Suncor Energy (SU) 4 Feb 212020 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to Suncor Energy Fourth Quarter 2020 Financial Results Call. [Operator Instructions] I would now like to hand the conference over to your speaker today, Trevor Bell, Vice President of Investor Relations. Thank you. Please go ahead, sir.

Thank you, operator, and good morning, everyone. quarter fourth Suncor's to earnings call. Welcome this Executive Officer; me morning Financial are Chief and President Little, and Mark Officer. With Alister Chief Cowan, today's information. Please contain that note comments forward-looking because materially The may in in our release assumptions from our of earnings described various quarter well the that actual are risk differ expected as results fourth annual and factors form. results as information on those of and EDGAR both SEDAR, are available website, And suncor.com. our GAAP. these in comments not to referred Canadian measures financial Certain prescribed are by

please see a fourth of description financial measures, For release. earnings our these quarter

Following we will to formal open remarks, up call the questions.

hand his will I it Now over to for comments. Mark

morning, Good joining and for thanks us.

operate the the assets reliably. the recent at end safely our quarter did that performance to noted reflect not I excellence. our During operational operational third focus and of call, on October, committed We

three little recent discuss to two of our Patrick I at and else, Taylor the and involved operations Miller, later. incidents, the will in above of response safety tragic the which spirit wanted sites. After value have a I of reliability incidents, the and of incidents safety recovery first efforts. involved In has weeks, their and leadership our While also we matter lost in engaged the people Leslie met Patra. Daw, I those lives. the Suncor had families. all two with In contractors our address safety the in a with

heartfelt you, thoughts forever. of Patrick's People us, I go all to and and are can't on tell the lives friends difficult and for As comprehend coworkers. this team, Suncor and is Taylor, leadership myself of I prayers families whose been devastating behalf And and our the families, ones. has as condolences changed will and out on Leslie this even loved how

tragic and contractors and us safety making is shareholders, the our I are and have occurred practices. we we employees expect a to safety to strong workplace. protocols safe ourselves. concerned Suncor's which our The standards, and performance committed unacceptable team culture We are to a leadership and better despite of commitment about and events greatly This sure our executive

action the have following with measures. we So taken

We them done happening these how ever And again. must prevent are to understand incidents most importantly, from be what investigating to occurred.

Our with we the changes and will work rigorous, investigations contractor organizations are our closely required. implement

We have initiated where review area safety This in these is the mining quarter. our a expected of incidents occurred. third-party completed be and procedures of to the the end first by specifically

has Suncor the This our across critical leaders recommit met executive to to refocus other. and Our And series on recent we the review to held our concerns held incidents, our discuss senior X,XXX safety the downs have excellence. of on most with personnel operational of attended. and recommit part this from team entire Monday journey. caring focus also our workplace of organization the The safety a a [indiscernible] across just ourselves for and stand each in we one, week, company the over which is

every insist and and share contractors We commitment. to a safe committed safety this that and are workplace employee

assets. appropriate of all and ensure taking actions all assure reliable are me Let to operations we of our you, safe

with results, Taylor, talk our physically downstream peers. As that volatility model. like the our competitiveness of join now quarter access to of about you assets. asset would outperform we else. XXXX, utilization integration you. our Throughout achieved have We our We our and above results, safety to I global in taking continued reliable XX% gears Demonstrating best values XX%. and value by a the to almost the An connection performance across clearly of to downstream. the business base in stated which outpaced brief all I its Canadian would reflecting industry of Suncor's me our delivered silence in demonstrate that strong and fourth remember change integrated Thank ask and and moment operational benefits Patrick. peers customer. that of the Leslie

As produced the the Combined outage upstream base completing barrels despite at we tough and in take over at last the to of the a was made XXX,XXX debottleneck created the address facility. oil. maintenance Well, day of call, quite synthetic a Syncrude quarter, operational fourth crude indicated our the work maintenance base and decision quarterly in a producing the plant plants with average October. significant day, strong, we Firebag performance our some this completed variability business and on barrels to upgraders complete XXX,XXX this issues

quarters over quarterly plant best barrel. Base achieved costs concluded time. supporting in history, the XX% lowest which in maximizing and our maintenance, second volume synthetic cash the unit quarter value and of The an the almost October. despite Oil Syncrude some utilization with excellent had Sands value of production strategy each our one a XXX% also continued barrel, in utilization of $XX

barrels recorded of a Suncor. net XX,XXX Fort planned, over day As Hills production to

the discipline. second up focus cost ramped As with continued train on

once Our rates month completed. current half of for from of the November to were volumes of guidance by first a XXX,XXX day barrels end though, is period the activities XXXX, production year. for I our the the production maintenance and performance, indication reflects a average ramping XXX,XXX better solid believe December, the gross two of to full

we company. of in continued month averaged two is January. which of XXX,XXX performance production, level all-time period, This During has an for this record operating production barrels the

