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Imperial Oil (IMO)

Participants
Dave Hughes Vice President of Investor Relations
Bradley Corson Chairman, President and Chief Executive Officer
Daniel Lyons Senior Vice President of Finance and Administration
Greg Pardy RBC Capital Markets
Carly Davenport Goldman Sachs Group, Inc.
Menno Hulshof TD Securities
Christopher Tillett Barclays Investment Bank
Call transcript
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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Imperial Oil First Quarter 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mr. Dave Hughes, VP of Investor Relations. you. Thank ahead. go Please

Dave Hughes

Finance Chairman, and first everybody. me quarter President Development. management Wetmore, Brad Vice President our Jon Administration; Simon President Jeff, Dan of us Evers, Vice of today for on senior Corson, includes that our the earnings and Commercial Lyons, President of and Younger, good the you, CEO; Thanks morning, joining Corporate of is Senior and Vice President Sherri and Thank Upstream; call. Vice Senior Downstream; With and

link I'm going our Today's results may our conference and reconciliations depending Any differ of found thing website the The non-GAAP to guarantee First to be the information. forward-looking do VI not on operating and comments cautionary performance comments financial on most is of number recent information factors statement. future of contain definitions to and can Attachment read can Today's these press forward-looking measures financial include release call. reference and also in is assumptions. available actual measures. and of materially a future a this with

as recent Forward-looking that our detail issued as press first earnings assumptions the release factors Form most well XX-K. morning described in in quarter this our risk information are and further we and

provide we SEDAR, Q&A. All Brad the opening with offering so on those financial those. of to And an will after documents our and we'll are then move the operational update, again, start out with some will EDGAR website, Usual Dan on and a available remarks, then please update. remarks format, refer Brad, to opening

Brad. to it So with I'll turn that, over

Bradley Corson

healthy. continuing first well each I your you Well, families are stay good of our and quarter earnings XXXX call. everybody, hope morning, welcome and and doing to to

Imperial global and production what Now, a cost foundational which economic challenging capacity and last the both but the challenges. results reduced I face very for was including discussed early Imperial's you we pandemic also one I a our in increased very in in the delivered solid of noted industry, time year back structure. February, business to spoke associated improvements,

year, as that on Over respond environment. the we taking recovery we making for eventual we past the emphasized were tell that a to remained we ended were on we very the business of positive well despite sure the to steps placing the have positioned the the I'm continued to that priority on pandemic. continued first brought pleased you through challenges note XXXX XXXX has quarter by

minutes, I strong results detail few next a the and very first quarter. will Dan the Over what was of

delivered see. still business which by our of lines of – the $XXX that highlight quarter, fourth business all the about have with those we great to first to seen lower results. quarter XXXX, commodity normal quarter first market improved our improved recall So billion continued since results quarterly talk and environment related quarter. impairment of third earnings XXXX. unconventional over demand, $X.X coupled million, to assets. entered were The excluding this now quarter identified of close highest margins we strong Without that have than an an our Since $XXX product reflected items But the the operational impairment, let's improvement performance since quarter. resulted product our prices is I'd strengthened. million been highest but also over the lines our XXXX $X.X in the for earnings Earnings quarter versus and all delivering and have us cost of earnings versus positive quarter fourth the facing this billion fourth

and focus first and not operational our efficiencies. expense progress was XXXX. the that we in an are reductions significant efforts first past all quarter reason put confidence reductions into $XX the from also forward. These And operational that XX for quarter on production results on year to including The in XXXX operating to of performance, And $X drove costs the strong lower indicative and were our savings over in perspective, over activities cash as integration. structural, first about benefits quarter cost those quarter reductions years provide the lot quarter cash our structural. first ongoing billion, operating good are finding talked weren't We've And this you highest than flow million our I more seeing we continue And and and manufacturing delivered in performance those to will while reflecting of the XXXX. efficiencies in upstream of of that company's such around financial offset this billion. resilience, strength, production moving significant of cost committed agree almost flexibility first strengths are hope a in $X a

operational cash dividend our a the declare to strong continued performance Our not for only and dividend. but supported again generation once to significantly that ability increase quarter,

the over of share each XX This consecutive per and we now $X.XX for represents per which a XXX of have $X.XX grown We a or XX% close reliably to morning, a years paid last dividend announced share, increase years. dividend at increase.

