Cenovus Energy (CVE) 8 Feb 222021 Q4 Earnings call transcript

Good day, ladies and gentlemen and thank you for standing by. Welcome to Cenovus Energy’s Fourth Quarter and Year End 2021 Results.

As a reminder, today’s call is being recorded. At this time, all participants are in a listen-only mode.

Following the presentation, we will conduct a question-and-answer session. advised rebroadcast conference of without be be may Cenovus Please or recorded the Instructions] that call this not Energy. [Operator express consent to now would like turn conference I to over the Ms. Vice Wendt, President, Relations. Sherry Investor Ms. ahead, go Please Wendt.

terms quarter oil Thank you, operator, advisories to refer factors end the welcome referred release. everyone located will information, and at conference I measures, to of forward-looking and today’s to These outline XXXX call. news and to results you the year assumptions Cenovus’ and and gas this fourth and the the non-GAAP discussion. today end describe risk relevant

detailed Additional Alex Form MD&A take XX-F. annual our that Executive Chief Pourbaix, information royalties provide please with after follow-up off maximum instead any modeling Canadian questions. and and of are with ask figures recent on and before please presented a and President call, one in comments, to will and AIF the Investor you our please one if in we you question is will and Alex, you queue rejoin any All for then available Officer, your hold ahead. the dollars keep questions stated. other can could our brief directly go Relations We otherwise Cenovus’ questions. and most follow-up, those on unless team

Thanks, everybody. Sherry, morning, good and

results, COVID-XX. I would thought our to and update I response Before financial we operating to get on ongoing our you

communities how ensure say the of we’ve the Omicron to and years, variant to continuity. field last monitoring the safe about I’d business people of reliable our health a at We’re maintaining over lot maintain learned and safety our closely and and operations sites. And and all two

possible focused our journey. focus in sure on goes safety improvement Above safe further underscores to tier communities day. we and we Cenovus in and them we me continuous and first the The local Management place on doing improvement operate, protocols underscores work It forest way how fires followed health of how all, year is business safety overall operational both And challenges serve. how we System Despite we recordable solid at The have was without way as robust the was British to for needed. impacted integrity, to interruption company, safety, this in year we focused a be local our which Columbia communities adjust the have related must and continuing not We and to only the not the a and the our how to performance. for also operate. supply needs really of operational, including Cenovus though, integration I was and roll this how have foundational community. safe where but safety And pandemic complete our and risk. tirelessly situations, teams ensure moving British the to COVID-XX, must do our every challenging order In the meet how meeting natural product supply Columbia of areas. our business take out combined we to example role needs by impacted sites disasters our teams year to work do are outlining top is we presented our an continuous keep our flooding, customers significant we the areas safely together the we continuity, our health, as had programs safety in seriously as in Meanwhile, year everyone of to everything in think where and be to we harmonized so, caused in Operations this home refined performance severe and with Integrity environmental manage products reflects XXXX. widespread continue the this it make injuries,

bumps but deliver accomplished to accomplished really Turning quarter Upstream set good employees one we company has Cenovus. annual a now first we’ve when overall on what been with leadership as there few that out We combined our Upstream start job well want results, way to strong to operating not continue look this say a along more. the I very I’ll a I for a done. really team to we our in and and our weren’t year, everything XXXX performance. That’s fourth segment, and commend to year the do very