Firebag to barrels the at this of was day. XXX,XXX upgrade production a One the capacity factors contributing to

timing our So that was very good. on

guidance ended assets. cost our targets of We all continued operating quarter, our reductions unit cost of our deliver strong range low to the towards performance for cost end in and the the year exceeding for

in for to And $X.X fact, expertise. we quarter $XXX leverage through our volatility, downstream, and operations, quarter. billion our operating we were billion had million. XXXX, reduction $XX.X utilization by costs the despite exceeded reliable year, total another the $X.X compared marketing In the For which of which target reduction of in market the XX% a our billion, averaged logistics we

Suncor's increased by accretive storage and highly refinery rather of we Hills. We global Throughout deployed to in several Buzzard the and reducing BC Edmonton the our Base plant completed haul Fort nameplate X%, between pipeline the program Oil than increased nameplate sustaining at XXXX, capacity. Sands Firebag we we projects expansion, and continue capacity including X%. flow investments, We at below. invest autonomous by We trucks our to terminal interconnecting increasing or the drive flexibility capacity funds Lastly, capital capital increased commissioned Syncrude. levels to access

incremental target million $X by we XXXX, $X in XXXX. billion funds free XXXX cash these As and completed of expect as result, annual by investments flow incremental and generate of flow the $XXX billion to a other part

XXXX, already plant basis to the current cogen we guidance for wind facility current I XX-mile XXXX. our which That that Looking XXXX well is can at will have our guidance. capital range. above we base not said, the our being the planning within above assure project, accounted you despite commodity capital for restarted outlook at construction our price and increase

that me say again. Let

the We free our investments volatile gas XXXX of range. fact, projects over we capital in above in the an range. material making to environment. will capital that and will funds also middle these increase confident to I’m financial target Suncor's add while Suncor's not some guidance it wind continue long-term the current annual our our greenhouse our shareholders, go to our strengthen to to and value in now to our of addressing the I increasingly types cogen hand flow steps And through highlights. Continuing emissions. prudently value will Alister in invest in

of generated the $X.X quarter, the fourth Suncor Mark. from billion the Thanks, quarter. In despite operation, funds the flow at beginning of maintenance

this pipeline to one-time Now provision solid a prices. our integrated demonstrate results across at to for cash These XXXX assure continued the portfolio excludes We generated in the progress related dividends. that $XXX provided capital of backstop the time. XL a future million million commodity a payment value flow and guarantee for on world Keystone after $XXX sustaining to XXXX in and a of with performance model all physically of volatile

Our remain price realizations strong.

prices CADX.XX per by while fourth bitumen realizations barrel. improved quarter, the CADX by only saw During improved barrel, benchmark we per crude price

Our FIFO as reflected This operating relatively by $XXX weaker flow, pricing lower reflecting higher QX. uplift margins cracks which benchmark and funds compared recorded smaller driven to QX, downstream also flat seasonally volumes and barrels. in exported was million a lift of headline of

mentioned. Our Mark - we downstream and in expansion planned utilization bolstered refined maintenance, a fixed was build to demand weaker and terminal In by store taking that QX, of we the the our product cost advantage our business of Buzzard XXXX nature of inventory. leverage see advance

the will implemented successfully recall this Edmonton refinery in that You strategy we XXXX. for turnaround

economic We be season sold expect value and will inventory, this as maximum capture the driving summer into improving for environment. to an it

within target. Similarly, lower XXXX operating As of than or Mark is our XXXX, XX% reduction in This a $X.X million full-year the came spend the billion of expenses which previously our billion is $X.X communicated comfortably target. was billion for $XXX in more as capital said, guidance in invest economic removed of cash range, these growth, guidance from Mark We our the highlighted. completing several which range midpoint to XXXX. prudently capital original while in highly reductions future our continuing $X.X achieved flow initiatives,

would estimated you at time lower made As that prices $XXX debt. billion today's $X repurchases guidance, least at $XXX we levels. our million that repaid much had of December to of we million commodity share in than saw I at

