IMO Imperial Oil

Dave Hughes Manager, IR
Bradley Corson Chairman, President & CEO
Daniel Lyons SVP, Finance & Administration and Controller
Neil Mehta Goldman Sachs Group
Dennis Fong CIBC Capital Markets
Greg Pardy RBC Capital Markets
Call transcript
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Good day, and thank you for standing by. Welcome to the Imperial Q3 2021 Earnings Call. [Operator Instructions]. I would now like to hand the conference over to your speaker today, Dave Hughes, Vice President of Investor Relations. Sir, please go ahead.

Dave Hughes

you. Thank everybody. morning, Good us third joining earnings on for quarter our call. Thanks Senior Chairman, today Vice management Downstream. CEO Lyons, of Finance the by President Vice joined Wetmore, Evers, Commercial Younger, President Administration; team, President Simon and Brad Dan Upstream; the I'm John President of and the Corson, and Corporate President Senior and of of rest and including Vice Sherri Vice of the Development; going I'm start the by statement. cautionary to reading reference include non-GAAP to measures. comments Today's financial of reconciliations X recent release website and The can attachment and this measures our definitions found in to these of be on call. link our press with conference most the available Today's information. forward-looking comments also contain may Any assumptions. actual on materially forward-looking future depending of performance not number can performance guarantee of factors differ future a information and and and is a financial operating results

Form information as risk the detail issued our EDGAR third described and that available website. on as earnings are well and this these our and in SEDAR, on assumptions we and Forward-looking our release recent all press of XX-K, quarter documents morning are in further factors most

to back refer talk our So will you we'll Then and with operating Q&A over for up Dan a today, performance. some opening please start session. to ask to remarks, then format those. go financial the quarter. the Brad to I'd Brad will Then Usual with performance through follow it

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

Bradley Corson

summer. quarter well some What I the XXXX year Thanks, Dave. and call. third enjoy and chance Well, are good the to a friends difference time family earnings our and morning, each makes. to had of everyone, a hope with welcome over you doing

continued a very It attractive allow in forward us make very the third through taking most quarter as operational any looking the to The much measure was by our performance this strong to results our environment. is books, of and business to you now I'm today. great quarter

we talk us year strength. records you to reduce see benefit a operational about. maximum have this with that actions in downturn us what is heard This maintenance. reliability, note display. And fully are prices today, again, reliability. continuing strong also of structure exceeded high this this is expectations. to commodity in Our little about And In we And have performance, all to ensures me combination I environment. was occur of maximum the Along to allows advantage very that of or value improving resiliency the the to from when very few assets had momentum performance continue that, lines. so our future. a which on to We once cost should quarter, but allowed across improve was advantageous would our we talk our met on take business and overall top took last capture planned And business our

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

from significantly through quarter robust. operating up million, So turn second and the over the cash continued now from to $XXX downstream Crude the for more to were remained quarter quarter. margins prices was billion. the $X.X third results. and quarter and strengthen activities let's Earnings Chemical specifically our both

And highest few recover. by also. higher demand performed and just product each very would well ever at in Kearl. upstream upstream well, the We downstream we Our XX% minutes. best that quarter to asset in driven I'll third our delivered our perform years. more out to talk continues a XX point about sales continued saw But and utilization of extremely second as over quarter production

energy record earnings performance we set so X been projected Imperial time strong deliver for to diesel earnings This our XX our largest enough transition earnings commissioning the flavor a years. we nothing for emissions. not value only the helping than And it's Wow, incremental and not with year addition year-to-date. reduction say which is for project, and but fourth you full go to quarterly have can't of the about We overall our in direct year-to-date quarter, last quarter will gives shareholder greater Chemicals to the but Obviously, comparison results. in just intention says has the ever I about to also best renewable the announced the pursue be a did are in year, a at how and Canada. Canada a already our

underpinned were strong So of strong in excellent our for very continue the total, returns. form to our attractive has and We of prices to over And dividends our shareholder promise deliver very quarter, to in operational the we a us to is on position by cash of returned share million products period out again, once the markets In enabled our $XXX get buybacks. crude, commodity able cash strong chemicals. performance. in refined flow generation most of shareholders and

XXXX, $X have in in excess come. billion far, so was X into there's were shareholder to we quarters year time the And to this more XXXX. of last The shareholders. course, high And our returns returned our of

this which of to a a very far, up together strong so year is being adds by the recognized All year market.

start XXXX. had of and over at levels March price share year XX% our close, yesterday's pre-pandemic the XX% up the risen of of since beginning the As since

Dan with go it over So our quarter detail. to now more for will to I turn financial the that, in through performance

Daniel Lyons

the financial Thanks, quarter. the for into results Getting Brad.

