Keyera Corp.

Good morning. My name is Lara, and I will be your conference operator today. At this time, I would like to welcome everyone to Kiera's 2023 year-end conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number 1 on your telephone keypad. If you would like to withdraw your question, please press star, followed by the number 2. Thank you. I would now like to turn the call over to Calvin Locke, Manager of Investor Relations. You may begin.

Thank you, and good morning. Joining me today will be Dean Sattagucci, President and CEO, Eileen Maricar, Senior Vice President and CFO, Jamie Urquhart, Senior Vice President and Chief Commercial Officer, and Jared Bastilny, Senior Vice President, Operations and Engineering. We will begin with some prepared remarks from Dean and Eileen, after which we will open the call to questions. I would like to remind listeners that some of the comments and answers that we will give today relate to future events. These forward looking statements are given as of today's date and reflect events or outcomes that management currently expects. In addition, we will refer to some non-GAAP financial measures. For additional information on non-GAAP measures and forward looking statements, please refer to Kiara's public filings available on CDAR and on our website. With that, I'll turn the call over to Dean.

Thanks, Calvin, and good morning, everyone. Kiara delivered record results in 2023. We continue to execute our strategy of increasing competitiveness, enhancing and extending our integrated value chain, financial discipline, and sustainability leadership. Results include best-ever safety performance, and exceptional financial results driven by record realized margin across all three of our business segments. Kiera ended the year in a strong financial position with net debt to adjusted EBITDA at 2.2 times, below our targeted range of 2.5 to 3 times. We had several strategic accomplishments in 2023 that helped drive the next phase of growth for Kiera. Early in the year, we closed the acquisition of an additional working interest at our core KFS complex, adding meaningful fractionation capacity in a high demand market. In the spring, we brought CAPS online, strengthening our long-term competitive position. We now offer Montney and Duvernay producers a fully integrated solution that's driving commercial success across our value chain. Today, we announced that we've added long-term integrated agreements with several producers. This includes approximately 30,000 barrels per day of incremental volume commitments on caps and 33,000 barrels per day of incremental and extended fractionation commitments at KFS. These have weighted average contract terms of 12 and 13 years respectively. These integrated agreements also includes storage at KFS and other services like rail transportation, pipeline connectivity, and product marketing. These contracts are with highly creditworthy counterparties, include a high degree of taker pay, and require minimal additional capital. CARE delivered record fee-for-service growth in 2023 with best-ever contributions for our gathering and processing and liquid infrastructure segments. Continued growth from Wapiti, Pipestone, KFS, and CAPS support us reaching the upper end of our EBITDA growth target of 6% to 7% from 2022 out to 2025. The new commitments we announced today support continued growth beyond 2025. Our marketing segment delivered a record $479 million of realized margin in 2023 driven by record sales volumes for the segment and continued strength of our iso-octane business. Our ability to leverage our physical assets and logistics expertise provides us with a distinct competitive advantage and delivers strong cash flow. This marketing margin is then reinvested into long life infrastructure projects, in turn driving growth and high quality fee for service cash flows. As we close out a successful 2023, we're excited for the year ahead. 2024 is anticipated to be a year of strong free cash flow generation resulting from continued margin growth and lower capital spending relative to the past several years. Our capital allocation priorities remain the same. They are first to maintain the strength of our balance sheet and then the balance between increasing returns to shareholders and investing in additional growth opportunities. Fractionation expansion opportunities at KFS and a CAPS Zone 4 expansion are great examples of capital efficient opportunities that support our growth outlook beyond 2025. Our strong balance sheet provides maximum optionality to bring forward growth investments when they're ready. Lastly, You would have seen in our release this morning that we'll be taking AEF offline this spring for approximately six weeks to proactively complete maintenance activities. These maintenance activities are intended to facilitate AEF's continued reliable operations at full capacity until its next scheduled turnaround in 2026. The work is expected to impact 2024 realized margins for the marketing segment by approximately $35 to $45 million with no impact to maintenance capital. Due to strong near-term market fundamentals, we still expect to be within our stated base marketing guidance of $310 to $350 million for 2024. Consistent with prior years, we'll update our 2024 marketing guidance with Q1 results in May. This will include the impact of this outage. I'll now turn it over to Eileen to provide a further update on our quarterly and annual financial performance.