per in was Our quarter, extremely reservoir fourth in nearly production highest third average of quarter. fourth Alberta Despite the to at in to an XXX,XXX some of day quarter. in the Cenovus. Cenovus’ range Creek we total thermals, have led in rates is the barrels later the increase for Investor our oil call also Christina reflecting per in production cold Lake the our Production Saskatchewan Foster at averaged to around planned over quarterly day, barrels XXX,XXX by and thermals. barrels range the an XXX,XXX techniques. wells XXX,XXX increase for and barrels is day, record of of which at the year. includes the day over our Day. benefits XX,XXX experiencing turnaround Lloydminster weather includes per turn of about the XXX,XXX see and well Investor nearly Christina These in redevelopment impact the sands day of production of quarter barrels delivered XXXX the three performance And some Production a for guidance Christina at arm an which to Day planned in the XXX,XXX XXX,XXX per we’ve pads was in of we year. these production at pads applying rates per a the volumes the operating Creek, production the spoke quarter. ever additional continued this barrels west continue the and from quarterly the about day, third largest quarter assets increase was last about XXX,XXX and day our in of that new the Production the assets, per We in to the average guidance of BOE spoke Lloyd at XX,XXX BOE per at Foster XXXX per day, December, seen of Foster impact deliver re-drill

our Our reflected realized volatility also across winter segment in in sands reflected condensate we and seasonal normal [indiscernible] that months. oil prices November. pricing the the additional pricing and the saw blending October WCS requirements Results between for higher and WTI

barrel. oil contributed In addition, in higher to sands about quarter-over-quarter costs an natural prices to gas operating $XX.XX increase per

higher third third prices and result the operations, of operating unit fourth to million reliable X% margin of sales, was to the flat delivered the nearly conventional Production business due lower asset quarter. a Turning commodity quarter the but quarter. operating conventional, than with still about $XXX costs held as in relatively

our X.X XXXX. continue strong contributor to billion of delivering margin XXX contributing of be to operating the offshore margin Our a over in operations in business, million and operating over quarter

continued was Asia XX,XXX per over the Pac performing slightly fourth quarter, of previous daily well production quarter. which the with operations BOE above in day

realized increased we saw and However, FX. prices

there. realized contract Indonesia, with in region strong our and Investor our Asia was in volumes back see benefit the to in Java at In region lower of value Atlantic, In the signed production and drill field, reflected well we development we explore we in East business the for in some we a MBH completed contract add January. the the as said a additional continue to which the sharing Day, partners continue in Lehman gas opportunities but [phonetic] able to was to as overall, net turnaround demand Brent December pricing. capture production activity We strong the are higher

five in This turnaround refinery the the was of reflects to in business; cracker downstream of the quarter. $XXX a at US units, So crude XX% averaged and outages Refinery. the manufacturing at Lima moving a a Lima major year event, the total around with the planned planned in unit segment, million. one involving cat The cost impacts turnaround the every utilization

units, turnaround, unit costs to week and extending planned January. and secondary for beyond to the the encountered some December barrel. timeline manufacturing the US challenges outage, the the associated through six fourth XXXX eight Due per increase with in impacted expenses turnaround-related run rates, we Following with initial rates reduced quarter operating processing repairs to which into

resolved. reliable and This to operating and this the throughputs are in back confident in quarter. refinery very segment, with the full We wider utilization reduced operating the of in an upgrader. with of Lloyd first for the to strong segment of third capture performance operating margin operations average finished January. The differentials these generating year margins well and a one-time of to throughput report the $XXX expenses average this utilization in to also expect upgrader unit fourth due is an been In for are at reflecting price performance at assets, of complex has Fourth manufacturing strong The the refining Canadian we was continued the as to year. and see out the reliability quarter quarter now and that utilization XX% repairs XX% Lima I’m the million, similar be normal. were impacted Lloyd quarter steady as to the asphalt pleased modestly operations continue and complete issue that team

are we’ve a of environmental, for who social, governance you you of joined targets know day areas. couple announced These morning. our remind us and five I all however this available on website, wanted December, Investor those focus you at For in our ambitious to

billion greenhouse XXXX been approach X end address emissions to always with target as to XXXX X indigenous at reconciliation. spending to are We a supporting by part committed our least Working important between part climate XXXX. businesses have efforts and partners reduce indigenous year of XX% of year absolute from indigenous our has our emissions, XXXX gas business to levels. scope set an with $X.X and we by change and And

our by includes We’re net sands oil zero which of XXXX, to initiative. our the our zero ambition also with net pathways emissions from work operations maintaining

