Imperial Oil Limited

and welcome to the Imperial Oil Fourth Quarter 23 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Peter Shaw, VP, Investor Relations. Please go ahead.

Good morning, everybody. Welcome to our Fourth 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, Sherry Evers, Senior Vice President of Sustainability, Commercial Development and Product Solutions, and Simon Younger, Senior Vice President of the Upstream. 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 the number of factors and assumptions. Forward-looking information and the risk factors and assumptions are described in further detail on our fourth 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 our website, so I'd ask you to refer to those. Brad is going to start this morning 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 is done, we will follow with a Q&A session. So with that, I will turn it over to Brad for his opening remarks.

Thank you, Peter. Good morning, everybody, and welcome to our fourth quarter earnings call. I hope everyone's doing well and your new year is off to a good start. Today, I'm pleased to report that Imperial delivered another very strong quarter, capping off a very strong year for the company. Curl continued to deliver excellent production results and set many new records, and this performance drove higher upstream volumes. At the same time, our downstream business, with our structurally advantaged Canadian position, continued to capture significant value from wider crude discounts. It was a very solid quarter, and as we look to 2024, we feel very confident about the strategic plans we've laid out, as well as our operational capabilities to execute those plans and our ongoing ability to generate value for our shareholders. I hope you see a reflection of our confidence in the dividend increase we've just announced today. Reflecting on the entire year, I'm very pleased with Imperial's performance across 2023. Specifically, we continue to have safe and reliable operations across all our assets. It's strong execution of all our planned turnaround activity and continued focus on reducing operating costs. We took action to implement measures to address the environmental incidents at Curl, including expanding our monitoring and enhancing our engagements with local communities. And throughout the year, We maintained our capital discipline as we advanced high return growth projects, such as the Strathcona Renewable Diesel Project and the Grand Rapids Phase One Project, both of which remain on track. And for shareholders, we delivered another outstanding year of returns. So over the next few minutes, Dan and I will detail the results of this very strong quarter. So now let's review the fourth quarter results. Earnings for the quarter were $1,365 million with cash from operating activities of $1,799 million when excluding working capital impacts. These results reflect continued strong operational performance and record production from Curl, offset by weaker commodity prices. Full year 2023 saw strong operating performance and successful execution of our planned maintenance activities, which contributed to full year earnings of nearly $4.9 billion. Following 2022's record earnings performance, this is the second highest earnings in Imperial's history. We achieved total upstream production of 452,000 gross oil equivalent barrels per day in the fourth quarter, the highest quarterly production in over 30 years when adjusting for the divestment of XTO Canada. Our results in the upstream this quarter were underpinned by record performance at Curl, which delivered 308,000 total gross barrels per day of production, the highest quarterly production in the asset's history. This is just one of many records we set at Curl. I'll talk about each asset in more detail in a few minutes. In the downstream, we continue to see strong operating performance. Refining throughput averaged 407,000 barrels per day, which equates to a refinery utilization in the quarter of 94%, inclusive of the planned turnaround in Sarnia, which began in mid-September and was safely completed ahead of schedule and below budget by the end of October. This is especially notable because the joint refinery and chemical plant turnaround was the largest turnaround ever undertaken by our Sarnia site in terms of scope, workforce size, and total spend. I'd like to recognize the hard work of all of our teams in Sarnia for not only delivering this exceptional outcome, but doing so in a way that ensured nobody got hurt. Our continued focus on financial discipline across the company resulted in lower overall cash operating costs, even beyond the reductions we saw from lower energy costs. I've been very pleased to see the progress our teams have made on reducing costs, which is especially notable because our company was able to deliver record production while at the same time successfully executing significantly higher planned turnaround activities.