higher our allocation our environment all will capital we I Should incremental reiterate funds increase of to pricing guidance reduction will range has As not since guidance know, will debt with increasing that the and release. sustained improved comment be be Mark's the prices. buyback. this further our commodity macro

not And buyback to in asset and stock reduce shareholders our discounted. and from remain margins our committed this deeply cash time, to with X% provide forward. will me this we to we At sense. increase return. the is a believe our we going dividend part to funds enhance annual flow Dividends increase X% returns. address will base, share the shareholder existing preferring the increase a as of returns. absolute Let an the foundation relative shareholder Both the to providing our dividend, big remain as We use costs

current updated prices. So for ranges clarity, commodity at our at

buybacks, $X $X.X our billion and share repayment, billion. million $XXX to debt billion For $X to

and Now I use many analysts their that assumptions. own investors recognize do price commodity

have the So flow said, to back our approximately to said I'm it not to and debt two-thirds for you allocated expect funds going has capital to Mark, we guidance, Mark I as increase and additional range. current repayment about prices from share will to to Again, guidance talk we buybacks. be outlook. should commodity further, one-third hand the increase

Alister. Thanks, like an Alister both I and to made. have emphasize would I point important

nor cash capital won't. need the not change, expectations in our will to across of Further unusually it of all and improve that balance say it did increases, flow on program but integrated performance, not sheet meet impacted we a those XXXX our think assets, our will physically consumer shareholder don't weakness of and returns. the prices sides allocate collapse and price the our demand I shareholders. funds As I to necessarily that model. crude both Reflecting

share historic to not flow commitment and performance relative committed we further these Our reflects challenges. made it cash $X its price to underperformance peers but delivering to I on The are by billion management our team restoring strengthen and only levels, to the previously.

progress in to a taken our reflecting we made our significantly during out our become production capital November downstream Changes up to or health in and costs the and and encouraged organization. in train, maintenance costs forward. discipline this performance Hills and production reductions. and operate these to targets asset with are with three successfully spend. structurally In this the January, in XXXX, actions production and cash impact the Several higher financial best capacity to year resulted more the value exceeded beyond, plant Firebag were maintenance order October, breakeven positive production the of performance to a the Fort period from will cash which in continue significant including reduce cost operating utilization and and company's cost have in maximize lowering upstream resilient We month infrastructure of going the In stronger, the been lower December, mine XXXX fact, second asset. and new increasing ramping The continue focused has the flow by maintain in very to will extremely in Since XXXX strong. consistent to committing history. I’m completion making we was capacity base upgrade will realize upgrade to rates. fully achieve on carried is maintenance we

the stated, timing We right I would going call. right in was was As be than would be in expected as what we QX. the believe forward This higher that it the October. price

is operating asset been Suncor late over Capturing step governance as year. The of the in Syncrude. higher brief the will Syncrude operator pricing Similarly, asset the this to this the QX XXXX taking and asset. or And announcement XX% the XXX,XXX it Fort of at in fact, the significant role the and very maintenance barrels activity, has of as in Following into in potential a change XXXX. day forward most And utilization. the be for full a over Hills. of significant structure is operator and of history

So to similar it very is that.

And regional so million of on we of in It for capitalizing operate generate Syncrude to approximately our is way. Syncrude an collective basis advantages very similar annual on a $XXX flow by incremental the will cash operations. anticipated

Suncor. years. to And building reliability on looking and the the are over increased is few the this asset realizing We value unique past lastly, forward of this to by

economic several returns generating investors, to our for that Restarting the of also I invest earlier. This are XX-mile high-return wind will only and of down completing initiatives successfully carbon positive but cogen farm mentioned our great footprint this. help investment continue the us focused examples business. drive not in on We it projects, the

and to our XXXX. of to on by this XXXX growing flow billion incremental billion by work intensity XX% reducing cash As a year commitment to $X add XXXX, by carbon deliver our we $X by

we demand our gain upstream have and and momentum, steadily businesses. tailwinds both improve consumer to downstream As pricing significant and

XXXX. in think funds enhanced remains that position namely are will fact, of we I increasing capability a can't and will that, returns. during we performance, than our and strengthen I'm significantly you. financial come it safety to I generation operational position was on with back shareholder in confident fact, In deliver business being plans, our better XXXX. better The and intact of into free we flow And Trevor, turn as

call to will back Mark the some the questions. operator take Thank and you, turn Alistair. I Operator. to