we the now of year. free the RINs, assets spreads, billion $XXX results; scope refining generated than well $X.X activities X Turning and outlooks, quarter, flow range in million a independently the nearly in flow was of spending X.X value recorded billion. US operating specifically Capital quarter. funds differential. X.X flow in more placed our our price in within related in and for WCS of cash segment derived impairment commodity this billion, The close to quarter, US carrying us and around funds the to guidance from to which financial full billion fourth the manufacturing changes We impairment current our crack the adjusted

booked think we about in way conventional impairments the does reflect not related the business. We reversal QX change a This in of downstream to business. our prior also any

with comes of We integrated model more our to downstream value continue diverse and in to that portfolio reduce see assets. cash volatility a long-term and flow upstream

in flow that saw These synergy a sands free performance mainly nearly administrative corporate XXXX in closing also billion. fourth Conventional the adjusted about accrual billion results for X.X since general XXXX, reduction with Tucker proceeds increase flow the the our debt those X.X by synergies fourth reduce Wembley with which debt was over is represent program year incentive nearly our that received the billion. another of reflected billion. Retail proceeds assets effective That’s is on impacted Wembley the for at of three the to the of implemented really funds we’re the also which two-thirds side, Husky closed X.X program, to generating associated Tucker Husky business, related billion insurance you close I’ll quarter, On oil and funds project of in update transaction take still to an funds in fourth the our a proceeds speak at stations. flow. of when November. incentive non-cash and the employees motivating X, including we pursue collecting for fourth adjusted $X.X this in NCIB of transactions our capital We costs to XXXX. capital In QX. an to executing with free the additional related a company, the the we the This together total X.X the enabled especially transaction. in XXXX. opportunity our disposition announced January expected clearly to also retail to and free and expected financial our coming flow in in consider one-time of X.X billion we The in very still sale funds very, This close in below net quarter, refinery in of quarter superior and X.X asset time This flow one-time the was expenses rebuild, announced and plan provide ability funds in for began January on generated which the in shareholders. sale billion us net quarter quarter, mid-XXXX. in

As price of February million XX of shares at share. per have a $XX.XX we weighted approximately X, repurchased average

Looking and we’ve of over everything out on better created synergies, including returns. more upstream resilient We’ve successful and reduction, debt for above back business year, net to operations, transaction targets delivered our shareholder a delivering over sales, the asset Husky the past we’ve integration do, Canadian Cenovus. downstream, set increasing and

increasing hit more assure Now, at to we free flow funds you, X our continue all, opportunities assuming rapidly mind could and prices net adding of debt shareholder even will we continue for billion, this in commodity the to target I you’ve XXXX. implying will team. looking hold, will for be allocate of top capital shareholders from come management returns above we to be And our for value expect us. discipline

take So we’re with happy your to that, questions.

from We’ll our Capital first [Operator Pardy Instructions] Markets. take RBC question with Greg

Good for Thanks thanks. Yeah, the morning. Alex. rundown,

perspective? you maybe like sub-X in looks billion, Can highest from So light to organic sound of forth. so terms you’d shareholder lot like for doesn’t that a have your to-do as on a just -- first investment and the there’s ground you’d that And of what maybe in priority to list? shed return was the my really now just appetite be on right to from those things would any options question, -- going you’re increasing said be it extend

Greg. Day, to look Thanks question, going Investor were I as for very allocating our I very, we no. the to the at cash recall, balance clearly, think said you’ll we think at I and we mean, shareholders. our made increasingly sheet, returning delivered what we Yeah, to that

decent We You’ve start a our think, seen got NCIB. a I off, quite that. with to

is, double rapidly very shareholders. You’ve dividend very, the and would and value to of importance what more towards on focused urgency the our billion a heading we are think in I we debt. seen say I us net here below And the and are returning

we’re a Board, an to that We’re can in increase little think do, than we pace plan about. even our -- our be back on in of updated we I coming a And to to shareholders. thought frankly, as to we’re management shareholders fairly work bit shareholders at quicker continue here short delivering team, have a probably but it will that order, a anyone and expect our how with to going return returns as

we’re think bit to to So we need I I’d say just a bear announce live shareholders. us, come very a little can that we our of to to with the with plan do just work issue, back

