Imperial Oil Limited

We're about to begin. Good day and welcome to the Imperial Oil 2Q23 earnings call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Dave Hughes, Vice President of Investor Relations. Please go ahead.

Thank you and good morning, everybody. Welcome to our second quarter earnings 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, Sherry Evers, Senior Vice President, Sustainability, Commercial Development, and Product Solutions, and Simon Younger, Senior Vice President of the Upstream. Cautionary statement, 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 on our second quarter earnings release that we issued this morning, as well as our most recent form 10-K. All these documents are available on CDAR, EDGAR, and on our website, so please refer to those. So I'll hand it over to Brad and to Dan to go through their remarks. And as always, we will follow up after that with the Q&A session. So Brad, over to you.

Thank you, Dave. Good morning, everybody, and welcome to our second quarter earnings call. I hope everyone's doing well. Before addressing the financial and operating results for the quarter, I wanted to take a moment to talk about the serious wildfire situation in Alberta and across many parts of the country. that has been present now for over the past few months and continues in many areas today. Our thoughts continue to be with the many communities that were and continue to be impacted by these fires and related evacuations. Throughout this challenging time, Imperial is working directly with communities to help address emergency requests, including donating safety equipment and personal protective gear to firefighting crews, ensuring local supplies of jet fuel for firefighting planes. And our employees are helping deliver items donated by the company, such as water and non-perishable food to those impacted by the wildfires, as well as the first responders. I'd also like to send a heartfelt thank you to all the emergency services that have been doing such a tremendous job in battling these fires and providing assistance and support to the impacted communities. Now let's talk about our second quarter performance. The results we will talk about over the next several minutes are reflective of a quarter that included a significant level of planned maintenance at three of our major assets. And I'm pleased to say that all the work was completed safely and consistent with our plans. And while we still have major planned turnaround work ahead of us, in particular a turnaround at our Sarnia Refinery and Chemicals site later this year, We expect to see stronger volumes in the second half, most notably in the upstream. The second quarter also saw continued strength in the commodity price environment. While we saw some moderation in diesel cracks, motor gasoline strengthened, and crude remained relatively steady while WCS prices improved. All in all, a positive environment for us as we move into the second half of the year. So now let's review the second quarter results. Earnings for the quarter were $675 million with cash from operating activities of over $1.1 billion when excluding working capital impacts. These results are notable in that they demonstrate continued strong performance in a period where we were executing a significant amount of planned maintenance activity, both in the upstream and the downstream. In the upstream, production in the quarter was 363,000 gross oil equivalent barrels per day, reflecting the impacts of major planned maintenance at Curl and Syncrude. I'll talk about each asset in more detail in a few minutes, but I'm pleased to say that this work was executed as per our plans and operations are now back to normal at these two assets. We still have some planned maintenance scheduled for the second half of the year, but it is much less significant. And given our first half performance, we are moving into the second half of the year with confidence in the production guidance we have provided. Our downstream business also performed very well, refining throughput averaged 388,000 barrels per day, which equates to a refinery utilization in the quarter of 90%. This reflects a very successful major plan turnaround at Strathcona, which is our largest refinery. Operations are back to normal here as well. We ended the second quarter with year-to-date utilization of 93%, which is right on our guidance for our refining business. While we do have another significant plan turnaround at our Sarnia facility in the second half of the year, which impacts both the refinery and our chemical operations, we are confident in our plans and ability to deliver on our full year guidance. We have talked a fair bit about our priorities as they relate to greenhouse gas emissions reduction, both our own and those of our customers. And I have a couple of exciting updates on our efforts in this area. Our Curl mining facility received its first shipment of renewable diesel for use in our heavy duty truck fleet. And we passed a significant milestone with respect to our renewable diesel project at Strathcona as we began mobilizing key contractors to the site to begin facility construction work. On shareholder returns, in addition to announcing a 50 cents per share dividend this morning, In late June, we also announced the renewal of our normal course issuer bid, under which we plan to repurchase 5% of our outstanding shares, which amounts to around 29 million shares. And as you would have seen in our earnings press release this morning, we have decided to accelerate the buyback program with the intention of having it completed prior to the end of this year. As you know, we have a long track record of shareholder returns, and this underscores our continued commitment to returning surplus cash to shareholders in the most effective and efficient way possible. With that, I'll pass things over to Dan.