[Operator our first Instructions] sir. Neil Goldman from question from And you Thank Mehta comes Sachs.

remarks a year, kick on Thanks tough that where could guys safety. Maybe reliability. of to as was on operational it asset-by-asset. just Mark, and cash said, is you opportunity opportunity across here a that if a flow. represent capture off opening appreciate the on go-forward place basis, there lost good you But an XXXX, lot a profit was can

upside And be So you of you operational the core of quantification can doing assets through what great. drive any go and improvement? are that each to would

of talking and leadership organization for about have the Yes. Thanks we is Clearly, operational the me and in question, last Neil. for our two, month lot team spent priority or a time entire the and excellence. the

above the gone across all that assets, We all and structurally the of our we safety from committed that move so so Syncrude, wrong, we improve consistent do forward and in on that integrate situation that, gone has asset are focused something on else and and is platform reliability including attention where performance each entire to and delivering the the we how learn have things wrong.

are making. that the progress We are we encouraged by very

see and their and taking you their and we second You And reliability, in November January. Syncrude, it are was that further. and have can in steps we additional seen best improve December to the in even at XXXX have our it history, results

be. Plant. attention partnership company, the the savings reliability that Fort it focus for rates it where owners ramp priority It million on up now the with the whether our at delivering $XXX is exactly the same. is will the So to of we process at gross it Syncrude, for number and is of in and whether The full expectations all the at Hills, capturing the Base are or production or where working to one is is

follow-up there the cash is around will just be that. I I'm questions on guess framework flow. Alright. the more sure

billion produced flow $XX So you in of WTI environment XXXX today. cash a in $XX.X

plus/minus We that are sitting price.

So off $XX billion back for upside as seem of will Does I then you back And of take framework dollars I number assume bias oil are least million asking look million extent I'm and should you seems those published that billion course, is in CapEx And that you around that see us higher? of want $XXX know you XXXX, FX of suggest to XXXX you do hundred million, levels not you at the if around but but XXXX price. Syncrude. of through. savings, cost let that range math would a even that wherever got cash out you it of to any - is that refining it $XX margins, going And to or a year, sensitivities same fair it flow will weaker flow And couple $XXX with just to noisy hard have another cash in to that. have flow, stay then out to the from sensitivities. you? to number, you billion And get of $X that

to an it not guide Yes. you out the think you that are Neil. I unreasonable assumptions don't level. Thanks, is that about one. to will I there, But think mean I you laid talk is we cash going if flow. to

the cost as structurally have, We Mark operating the business. said, improved of

So cash we on been would I And very forward. allocation rates go that obviously, What additional of, drive ramp as flow also the Fort we Hills will clear. up have to say help. we as will fuel

returning to here. shareholders don't. think for the repayment, we is priority XXXX? increase have the balance the levels is to Do sheet cash I our We going strengthening materially that I No, set and from capital

seeing I be point levels consistent time. it this pretty will those at with you are think that in

endorse positive be your think XXXX would would very assumptions for a So I and that. I

you. got Thanks

Pardy our RBC from comes Greg question next you. Capital. Thank And from

open. is line Your now

forth. care you about Yes. I echo how your is will workers what morning I and Neil Mark, so much and Thanks, know good saying,

so to the kind to opened at dig like open then what door So the going that about ask the up I coming from gives Syncrude. because anyway. Syncrude? have and year, success I are important. What was the is but on for done starting you kind as bit on back, look also you a would the to pipeline, issues there I of those wanted I'm you path them? head bidirectional of it a up of you which is you You changes operatorship, safety governance. curious what on to are a of addressing end But mentioned they appreciate this And forum. just to you are see

both appreciate Greg. it it. Yes. the are material. mining mined I Sands running none unique. actually of corporation now which Oil structure in Thanks, Syncrude, ownership the separate Sands, it the somewhat anything or also And upgrading because of oversee owners owners we directly Sands. an ourselves And of entire original the Imperial, had With XX% Oil the material, upgraders did from with mining Oil are are us, over for of where around

of maximize eliminate of out So lot overhead that the after that way extract duplication best concluded had the the present more assessment there asset Suncor collapse extensive owners, structure asset cash eliminate structure corporate integrate and a a duplication the net the and and to of if duplication. to we the all we and with that owners that was value overhead long all just and we by the the to would than it of the