I’m US fine. question, that But so Jon. for And what, just much or or go or about want would Okay, to should second cash just the you flow what you refining -- ops? be is anywhere utilization thanks expect to performance And really generation, it on that. more improve reliability perhaps what for your but steps taken have from we not probably thinking

make and Keith in. then let comments chime a few Thanks, Greg. I’ll I’ll

US core did to The I’d during then but good. is that coming absolutely the execution isocracker the cost, total about execute The in operation. did make reformer was Lima. struggle of XX-day refining of quarter now up out of our turnaround first $XXX million. the rates is strategy company comment the Lima turnaround actual Alex a was is the of normal The we turnaround and quite to mentioned, with We as refinery and

we by XXXX more utilization there’s know, availability, continue I justify, utilization to, major Keith, mention operation. another turnaround a at those crack get expect BP. take as What to as market. past think, historic lower executed to at has normal to and you utilization Toledo in the rates continue But will and else partner been anything we should more the be don’t would cracks expect of to that. in commercial due through into want going rates I add seen than that will to XXXX we reasons, rates forward, it up. We our see so have largely of run have of you I we at robust is to do historic

in think just, us be in through but we’re be you and that’s type gasoline I once diesel weakness we demand online. now around kind is cracks will cracks, bit turnaround I a the to back No, with some little of a strong, neck of thinking Greg, that RINs Lima and in got think five of seasonal gasoline and XXXX. refinery really obviously, is that The behind it. And, event, Omicron, the obviously, quarter, year $XX. saw And, really impacted transitory expecting and

with even throughput Jon expecting what in XXXX, to, alluded turnarounds we’re the we’re on saying. higher So, based

Alex. downstream. just of Greg, would I with on Hey, overarching and it’s I Keith might that and said, put Jon one comment agree kind everything US the

Jon absolutely we’ve an out put see of and kind the our And focus in we strategy. exact and and that Keith that very downstream results should area our kind our is of deliver there. I to this that Norrie on and integrated an As the business. focus investors business making It said, at the expect of core sure are in significant business for US XXXX. thermal same think effort start, part is XXXX the we Jon putting delivered the into us that of performance of same collective that

much. Understood, thanks very

worries. No

Fong our question take Dennis from with CIBC. We’ll next

my morning, for good Hi, taking questions. and thank you

could this here, like opening you did looks It noted of at that modeling be to $X.X more but first pricing a terms in some Jeff. as with forward, a into just impairment directed little your charge, But of the to your Alex, stock that the both wanting there bit embedded financials actually assumptions billion of looking kind and RINs digging take more color at, as the detail and The respect some impairment assumptions discount be as I was comments, of we changes you and question. rate one might not around the get well a in the changed hoping going you’re charge.

their really Thanks IQRE the for is, and price the to the where question. reflection really sit we’re And third-party what number had as the of here. see Jeff I’ll really those the mean, can driver. Yeah, reflects in one, lines that’s similar and reversal. in, currently I upstream, downstream this you say in so we prices, it’s seeing the

a really drives different Dennis, changes it’s reflection adjust pieces a that, evaluation third and is and one, of lines, structures and refinery. at on depending rates party look price lot the those number of discount in one. that number and two the in the will will vary with So of And number investments

is. moved a reflection different that So, -- But depending that’s the change really, [phonetic] it’s party for between a always reflect but we’ve points, where investments, -- and market that flexible on really price little third Dennis. region can bit of those a

Okay.