Thanks, Dean. Adjusted EBITDA was a record $339 million for the quarter and a record $1.2 billion for the full year, compared to $212 million and $1 billion for those same periods last year. Distributable cash flow was $234 million or $1.02 per share for the quarter compared to $104 million or $0.47 per share for the same period last year. DCF for the full year was a record $855 million or $3.73 per share compared to $654 million or $2.95 per share for 2022. These results were driven by record contributions from all three business segments. We recorded net earnings of 49 million for the fourth quarter and 424 million for the full year 2023. This compares to a net loss of 82 million for the fourth quarter and net earnings of 328 million for the full year 2022. The 2023 results include a non-cash impairment charge of $210 million related to the Wild Horse Terminal. The 2023 dividend payout ratio was 53% of DCF at the low end of our target range of 50% to 70%, and corporate return on invested capital for 2023 was 16%. At year end, we had over $1 billion of available liquidity, and in January of this year, we issued 250 million of 30-year notes at a coupon rate of 5.66%. Looking forward, our 2024 guidance remains unchanged. Growth capital expenditures are expected to range between 80 and 100 million. This includes about 60 million of sanctioned capitals for various optimization projects, with the remaining 20 to 40 million contingent on the sanctioning of Cap Zone 4 and fractionation capacity expansions at KFS. Maintenance capital expenditures are expected to range between $90 million and $110 million, of which about $20 million is recoverable in 2024, and another $15 million is recoverable within the next few years. Cash taxes are expected to range between $45 million and $55 million. Thank you, and I'll turn it back to Dean.

Thanks, Aileen. Man for Canada's energy has never been stronger. Our basin set new records for both natural gas and crude oil production in 2023. Trans Mountain Pipeline expansion and LNG Canada support the next phase of basin growth. KIERA is positioned to participate in a meaningful way. On behalf of KIERA's board of directors and management team, I want to thank our employees, customers, shareholders, Indigenous rights holders, and other stakeholders for the continued support. With that, I'll turn it back to the operator for Q&A.

Thank you, sir.

Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star, followed by the number one on your touchstone phone. You will hear a three-tone prompt acknowledging your request. Should you wish to decline from the polling process, please press star, followed by the number two. If you're using a speakerphone, please lift your hands up before pressing any keys. Our first question is from Rob Hope from Scotiabank. Please go ahead.

Good morning, everyone. The first question is on the KFS contracting. So the 33,000 barrels a day would be, you know, we'll call it half the propane plus capacity, assuming that the volumes are propane plus. But where do we stand on the remaining capacity at KFS contracting? And with this incremental contracts at hand now, does the contracting strategy then turn to the expansion?

Morning, Rob. And thanks for your question this morning. You know what? Obviously, we're very pleased with our contracting and how that's really integrated with our CAPS pipeline project. Again, allowing us to be able to deliver integrated service offerings to add value for our customers. You know, certainly we haven't, for commercial reasons and commercially sensitive reasons, we haven't disclosed how much of our capacity is locked up. But certainly this helps support a future expansion. And anyway, that's a key part of our integrated infrastructure KFS asset. And maybe I'll just turn it over to Jamie if he wants to add any other comments.