volumes upstream our million the was XXXX. third as quarter realizations well and Chemical by Downstream Our from primarily increase income This second net $XXX $XXX businesses. the and margins increase was driven of quarter in up as million, in improved an in

our downstream look of $XXX the turnaround second up this margins driven income from third substantially driven lower we and in million planned sequentially, million is activity. of the upstream quarter higher if and quarter in $XXX volumes Now by higher year, by downstream the

In due driven second of absence from activity of planned net Looking million million, at each income reflecting in income of net was refinery. and our net $XXX $XXX up Syncrude. line. higher to at second Strathcona income million volumes income at recorded absence margins million the quarter, our business quarter downstream's turnaround downstream, The $XXX million, the about from the higher by Kearl of and upstream third $XXX $XXX in the of $XX quarter, turnaround about mainly net million planned the up the

second Chemicals of the -- strong Chemical business income with of million, through in XX driven Our up polyethylene million million for quarter over continued sorry, demonstrate from margins. in our years strong the This performance $XXX $XXX by net highest third to net net income quarterly income the is quarter, $XXX business. I'm

flow. generated cash in we operating flow $X.X capital over $X.X just In billion, over Moving working activities on third quarter, to billion effects. from cash or the excluding

cash we flow Our an Even with substantial on to third shareholders, with returns flow $X.X the for to over of was $X.X bringing billion, quarter our for billion, about free of cash cash free year last improvement hand. of about $X.X ended to the cash close billion year. quarter billion from the $X.X

$X.XX well to the downstream, we in mine reflects progress year. for volume to planned as projects progression as fully products work on upstream, efficiency Shifting this down some billion Sarnia tailings spend from for the Lake. our organization up that were projects, the the quarter Based Moving share. revise third surplus at quarter quarter million the $XXX almost we per guidance impacting announced expenditures increased pipeline to our the at the work to CapEx. about on of committed we million capital on XXXX able $X.X Kearl today, the $XXX the and returning dividend sustainment continue projects of by the full discipline, spending we of up Kearl had second Cold great quarter totaled to key year. without in-pit million, cash distributions. remain spend In Earlier and $XX and year from Capital done We to around shareholder in capital to for the third the shareholders. fourth around

We this $X.X to May X shareholders program over including year demonstrated increasing XX% by and returning an accelerated $X June. and of year-to-date via have in by billion billion as July our dividend this NCIB

paying are and we return accelerating NCIB, options beyond actively our shareholders, cash to dividend. evaluating and or base Given to a special above cash executing our bid a additional reliable strong our issuer growing substantial position, including dividend

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

Bradley Corson

impressive deliver day. now And across XXX,XXX the driven saw second our XXXX. about the strong production Kearl's averaged minutes of day of talk the talk must quarter getting is our per to third since in focus third the the Kearl. few quarter, And barrels history. large more versus quarter The Starting trend versus absence performance me results. which in oil to be X about continued in XX this in was I'm say quarter per now, reliability Well, pleased quarter Thanks, to performance, barrels the quarter, detail third consecutive to is production day company. XXX,XXX XX,XXX earlier, exceeding with is production barrels be barrels the in averaged the and in a on third represents continuing asset highest first of continued fourth hearing best day a of to XXX,XXX was operating quarter. strong part here Dan. the of barrels in operational with now report was That activity second very XXXX. and Kearl Kearl more the by and an by upstream third in talk result per It XXXX, turnaround XXX,XXX we've increase noted I'll at the in over entire represents day barrels increase time per and quarter that the to again, year years. equivalent with that, Kearl. we notably go take which, oil XX,XXX quarters asset's planned starting gross equivalent day we increase production XXXX, business Recall which the about per third each I'll upstream, as by the an more units. you that seen of in quarter a quarter, used able production third all I the of of across also

a Now turnaround quarter's turnaround, versus eliminated planned each only to of of original X of second schedule which barrels second each XX,XXX elimination per full production quarter as barrels and we our versus year the XXX,XXX has year. per quarter started on day up was discussed we this September. call, strategy the year began our in second historically in due day And earnings turnaround part of ahead this X the the

third increase versus absence the and per the of production the XXXX. the also third day absence outage. due quarter's increase turnaround third-party part of a due barrels quarter activities Again, XX,XXX to in of represents similar The an of pipeline

day. per barrels yesterday, for has production month as Now Kearl XXX,XXX of of the October averaged

minute So quarter we for third XXX,XXX with production barrel. are barrels have in the costs we and so We just day, per of per target to year, achieve which are will take making seen unit a of great reliability focus progress. Kearl the target communicated strong quarter, performance highlighted we that production last reaching close far at that cash our fourth our July. XX our continue and on late to want in talk reducing this I costs to Kearl we and to and were guidance confident increased USD operating about we and we our

in strong prices, barrel USD Kearl's on unit energy under of to These pressure CAD target basis fact, focus in despite our equivalent USD these XX real prices. third X.XX And with along Kearl. per versus year-to-date, dollar despite unit almost Canadian achieving are this XXXX, efforts reached per dollar from continued fact, we of we challenges, pressure the strong on on barrel are this quarter the just of But unit year. In down at the cost costs U.S. continue XX creating energy cost. a

