Suncor Energy Inc.

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Suncor Energy second quarter 2022 results 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 the session, you will need to press star 1-1 on your telephone keypad. At this time, I would now like to hand the conference over to your host today, Mr. Trevor Bell, Vice President of Investor Relations. Please go ahead.

Thank you, operator, and good morning. Welcome to Suncor's second quarter earnings call. With me this morning are Chris Smith, interim president and chief executive officer, and Alistair Cowan, chief financial officer. Please note that today's comments contain forward-looking information. The actual results may differ materially from the expected results because of various risk factors and assumptions that are described in our second quarter earnings release, as well as in our current annual information form. Both of those are available on CDAR, EDGAR, and our website, Suncor.com. Certain financial measures referred to in these comments are not prescribed by Canadian GAAP. For a description of these financial measures, please see our second quarter's earnings release. Following formal remarks, we'll open up the call to some questions. Now, I'll hand it over to Chris for his opening remarks.

Great. Thanks, Trevor. And thanks, everyone, for joining us today for our quarterly results call. As previously announced, I've been asked by our board to lead our company forward during this period of transition. I've been with Suncor for 22 years, and I've held various operational and business roles across the company. But since this is my first time speaking on Suncor's earnings call, I'd like to briefly introduce myself and discuss my priorities. During my time with the company, I've worked in our oil sands, downstream, and corporate divisions, as well as in both our Canadian and U.S. businesses. And for the past 10 years, I've led the company's downstream business, which is the most profitable in North America on a per barrel basis. I have a great appreciation and understanding of Suncor's assets, business, and people, and will be drawing on that experience to lead the company through this period, with a focus on rebuilding confidence in Suncor. To be clear, as interim CEO, my mandate is not to simply maintain the status quo, but to work with our board, executive team and all of our employees to make the changes necessary to improve our performance and deliver the value you expect. I believe it's important to step back and clearly assess where we are, confirm what is going well, identify what needs to be different and keep the momentum moving forward through executing the changes necessary to accelerate our progress towards improved performance. Safety is the most important value at Suncor and our safety record is unacceptable and improvements must be made. This was brought home by the recent death at our base plant site in the mine area. I want to express how deeply saddened we are by this loss, and I am fully committed to doing everything necessary to build a better safety culture and improve performance so that everyone at Suncor goes home safely each and every day. To that end, my number one priority is improving our safety and operating performance. To me, safety and operating performance are strongly connected. We cannot have great operating performance without great safety. It's simply non-negotiable. Safety is not only living up to our core values, but integral to delivering the industry-leading operating financial performance we expect. I'll speak to this in a bit more detail later in our call. In addition to driving improvement in our safety and operating performance, I want to be clear. Our strategy and debt reduction and shareholder return commitments and priorities are not changing. Suncor's strategy, which is fully endorsed and supported by our board, is to optimize and sustain our base business while increasing shareholder returns, reducing our carbon footprint, and prudently investing in lower carbon energies. The capital allocation framework, as outlined last quarter, will support increasing shareholder returns. We announced a 12% dividend increase in the first quarter, and by quarter end, we've already repurchased half the targeted buyback of 10% of our public float. And once net debt reaches $12 billion, which we expect in the second half of the year, we remain committed to further increasing shareholder returns to 75% of excess funds after capital expenditures and dividends. Physical integration and Suncor's unparalleled integrated asset base will continue to be an area of strength that we will optimize to unlock incremental shareholder value, as demonstrated by our second quarter results. However, we are reviewing options for our retail business to ensure that we are maximizing the long-term value of that business for our shareholders. And we will disclose the results of this process in the fourth quarter. We also remain focused on delivering on our pre-fund slow growth initiative and unlocking synergies at Syncrude. And while we have to acknowledge headwinds from higher commodity costs and inflation, including in our mining costs, we continue to make very good progress on our initiative. We continue to optimize our portfolio to ensure our business is set up to deliver superior long-term returns to our shareholders. To that end, we have signed a sales agreement for the Norway asset for gross proceeds of approximately $400 million, which we expect to receive on closing later this year. As well, we have moved into the final round in our sale of our wind assets and we're seeing very strong market interest. And we've begun the sales process for our UK North Sea assets. All of these actions are to improve fit and focus in our portfolio aligned with our strategy. And finally, we will continue to advance our strategies to meet our long-term carbon reduction objectives and develop new low-carbon businesses, ensuring that we prudently manage investments in those areas. In summary, you should expect me to drive improvement in the safe and reliable execution of our operations while advancing our strategy, strengthening our balance sheet, and growing returns to our shareholders. Now let's take a look at our second quarter results. In the second quarter of 2022, Suncor reported the highest quarterly adjusted funds from operations in its history at approximately $5.3 billion, or $3.80 per share, as well as free fund flow after capital expenditures of $4.1 billion, or $2.88 per share. And we returned record adjusted fund flow right back to our shareholders. Upstream realizations were on par with WPI and downstream captured strong product market values of near 100% market capture. Both of these things highlight the strength and competitive advantage of our integrated model and our focus on higher value products beyond Benjamin. Our upstream production of 720,000 barrels per day reflects both planned and unplanned events in the quarter. Oil sands operations production of 365,000 barrels per day included planned maintenance at Firebag and Upgrader 2. While the significant 10-year turnaround at Firebag, which was the largest in its history, was completed with solid execution and a smaller production impact than expected, our production from this area of the business was below our expectations due to unplanned events at our Makai River in situ operations and base plant, Upgrader 1. At the same time, we achieved 189,000 barrels per day production at Syncrude, which exceeded our plan for the quarter. And we produced 87,000 barrels per day at Fort Hills, which is in line with our plans and reflects planned maintenance at that asset. And we produced 79,000 barrels per day in our offshore segment. Looking at our downstream results, we generated record adjusted funds from operations on both the LIFO and the FIFO basis. Our throughput of 389,000 barrels per day reflects planned maintenance activities across all our Canadian refineries, as well as unplanned events at the Commerce City Refinery, which had an approximately 15,000 barrel per day impact on the quarter. And we have no further planned major maintenance in our downstream segment for the balance of the year. Now let me turn to our full year guidance. After careful review, we've updated our annual production guidance to 740,000 to 760,000 barrels per day, reflecting the performance year to date July and our expectation for the remainder of the year. As well, we've updated our capital guidance to a range of $4.9 to $5.2 billion for 2022. This increase in capital reflects the White Rose offshore project restart and our increased working interest in that project, as well as increased spend during turnarounds and maintenance to improve safety and reliability, and general inflationary pressures that we're seeing across the portfolio. And with that, I will pass it to Alistair to walk through the financial highlights.