June I but that over an not our dividend confidence Additionally, our tough next very Last keep position to to turn months. paying announcements the for go financial our able cash year, continue our underscore proud very our allow in so current returning to program NCIB repurchase and to stable, Dan up we just we time. detail. future, now shares over the Imperial to to fact a ongoing the performance commitment the our financial strong the the end quarter of were us through by in were amendment to clearly to Today's more we demonstrates in of it to XXXX, a also outstanding two just shareholders. of of X% announced will to reliable

Daniel Lyons

Brad. Thanks,

is in this a call. quarter, of popular the at we the from information as this by you are did I beginning added into wanted on and very think, getting to Before I some number highlight numbers, Dave that demand releasing this fact,

This five publishing non-GAAP began additional measures. quarter, we

hope excluding items. the this million forward. XXXX million, quarter you'll million find $XXX net refer You'll excluding excluding added cash activities, Lake appropriate Cold or working back first flow in numbers, by back the Upstream measures of going identified the net and We'll Getting We the up items, costs, Kearl, quarter major our free find income the release. Attachment are The unit disclosure operating cash measures almost these $XXX at asset being from Syncrude. Upstream was identified at earnings and when of as up from first capital, these operating useful. looking for VI the to press costs cash $XXX income cash for to flow,

earnings identified As Brad our million up items lines. $XXX $X.X income net our up by about is noted, fourth results first are excluding just business looking over the sequentially, improved across of quarter million of from driven quarter and all billion $XXX

the offset $XXX Again, the quarter, in improved of excluding line. of performance the The billion of net non-cash partly income million $XX to results loss seasonal recorded of billion lower higher compared of of XXXX impairment Upstream $X.XXX million at realizations, first fourth $X.XXX by the volumes. Looking about by business charges by quarter XXXX. quarter fourth driven saw in we in a net

million $XXX first Turning quarter up to the mainly of by net fourth the the million Downstream. Downstream margins. quarter’s compared driven in to million of was income net improved $XXX $XXX income

performance of first strong compared business million $XX margins. of also the quarter to XXXX earning fourth primarily in Chemical demonstrated million quarter XXXX by Our in driven $XX higher the

the of before quarter Finally, mention want termination reflect that impact pipeline the flow, I statements agreements for looking of the at XL with the cash to Keystone our financial project. associated

purchase million our these was earnings. of of agreements, after-tax the liability our As $XX At quarter $XX XXXX March by agreements the other $X.X corresponding which XX, we of a same in result an XXXX, recognized time, as termination first reducing commitments, there billion. of our decrease long-term million of in the a resulted charge through long-term

at generated $X.XXX first operating the $XXX from period the year from and $XXX fourth quarter, billion up quarter. Looking up flow. last million from Cash in same the activities million cash was

million, quarter in of XXXX. quarter the Our free $XXX cash million first flow was $XXX the up first from

cash of flows, first $XXX at $X.X increased cash almost strong from hand these with end the on the year Finally, to quarter. billion end our the of the million about at

shareholder efficiency and Lake CapEx. Downstream. $X.XX Sarnia dividends at first the first per Capital debottlenecking the fourth million, continue approximately Consistent previous billion $X.X $XX quarter. with quarter at guidance, quarter, the XXXX from the of in expenditures million focused $XXX and our million $XXX compared quarter Cold for totaled million the In we Products to projects distributions. in spending in Kearl, down project with in on Moving and on the we first XXXX. to $XXX Pipeline of tailings to to paid expenditures expect capital in-pit Shifting at share volume the sustainment

in of to XX, At financial represent Brad per next As actions performance, first would our confidence billion and of about low announced this of our also of consistent as cash planned over by cash with XXXX. dividend finishing Wednesday are flow. to months these the the or requirements, to share longstanding quarter. in earlier indicated, free the price common next the X% July Brad consistent quarter $X.XX our Both our a $XX, from future $X two to return in today, to June noted, XXXX or commitment share strong shares we commencing of $X.XX second increase up And we up purchase and purchases capital with nearly outstanding XX% payable robust shareholders.

Brad Now performance. our operational to I'll back turn it discuss to

Bradley Corson

operations. to typical talk weather, and production managed did winter the the part performance quarter Upstream due year, represents per major and organizations. fourth was the mild Kearl quarter Production XX,XXX is was a large in excellent operations Thanks, Upstream in first day Kearl, Cold well by day Lake the provide lower XXX,XXX now winter expected the versus first as by Dan. in and production driven of few first arrived the to This exceptionally take real per I'll down continued at particularly but in averaged three in XX,XXX impact was was quarter all can quarter, the barrels start assets: versus XXXX XX while which XXXX operational finally of in we production first And see very strong challenges Syncrude. a performance early This quarter highest Syncrude. typical our a our years. due Alberta our Northern mining minutes was at February, quarter. of up the oil-equivalent day barrels oil-equivalent some barrels first to and about production to our