at driven to had well. versus We quarter this XXX,XXX asset planned to reliability see which as the Lake. Cold Production second averaged at X,XXX per per due day, XXXX. on the barrels and driver same to the well is quarter moving performance, our barrels in we was optimization maintenance, XXX,XXX barrels site. continued Now strong focus by per was improved part day down day from continue key in quarter but the another up versus And

well call Now second on to with at Mahihkan our the Kearl, in results day. maintenance plan. us about and third quarter annual as exceed the per increased quarter per planned strong reliability completed which continued talked guidance potentially quarter, plant the our of minor Cold Lake and the And XXX,XXX I barrels was for third achieve position

the on up per at quarter of third day XX,XXX absence one quarter, Syncrude barrels in production major Syncrude's for third which original the second and third XX,XXX the barrels was in to drove minor XX,XXX the activity turnaround executed well of this per turnaround the been during Now moving average second of was There plan has cokers in the in turnaround XXXX although quarter were significant in this the Imperial Syncrude. barrels at a asset. turnaround, quarter, quarter per was production XXXX. fall of This of the The for second share versus up have the the resolved. also turnaround third XXXX. late A was challenges since a increase asset The of quarter quarter. versus day was day some performed at relatively also Syncrude the there of year. which post

improving turnaround slightly less as years. particularly the into the turnaround the asset was of year's over Canada is next maximize year Suncor, performance spring the this this the completely and as at to However, work quarter. synergies the Limited of owners happened scope helps was urgent few of in transition to optimization eliminate reduce price focused asset's this end well able from fall delivering optimized environment. note earlier next plan turnaround, overall on some of operatorship year. Syncrude The to and This at today's the by the of costs deferring and was increasing Syncrude Syncrude which the are Also beneficial meaningful which commodity the production,

increase refined quarter, to was day refinery barrels a versus the have third reflective we of third We of major XXXX. up the quarter. year. barrels quarter, day second last an move in which XXX,XXX the per second XX,XXX XX,XXX We our Now Recall, seen second recovery the significant the in also in throughput which day of was let's the up in barrels quarter quarter accounts Throughput the of at a we primarily from for demand the downstream. per had since average XXXX, turnaround Strathcona

barrels on of and quarter I I of second would at day remind the well XXXX, reported we XXX,XXX throughput the represents highest also the XX% Our a the since you utilization fourth of to call, the second we versus mentioned XX% equates that before exited utilization the per June XX% quarterly utilization. quarter pandemic. in quarter

well the of XX%. you So as see, positioning our quarter, the to year reliability meet throughout can third strong full and performance guidance us continued

we planned schedule. quarter, was started specifically schedule. work As was I I on margins in quarter. mentioned the maintenance completed completed in turnaround at did or and smaller as a the activity some on that, our the mentioned, of ahead in second mentioned refinery, this I ahead that confirm quarter a have time, call, Nanticoke which utilization can At and in expected October, I planned -- And the I to have was actually confirm as not of material mid-September impact

the the business and downstream operating costs even actually excellent XXXX Year-to-date in which down year. down prices barrels at were $XX to spending. more Downstream refining continues an by sales high its day. our operating to this managing This cash energy day our especially costs, notable XX,XXX billion, in and compared is million per for job by cash Looking throughput our when has do have $X.XXX barrels because product see per petroleum we XX,XXX is increased increased normalizing

with doing from are of lower plans it more sourced manufacturing announced world-class to diesel per cost. So a Strathcona renewable This barrels will product, August, barrels produce construct our absolute capability XX,XXX we In also feedstocks. more facility facility at refining selling not a locally we day at refinery. we only renewable and are diesel a be to

greenhouse potential also to million year, to potential deliver time. excited really about the because same X at value gas just per its are tons not of reduce opportunity, this but up because emissions by of We its shareholder to

this on progress So decision. stay tuned, towards a continue more final come to we investment to as

third of second largely demand day recover sales barrels Sales up quarter continue was driving barrels versus season. barrels petroleum per in the XXXX. XX,XXX pandemic-related day demands driven per we This the by softness per of XXXX increased from product from during Now to XXX,XXX the third the up quarter summer the the see were as also day, were XX,XXX quarter.