like by is and And mentioned, now Hills how first it a the so this it is I a the most Fort structural way it change the this was as originally So in substantial constituted change. looks managed back governed. 'XXs, will lot far and since look have the is that in major significant or

anything assets. I a to Okay. And going follow-up other to ask ask because I'm on want

than decisions owning And decision-making, you wrong if did to as it, then, So some despite the owners structure, I'm JV little. under have to was relatively essence, correct the get unanimous in - just me a in much IMO seat between of result then, timing to that of you decision-making for? you are the more yourselves and and the the looking to are kind this driver's drive

that require that forward take different unilaterally unanimous of support really and we operate get decisions three the of decisions the the of are is ones and is the of require support certain just owners to There is small. XX% move There decisions that require owners. asset. Most and could other quite There there three from ownership that are other unanimous all to through, the actually categories.

with business these build significant us massive This actually making, the of day-to-day But supply leveraging hasn't So of having or it. to any changed. create implementation why a allows functional alignment generates decisions, support. without it lot it how decision a support chain technology, is to new decision-making value associated around assets and drive and transaction

about by in they So the efficient we the very about years. more super just And for couple far of how it. the have is all the been organization. optimistic Syncrude I'm and responding management has are effective progress encouraged made last team structure This getting great and

So about we step. are very this optimistic

Okay terrific. much. Thanks very

Crédit Gupta our comes And you. Thank Manav next from question from Suisse.

is now line Your open.

focus guys, little on Hey I refining. to wanted a bit

also utilization a let's Your was actual you and announcement because so I'm of which up to trying reasons all saw materially working of but bit headwind, inventory capital prices product you taken thought hold decision this sales back higher. you this get little the you was the are understand, And some went vaccine the reverse. obviously, down. in was will the And probably saw commodity much a better XQ. prices one

process inventory? I'm was actually this of the But some understand, the has trying to thought call back So already holding just worked.

just maybe working prices One up. increase up, factors inventory, was are capital in that I receivables commodity I come our up, mean, in other And went just is is I our the working would to Yes. two When fact driving prices there will minute. go goes commodity that a say that the capital. up. the go

ways, we a that would in good So is I very thing. say guess, many

On is it. of side, the couple inventory there pieces to a

ready have. work. for we have upstream in the most the organization, fairly actually getting And turnarounds ever significant Some we is some timing, cargo but just are significant we

for bunch And have Base Syncrudeis which which of some this for our refining, of at coker taking going at turnaround. a well turnaround in also we into pushed big of year UX five years. then we is the Plant Base our is turnarounds a their in Plant, year. also offline as capacity And two-thirds from So the last in first upgrader time

of And built have so as that, we a result inventory.

with If and how the build look increasing this versus to their you XXXX, We it think just inventory entire a our base asset management. own dealt to at to our this in go inventory, built on pushing we utilization. use assets we is back assets prudent leveraged competitor's and

We a expecting are the towards and product as down the draw we second are the season to lot quarter move selling we in here. as optimistic we primary this of inventory will driving get forward And summer. be very first that inventory into the we

sense. perfect about, of trying on talked understand, reduction target Makes quick this this working to will X.X based one reverse. debt I Because cash basically target. the organic million you have of I million million generation? understand, as be reduction a debt capital I'm flow follow-up discretionary XXX as is on to

receivables. You asset million from over get have tax sale XXX one Golden will coming in probably billion proceeds Eagle. then you in from And

cash are cash to this is in, in there additional you the billion two free X.X on So generating. of coming top

I'm trying organic one cash of just debt purely X.X the million the on guidance free flow. So based million reduction to to understand, is

at have I Yes, Manav. our using, commitments Thanks, reduction coming is think have will I why commodity one-third flow certainly, gave a we QX. is I and if indicated. and prices our And allocated you recognize to what looking you manner, operations. the same on from debt when those would in at than two-thirds of from are price. just the based to of that, we flows look many come market, that higher will Yes. obviously, I cash are the the Golden it I will I we you which obviously, as lower commodity tax mean, are Eagle. take in store be announced that. and sale buybacks, in But repayment These to we say I additional cash have

so questions. much you my for Thank taking

from question Bank Asit Sen from Thank And you. of our next America. comes

now Your line is open.