question, Greg begin managing of Okay, job asking a company And it in done was along, maybe debt thanks. to then little good especially with. really term there terms but the redemption. second most falls the with a has The recent bit maturities,

just that you optimizing about thinking kind And cost generating? improving structure, is that thinking maturities the about structure debts as terms as term cash structure capital in that about optimal be that as are be side? ways the forward? how of amount you’re can and we of any given or free of there think going an we should on Just the well the How we the should flow

billion be and we’ve they referred largely quarter we Alex you’re always the cash share Number to would about to Yeah, the this us over -- billion. that we’ve talked I’d Jeff generally, and expect us I and to, between balanced. last X with again. a to holding expect billion, that between and for operate one, up a [indiscernible] year were a more we’d into buybacks to eight then dividend so is, as reflected balanced it’s said ten talked the

[indiscernible]. look across we’ll And point, cost to billion, all so deleveraging down year, the until optimize did we’ll to We our but as We deleveraging. we’ll profile. the can term, look did the maturity to as the QX that it if curve we and up X want where last we get out. to returns see and and the shareholder accumulate cash, and we balance your to maximize balance at we there’s continue and we’ll look in opportunities And,

market is really it So dependent.

you Great. the color. for Thank

Dennis. Thanks,

We’ll go JPMorgan. Gresh from with our Phil to next question

Yes. Hi. Good morning.

talked First the question, about some was things didn’t quarter, headwinds. price just hit capital I’m working first some any I oil in know if of you if that, there like know that any have seem fourth the thinking environment, the rising first about could tailwinds are billion -- had quarter, I in know you of quarter. didn’t I absent as your we in peers should there would there it thinking be about target some because a X potentially

on either comments? just So have of any thoughts those you’d

It’s Phil. speaking. Jon Hi,

and I you capital think of good managing really see particular things was noticed we to February and working one million and one will sell and of spread did as not some WTI December, so opportunity capital, pretty that December the be the in things reflected some And job that WTI, we was in some sales take working is both QX of as about an did that of the year. WCS and said, this pricing, $XXX inventory those did a January in in being we there release. would of in build well weak a have

capital working release and that QX. some we We of that expecting you’ll in We managed going But, us stored continue into some we are manage to working did headwinds through all did capital and something cap QX sell that we see think or production line impediments number. QX we through and necessarily we in put that’s QX. reflected overall, the see in any barrels So it’s that see don’t and think I forward. to QX,

target the of it. of the by Got on broader And the anything be XQ. spot the ability below these billion end to X at prices view

me I’ll going two are you, pretty tell to to to from thing get some proceeds that’s to which is mentioned, -- material get going and and QX Wembley asking that going happen get we’re the Phil, nature. what closed, sales Alex is when we about both asset in in is you’re are Tucker, those digital now So those

actual rapidly towards as So, moving going I’m we’re -- debt. billion are there we to on a date have get but to not don’t when net billion. are rapidly I of converging we $X

Okay. Fair And to quarter. enough sell that. Thank by follow-up, for that end their you. intend ConocoPhillips clear one of was just on they call, the first then earnings pretty obviously, down their full stack the

in buy then of managing that, and the you so that just thinking hopefully, or it of soon. is have is kind or open back Cenovus is be there shareholders, there stock, And in just review more market any the about terms of to is the in we’d it the update and anything buying

with effective I my work have a it -- Alex, that selling their I that effective to really this has guys quickly. action down so here works reasonably our remains heard pretty to by been I that Conoco’s end And Phil. opportunities but rote the that mean, many them, found it’s Yeah, always to say coordinate me some your to be I a as a there’s appears program, offset NCIB this little it’s it’s down. going their sounds we pricing that think, program, pretty I that point, observation to block. happy rules, our the think we sell offset difficult made pretty think the to NCIB as coming any mean, first it for haven’t we’re off us but comfort is you Into bit a with at times long and point,

Right, enough. Fair you. okay. Thank

Yep, no worries.

