'll be happy to answer your questions.

Peter Shaw: Well, thank you very much, and on behalf of the management team, I'd like to thank everyone for joining us this morning. If there are any further questions, please don't hesitate to reach out to the investor relations team, and we'll be happy to answer your questions. With that, thank you very much and have a great day and a great weekend.

Speaker #3: With that, thank you very much, and have a great day and a great weekend.

Operator: This concludes today's call. Thank you for your participation. You may now disconnect.

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