and commented I'll to the a was detail about for go that great XXXX I last on earnings year pleased now we asset starting Kearl, So say quarter's with Kearl. talk again. each in here call more what versus I'm through performance day day per best This gross first quarter, Kearl’s fourth continued was quarter of barrels while XXXX. Kearl’s quarter down still first XXX,XXX strong ever the production. barrels XX,XXX was of production per

first In and This quarter quarter record the is month behind fourth XXXX. the I challenges notable can year at is quarter production. traditionally the best noted second weather just the as especially is ever lowest of the winter given fact, quarter production given it Kearl introduce delivered the of each

is So best be barrels a month ever positive far into to at our so December January has strong a start averaging February and to October, best XXX,XXX last Kearl Kearl. ever a a was April per the reported it month. And Kearl, great that ever a clear, best I at quarter. over just this April. and our for best March production at Kearl, ever ever year been November This day best also continues building momentum ever our on that just best

that we begin in scheduled per XXX,XXX However, of early XXXX. planned as barrels are track and for the until have is to with on in trains being the barrels quarter. That of one to you day of said, consistent our also the the a production day achieve an we well Kearl previous strong is in are guidance past per May. impact scheduling have May is This expected estimated year-to-date, around of to on performance lasting with our and quarter turnaround second XX,XXX turnaround aware, end

operations day Lake let's Now XXX,XXX fourth also Cold versus delivered ongoing results quarter strong and some implemented. the versus optimizations well we've Cold quarter the per barrels Lake. first about This Cold with the XXXX. per is production that as at and of is day. the of quarter the as first barrels up Lake, talk reliable This averaging well result in steady flat X,XXX

by but down in our of to oil quarter, years barrels XX% the The and it drop our while is to of successful seasonality a of for of at relatively technologies the net-zero the of first plant. barrels to first note average it with turnaround greenhouse Syncrude part commercially for versus first as time, the at the the quarter reliability technology greenhouse maintenance is our to part in as as X,XXX for versus second versus of developed overall expected over reduction have the technology to Lake they reducing Syncrude Lake LASER X,XXX Imperial’s Also we light recovery, is intensity given highlight addition steam commitment deployed enhanced such, the intensity up up increased helps of expect at liquid production respect again day facilities. Cold a was impact in sands key startup operated operations. barrels quarter ago. stands Mahkeses solvent will This only first XXXX. fourth quarter, of a which improvements We was few production expected some quarter, plant schedule and per day the have is quarter. and we technology fourth XXXX which LASER This of cover increase minimal exciting gas to day planned seeing is of the the pathway per and routine our future. XX,XXX been is Mahkeses production to Imperial gas the share per not the enable a use from was a a key but quarter to a expected our Mahihkan the the the production, at the really quarter Cold

a second one after and run of turnaround that The mid-June offline maintenance per the April. major normal three second barrels Syncrude XX,XXX Now in began for is involves day of the a in expected the to has has impact looking quarter. last a planned routine early cokers and share. work until Imperial taking quarter production to

emergency in there currently the is and challenges in COVID-XX-related situation of a as facing is Buffalo. the of the turnaround. preserving of to state reduce with the However, municipality light the in of I'm currently schedule McMurray, sure This but the Fort this workforce on but area evolving, are taking still you and the of size Wood aware, is site, Syncrude objective currently the steps still of city overall of

actually Suncor, the Imperial the the are change an was Now, operatorship of of share of bidirectional expecting third This remain to complete this Sweet now respect allowing service again, with to barrels be put and the are day Syncrude in the quarter, to of to the in X,XXX the first respect in both use owners we of the to agreement million in the produce quarter incremental transition were the And deliver synergies. end the SSP the finalized quarter, to is $XXX by expected to confident and year. partnership. Premium Syncrude pipelines, status from first to transfer With of per or imported product.

an day demands demand of the first first to lockdowns last product Now seeing first which a in as barrels to softness be lower day uncertain. down XXX,XXX the continue indicative the and somewhat the in ongoing XX,XXX fourth the of let's Utilization been variable last the was efforts, down flat to versus per and since quarter the The of first year experience but utilization was quarter, XX% and the average versus And quarter is continue volatility quarter XXXX. a from we quarter reopening have of in outset X,XXX up we barrels move which quarter the Downstream. year. barrels fourth quarter, in XX%, versus We was versus day of the the of refined pandemic.