Sachs. next question our take Goldman Mehta with We’ll Neil from

move hedging. would team. inventory was is a and but QX Good some think philosophy to fourth think that And wanted or management talk big just higher. your that would I and up, spend maybe risk you oil there’s management on management. number quarter, about prices risk for something around morning Jon time having question a It with about the as sequentially picked we in Jeff,

around talk forward any can and just terrific the be provide you too? the philosophy general, So about in would that, curve at quantification

Sure.

producer, alive an that what company are this them of So, two But are in integrated is term. built programs really where barrels market Western access we and we in the two the out our short pipeline within broadly, oil network into to that what are as we of have and company through that Neil, market we’ve consideration always we a our We sell both and Canada more pad as were our forced it are where was strategy. refining particularly the got we’ve access moving through our the in a hardest achieved day. something years, we’ve And at is about discount how at and talked Husky time length built more core over that something to barrels four last and world a in be to want acquisition. we with didn’t well

of those will to lose prices. we and this to the rising become quarters In barrels month so be you’re we’ve money. and environment, of gone company, from price seven XX% going what the expect the opposite where of inventory WTI just million hedged. that would to the We’ve see typically is through but around In decline less of term have had neutral period price, rising over month, about around inventory hedge we about do a is will we through in month we XX% price So you XX end, precipitous think carry, if will a those barrels if valuable will barrels, environment, revenue through cycle, net-net, a time. that they effect, consecutive a exactly you you falling of that get

where the that then following between pricing the month. WTI, differential we one the align pricing WCS program another Program exposure we two so one. a WCS windows price we WTI take don’t we program in have where exposure, that’s we and and So set the run our and the is month, WTI in differential,

So bring about them those we we XX% and and do exposure. collapse our together that on of

it we’re will that again, in lose will or net-net, that it’ll low price rising be program -- the And a do. cycle, in those a price are WTI make pricing two over because So things forward the environment, better. money a in revenue neutral bringing environment, But the money. declining we

hedging help And look you what Jon, those Street curve we then the could think forward impacts can calibrate the about using like, XXXX? as

if depends largely XXXX in should it world pricing, where you’ve the of goes flat got price Well, be kind where revenue through neutral. it a on but you’re of WTI

Thank you team.

Thanks, Neil.

Manav from question next our with take Credit Suisse. We’ll Gupta

in Hey, guys. and question, modeling XXX,XXX. this it Christina a with a me. might Creek was XXX,XXX question, not know actually like but modeling Foster bear so I sound it’s quarter at

annual end at guidance, Foster XXX,XXX. Christine has upper you think of both Now look end, guidance upper breaching XXX,XXX you basically on I the if the those, are

So think at now when end should to you as assets? it about these the we at XXXX, least not of the if relates top top two model over end it, we

what thoughtful give I ask insightful question, Manav, and a will Norrie the all time, Norrie and this a you response.

I is as suggest through. range here. give you kind and a of ups It we Manav. Norrie because we downs, there’s would Hi, go

Our fourth quarter, weather. we performance. by had very weren’t the We impacted strong safe

would have range, activity but could as ends I there just kind use both is a forward we a going of continue go We range guide program forward. you to of and the strong of

with forward strive Creek Foster at finding production. development we inventory, going that’s to our very will of both costs and have and this a and year we turnarounds balanced low have strong kind Christina We maximize continue and to Lake

Okay.

question, second I – remember you The

is this Manav? I Manav, am Jon. sorry,

sir. Yes,

Apologies.

turnaround. spoken well We to. Norrie and just I’ll do and year production have be both things Foster Christina will there turnarounds of this in has other those during reduced that maybe two remind So you as

that the going we Foster timeframe impact numbers in where to representative intend the guidance, that’s QX production but will I think, in down the you So we’re we’ve something what to do is QX Lake those but be. given and Creek in Christina take of timeframe,

up quick on think follow deal my And I the timeline. you the payment had Perfect. time a here Conoco, did is contingent with and at the Christina Foster

did they deal. I you help these contingent us the it the at to if from two time five point can payments think was But years assets? would, as will you relates understand what the it stop,

that -- that and it date think There is is Alex. when circled off. the of this is it year my May Manav, calendar a of I rolls on is

XXth.

me, May Norrie XXth. more has May granularity XXth. than

XX o’clock. at XXth

closure five of years two May because So in back of these XX that’s XXXX. date assets the the was exactly

XQ, right, think the it? is to pay way them So you post that basically do about not right

Correct.