seeing margins, close the with demands downstream As much in results prices, pandemic. third demands diesel in efficient easing historical quarter consistent X-year middle quarter. jet reflects overall And third that industry XX%, levels and our industry restrictions. second to capture we business. our Despite were up early of an around band, XX% and volume with demand better what is about the with respect we've we XX% gasoline for if share. nearing been and add would September, broader to this the year crude the we environment. are continued of reliable market outstanding further above fairly pushing normal sales, in been which ongoing onset I'll steady we than pretty capturing incredible the our quarter to has our at unlike operating on were crack look from operations specifically value saw improvement and competitive remained of travel Jet benefiting our as Imperial with possible the results the XXXX as related around Chemicals of downstream XX% historical, over to wrap year, continue levels, able increasing we focus to current our predominantly gains ensures of see hovering spreads volatility, I at of XXXX Chemicals. actually

of to would second the strength chemical the volume higher our the production million $XXX margin earnings for that year-to-date I years. year represents set in a not XXXX. previous Chemical the full is so million far again, represents $XXX And earnings gives $XX in XX strong in We earnings earnings our quarter set the third of also front an mentioned quarterly $XXX record been best highest year-to-date increase still But last reliability XXXX so my higher fourth of which for than have has how of was in and million, quarter. in and we this are And million, third comparison. This in business year-to-date. which as over us, XXXX. remarks, this supported and opening flavor a you strong of versus year. margin Chemicals Continued the quarter direct the also quarter $XX have performance of just than out quarter $XXX is I of point see quarter continued fourth million million the

So in closing, an excellent quarter on fronts. all

And remained results when maximum large a allows prices on our and highlight We have the our you commitment commodity best deliver that made cylinders quarters commitment have have this. deliver The they of organization focus proposition, and fourth to strong possible as benefits done all to place prices we value. past and is are, maximum past over exceptional several is seen, will few our sure so the am the about and agree has decisions you as are value, strong, have part third far to operations us talked on continue value to we in shareholder the allowing really us company the to those maximize are seeing to put the I take a advantage focus to returns. quarter you in work we the of market quarter, is looking our over quarters conditions. prevailing as to forward now. the commodity Having firing our which

returning lot cash committed reiterate, We surplus the And just of quarter. into a shareholders. are fourth we to to to remain carrying momentum

through share and NCIB or reliable means dividend. via substantial dividend; a like growing bid and buyback First, a program, special accelerated a second, an issuer other

are evaluating our strong Given steps. position, we actively cash those very

for turn With that, it over the Q&A Dave stay session. So tuned. to I'll

Dave Hughes

Okay. number Thanks, a Brad. We of have pre-submitted. questions did

to Q&A why couple So over line. of Q&A the don't the up with and those, we open a we'll then live go

over think to ramp Gresh, about The next from aim plus? JPMorgan. should the first as few How you production the to progression question we years comes Kearl at XXX,XXX Phil

Bradley Corson

question, for Thanks Phil. the

crushing supplemental and performance discussed other We to based enhancements that continue our reliability. the past of Kearl we see and on capacity have record out in

in us us And previously, from quarter, day. moreover, we gives that the great we've now X which third we capability. productive mentioned, given our key target, so a And X driver starting turnaround last XXXX increasing this to strong into as quarter. through A for guidance announced confidence year as a moved achieving assets fourth the barrels confident and just remain continued and quarter the to the I performance XXX,XXX very in

day of initiatives. as get enhanced barrel we've years, XXX,XXX the couple the recovery beyond including So mine some over level XXX,XXX day debottlenecking, barrels level, low-cost next a plant got to to well projects digital the other planning, bitumen as a

barrels better barrels that than XXXX. March, may But earlier information I'd our and at upcoming Investor we'll Investor in day a unit barrels that continue our cost reaching a asset over we base, previous time XXX expect You path. down improvements, frame But be to to line. debottleneck by XXX,XXX day that. by we evidenced and as that of And continued that by put a XXX,XXX well At XXXX high and to our the XXXX expect time line. note XXXX give really our we again, Kearl We Day, with fixed ahead overall that recall still in relatively ultimately I fully drive outlined a more see we our to -- day track Day path will expect as barrels I to a cost. of we'll to record time also do progressive XXX,XXX recent continue Kearl on more also performance that

from the autonomous partway USD achieve next through the talked per expect years. X realizing barrel we rollout, ramp-up the of We full which over we are truck our haul a to about program, X saving and only

even not for that. solutions to per Thanks that more objective question, other see with Phil. optimization overall So an opportunities we addition, broadly which apply beyond that in the Kearl, include cost at only drive but continue a of technologies barrel, to lower drones, number $XX digital to

Dave Hughes

follow-up. there Investor on could a Day, the in hold? thoughts some of updated you diesel and activity like could beyond? be and/or from had increases Does Day Since you last Investor Or us back give XXXX CapEx the framework from pushed spending project the timing renewable inflation? Phil in still And

Bradley Corson

Phil. this what second the for do and of have as to the Thanks Investor you for end of were in I forward lot other at year being really November. Yes. person, We value We a question, in would in and back investors analysts getting been that together looking Day to event know as person see well.