Thanks, terminal. good and midstream you investments Buzzard mentioned Mark, everyone. opportunities highlighted in morning

you about value incremental? the are on thinking Anything if elaborate how synergies, Just you and could investments wondering strategy, add?

we right highly fact is, product Yes. Thanks, is the temporary have f issue And Asit. of because some seeing we some been have keep the we the some permanently that despite both are it part to competitive doing able East of and in shut it It to some interesting essentially and down, have And using refineries export to the our West be are side. shutdown, downstream of the off actually utilization this that oversupplied, product Coast is be infrastructure, of the making exports. assets have Coast you high. are markets and that export with able now money

that the we obviously, positive. returns so But And are lower. see as very

If you are we look than frame. at were $X time higher crack the November New December barrel York up a Harbor strip, the we in and

driving season. prices expecting two, as one, build go into So as such be forward And we that, optimistic high at a very associated vaccines easing an lockdown. are we of it the are inventory, we is with good strong to and position sell recoveries we able the to

weaker our in a stay the long-term this of because of profitability managing we the way competitive flexibility is view that infrastructure is market relatively such is have to a important and it downstream. having allowing So stronger an assets, these

why us. think for very is is So it good that a investment we been

very thought is helpful. wanted That this also process to Sea was I which your nice. get on asset North sale,

region you are upon the valuation rationale, touch in consideration a the about entire and given further the stronger Just if how portfolio? macro, wondering opportunities thinking strategic could you

we of this. end-of-life time The out not an we for date have Golden that end-of-life really Yes. because kind is one view an we where all assets, every our with are Eagle of of we thing player in

what have been disciplined just very said. this with we always so And has

but end-of-life player. We early-to-late not kind are of in life,

have a feel We it that we could Golden that little be distressed later. at exiting sell to this felt It the doesn't a little we the or been around exit so seen have transaction. And about it could before last the like time. sooner, have would that that Eagle, been asset we asset it have We we year. this prices looking talked would

joy for to The whether disciplined actually reserves doesn't us and stuff, down of all this really the making economic so go us. up following about the and course. is kind that and our is for decisions shareholder normal And all this matter is just right and it our

We said cash is always of disciplined strategy. our This are shareholder, just have execution E&P, why about Golden it we that is the is flow driving and Eagle. exiting for

Thank clear. Mark. Very you

our Thank from question And from comes Phil Gresh next JPMorgan. you.

now is open. Your line

Hey good morning.

First know there on costs. question, of a is been questions lot I

think cost So are the structural any I actions return I companies temporary the a And took reduction more of these you lot be to was actions hate but downturn that the to cost potentially of forward taking actions. you energy of cost about that should just took? how transitory we redundant, moving relative through curious,

Yes, exceeded our I target XX%. will Phil. as one. as saw, you $X Thanks, by billion take that you we

reduced by XXXX the cost levels. billion we compared to X.X So

we of told structural initially And reductions. bit would thought come of were that back Now had third the a we in rest those overtime. really

I we say As and that about the gone year, costs. I have would now, our say through structural XX% our reductions would

improve have we reductions been on So those as to forward. structural we able go significantly

we investment of then XX-mile implementation some new of the starting in in which come go reductions and in flow, business, XX%, over of to is And as three of will cogen some obviously which the years. $X other as of the think, back next XXXX. you additional are the across in come such take the which billion are to see two margin cost and some forward, are cash time wind business of execution project, I of further will the The I years, some additions which our and couple think the next

the you and real are that see to the benefits of of So execution strategy. delivery beginning the now

X.X Alistair drive flow Suncor to continue processes would I structural cash structure, of the that part of with part have is, look of XXXX, to the further in exactly changes cost company-wide drive this strategy, is implementing underway several the efficiencies add is initiatives maybe which to and said. we billion is $X by And Alistair, and down It increase it. as incremental to structurally Well, associated just the you what XXXX.

year. calendar cost So we here the continue to increase in structural even changes this

a would in the terms think in think targets target those $XX If about, billion Hills have $X talked for How time past Oil you when today say, the a you at to No, or I lower Fort that of I relative OpEx times of Sands $XX flow a have calibrate is barrel a and and other helpful. talked Syncrude. cash line? barrel target about you improvements about

which It on and We have We it. decisions XX%. around big set associated the overhead we around we interesting. piece also an structure as the that shows with that challenges and said executing to COVID. that these to example, it with XX% final the end is that a company. in is At Yes. incorporated it. have basically changing structurally on lagged it. we range some work Syncrude, have required as the This basically with see these structure governance associated the driving includes Syncrude, And the XX% At deliver in think still this made, cost high is think asset these deliver turnaround the our on this is structure a $XX. of of plant, changing is of of down big year, But base although capability targets utilization lot we we year, decision have incorporated the is we

targets $X these in you billion helps So actually us the mentioned. achieving cost that