program Although quite is appear Canada the is gaining which vaccination it momentum in positive. now, that does

a refinery is not produce expected rate. a Looking able so get second reduced Strathcona this, the to such is through at in that planned end quarter, run the still a shutdown started early May. turnaround site of does to facility we have entire maintenance at as With and the our turnaround the to April

on impact utilization. or able and refining be impacts. for in advance as We XX% we quarter well around around Downstream turnaround, overall supply is impact to day But barrels per minimize to an plan the expect are XX,XXX the product in typical

not fairly expect we even will is turnaround see though decrease year for So this XXXX product to a would sales, the the light lower utilization. we the one see significant and Downstream represents in a turnaround our most significant Strathcona year. of

reminder the down recovery quite Again, reflective barrels day, fuel roughly demand of for XXXX. quarter the year. XXX,XXX So with well us, is having flat the up barrels has versus day sets pandemic product the reduction over Petroleum quarter quarter but per of this the demand. the XX,XXX fourth impact had potential sales behind XXXX, the per us of first in were year-on-year first the on of the

that reminder, XX% was out The the industry for on close call of normal those fourth were whereas levels. the a bit quarter with February, the to demand diesel in around to historical and As XX% of range XX% maybe seeing a played in gasoline to in now which jet, of XX% of sits with demand, for exception levels quarter consistent mentioned XX% of rest on I historical. strengthening pretty gasoline motor demand we more the January,

compared in very challenging measures in the to quarter financial million volatility Looking Despite strong these business with XXXX. conditions, and near-term time. the remain fourth over deliver expect $XXX as provincial in federal restrictions our experience of recovery of we Downstream we with to and evolve, million quarter continue broader the but volatile healthcare results to forward, demand earnings continues $XXX travel and confident

first driven see which performance by to quarter we typical from Gulf in million half delivered Chemical levels profitable margins million quarter, an the quarter significant Downstream second in of which the these Coast levels, some million we volumes fourth margins normal lag the quarter, return second we and do of compared $XX in contributed And last far $XX to fourth impressive of of operations was while versus healthy the to continue in Texas. strengthening to tightened to supply the for to a earnings higher some Even very than as and the some business of resulted This year. in quarter as business. first quarter, our demands strong $XX XXXX margins increase experienced continued the expect fairly returned And so another normal. XXXX to of more

to wrap couple items, which So as we are up, I'd like a just highlight noteworthy. of also

First, Imperial report. corporate sustainability recently released its updated

and you key will the on a risks of are the the A As pathways this we significant X is see, a detail approaching dimensions and change. we that how net-zero. reporting what document lot note to is of sustainability provides estimates identify climate introduction of emissions to progress Scope are as we viable particular view taking actions the of and

second Health mention The want program. our Care is item to I Heroes

XXXX $X healthcare to year, now and this a pandemic, on an additional donating You campaign, over have first in of similar is workers we recall frontlines the been of way many for quarter that Canada. workers recognizing year. in This million million free we at at pandemic may a thanking fuel. our fuel this the second of that the the the one launched $X.X XX,XXX in essentially free of donated back in of outset anniversary year And across healthcare the pandemic, the

which our business the to have XX very to represents a And to stated supporting has for taking steps strength, that this and that. shareholder We play resilience their success. in by and XX with regarding drive we shareholder history partners our pleased to our value resumption collectively I deliver like confidence once working us just resilience, They how the am integrated the buybacks I are returns. I to support Imperial the commitment we what the been finally, by critical of service. and business in roles shareholders. believe conclude largest last their employees, determination the are the all way I'd mentioned through difficult share our dividend, wanted to the so commitment months. that thank increase their Dan our and saying grateful for returns our coupled meaningful does just over in again, time our contractors and

session. it So you. Thank with for to Q&A Dave that, turn I'll over the

Dave Hughes

Okay. Brad. Thanks,

We we'll from couple have I a with line. to so and of questions we'll had the then those questions live pre-submitted, a think few analysts move start Q&A addressing

they're reasonable to Brad, the guided think between related. from couple What cash from questions normalized I'll first operations is of ops is in cash flow normalized the at Chemicals from Downstream So Day. breakdown expect Investor you Phil at And JPMorgan. Gresh And both billion the this of both, XXXX? come of kind $X.X them and ask do segments? two Imperial to

Bradley Corson

your for Thanks question, Phil.

from looking to and average look $XXX XXXX, operating another about you flow million. If Chemicals from generated per back our billion in $X.X was at our XXXX activities cash year Downstream around

would this generated Day. operating I discussed of to and in with first So company that our from we combined Chemicals that and quarter suggest amount. billion about Downstream Investor $X.X $X average split be to our at billion can your the business activities cash for question, the second applied in half respect over And also forward-looking now

we the that at the to about Investor referenced third So us Day. of a $X.X gets way billion

to possible still uncertainty, certainly rates. But guidance on full-year with and given some we XX% our of utilization admittedly, targets. balance vaccination it reach increase but those it's remain confident So in there's continued

that Now profitability. ongoing impacts, structural Downstream and Canada notwithstanding in our from benefit support demand continues advantages business to Chemical

So comfortable we provided. we’ve guidance your that question, are Phil. still answers that with Hope

Dave Hughes

Okay.