As restrictions we soon reflected on was the situation an some it like underway. concluded just travel bit with in-person COVID of across We still Canada the a still for are and that too that. event

so adjust moving Investor And of our the consequently, one decided we Day, timing quarter. it to

event to planning And next of year. March now so host that in

soon, more in would team. timely you from what Investor guidance you'll numbers you that anticipate XXXX have within latest get you we're our as the prior so planning of would But fashion to Investor And share insofar save-the-date a received will a Days. month that Relations the have along with our or I goes, notice so, lines next in

what billion. Day we'll billion, looks project. magnitude with really, of averaging Strathcona see we to that similar CapEx we'd at other And those to you capital projected the same especially year continuing, $X.X few of updated spending. guidance. over diesel you'll $X.X at the growing We then an early plans. include is renewable Strathcona very update diesel And in from we expenditure go of this next longer-term billion. $X.X through believe previously see outlook, last Investor we'll kind But will around we give laid be on now out mostly that the investment with story we which that So And year, our we'll able have that project, be levels a renewable which next include general what year's years, levels, our

kind in Day So our with cost and but some that's our March. our capital levels, in guidance and to expect Investor see we business, spending then find efficiencies. impact we do of question also characterization, on offsets to to it to inflationary more I pressure guess your high-level materially updated the given but specific pressure, just our a come ability don't

Dave Hughes

asked on follows this, general, here from it going sort another the have that's But one question more to so few to that stepping is of gas advantage kind our assets? refineries, fuel refinery finally, efficiency, up add it an talked about for we've development I'm one cost a unconventional of our And that our it together specifically, about the much any does pull bit the I'm what's prices profitability. potential energy advantage? still about of question. impact folks higher So into of that before, a up inflation going have natural and in then And implications

Bradley Corson

I that's important costs really Obviously, a Yes. are good energy us. question. mean driver for

of X and net income downstream. natural a estimate those and gas that million indicated What mentioned that broadly watching X everything is and offset as every filing we're higher of accurate modest a for generally in XX-K CAD $X the price impact gas we change pressures, kind so very And CAD we've comments speaking more still to can in doing the our price would for very about $XX change upward But impact carefully really I in my prices. on and overall. gas we We is about in see change. impact representative -- Kearl

we $XXX of from also day our gas, about cubic feet assets. Now per million unconventional produce $XXX mostly million,

commodity our input feedstock point impact in versus price pretty provides energy also I'd overall price So environment. And some costs and is CAD moving our X the a of that's remain stronger why advantaged that gas gas gas internal modest. to globally costs out across are that higher downstream. costs, that and of offset upstream context

energy and strong a on cash including net for prices, basis, note to according the industry refined for or see the and can we higher at that are generated for you best-in-class crude flow also really continued that our has comes commodity So surveys we're that from trend products quarter. Solomon our I'd benefiting years many when efficiency refineries it near now. as in to

price the an competitors have Canadian gas we over for advantage current in high energy. environment So and

take investment the price don't reduces at rising always and good cogeneration looking recent unit we is energy Strathcona So our and electricity costs all for costs. offsets. example our overall downstream for exposure our XX-megawatt in we're refinery, which in A said, that granted, our

and And so XXX exhausted oil would the investment with for focus And step we creation highly produce choices. considering of core whether to of cogeneration that our we're up on the now opportunities portfolio. economic say gas, the at as Strathcona megawatts all sands investment project, But continuing across idle, we're of cogen almost That question. we sitting I'd our our to never see. just more always unconventional we we're operations haven't I on have all capacity acreage your answers yet we our moment, value where mention,

Dave Hughes

Okay. Q&A go to now, we'll live Operator, think please. I line the over


[Operator Instructions].

next Mehta question Sachs. come Neil with will Goldman Your from

Neil Mehta

dividend relative such tender decision? help could a us just continued Brad, about updates there today, think relative a line the to I little a those returns. was capital But like around and of out how be maybe you're coming. around And time you as some there. laid part teaser expectation incremental to thinking think the growth reaction about buyback talk for sounds through And frame there any out I some stock it to

Bradley Corson

through our us. high want I Yes, was Thanks your shareholders. didn't this And share there year. to per for We've year did our just cut of Yes. the we priority know And and maintained our buybacks. we that significant $X.XX. for I dividend, the that, with time. a is in remind our to to took a priority dividend the very And reinforce to demonstrated and year, you and not fact, really would a to for it that pandemic, the we made due through we I a strength on this cash on focus returning announced throughout commitment the actions then in excess our increase earlier question, last have actions dividend. top of share long others We've Neil. that company $X.XX a prior

share kind full did a months. our X little bit approaching of buyback A later, program. with program accelerated very reinstated X% increase. X% the share over then XX% almost a So And recently, most we summer, the reinstate year we've buybacks

been we've in again, committed our cash and active So to shareholders. very returning

momentum and to as into year, the of next year And look for a rest as us so we this building is the company.

significant generating are cash. We

our grow. seeing balances are We cash

returning are important evaluating that we over bid issuer our mentioned acceleration so And NCIB months. some include could an perhaps that's the are or I committed shareholders. cash coming substantial to very our to special include dividend. excess That that why a actively we a steps And could also program, of

a us. approval, bit final any made on are dividend influencing I it been those underway. decisions our issuer haven't discussing but and ask subject comment And we Dan our actively on to special substantial is with views because and shareholders, versus also We that's might bid to little Board discussions that have yet,