Yeah, thanks, Dean. And thanks, Rob, for the question. You know, so as we think about expansion, you know, it's really driven, as you pointed out, around demand for frack capacity, both in the near term and the long term. And as you noted, we, you know, with our additional 21% working interest in KFS, you know, that's really given us an advantage in the market to be able to go out and contract long term because we've got capacity available in the short term. So, There's a couple of ways that we're looking at expanding our frac capacity in Fort Saskatchewan. Our most capital and time efficient option is to pursue a de-bottleneck of frac two. And this allows us to take advantage of existing equipment. So the per barrel cost of incremental capacity is more favorable. And also we're looking at further capacity expansions by building out frac three, which would be a new build on our existing lands. So we're also actively evaluating the best way to proceed with this project and we'll update as appropriate. But it's really important to note that this isn't an either or. You think about it sort of as a build as we increase our frac capacity, the de-bottleneck would then lead into a potential frac tree. So they're very exciting opportunities for us. I'll just remind you and the listeners that

you know, it's subject to appropriate customer underpinning and board sanction.

I appreciate that. And then maybe keeping on the contracting themes, good to see some incremental contracts on caps. Can you maybe just give some additional color on where we are in further discussions with customers on, you know, increasing that percentage contracted even further? as well as how the Zone 4 contracts discussions are going, especially given the fact that a BC pipeline now has regulatory approval, although it's not yet sanctioned.

Yeah, no, we're having great conversations with our customers. And, you know, obviously we're also very excited about the growth in the basin. We think about LNG Canada finally coming into service in a short time period. We think that's going to unlock growth in the basin. And when you think about global demand for LNG, we have a tremendous opportunity off the west coast of Canada. So I certainly expect that there's going to be further expansions below phase one of LNG Canada. So really what that means is that there's going to be a lot of growth opportunities in the basin, and we're very well positioned. So the contracts that we announced, again, integrated contracts for our services, we are in active discussions with other producers to continue to add more volumes to our system. And in addition to that, with the growth we see, we think that there's gonna be a lot more volume added in the years to come. In terms of zone four, Certainly, we believe that there's going to be development along the entire Montney Fairway into BC, so we'd love to build a pipeline to the border. It's great that North River Midstream received federal approval for that connected across the Alberta-BC border. That's a tremendous milestone. Over three years of work on their behalf, so I congratulate them on the great work they did to get that approval. And, you know, for all the reasons why producers you know, we're supportive of cap zone one to three, those same reasons apply to zone four and into BC. And that's that they want optionality of their transportation of NGL service. They want competition. And again, it doesn't hurt to have a new pipe in the ground in terms of overall reliability. So we're very happy that we can provide that competitive alternative for our customers. We're here to add value for our customers, and I think that, you know, we have a great opportunity to do that for them. And if we do a great job of it, we'll also create value for our stakeholders as well. But, Jamie, anything else you want to add on that?

No, I think, yeah, you hit the nail on the head.

Maybe just lastly, you know, our caps, we just want to remind you that our guidance is now at the high end of the range, so 7% EBITDA growth out to 2025. And the contracts that we announced, and again, some of the deals that we're working on going forward will help deliver growth beyond that 2025 time period. So we're very excited about it.

Excellent. Thank you.

We have our next question coming from the line of Robert Korn from RBC Capital Markets. Please go ahead.

Thank you. Good morning. If I can just start with questions on capital allocation and capital efficiency. You mentioned the number one priority is balance sheet strength and just where debt divita is, like you're already there below your range. So are you rethinking, you know, the nature of that range, particularly just where investor feedback is and trying to prepare for future CapEx and we should expect that you want to be below the range? or that you're going to move the range. And then the second part is just on capital efficiency. And how do you define or think about what capital efficiency is? And just the idea, trying to understand, you know, your approach to projects and, you know, major projects.

Maybe I just have a couple comments and I'll pass it over to Eileen, Robert. But thank you for the question. And, you know, I'll just state the obvious that You know, we're in an enviable position that we just delivered our best year ever. And our balance sheet is also in an unbelievable strong position. So it gives us a tremendous amount of optionality for us to pursue opportunity. And we see a lot of opportunity across our entire integrated value chain, especially when you overlay the growth that we see coming in our basin over the next several years. So, again, we're very pleased with the position that we have. And so, with that, I'll just turn it over to Eileen, and maybe she can add a few comments as well.

