Imperial Oil Limited

Good day and welcome to the Imperial Oil 4th Quarter 2024 Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Peter Shaw, Vice President of Investor Relations. Please go ahead.

Thank you. Good morning, everyone. Welcome to our 4th 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 Cheryl Gomez-Smith, 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 our attachment six of our most recent press release and are available on our website with a link to today's conference call. Today's comments may contain forward-looking information Any forward-looking information is not a guarantee of future performance, and actual performance and operating results can vary materially depending on a number of factors and assumptions. Forward-looking information, the risk factors, and the assumptions are described further in detail on our fourth quarter earnings release that we issued earlier today. All these documents are available on CDAR+, EDGAR, and our website, so I'd ask you to refer to those as well. Brad is going to start with some opening remarks and then hand it over to Dan, who is going to provide a financial update, and then Brad will provide an operations update. Once that is done, we will follow the Q&A session. So with that, I will turn it over to Brad for his opening remarks.

Thank you, Peter, and good morning, everybody, and welcome to our fourth quarter and full year earnings call. I hope everyone is doing well and your new year is off to a good start. And apologies for my scratchy voice as I recover from a cold. But I'm really pleased to report another strong quarter for Imperial as we wrapped up 2024. We saw excellent operational performance across all our assets, both upstream and downstream, which largely offsets the impact of lower commodity prices on a sequential quarter over quarter basis. And despite the lower prices, our ability to continue to grow production and deliver strong downstream reliability resulted in a very solid end to 2024. Our upstream continues to set records, and we achieved the highest fourth quarter production in the past 30 years when adjusting for the XTO divestment. We also realized the benefits of TMX pipeline and additional egress, which resulted in much narrower and more stable differentials compared to a year ago. Our downstream business also performed very well over the quarter. and contributed solid earnings with lower turnaround activity and higher utilization. We continue to benefit from the structural advantages of the Canadian market that supports stronger financial performance despite softer refinery crack spreads. Over the next few minutes, Dan and I will detail the results of a very strong quarter. So now let's review the fourth quarter results. Earnings for the quarter. were $1,225,000,000 with cash from operating activities of $1,650,000,000 when excluding the impact of working capital. For the full year, earnings were $4,790,000,000 down slightly from the prior year. Also worth noting that we delivered our second highest earnings per share of $9.03. These results reflect continued strong operational performance and our ability to capture value for our shareholders. In the upstream, we achieved total production of 460,000 gross oil equivalent barrels per day in the fourth quarter. This marks the highest fourth quarter production over the past 30 years when adjusting for the historical volumes associated with the divested XTO assets and resulted in the highest fourth quarter upstream earnings in the company's history. The strong fourth quarter results also contributed to the highest annual upstream production in over 30 years at 433,000 barrels per day, even when including the divested XTO assets. Our strong operating performance led to a unit cash cost reduction of nearly $3 US a barrel when comparing to full year 2023. And looking ahead, we expect to continue to lower our unit cash costs based on advancing further growth and structural cost reduction initiatives. Curl continued the year with yet another strong quarter, which resulted in us achieving the asset's highest ever annual production, exceeding 280,000 barrels per day this year on a gross basis. I'm very proud of the team for achieving this production milestone, and I know they are squarely focused on carrying this momentum into 2025 and achieving even higher volumes. I'm also extremely pleased by the performance at Coal Lake. We delivered very strong performance in the fourth quarter, with the planned turnaround activity behind us and all of the new Grand Rapids wells producing. Our transformation of production and unit cash costs at Cold Lake is off to a great start, as we leverage solvent recovery technology with impressive results. And in the downstream, all our assets performed very well, and with the only planned turnaround activity in the quarter being the completion of the maintenance work at Nanticoke that we discussed on our last call. Refinery throughput averaged 411,000 barrels per day, which equates to a refinery utilization in the quarter of 95% and a full year utilization of 92%, which is at the top end of our 2024 guidance. The fourth quarter also saw us continue to maximize shareholder returns. We completed the accelerated NCIB in mid-December with purchases of $1,475,000,000 in the quarter. In addition, we paid $317 million in dividends in the quarter for a total of $1.2 billion in dividends for the entire year. And in total, we returned $3.9 billion of cash to shareholders in 2024 and $16 billion over the past three years. And finally, this morning, we declared a dividend of 72 cents per share payable on April 1st, 2025. The 12 cents per share or 20% increase is the largest nominal dividend increase in company history. This is further demonstration of our commitment to growing the dividend and returning surplus cash to shareholders. It also reflects our confidence in delivering on the guidance we communicated in December. As we move into 2025, we remain focused on our core strategy of optimizing our existing asset base to maximize shareholder value, a strategy that has allowed us to increase our quarterly by over 225% since 2020. So with that, I'll pass things over to Dan to discuss our financial results in more detail.