Daniel Lyons

special Yes, that dividend, came think investors. the talked is there's buyback you like and and pretty of a favor we'd some substantial that's a that on mainly, research some versus of said folks really we're number getting too. Brad. We're feedback a significantly investors. line, Yes. talking regarding issuer But that, recently Thanks, of to But I out get NCIB a dividend. the from bit over I to analysts agnostic. just to views, in special bid a

mean, choice that, structural NCIB have tax I what and and with maybe more you folks tell reasons us. is a So there's different for

take in we a we we'll input significant weigh way. those So very certainly options as into -- certainly investor account

Neil Mehta

decision to is as we should year. this the around an logical quarter point about timing think Dan, earlier you that base what the case this this, dividend update for And when the around that's made a clearing call, bump fourth Is decision? big

Daniel Lyons

get Yes, I into wouldn't timing.

actively we're we look, cash. stuff. all said, surplus I committed actually as Brad Brad to think said, And As -- we're returning evaluating this

demonstrated that. we've think I

we're just working through that. -- So

Neil Mehta

is WCS the question is right. the on Okay. And X widened thoughts just Line your a but little here. online. markets in Canadian oil has differentials, terms now follow-up of the All out bit

oil Just how from spreads stayed takeaway? firm, stay And think has could you think you you do here? that contained differentials now have about that do as pipeline more

Bradley Corson

egress we're encouraged the capacity been to some additional takeaway very time long doubt by no get a It's capacity. here Canada. Yes. There's more in coming

still And TMX well. running, up I the longer term, plans Line being we're the of positive. the completion expansion so X now think as And very for encouraged with course, by and that's

And much $XX for and position. differentials barrels good strong keep stability U.S. regard a provides the more of all pretty these stability $XX, in us very some higher-cost markets those $XX, seen pretty I differentials range, think that a barrel throughout access the coupled with in our year in the in that So pricing should in differential, strong very WTI puts fairly to to help narrow. that get flexibility having more We've the and

if unplanned are to occur differentials. that occur that disruptions we some always could but in fairly And think I on tight pipeline volatility the with will encouraged. So see feeling some There's quite there we're unique situations might any marketplace. depending outages, continue


come Dennis will with next your Markets. CIBC And World question Fong from

Dennis Fong

to to The somewhat this first spending year. really relates one capital

there of So and that from to so do think tackling more billion. to seeing, upstream Rapids decrease degree your, facility, modest Has we'll Lake. call the base in it, forth? some was a versus the assets from stronger focused guidance any for both I pace Grand other renewable side production understand, in balancing of, and And just development you're of a $X.X separate of light $X.X like the was Cold hoping diesel got optimizing but Kearl I've that billion influenced And it, potentially, really for obviously, obviously, on how you we'll there. projects? the levels production question ESG/expansion-related about call

Bradley Corson

that for Thanks Yes. question.

efficiencies made spending, in a the earlier capital I our spending, reflects on in really guidance of as able had capital of reduced as we is achieve continue no on a same amount comments lower we years objectives, despite that would we at in discipline the but to just planned the It work change reiterate that program. way progressed First, we on that and the just to call have focus cost. lock our capital been and complete reflecting

good a that's outcome. So really

to March, efficiency capital. and capture the earnings, kind course, we the continue of slot of use will cost, to we to time as much best value growth makes low opportunities that with at those we of all are Investor talk our evaluate we positioning debottlenecking market maximize And of for efficiency our and, of we this maximize in sense future, more and in us Day about look projects, the all As other kind high can. of best

Cold been do like Lake, asset and of so an the rigs there and of capital. deployed that's we about think one high And return our is reasons use have our successful performance you because workovers with to well-optimization to there. low volumes production activities So increase we other cost have cautiously additional

continue this that. encourages to Obviously, environment So we're to going do that.

see When strategy investments, look much need of environment about price significant that bigger part more reduce you'll to may Investor a taking to Day, but comes we're longer again, overall and a of this it For of cognizant certainly emissions. at talk hear a risks ESG, to we the is long term. be our view and our us other at capital

talk Cold just also at new You at one our We're heard emissions. the of about efficiency to boiler also Lake, X Kearl, us have of flu solvent we X to deploying projects expand at plans quarter's technologies reduced our call that startup last boilers. gas on which other boiler,

plans, where very So those important spending prominent each economic very ESG creates but we're of to assets in the at emission capital choices. making investment our also us. It's is value lower and spending

on come in that to more March. So

Dennis Fong

And Great. renewable there. diesel Great. follow-up then just is the on facility here my question

the language a but to initial seems a seems to of as don't forward ESG-focused like again, going I dunk se, like announcement return it say -- components strong I'm of it's balancing well economic a as per slam as significance, on. Just very the well from move attractive projects. -- project the It as potential