Sure. Thanks, Robert. Yeah, it's a great question as it relates to the balance sheet. I think, you know, to answer the question, it's really important to know that the 2.2 leverage at year-end included record marketing results. So, once you normalize marketing to even the high end of our new base, so say the $350 million, that leverage ratio is at two and a half times, which is at the bottom of our target range. So, I think the key message here is that we are very comfortable remaining at this range. You know, the balance sheet provides us optionality, as we said before, to pull forward growth spending. And, you know, as Dean alluded to in his comments, we have several exciting opportunities, you know, Zone 4, FRAC expansion. So, you know, based on where the balance sheet is today, we feel comfortable that we could fund these types of opportunities on a self-funded basis. And maybe the capital efficiency question, I think, you know, maybe Dean can add to it, but I think we really look at, you know, how are we adding projects to our existing value chain and looking at the fully integrated returns, not, you know, in the whole system. And I think that's where additional FRAC expansions and extending caps to Zone 4, those are certainly more capital efficient.

Yeah, I mean, on that.

Oh, sorry, go ahead. Go ahead. Well, I was just going to say, I mean, obviously, a big part of our capital efficiency, too, is just having the financial backing to make sure that we can deliver strong returns for our stakeholders as well. So that's a key part of our strategy and how we deploy capital. But sorry, go ahead and ask your question.

No, so yeah, so there's a bit of that. Just, you know, you've had that old range of 10% to 15%. You've talked about wanting to be towards the high end, so presumably that's kind of what you're getting at around, you know, being efficient. You want your returns at that high end. You know, Jamie also talked a little bit around smaller projects or time-efficient projects. Is there a real bias to trying to take on smaller initiatives that can be done quickly, or is there still an appetite for

know a caps like and i don't know what that project would be but to take on a larger project that would be a multi-year build yeah i think that's a those are great questions and um you know first of all say that you know we're here to provide a very competitive and efficient service for our customers so we look for opportunities to be able to uh you know to provide that service offering for for our customers um And we're also about adding value for our shareholders and on a per share basis. So that's how we think about value. It's got to be value accretive. When we think about individual projects, we do look at large projects and small projects too, because, you know, there's a number of smaller projects that, you know, that, but generally our small projects have to have a very high return and that's to compensate for the resource allocation that we would dedicate to those types of investments. Generally, they're the ones that we can turn around on a shorter time period versus the big projects that might have a two to three-year development and build cycle. So, there's always a combination of both that we're pursuing. I think the one thing that's exciting too about our small projects is that Jared's team has identified a number of emissions reduction opportunities that also have really great economics. We're also, you know, satisfying our goal of reducing our overall emissions and achieving our 25% intensity reduction goal by 2025. Got it.

If I can just finish on marketing, and I know you're going to update your guidance, but just if we can deconstruct 2023 just where the market is. Like, you know, Eileen, you mentioned, like, you put up a record year. There was actually a slight loss on hedging, so... you know, hedging wasn't really a driver. If anything, you should be outside. Can you just talk about where you're seeing, though, the butane market right now? And in 2023, how much of a benefit did you get from Condi? Did you see that as one time just with Trans Mountain coming in and oil sands growth? Would you see that as continuing? And then, you know, how much might have been a benefit from E15? although those may get rolled over as well. Just what was unusual in 2023 that, you know, people shouldn't be thinking about as carrying over into the 24 and beyond?

That's a lot of questions, Robert. You know, first of all, I'll just say in general terms, obviously, we had a record year. You know, we benefit from volume because we're a volume times margin business. So as the volumes to our systems grow, our downstream marketing business will benefit as well. Our iso-octane business has been very strong. And, you know, Jamie can speak to some of those factors that contribute to that. But I also want to say that you also touched on hedging. And I do want to remind everyone, even though that we have great marketing results, We have a very disciplined hedging strategy. In our team, we have a team of executives and a marketing team that meet every week and we go through all of our positions. And so we want to always make sure that we're preserving margin and we're not trying to swing for the fence to also expose ourselves to big losses as well. So that's all part of our overall marketing margin strategy as well. But with that, I'll turn it over to Jamie for his comments.

