Imperial Oil Limited

Good day and thank you for standing by. Welcome to the Imperial Gold Oil Second Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 11 on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Hughes, Vice President, Investor Relations. Please go ahead.

Thank you, Michelle. Good morning, everybody. Welcome to our second quarter earnings conference call. I'm joined this morning by Imperial's senior management team, including Brad Corson, Chairman, President, and CEO, Dan Lyons, Senior Vice President, Finance and Administration, Simon Younger, Senior Vice President of the Upstream, Sherry Evers, Vice President of Commercial and Corporate Development, and John Wetmore, Vice President of the Downstream. Today's comments include reference to non-GAAP financial measures. The definitions and reconciliations of these measures can be found in attachment six of our most recent press release and are available on our website with the link to this conference call. Today's comments may also contain forward-looking information. Any forward-looking information is not a guarantee of future performance and actual future performance and operating results can vary materially depending on a number of factors and assumptions. Forward-looking information and the risk factors and assumptions are described in further detail in our second quarter earnings release that we issued this morning, as well as our most recent form, 10-K. All of these documents are available on CDAR, EDGAR, and on our website, so I would ask you to refer to those. Brad is going to start with some opening remarks and then hand it over to Dan, who's going to provide a financial update, and then Brad will provide an operations update. Once that's done, we'll follow with the Q&A session. So with that, I'll turn it over to Brad for his opening remarks.

Thanks, Dave. Well, good morning, everybody, and welcome to our second quarter earnings call. I hope you're all doing well. After a challenging start to 2022 with some significant weather impacts, I'm very pleased to say that our operations returned to normal in the second quarter, which underpinned the outstanding results that we reported earlier today. The high price environment continued through the quarter, and the focus we put on reliability and strong operating performance allowed us to take advantage of this environment. I think it's also important to note that this performance comes when Canadians need it most, as global challenges have resulted in supply disruptions and subsequent price escalations. With our strong operational performance, we are doing everything we can to increase production and ensure a stable ongoing supply of the products that fuel our day-to-day lives. These economic conditions have so far continued into the third quarter And with all of our major planned downtime for our operated assets behind us for the year, we remain well positioned to continue to maximize our production in a very tight environment. Over the next few minutes, Dan and I will detail the results of what was a very strong quarter. So now let's review the second quarter results. And we have a lot of positive highlights to talk about. To start, Earnings for the quarter were just over $2.4 billion, and our cash from operating activities was almost $2.7 billion. These results continue to reflect the strong commodity fundamentals we are currently experiencing, as well as strong operating performance in the quarter. They are also reflected in the increased royalty and tax contributions that we make to the government and that go to support the communities in which we operate. We achieved total upstream production of 413,000 barrels per day, which represents the highest second quarter production in over 30 years. And this includes the annual planned turnaround at Curl, which was completed on time and on budget. With the first half of the year behind us, we are updating our annual production guidance for Curl to reflect the challenging first quarter we experienced, which I will talk about in a minute. But as mentioned, our operations are back to normal after the planned turnaround work, and we look forward to a strong second half of the year. Our downstream continued to perform at a very high level, with second quarter utilization of 96%, which notably is the fourth consecutive quarter of utilization above 90%. This is particularly important in the current tight product supply environment. and demonstrates we are doing all we can to bring as much product supply as possible to the market. While we saw the last of the provincial pandemic-related restrictions lifted in the second quarter, both motor gasoline and diesel demands have leveled off close to pre-pandemic levels. In addition, we are also seeing jet demands continue to strengthen as the public resumes traveling. which is very encouraging as jet demand has been lagging in its recovery up until now. With respect to delivering on our commitment of increasing shareholder returns, we successfully executed a substantial issuer bid, only the second in our company's history, returning $2.5 billion in cash to our shareholders. Including our quarterly dividend, we returned $2.7 billion in the quarter. And we recently announced the renewal of our normal course issuer bid at 5%, with the expectation that we will accelerate the purchases and complete the NCIB by the end of October. And finally, this morning we declared a dividend of $0.34 per share, payable October 1st. All of this leaves us well-positioned to return more cash to shareholders this year than we did in our record-setting 2021. Just before I pass things over to Dan to go through our financial performance for the quarter in more detail, I would also like to highlight the successful marketing efforts related to our XTO assets. Together with ExxonMobil Canada, we announced that we have entered into an agreement with Whitecap Resources for the proposed sale of these assets for a total cash consideration of $1.9 billion, which equates to $940 million imperial share. We are extremely pleased with this result and expect the sale to close before the end of the third quarter. We have talked a lot recently about focusing our efforts on optimizing our existing core assets and feel we still have plenty of opportunity there. This divestment is consistent with this strategy and continues to support our commitment to maximize shareholder value. And with that, I'll pass things over to Dan.