Thank you. you for Thank questions. taking my

Manav. Thanks,

Chris Calgary with question Instructions] Herald. Barco take next our [Operator We the from

Cenovus Alex. for higher a completed of of bit in in been have Mountain what XXXX are sometime about I Hi, at kind upon a shipper fair substantially you on a sometime it carrying not and Trans guess, being price that pipeline with and tag. it’s hearing talk what least Alex, or expansion expansion? question as there’s will taking XXXX impact place but

perspective, with be and Chris. quite an that our nothing from lot toll I will are Yeah, we’re and contact I our say we seeing would people us significant owner really for to and, any of mean, a will a as regular we toll that on in significant outcomes would market. TMX make think expect the of getting difference the range Hey, still attractive production such, that a a that confident as And model work, that for at of we’re shipper like I aware, as we’re developer shipper.

Can me how committed have you many the tell barrels expansion? to you

not Chris. Geez, I’m sure that’s that public,

you volume. -- largest a on could one think we shippers meaningful TMX, the are it just very I and is of go

last to weeks barrel at I’m or towards $XXX in oil prices all lastly, oil of and this up perspective a Just your change rapid affecting your thoughts moving a curious Does prices. in $XXX obviously all? being capital your we’ve couple WCS or is at changing follow spending XXXX? a on thoughts how expansion WCS seen in in barrel at the

do these of XX the active program, in we WTI, when all not I’m something in of can cautious. the I’m our higher for business. acceptable oil, bottom invest sands now. You to and we’re of and always we that prices, of to We doesn’t this see so describe very return deliver development it’s cycle, at a I just the plans comes enough conventional an enough said have kind won’t it on scars we guess the anchor Chris, at pleased would gas. company’s old cycle which kind count pricing, bear That and quite for being project that oil We as the although oil know an both of in bottom

just lot a be a to basic service our of lot service sustaining contractors, employing capital So, a with we’re of of lot rigs, going -- and program. drilling

or what where is the got question EOR guess, sitting going not could response -- if of have And included the government to on federal government? is understanding One yet final from be where with any you, we’re federal whether I from the that and is your tax capture credit and I carbon sequestration?

with probably better announced probably with day come government, have is I or on that discussions the milestone federal likely plan is to is of going my obviously, but and a work goodness on we government’s very the the now federal them. mean, from what about end to the forward I, discussion in I the from working a that which, April. year. government hearing we’re more within as I next the I to together, to going going collaboratively budget, be is and XXXX in we going consistently their in March at the tax been of mandate, details credit But of look the investment would suspect part understand, So, in And be major the this say lot Chris,

to the EOR to of the effective is have and, have to now We don’t they’re certainly point, I EOR have like had discussions we going that. guidance sequestering as way -- government certainly I the whether I that this about probably but most at any cost right opportunity when COX consider remind

you. Thank

Chris. Thanks,

Nia We will from next Reuters. Williams to our go with question

there. Hi,

been value opportunity you there in in moment? add to there Do see the have Canada looking for than Asia. more about at talked You investments

Alex. it’s Nia, Hey,

we operation look, a with know, we’re Asia happy Pacific, have very good quite in it. You

and We to continue continue we been over we great to and time discussions. have development have able partners those have to add opportunities,

think some relatively investments that in business continued it’s attractive pretty opportunities but basin. a modest see days, early it’s make to we a I So,

to up, Okay, follow towards year? funding any do a you allocate alliance then, And this expect capital thanks. as the Pathways Oil Sands