Will from Next ATB. Lacey at

increased focus potential $XXX to investors, carbon specifically on by government under implications business quantified cost base the carbon a the proposed at have pricing With ton? you mechanism the the

Bradley Corson

Will. question, Thanks Yes. for that

Imperial highlight in has carbon pricing. tax long and with economy-wide to carbon want jurisdictions operated just that supports I an First,

to technology leadership to and work plants emissions really technological as for to we to stable incorporating net-zero. policy continue carbon certainty on actually provides pathways carbon been we've a We in strengths accelerates So investment, now. believe innovation, while and also play industry, the of pricing can our our a cost and our but

carbon quite well future. low in to operate a and positioned compete are We

for So thanks question. that

Dave Hughes

So further in to – your a discussion discussed tax thoughts this? on a a their more incentives utilization the kind bit one this that storage, that federal initiatives? detail with with of capital may how ExxonMobil of is and and proposed global the on regarding follow-up Have influence – you this carbon of capture government related discussed

Bradley Corson

Thanks Agreement. that In in and net-zero And regard XXXX, technologies as and advance pathways follow-up for storage substantial efforts you to of exploring future, Alberta those and enabling have support federal for the to storage, low view Imperial net-zero have could that well-positioned to carbon we but Imperial's to will climate solutions for carbon access And which we business much government storage, focus we the the And carbon and with certainly program new aware, low with are with February, a There's from that of that federal achieve energy with growth capture maybe next one result to look funding as with to as extensive to relationship on defined we is greenhouse details, best portfolio. critical with ExxonMobil, the a be and question, generation this announced ExxonMobil encouraging be very step That technology the production integral emissions. net-zero believe is recent its called and ExxonMobil. relationship still capture noted and its business the technology the develop and ExxonMobil, support paired we design technology, And Will. industry-leading in created to reduction. through arising coming capture industry carbon production we program ExxonMobil emissions as and capture opportunities initially incremental carbon I emissions. industry in to budget, on Paris enable required net-zero the emission our when is will to an government in technologies, truly announced We a to forward working those lot outlined also they budget government in reduce critical those transition. from to that technology goals that leveraging to commercialize a access technologies, But emissions. months. gas colleagues along earlier

So that technologies, the be supportive through commercially it's the advanced but to policy. of also view with even convergence our CCS viable Canadian potential more has

So thanks for that question.

Dave Hughes

we And on and the result in final operations from the Wood over as region? implications a the one had challenges Q&A. of go one just to the Brad, for Any comments live COVID we'll Buffalo Will, then

Bradley Corson

Yes. I'm to all first, just you out how and out glad the our go prayers asked I individuals the And unfortunate that and very in question. region is point Buffalo situation Wood thoughts would affected. those

continue site health always be, foremost, transmission workforce the has strict focus operate. Our communities been been guidance. and to we government protocols to the in to and our and all maintaining continues safety and prevent our authority we the of follow first and the We've health which risk of of COVID-XX,

Syncrude call Fort full with at turnarounds is we're And impact certainly managing I out executing I for not leveraging time. consideration only in operations mentioned precautions from been XXXX. applying to COVID learnings oil we've would but so we and around that But and in Kearl, also and region this to to point safely an comment escalating workforce safety to deployed situation them the boarding used our now testing McMurray, though rapid You we've addition our to to Strathcona planes prior Kearl, heard earlier at are The developed acknowledging sands plans far on the regards there progressing operations already. in me in we no the really successfully have the been without and our that any were impact note turnaround plans mitigating to for travel year, COVID last transmission relative turnarounds turnaround. buses of our and One site. that those

to this us manage and COVID. potential transmission identify So gives other mechanism of one any

to the there operations for Kearl been to continue impacts situation plans our and impact that upcoming monitor no going schedule So to to have turnaround, adjust and our at we're current but needed. again our no as