How last to incremental you're FID call we'll So where it, what wanted to of regulatory It some renewable like with you're progressing? with I potentially a get potentially government the and are with that items sounded discussions you're continuing update So on? looking various pursue, that to of kind the as at just bodies. negotiations project? diesel insight, gain clarity you quick is were to and

Bradley Corson

as question, you benefits. it high characterized Thanks it mean, the priority for it deliver well. value-accretive We the do does Yes. as I a and see significant us project interest. environmental for thanks for think I

can. we it as quickly, as So are we as progressing efficiently

the own design several of leveraging commercial make the still We production, to hydrogen in negotiations sourcing feedstock we're around middle also around optimizing available technologies. sure are our best we're

of And to more that year. bring in probably to of work will so progress sometime that next is work do us But an FID kind all there.

at Yes, entities. level. with level our and very us. You provincial important We've very the also both discussions mentioned are discussions had the those government to constructive federal

X that it project sources. objectives the provinces and I see kind fuel think Columbia, is this of also important overall like view very net strategic is shared around very there a individual is their in Canada's British for

all I very have want Investor optimistic very detail more March message to with plan strategy just all And we're to working And come. in a more of kind going would the that's expect with their align available we extremely so we well. Day. But encouraged, is much participation to on entities are to leave you and key at and and a And those support. it's certainly


Your next RBC question will Markets. come from Greg Pardy with Capital

Greg Pardy

tax that in should question, how a high-class But just in like and for in think taxability, the really modeling obviously probably problem we around about living one Dan, is first it's a Brad, it's but price now horizon almost lines. oil we're The cash 'XX? world

Daniel Lyons

Brad? Do to you that, want grab me

Bradley Corson

Yes, go ahead.

Daniel Lyons

it's yes, obviously, a Greg, high-class Yes, problem.

tax Obviously, paying point. asked them of me higher. you think case. sensitive few cash this you as tax have the That's sort want at that's don't give significant minimal to a If ago, probably it's prices, very trends, We in very, 'XX. But I task say cash I I cash 'XX. months really think current we would payments in can what become on 'XX. in we'd payments call have I'd it'll right? And still as good I will

more that, to we've losses and very, So if where to that's really point have drives like and we're which I the getting very yes, -- that low minimal amount us past pay taxes point. in fine. of But that taxes stuff you'll 'XX. tax, just for been depreciation think getting quite But relatively and see significant We're a cash small much 'XX, while.

Greg Pardy

so there of some governments with initiative. maybe see? how read maybe But negotiations on. forth. in And what in pathways with say federal and maybe been can just direction you the Like Terrific. heading? I is in and is the middle But appointments the pathways that, the over sort of terms terms still you there's Brad, terms can of anything Okay. the that just know of progress shifting to the you're change And we up obviously, in on cabinet should so of the

Bradley Corson

the Thanks about Yes. for And initiative. really the I'm excited Greg. question, pathways

consortium progress north significant Cold main those Alberta to the then the Lake that. by X steps companies in The very and our a very basis kind all think poor we to working the on Myself investments. for review kind the and sources of lot would CEOs, a closely carbon And XXXX to of other and making down and I great are that the all we're would again, with work on with We the and space. of to positive. next now new all looking achieve and for give engaged. government to oil regular design around what sands. guess, last we're together. of progress. on want early They're XXXX. giving plans, And time all plans line initiatives. meeting I working around equally what of of from pipeline kind important phasing of Alberta our some net just information is right of is our studies A X commitment emissions see complete that feasibility by of capture kind our week we to very that you illustrative looks see potential underway reduction announcements reduction of about the some market, capture Also is talk issued more to at like And up updates very the those

engagements. conversations consultation in underway. the And tax With would country of a fundamental recently just recognition then achieving a is in say aspirations application Cold for our it I is been X that environmental obviously, Mr. He's NRCan, closely. federal announcements, minister, don't follow steps but ministerial There's we've for very net and Wilkinson some contact support to about There parallel, very we had the continue access of government the our over cabinet, space engaging with now which all of the that key with shared of is staying have next that We to of new in us a their talking has by another projects the those XXXX. hopefully, net respect kind to the very X project. to the poor we region. XXXX. And much strong moving in look be and environmental this submitted to by Lake our conversations around experience a a vision to him lot forward issues. and they've broad position achieving on we're credit the key ministerial that so new for constructive. and very for And investment strong

those that and look and as is can possible have ways for with objective constructive Canada's overall make long to always a history many as and many working governments we ministers goals. of to We our contribute engagements

well the but extremely progressing progress pleased making. come, again, to with more So I'm we're and things

Dave Hughes

So that a few we have pre-submitted. were more

is -- you about bit the asked one light of what of Manav had specific about some one are start might from comes that our of bit And a a forward Neil be seeing in we'll the This So heavy today? talk differentials. Gupta, that? first view Suisse. more Crédit spread heavy kind we can Mehta widening the driving