Sure. Last one for Alistair.

the reduction maintain thinking how to growth dividend? buyback it as an whether about you Just made dividends, about around certain color debt a like think commentary should the how piece. the clear is eventual return very versus Obviously, we the you any or are the on target to in breakeven that? Just in more

last Phil. dividends. on $XX capital cover reset sustaining the Thanks, to year, a When Yes. reset to WTI we we breakeven

cost the executing reduction our down As driving productivity and are are we the of side cost plans, business. on we

that $XX So allows increase WTI us within the the breakeven to dividend.

the that. sustaining costs, the So gives down, are execution us dividend capability operating whether down the will move increase And of breakeven the scope as same, capital we but driving forward. and stay driving confident very the we to

you. Thank Okay.

our markets. comes from Thank question from Dennis next you. Fong CIBC World And

Your open. lines now

good you my questions. and Thank for and morning thanks taking

follow-up and with of of associated things these spending with have the projects little structure, savings and about I projects? both a Neil not both expectations. and I a year this guess, of first with thinking kind spending a project the restart associated to, and both both cost and of And of question. impacting component know a well. completion be about improving guess, counterbalanced, been the The wind you going this relates as CapEx the the talking from of bit restart through Phil's How specific year's farm cogen balancing very cash increased I the we of should capital about the maybe have cost got forward act I

move of Well, make Dennis, we last to them that these ensure And wanted we is reasons because weren't is secondly, that projects, guidance. plow year, mean particular if could this did have wanted we two make were we to sure just I in forward ahead our that we the going when to we happen. sure stop it wanted with very we then things guidance announced to we capital is disruptive true. with that again to deliver One one the on case, is

So there capital great of continue comfortable to targeting middle shareholders. we of we and are lot confident of the that very are deliver guidance. there, we since these our released feel even for out focus feel targets and we We on projects, these we has range drive to been adds the the that a optimizing capital put now value can

forward are we these. on So moving about excited

just for make of as also color the basis spending would of savings call could improvements And it, XXXX, in that levels of years Okay. in, flow for just forward business, some from this offset I cash cash to via structure great free terms to potentially year. of which the is kind XXXX, Great. of some free impacts that company? in will carries of subsequent of sure we a is, cost maybe the No, presume increased just flow that spending the increases the

kind things you two Yes. spending two as we assets on are these referring to move these peak this of I investments is if specifically, mean, forward.

So price, we are the generate even associated are despite If to stock have the is we significantly the as of absolute free the with share like down flow. about weakness cash debt and result the we way weak positioned well X.X flow going why great of billion is XXXX. And can setting where left higher and and we price, given on the we things in the going time, up cogen, We point were particularly pay actually commodity of debt, a at positioned to is generally the buybacks. that stuff relative as very but prices a I think in ourselves for, this one support and that, cash to it. we it, feel Alistair two-thirds than just this share to rest mentioned, allocate

As we we be as very how is forward, to cash the our go expectation manage on well. disciplined

So can go and very keep keep forward. cash as going strong we free this that we flow

Great.

and that kind pipeline? guess, of for in maybe how through I these significant. turnaround on sorry, turnarounds are And I some you guess, measures metrics be takes the really the pipeline that a the the respect turnaround to I outlier is performance operational follow-up utilization to year to is we understand are to to obviously timing bidirectional and significant benefit or be of year to of planning the bidirectional be trying the activity that should guess, happens And testing for what Obviously, integrate the side actual unfortunately, looking pipeline. what of just being there happen respect that UX are my existing happen UX, the, maintenance? you both is the amount How be into this in of with and puts by, of net out operations And Syncrude facility QX. given with and what thinking to period? an driven about this just

this mean is is the a in good because of a interesting refinery. I allows it linear question. this complexity us it almost running is - program like a almost Yes,

We capture between itself from Syncrude fact, started utilization them that as them two expect optimize the capture to be Base suite up presents line, to synthetics synthetics the the as moving and as and economic every started into in hydrotreat spread. sour sell the we soon Plant to we to sites. opportunity able And

utilizations, upgrading utilize such. mine exists. value And line and every focus refinery around throughputs, of this so the or that utilizations depending on maximizing on hydrotreating is situation The opportunity the

Syncrude running in value. maximize So the we to percentage will that looking economic for just the we opportunity the and what of our was we we what and do did capture it significantly do and is it other we The mining both, of so the you assets this, assets, is at a because what it are like example improves below when when some flexibility literally It had you for have bitumen the problem used they discount are been crazy selling period is have Syncrude a these is side side. past and by utilization in time. at upgrader essentially own have of

focus, relatively for this have is we to to value significant the is our Now shareholder. the opportunity and volumes. capture that drives That what

Great. Thank you.