Sorry, part that. you get up sec. a of I there broke didn’t first of kind for the

Do you Sands major the year? Oil Pathways this allocation any to capital expect initiative

around over permitting I would anticipate right to future, engineering, I think we’re -- kind eight sort the of but now permitting. would of in investment most studies, ten significant of on years doing work feasibility be the very capital the we’re anticipating out work

a allocation if So particularly for modest up, relatively carbon years, it with but that tax federal capture for capital the sequestration. ramping successful we’re in is government the next credit and investment couple of

trunk year foundational pass, a is line you and investment would in a around that eight which carbon you’re that, were up a facility sure over to Lake to the I’m aware, to sequestration tax project, ten building credit ramping kind certainly see capital we partners come Cold As And the carbon have area. the if of period. to

Do you cost? numbers estimate this at have What sort are talking we much project rough of point thanks. how a about? Okay, would the

ultimately depends could think on really think being factors, of dollars. billions in it’s of you something but It number on of this single of I scale kind many of a in this

thanks. Okay,

thank you. Yeah,

with – We’ll take [phonetic] our McCurdy next question from Janet

of question. River I is for Borger taking And actually Refinery. Wood for joint the Phillips first have your about the two with my them and Yes. thanks venture future for Hi, XX of the you.

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has joint done, two those then second was refiners? I’m And for just future the what how I question. your I So changed and wondering venture a world is have the of when

all being our and have through has conclusion Husky particularly producer being I like the of Phillips first strategy and see changed being acquisition, in mean, excellent what can and an equal. way to a of And great production really a energy definitely, XXX% assets. we’re But refinery if gate term from refineries strategy are of towards love a say we’d Sure, I operator that in you that an I ultimately we that think the we great refineries. our with is involved great been the would strategy, are moving I a as the with fully we partner, partnership, they’ve operator all refineries, scenario of long a where world the a integrated been of it, they that, things that those has off, when partnership are to view can, mean,

announce, don’t But certainly their there’s situation to have to comments I there’s but -- with and with over would I and partnership and people’s time goals this look might from in think change to that there’s strategies discussion a an we no on of we a think change urgency align any way ours be that company’s that. come deal So lot probably where Phillips alternatives. urgency other don’t the not anything to –

So you. example, imagine of uses and WCS how Wood for I from because, would River that work out, that like lot though, a comes

mean, So of mean, mean, would you? how forward? I that it? work kind they keep far? thought supply you I would for Would you take going not take Have that some you out I would it? arrangement

having to comment. be stage the hard above be too could those of any to really of we really really a preliminary are speculate. could it’s early at No, and sort at discussions, It so it’s

that to timeline you these any discussions a then have you where do expect reach -- you that So around conclusion?

it’s go lot more but little a these I give detail wish pace the think what own take you and of I before kind we could more things going at between No, is. parties to the their I discussions honestly outcome determine a

bit So time. it a of is going to take

I understand.

second said my question into is comment this here you and earlier barrels QX. in you in Capline put Now that

about How -- you So getting idea be and it’d playing how and can see to committed I you committed WCS do a that? the do this is you any to this much you me guess, Have give how barrels? for are feel getting, you Gulf shipper? if you Louisiana? out And

Gulf and the as for part barrels. shipper Yeah, strategy to maximizing been we of the Coast value heavy pretty are an generally has committed would look the our we obviously at market And Capline attractive barrels. that, for integrated a

So to maximize it’s net our market route to just backs. another hope we that

appreciate much so Thanks great. your Okay, really I time. it. for

No worries. Thanks much. very

time, I’ll concludes question session. Pourbaix, for turn additional remarks. and Mr. closing you conference That the at any today’s answer back or this to

to get the with and care. today we’ll again. their company much, back so Take of time for let day. thanks operator your the Well, everyone and again engagement rest everybody, your Thanks and thanks, once

And concludes this participation. for you call. today’s your Thank

You may now disconnect.