Dave Hughes

Okay. over the we go line now, live please? can Q&A Operator, to

Operator

Capital Pardy Your of from line the comes first Instructions] from [Operator Greg Markets. RBC question

is open. Your line

Greg Pardy

guess, I off, enhanced Hey. disclosure. Thank first thanks you. good everybody. Thanks morning, for the and

We’re definitely that. looking for

great step I’d you'd, Couple there the to the or share guess – on order of about assume a renew that's think is, I a X% just magnitude, a) the June almost reason so. So is repurchasing like call it not Is one any that And of secondly, buyback. questions. a negative. similar Is there first forward. buyback post XX? [indiscernible]

that Just perspective? trying better from understand to your thinking

Bradley Corson

Yes. Thanks appreciate that Greg. added. the of first, I And your for the we've recognition question, disclosures

has you As the direct to Dan heard and we've from feedback out, response pointed that many been a analysts.

request steps your So to take support pleased that could there. those we

million buyback up program announcements we and XXX for think and strong very to on and our two of in year the both generation. very over of strong position next which going position, Investor very as to of of forward, strong the Dan and returning I've is quality shareholders a that X%, a underpinned buyback are we a and kind financial associated in us commodity the with I kind by capacity, seen made increase around over production operating the our in terms material market, and in commented, many our you just when the very improvements the combined the like occasions, find our year In committed from share in driven expenses. said cash assets, today much strategy in to Day something flow especially, underlying repeated favorable ourself amending in And the last very And that we as we've with I take fundamentals puts our dividend cash that shares strength with last the months. those we've

Daniel Lyons

Yes. XX.X million.

Bradley Corson

XX, right. Sorry,

pathway is we're And think I a so strong indication the that of on.

I to to this share proceed the a share current will to clearly that And continue continue that. if we think after program this will so we it's next assumption But we look evaluating even fair buyback strength we that be timeframe, buybacks expires. as with see

Greg Pardy

Okay. resume That's business you to are look understanding essentially Upstream limited I'm helpful. was if wondering sort pre-Kearl come reinvesting model appropriate, about I'm XXXX, growth? is, sanctioning to of the I'm [were going distributions. and as little has – circle bit an question the get a trying how is jumble framed, there But just you're growth. And is what second a to at model then dividend in interior back And CapEx, scope is just ask in the now it versus you. of full thinking you and town, signals] buybacks that

Bradley Corson

growth. volumes significant Last allowing below that at I'd saw XXX,XXX us – there we're also are we’re to some priority if I does applying discussions laser you production substantially assets. existing at year, supplemental the And year, those But a barrels an improving Investor have focused we reliability, near-term question. where on highlighted things of that's our at build think value. Kearl All is good point we a that And day. our the on capacity, value expenses, been it that And prior from that. maximizing barrels It's or a improving Day so our out we day. reducing This operating implementing discipline. to crushers, capacity as example, why now is increase integral an generate XXX,XXX in take capital Yes. indicating focus above

We have XXX,XXX. a to pathway

just years barrels a to time, we XXX,XXX from production So will XXX,XXX a grow over day. few

increase, which opportunities think, a on about barrels growth to several day. like a is was I XX,XXX an barrel Aspen, par in XX,XXX our at targeted day So portfolio,

but at achieving are that's much growth, and similar we delivering cost lower value. significant a So

maximize want to strategy value we progress sure, make So that from we and the it.

opportunities considerations we look strategies growth sites. we government those highest broader at the generate look will competitiveness, for giving at growth see revisit other do and that to to continue priority policy, at we return Kearl and as with market, things. those term, as continue opportunities all we supportive will debottlenecking other Longer continued the We look to

Aspen some an to have a we like And eye well, as always accretive M&A as we others. with should keep inventory and you there. opportunities see particularly projects deep We know strategic unique opportunities

Greg Pardy

Very very good. Thanks much.

Bradley Corson

Greg. Thanks,

Operator

Your Goldman next from Mehta question comes the line of Neil from Sachs.

is line open. Your

Carly Davenport

a morning. Carly on for quarter. Good good Congrats This Hi. Neil. Davenport is on

the first was Downstream. just The question around

You COVID the quarter. highlighted reduced to during lower driving demand as due sales the sequentially

any the for on in key look out what for you're So demand Maybe ground and you milestones outlook are to can Canada? about talk there recovery seeing the real-time then if just there? your