Yeah, so, Robert, I was feverishly jotting down your question here. So, hopefully, I hit all the points that you were asking for. I think the first thing that you were inquiring about was our butane costs. So, excuse me, as we look at butane right now, I think we look at the market as, you know, being in a relatively similar place as last year. But, you know, it's early days within our supply season and ultimately what we would be able to contract for butane. And to remind everybody, in 2023, butane was in probably the mid-range of like slightly lower than what we would have seen in a five-year average. So it wasn't like it was an extraordinarily inexpensive butane market in 23. So that really goes to the next question, condensate, you inquired about, you know, as I look at our condensate business, it's really driven off of the assets that we have and that we've invested in over the years. And so, you know, was condensate's contribution sort of a one-time thing in 23? I would say not, because that business is driven off of the assets that we have in the ground. And the service that we provide and remind everybody we've we do touch over 70% of all the condensate that ultimately gets delivered to the oil sands in Western Canada. So we have very, very enviable assets on the condensate side. On the iso-octane side, what we're seeing around the premiums that we're receiving for iso-octane and also Our Bob pricing is that we continue to see good fundamentals on a supply-demand perspective for gasoline within North America and also for octane. Continue to see lower imports of octane blend products coming into North America. and with new gasoline regulations in the U.S. in particular, you know, we're seeing less octanes being produced and ultimately, therefore, a higher demand for our product to be able to top up, if you will, the octane requirements for gasolines in North America. So, you know, those are all things that contribute to, you know, our base guidance that we communicated in the latter part of 23. I guess the last point I'd make is that the marketing team has done a very, very good job as well of accessing better, more lucrative advantage markets for iso-octane over the last couple of years. And once again, I think that's really driven by some of the change in regulation in gasoline and ultimately a demand for iso-octane in those jurisdictions. So that all, you know, roll together is sort of the backdrop for what we see in 24 going forward. That pretty much sums it up in a fairly long-winded manner.

And I appreciate the color. Thank you very much. Thanks.

We have our next question coming from the line of Ben Pham from PML. Please go ahead.

Hi. Thanks, Simone. A couple of questions on CAPS. I'm wondering of the contracts that you've announced, do you think you could have been able to secure those contracts if you didn't have the KFS deal and optionality that you had?

Hi, good morning, Ben, and that's a great question.

You know what, I think independently there's a lot of demand for, again, a competing alternate transportation system. service for NGLs on a standalone basis. So I think that that asset stands on its own. And again, you know, it's evidenced by the contracts that we sign, but I can say that we're very active in adding to that contract base. So there's good demand for that. I would say that overall with our integrated system now across the Montney is that it enabled us to provide a bundled service offering. And I think it's a more, efficient service for our customers, which again, it's a one-stop shop that will help add value for them. And for that reason, we're able to leverage other parts of our integrated value chain, including our G&P business, and also our downstream fractionation storage and marketing business. So it's really complementary to our integrated value chain, and that's why you're seeing integrated deals. And expect to see more of those in the future.

Okay, got it. And are you able to provide a bit more context on the messaging around the 10% to 15% return on caps getting pushed up beyond 2025? Yeah, no, that's a great question.

You know what, we're still not in the range, but I can say that this certainly takes us in the right direction. And, you know, as I mentioned before, you know, we're in active discussions to add more contracting. So we feel pretty good about, you know, how that's looking. And then, and again, I do want to emphasize to your earlier question that, you know, it really helps us provide an efficient service for our customers to basically sign a fully integrated deal with them, which helps, you know, generate strong returns at enterprise level, you know, and, and, We think that's a big advantage for us.

Okay. And can you remind me too on Pipestone, you had the bottleneck and things are going pretty well there. Is there some sort of operating agreement there that is going to expire? Is that on something else now? How do you see that shaking out from your perspective?