Hulshof comes from you. our TD And Securities. next Menno question from Thank

is open. now line Your

If we and questions. with renewables biofuels, and have look I energy taking carbon everyone extraction, morning on efficiency. low just start other opportunity four things thanks XX-mile, follow-up including energy. buckets, Good will beyond for a you off cogen enhanced and

from low the likely time? can see And those we perspective? to four, over that most carbon wedge of So to a were reasonably biggest expect increase push we allocation capital

this of of such. take about interesting year, the XX% farm we spending is guidance, these our capital we midpoint our It Yes. total and on cogen about, initiatives just between if the wind like are you talked and

And we so probably And are where ballpark. that actually the that, that would in say is at. I is

are our We through still strategy. working

of in we the market is to early and to play. are cogen the the it we drive we Alberta, We province investor some through of to markets, But walk which are planning where I in this up is mean, export we obviously, of detail it already going power level electrical the use on the investment. coming in where down this fairly days. that generation coal target in conference could think May, areas a virtual are

plants We is obviously, ethanol have area. and pays for that. are And that if playing the to energy shareholders, one is biofuels efficiency key the already you with an have that all be a in economic long return, that going in day we

bit more when get May. little into a detail Menno. get So we we to will I think

that Are Okay, on And would the Line X seeing replacement And just to event? to developments of - streaming quickly notable Line a you you X on how thanks year-end guess, related follow-up the access. be Mark. are still I question any moment? confident is market at

just Line issued, mean, interesting and Well, in permits last ahead. the clearly, of on X. have been it is moving more couple weeks, I is it

it is think about think it it in shutdown I time to we year-end pipeline exactly that The or low our Central in system, and is confidence very very that consumers, really on not, feel that that that. believe we So as Line I and event. track X, Whether safe increase. continues Ontario don't many both well Ohio. and good Canada, for Michigan around probability we frame. serves all it But is in are happens think a With that And relevant. at Québec as

But such. to it crudes pipeline, things allows we product very us to their So get now is the think we own - focus we we bring waterborne we into economies. have on Mainline important exclusively Montreal. of to is into that and that which so those have Ontario use Enbridge and Portland this one

crudes that a coming think in turns we Ontario. capacity it this than have without to waterborne using getting Line anybody pipeline what moving if through into we our had are market or better refineries and them. we forward out Montreal into get to risk, positioned X keep So we crude Either

that stronger that they we able going any or the refineries. side think market. market the positioned anybody be that on enough of efficiency we the in get constrain we from we into And squeeze more are than market, crude pay get result if to than So much a for to else as think you will the that,

we very probability low though a see event. So have it Even very a that there. position feel risk good we as we management

Thanks Okay. for color the Mark

Thank comes Chris our And question you. next from Barclays. Tillett from

open. now is line Your

call. of very been messaging been there morning. good my debt two-thirds clear Thanks comments toward Most allocation. to have my priorities of capital reduction, questions of for I kind Appreciate on guys about taking the has Hey actually some just one-third the wanted buybacks. asked. But already revisit

that deeper of step you sit maybe curious, to XX% terms where sort you you to guys or that range once could you have Is a back revisit dig is there. debt-to-cap long-term talked ratio get of XX% Just that that that inside in about? something potentially of regardless

for very I be let the question. will Thanks take clear. me that. No, Yes, Chris,

to For XXXX, in go cash within Mark the as there one-third is the will range, the reduction generated, flow capital any in to flat additional two-thirds said. And additional keeping cash flow buybacks.

that. appreciate I me, thanks Okay. That guys. it for was

to over like I now would the Bell back Trevor to you. Thank call for remarks. turn closing

taking Great. have we listen Thank in. And I around if you, operator. morning. out to you time would stay any safe. reach and us chat. for my you appreciate Thanks, happy the to day, everyone, joining everyone, are all follow-ups, and team us, this please and I Thanks, be to

you Thank disconnect. today's and Ladies you this conference may you. gentlemen, now and participating, for call. concludes Thank