Bradley Corson

different levels. impacted been has which The that been country, seeing. the current of so that then I COVID In mean, for impact. seeing. and the noted the really mobility that cases we're we're U.S. which has demand lot demands to is, of returning in of mostly I all pre-pandemic normal of volatility than the the in wave this take to kind grow businesses Jet again longer for is mobility especially travel progresses. provinces, in airports depending do back Canada, restrictions typical demand actively coupled recover significantly levels. allow long-haul the progressing the of travel to that We see allow year will flights. momentum because will to is some Thanks resume very XX% diesel of probably I Yes. to frame question, that an good pointing having in Carly. campaigns different of to levels. XX% cases we demand And Canada, demand, pre-pandemic and of I behaviors we've mobility in restrictions third is demand. And impacted expect normal personal contrast in many mobility the how only response U.S. returns of line the picking to And up, in this by the where We would XX% reintroduction demand react with even by softening jet that's But will currently There's that believe fuel many what in how U.S. third of gasoline. reflective country. the most Canada personal situation U.S. around very the still were that a time, normal demand. a currently across we that in restricting cases the is that motor and all is COVID seeing over it’s back severely very gasoline totally would allowing more we of in those more across But wave, see much and gasoline, been on will country is just the domestic with levels as to motor business COVID vaccination with and reduce levels, impacting

do for recovery – time continued uncertainty, year as continued we pathway think but progresses. see I over demand So the volatility, a

Carly Davenport

item. of then shows at the When helpful in looking looks reflected the could it housekeeping quarter, cash cash we the just are Great. what you million items like the are is That's just context. through other $XXX walk And for flow a flow inflow kind statement from items, follow-up there?

Bradley Corson

Yes. Thanks for that. answer I'm question. going Dan to that let

Daniel Lyons

is and kind It our forward, the Yes. other we've press And of them capital non-GAAP this flow going split the capital attachments a release quarter on Carly, swing working quarter-to-quarter. capital things excluding measures, lumped activities, operating can working talked working put of from some together. obviously sort these In with what a past out earlier started lot working quarter we I volatile. in quite and including this capital. line, cash about we and separate

other other income, are The example expenses non-cash, flow income cash. I a mean, that through net pension-related would or the run we not are statements but items that things good that through be

working capital we've cash, that aren't So folks that's want income separately. that aren’t they're an based capital for there, line, items obviously gotten, run it out but in of through the example there's of what's feedback that a that other call in but to number things on working –

what that's we've done. So

Carly Davenport

for Great. the questions. Thanks taking

Operator

from from comes question Menno next of the TD Securities. line Your Hulshof

Your line open. is

Menno Hulshof

everyone. one. my taking morning, just have and I for Thanks good question

of LASER your I higher You there look touched time? like just specifically? where would whether elaborate guess on is intensity target stand at over the could but things Lake, and that drive the you could there And reduction XX% be operationally could on what Cold LASER anything for years project follow-up my next couple

Bradley Corson

Yes. that Thanks question, Menno. for

at As about been on call, started now I as mentioned the excited multiyear previously LASER initiative up for That's quite Mahihkan. us, We're mentioned, at deployed that. have we a Mahkeses. I

part our its of Mahkeses, program. Now, Cyclic Steam cycling

benefits kind to years of multiple takes full it it. from achieve So

We're we're technologies other continue going its opportunities look for in that looking sight continuing the But that provide achieve develop greenhouse application that of XX% technologies that potential some to over to period, look XX% at we're evaluate up LASER. the further so intensity, important for not continue reduction solvent applications just of effectiveness. to going equally line gives for us to the but to And optimum to and what's deployment to reduction. for to we're and is gas up fact also could

this kind the stated XX% objective, our to as are gas ultimately We've intensity evolving aware also I So XX% progress gas can XXXX. pathway. reduce our that commitment greenhouse much reduce all achieved as to that, And already operations in by look a to by our you beyond greenhouse an is by for we're steps effort steps us And again, very a reduction the further technologists, XXXX. to our teams take intensity. we greenhouse of what to maybe gas but even intensity continuing net-zero another mentioned, have allow further a since we

Menno Hulshof

Brad. lot, Thanks a

Bradley Corson

Menno. Thanks,

Operator

Your next line Chris of Barclays. the Tillett question comes from from

Your line is open.