Yeah, Ben, you know, Great question on Pipestone. And we're very pleased that that project came in under budget and actually before on schedule, actually before the schedule in service date. So it's great that we brought in service in Q4. There was a lot of gas that was waiting to be processed. So basically we're using the full capacity of what we just added, which is fantastic. You know, we do have an option to take over operatorship. And, you know, that basically option exists after five years of being in service. So, you know, that's something that we'll be addressing in the future.

Okay. Got it. Okay.

Thank you. I should mention, though, on Pipestone, though, we do have the – we are the commercial lead on that project. So, we're the ones who contract incremental volumes to that facility. We just don't physically operate it today in the field. But we do have – you know, some of our ops folks that are very integrated with that facility.

Okay. Thanks, Andy. Thank you.

Our next question comes from the line of Zach Van Everen from DPH. Please go ahead.

Perfect. Thanks for taking my question there, guys. So sounds like Pipestone is running near capacity even after the expansion you guys brought on. Are there other opportunities you're looking at there? Or can you push incremental volumes to maybe less units, less plants around the area? Just trying to get an idea of how much more growth you can see out of that.

Yeah, no, thanks for the question, Zach. And we're very fortunate to have a footprint in a highly economic area of the Monteney. It's very condensate rich, which really drives a lot of strong economics in that area. We see a lot of demand, but maybe I'll just turn it over to Jamie for his comments.

Yeah, so just to supplement that a little bit is, you know, with the Pipestone, the bottleneck, and then ultimately the expansion that came online at the back end of last year, that's fully contracted with high taker pay. But it is a very active area. So, you know, we had announced last year that we were looking at a further expansion at Pipestone, and we still continue to work with producers in the area to see whether, you know, we can get the volume commitments to be able to pursue that opportunity. The ability for us to be able to shift volumes around to ultimately other facilities such as Wapiti or Simonette, we have a limited capability to be able to do that. And what I would say is I also think that the geology and the activity around both Simonette and Wapiti would support them

getting to very high utilizations in the very near term regardless. Got you. That makes sense.

And then kind of shifting downstream a little bit, the fractionation facilities saw a pretty big jump this quarter. Are you pretty maxed out on fractionation capacity as well at this point, or do you have a little bit more operating leverage there?

Fractionation demand is very high. So we are operating at pretty much full capacity. I would remind you that, you know, the 21% of KFS that we acquired last year really helped us because we acquired more frack capacity at a time when it's needed the most. And that's actually helped us leverage into some very long-term contracts as well at that complex. And as Jamie mentioned, you know, we're working on an expansion too for the future to service the basin.

Perfect. I appreciate it, guys. Thanks. Thank you. Have a good day.

Our next question comes from the line of Patrick Kenny from National Bank Financial. Please go ahead.

Thank you. Good morning. Just on the write-off of the Wild Horse Terminal, I assume you had very little, if any, contributions from Cushing baked into your base marketing guidance. But just wondering, you know, if we extrapolate the fundamentals around crude oil blending from down south up to your Canadian operations, especially with the outlook for tighter heavy differentials once TMX comes online. Any thoughts around how you're looking to maybe reposition your overall tankage and crude oil marketing portfolio just to help mitigate some of these structural macro headwinds?

Good morning, Pat. That's a good question, Wild Horse, and I'll turn that over to Jamie.

Thanks for the question, Pat. The structural forward curves of crude oil with the backwardization that we're seeing right now, it's really a challenge to justify high tankage fees for that type of opportunity. Having said that, that backwardization and the higher crude prices that we're seeing and enjoying right now as an industry is also beneficial to Keir as other components of its business as well because we price iso-octane off of crude and our buck crack off of that. But back to the storage business that we have down in Cushing, We're not a huge crude player and that asset was viewed as an opportunity for blending and it just frankly hasn't panned out the way that we expect it to over the first few years of operation. Not to say that at some point as the forward curve shifts, that that asset won't have its day. But, you know, and as we look at it from Western Canadian perspective, once again, to be repetitive, we're not a big crude blender. We, you know, we have an interest in VTT, but really that asset is, you know, more of an enabler for crude to ultimately go into other pipes, certainly will be benefited from the Trans Mountain expansion that we're hopeful that will ultimately be in service shortly. And that's not, as we talk about our core business, it's probably not an area that we would look to get a further position in.