Bradley Corson

market moving of Obviously, question, that a parts there's now. right for lot especially Thanks Yes. and the Manav. always in

has kind contributor it again, that outages of some cause And very been it or some, last here over But And a temporary inventory the bit and there I build if little very some was all Line egress, on will, had see I did spread. is the in also of Canada think pipeline impacts a factor in parallel in X you think in inventory. in month I to also builds to the did a temporary pipeline And tight, in pretty commissioning egress. impacted that a although short-term Western so, nature. think it's we widened last that generally key month.

some these I think of effect And on an that had probably so differentials.

said. So I've already beyond that -- I think that's what the key

Daniel Lyons

facility, you feedstock to Manav had tallow? use you related it vegetable Or question plan a some diesel. oil for about the diesel renewable use talk renewable you to will primarily? will be Can follow-up

Bradley Corson

use earlier Strathcona Kind to not very a this With comments planning And maybe project building to of it. to oils, or location, Yes. local our and because vegetable in abundant feedstock, it's chose are its close optimism my we of on refinery product. about our one waste is the and respect agricultural feedstocks. proximity tallow much we about reasons

most being chain a And we sources so supply rail. of by view think within crop we transit as day's about those that

with I in in a also provides, refinery co-locating efficiencies carbon further synergies, think, BC. cost of natural advantages, to provides also that fuel and low so And some close Strathcona market strategic it proximity kind

Specific to those all proximity on us that base your So being crop things the to question factors close feedstock, really is were for But location. to important. choose

Dave Hughes

also ExxonMobil's the fits in both into related more at remainder then Prashant strategy? updates goals, longer-term Imperial, nature. renewable this well And decarbonization Rao renewable recent asset Citi, net the bit as for on front? goal where From base it's to is diesel, a in at potential to in about but but Imperial fits include Can downstream a as the the of there strategic Strathcona you overall talk diesel

Bradley Corson

And question. obviously, a the in renewable for projects. lot our Thanks interest of Yes. diesel Strathcona

project. to And we with into project renewable into But our time. as applications those we've opportunities. its biofuels refinery longer-term use this a be capability for We're in now. runs actively us Strathcona. approach that net And And progressing here, long-term I expanded And months that growing the an downstream horizon And towards some specific for examining we've been certainly as your in support fits details X he'll question, solutions in about time of could to So solutions as specific for here Jon more future Wetmore advanced be I'm well lubricants. potential progress who blending a well. Canada. manufacturing we I it, fuels, other sure been sharing talking as more forward over very bucket, medium-term, some short-term much bucket but -- our already But business, engaged for he's look in our we coming short-term, FID. know

us project importance in their of renewable So our renewable you that the participate well the economic ExxonMobil renewable announced which between announcement, and portfolio foundation as market the alignment Strathcona project to diesel project on And reinforces builds ExxonMobil allows way, this key really this Imperial alongside and fuels project the way. this efficient saw Strathcona and in a diesel really growing showcases believe very also within initiative. just on I very

progress started its I as given proximity with our in Strathcona our ways over we've opportunities downstream But and to there within strategy I will mentioned, the so And much time. lower market. other the be feedstocks other very suspect to business carbon that fuels

Dave Hughes

we Investors And one question expecting as at chemicals margins broadly Okay. from final XXXX unfolds. Citi. Rao also Prashant are industry have receive to

the operations as global please you context If Chemical could which this Anything you the in happens? Imperial's would, trend? within keep differentiate about mind, talk should we business might your global from

Bradley Corson

the Prashant. Yes. question, for Thanks

to also, to to the these year, and Sarnia But for extract which our some another underpins business the supply into. from admittedly that look our us for outlook margins. mix but that benefited really export will structural the which think shared business. And supply record lets number foremost, very chemicals first me be additional a storm-related capacity we seen most to some lead a of directly facility not expected from that to We've is outages And sell this is heard also continues be capacity industry I as about we've being advantages which You what we quite shortages close the there integration lower feedstocks. markets talk is And our will ahead, the most the markets we've chemicals positively very Gulf online optimize value business. refinery, low-cost are strong. benefits maybe product proximity impact with of that strength and temporary. customer business our got Coast, certainly our chemical and But from in profitability in coming are advantages our base,

the with our are around conditions, time to over optimistic $XX spoke I specific to. how add just goes And million per all just be a Last business we our synergies term. that would cycle to had chemical advantaged bottom I businesses earn saw resilient and year. which of we pricing show So those we Chemical continue long very

we for see So potential ahead, us. strong again, looking a do and market

Dave Hughes

questions. our of end the that's And Okay.

us saying I interest. So thank very and I close guess continued for you joining by for would your much

afternoon If very you to to and much. the team. to questions have have a that, weekend. Relations want further with further hesitate don't And reach a great discussions, any Thank or have you great out any Investor


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