Christopher Tillett

$XX Are as changes? able just Thanks sustainable morning. for guess, million looks Hi, I for color, guess, Kearl? me any Upstream first breakout would of my provide cost for to specifically classify How – due to would that at or operational guys. like assets. the Good taking much call. I you the year-over-year on what be otherwise you is

Bradley Corson

we don't course, those costs, me. in expenses for you Thanks of have as But the And seasonality in front that would be detail to second due there'll weather of Yes. – question, turnaround mentioned, see I move into tell I I quarter, some about [Greg]. as Kearl’s we considerations. considerations. the what

So in to it improvements laid at talk a $XX last on that to We've costs were driving is per significant see something a $XX operating year, some level for we costs. this to think barrel volatility importantly Kearl’s if back metrics. asset in those what XXXX, around pathway reductions a achieve you'll Investor from U.S. a Day But all-in plan I $XX in And the and out in range. year. basis. unit significant on down commitment quarter-to-quarter most made The was that the barrel Kearl’s we're last – about go operating you to

may the you those on some what's most we're average to annual whereas pathway important for $XX is from we So in quarter-to-quarter, this made year. numbers and see achieve the commitment noise

Christopher Tillett

sort by of not of to to just clarify, do an a $XX I just hit guess annual the be you And benchmark expect and might end Okay. average year? that you the maybe

Bradley Corson

Annual Correct. average.

Christopher Tillett

Got it.

of a here. far the thus product Okay. a the From maybe I just are at the for that. there on while Thanks terms sales second maintenance. guess for turning commentary under is the And for that in Thanks then Strathcona. outage asset first be just Downstream so much how in? is in mix the quarter the similar to words, locked other of the it assume period to that mix there perspective, far? during is of we've will seen product that the guess through sort Or maintenance what I already fair occurring

Bradley Corson

of turnarounds those allow product in I advance. that program through kind And advantages to will of our us. kind months critically is commitments to Downstream As commented, we supply build relationships us will that we inventory of these many of maintain plan one our the because are important

of in those a Strathcona, all past, follow nature. readily But is of largely seen in think we'll fulfill I and to in so be last versus variable so I already in might don't you've we’ve quarter opportunistic and kind the taken locked be to going and it's year. to this the pattern that looking same And steps have commitments. much our able case supply of available hence how

Christopher Tillett

Yes.

last me. Appreciate are buybacks. all the for guess, just reference be the where curious hear to that. then from understand prior question And to just I commentary thoughts heads Thanks your in for Okay. your market that in? there that the be Is may a extent maybe Or of coming. the to of more would terms Imperial preference secondary sort open be something may in or offering that purchases? at not or interested

Bradley Corson

want that? do you Dan, to comment on

Daniel Lyons

get purchases NCIB shares. strong. look very efficient open-market go-to our to a stronger. repurchase through the could But Look, move. are Yes. prices They It's are way

return So to as are intentions long cash obviously, surplus a to for said time shareholders. our we've

that. buyback a have next the beyond and growing tool. Share We is reliable dividend

cash out, the is extent to look and flows the situation tapped that the strong, at we're if other So certainly are NCIB we'll options. in

Christopher Tillett

Understood.

Okay. much. guys. Thank Very very helpful, you

Bradley Corson

Thank you.

Operator

may Presenters, There more you at this time. are continue. no questions

Dave Hughes

we have pre-submitted We questions Gupta up came did Manav more Credit They from Okay. wrap two Suisse. operator. I Thank that you, guess with. can at

you question to Brad, I ago. in demand And respect response Canada. answered product few that a in Carly to Davenport's first Manav’s think Now refined question is question with minutes

operate? question. with you Manav’s Enbridge up we'll Line just noise wrap line second maybe on do can X, think the There So continue is to again some

Bradley Corson

question, But piece a the we've we're Well, occasions. Yes. closely. Line entire the And Canada. kind Eastern we infrastructure with it’s I something the Sarnia of implications Region for move of Obviously, watching about that specifically very to a line. critical Imperial, know and Ontario good X situation of crude to that's through U.S. prior also it's Manav. on is talked supplying Nanticoke

place be And think that, cooler engaging the has legal around to in in value stay that last just U.S. we I to to that will But shutting governmental the case recognized prevail and I is is infrastructure when service. that those supply to pleased mines will line in ensure we And a refresh in [indiscernible]. of maintained. of plans continue we kind and as that the importantly, on Canadian kind low address it and we we see of government the call, are that to have security think the line clearly Line look put down, mentioned scenarios. consider counterparts that see a that of That I would X of contingency We're scenario say a shutdown so critical. most probability. with underlying and you at don't kind quite

low we prepared. probability. view should But happen, be a it as it again, So we will

Dave Hughes

the it That's right. for All questions.

here of behalf morning. on us thank So I guess everybody team to joining us, note, for that I'd like with this on the management

team or stay you please here. reach to IR wish have always, questions any weekend have further follow-up to I’d everybody with good if out that, and the any a safe. want As And don't discussions, to hesitate

Operator

and for conference you gentlemen, today's call. your this Thank concludes Ladies participation.

You may now disconnect.