Okay, great. Thanks for that, Jamie. And then maybe, too, just on the propane side, so, you know, looking at supplies continuing to grow in both Canada and the U.S., but just in light of consumption being down this winter, you know, you guys mentioned the disciplined hedging strategy on the margin front, but just wondering if there's any concerns around, you know, physical sales volumes being down, say, for Q1, just given the warmer winter and the higher inventories that we're seeing across North America.

Yeah, so, yeah, great question.

You know, I think as we think of propane is that we think about really export. North America is very well positioned to be able to clear product out of the Gulf and as we see opportunities on the West Coast of Canada, you know, we really do view that that export capability is always going to allow propane to, and the producers that ultimately have that as being one of their products, to clear into markets that, you know, are going to justify, you know, the cost to produce and ultimately fractionate the propane. So, you know, that's our view. You know, I think we've certainly seen a run-up in propane in the last little while, you know, and as you point out, not driven off of North American demand, but frankly, global demand.

Yeah, I think maybe just to add to that as well, Pat, is that our strategy has also been to have optionality to be able to hit multiple markets. So we do deliver locally to the industrial market in Alberta. You know, we're pipe connected to IPL's PDH facility. We deliver some to the West Coast, but we also deliver some in the United States. And again, you know, the highest price market varies over time. So, you know, right now it's really helping us having that optionality and the physical assets to be able to deliver to all those markets.

Perfect. Thanks, guys. Thank you.

Our next question comes from the line of Will Gu from CIBC. Please go ahead.

Hi, morning. Just wondering if there are any plans to grow volumes at AF from here and what would that look like? Would it happen perhaps during a future turnaround or any comments around that?

Yeah, it's a great question, Will.

And obviously that part of our business is very lucrative for us. And, you know, what I can say is that over the last, you know, three or four turnarounds, our team has found ways to just create small, big bottlenecks. So we can operate that facility above nameplate capacity. And, you know, we've been operating at as high as 110% of nameplate. So, you know, I think that's really great because every barrel we produce in that facility generates a lot of margins. But maybe I'll just turn it over to Jared to, you know, to comment on what he sees about the future for that facility.

Yeah, well, it's a good question. In terms of future capability to grow volumes, there are opportunities that we do continue to pursue. You know, Dean touched on some of the incremental work that we've done over the past few years that really grabbed kind of small snippets of capacity. And there are opportunities to go bigger than that and do, you know, through the bottlenecking work. And our team does continue to evaluate those opportunities. But you're correct that we'd be looking to plan that kind of work around turnaround execution windows, given the nature of the work and the importance of runtime in that facility in between turnarounds.

Okay, awesome. Thanks.

Last one for me, just what impact has the cold snap recently had on operations, and how do you view asset performance in inclement weather?

Yeah, it was obviously very cold in Alberta for the first couple weeks of January, and those extreme cold conditions do cause production issues, but yeah, And maybe I'll turn it over to Jared to speak.

Yeah, well, it's a great question. And, you know, it's certainly super challenging times across the whole industry, I think, when those happen. And, you know, I really give credit and thanks to all our field folks at times like that when, you know, they're doing the best they can primarily to stay safe during conditions like that and then also keep the facilities running safely and reliably. So, we made up pretty well, but as you'd expect in minus 40 conditions, there are some things that just don't run that well. There's always minor things that happen at our sites and with our producer customers out in the field as well. So those folks are always working together to try to keep things running as best they can. But I think you can always expect some sort of impact when it gets that cold.

Great. Thanks. That's all from me. Thank you all.

Thank you.

There are no further questions at this time. I'd now like to turn the call back over to Mr. Locke for final closing comments.

Yes, thank you all again for joining us today, and please feel free to reach out to our investor relations team with any additional questions you may have. Thank you.

Thank you, sir. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.