Suncor Energy Inc.

Good day, and welcome to the Suncor Energy first quarter 2024 results conference call. At this time, all participants are in a listen-only mode. After the speaker 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. You will then hear an automated message advising your hand is raised. To withdraw your question, press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Troy Little, Vice President of Investor Relations. You may begin, sir.

Thank you, Operator, and good morning. Welcome to Suncor Energy's first quarter earnings call. Please note that today's comments contain forward-looking information. Actual results may differ materially from the expected results because of various risk factors and assumptions that are detailed in our first quarter earnings release as well as in our current annual information form, both of which are available on CDAR+, EDGAR, and our website, sunfor.com. Certain financial measures referred to in these comments are not prescribed by Canadian generally accepted accounting principles. For a description of these financial measures, please see our first quarter earnings release. We will start with comments from Rich Krueger, President and Chief Executive Officer, followed by Chris Smith, Sunfor's Chief Financial Officer. Also on the call are Peter Zebedee, Executive Vice President of Oil Sands, Dave Oldreve, Executive Vice President Downstream, and Shelly Powell, Senior Vice President, Operational Improvement and Support Services. Following the formal remarks, we'll open up the call to questions. Now, I'll hand it over to Rich to share his comments.

Good morning. First quarter. Following a strong fourth quarter of 2023, I would characterize our first quarter as even stronger. So how so? I recognize I'm going to start sounding like a broken record here, but by focusing on the fundamentals of safety, reliability, profitability, coupled with a determination to deliver on commitments. Chris will highlight our results in more detail in a moment, so what I'd like to do is highlight some of the more notable achievements, starting, of course, with the fundamentals. Safety. No life-altering or life-threatening injuries. Lost time incidents down 50% year on year. Recordable incidents down 20% year on year. Process safety events down greater than 50% year on year, achieving first quartile U.S. fuel and petrochemical manufacturers performance. How so? This is really a tribute to our people, our processes, our priorities, and site leadership. Second fundamental I'd like to continue with, reliability. I'll start with refining. Refining throughput, 455,000 barrels a day, up 88,000 barrels a day from a year ago, or 24%. Highest first quarter in our company's history, driven by best ever first quarter utilization of 98%, and led by Edmonton in excess of 100%. Achieved by operational excellence. improved winterization, and once again, the focus of our people. Product sales, 581,000 barrels a day, our highest quarter ever. A tribute to Dave Oldreave's sales and marketing team for aggressively moving barrels and capturing value. Upstream production, 835,000 barrels a day, up 93,000 barrels a day, or 13% from a quarter a year ago. highest quarter in our company's history. There are many, many multiple best-evers. Chris will detail a few shortly, but I'll continue. I'd like to highlight one in particular. Upgrader utilization combined at an impressive 102%, achieved in part via a very tangible competitive differentiator. I am growing to understand and recognize more and more the longer I'm here, and this is our physical integration. reminds situ operations interconnected to two large upgraders. The flexibility and optionality that this integration provides us is truly unparalleled. The ability to move molecules, bitumen, partially processed hydrocarbons, water, steam, again, all to maximize value. I guess to say it differently, there's integrated and there's Suncor integrated, and they are not the same. The last thing I'll mention is it's one thing to have a physically integrated kit, but it's something entirely different to capitalize on it. And that's exactly what Peter Zebedee's entire oil sands team did throughout the first quarter. Well done. So if you look at where we are on the production reliability, the year to date, the first quarter, Everything is consistent with our first quarter's expected contribution to our full-year guidance. In fact, I would say every major asset, upstream and downstream, delivered at or above our own internal expectations. The third fundamental I'll comment on, profitability. Chris will dig into AFFO, free funds, shareholder distributions, so I won't steal his thunder, but I would like to comment on one essential aspect of profitability, cost management. Total OS&G in the first quarter, fall in, top to bottom, was $3.4 billion. For all practical purposes, essentially flat with the first quarter of 2023. However, as I mentioned, we produced 93,000 barrels per day more in the upstream, essentially three Mackay rivers. We refined 88,000 barrels a day more in the downstream, essentially an additional Sarnia. And we sold 66,000 barrels a day, additional products, refined products, this year versus last year. We did all of that. at essentially no extra cost, zero, nada. That's leverage. In fact, all major assets, every single one upstream and downstream, operated safely and efficiently at lower unit costs in the first quarter of 2024 than they did at the first quarter of 2023. I got to say, I love free barrels. Bottom line, 2024, off to a strong start, good momentum, and we intend to keep it going. You may have seen or may be aware that on May 21st, we're going to provide an update via webcast on our overall story and our near-term outlook. Specifically, our management team will outline the next two to three years' expectations, financial and operating, our outlook on volumes, CapEx, our $5 a barrel reduction and break-even, et cetera. We're also going to detail expected shareholder returns and capital allocation at various prices. Later in the year, we'll see you at this point, but we anticipate a more comprehensive investor day with a longer-term outlook. So stay tuned. Troy Little and his IR team will provide further details in the days ahead. As I look at the second quarter, recognizing that this update is only a couple weeks away, I'll skip my usual detail on performance improvements and highlight only a couple of items. We've talked at length on earlier calls about mining fleet upgrades and the cost savings opportunity they provide, so I just wanted to comment on our conversion to autonomous haul trucks at the base plant. That continues as planned. Six months ago on a call, we were talking about how we had 30, 31 trucks operating autonomously. Today, that number is 56 trucks. And at year end, we're on plan for 91 or the full base plant or fleet. Recall the impact is $1 million per truck per year in sustainable savings. and an additional productivity gain. During the Q&A, I would urge someone to ask Peter Zebedee on what he has seen in autonomous productivity. We've also commented about acquiring 55 new 400-ton trucks to replace twice as many less efficient third-party trucks. The first 16 of those are now in operation. 21 more are on their way to Fort Hills over the next many months through November. And the final 18 of the 55 will arrive at the base plant starting in the fourth quarter of this year, continuing into the first quarter of 25. Recall in total, these trucks will lower our overall corporate break even by on the order of about a dollar per barrel US. Turnarounds in the second quarter, Second quarter is our big turnaround quarter for the year, upstream and downstream. In fact, about 75% of our 2024 turnaround activity, if you look at it on a spend basis, is scheduled in the second quarter. Our priority here will be to safely, cost-effectively execute on schedule in position for a strong second half. At this point in time, we're a month into the second quarter. Turnarounds are going well. We still have more work to do, so I really won't have any more detailed comments at this point. If you look back in time 15 years ago, about the time of the Petro-Canada merger, Suncor implemented an enterprise-wide system, a management system, to manage operational risk reliability, and overall performance. Internally, we refer to it as OEMS. In essence, this system provided each site with a standard list of operational requirements or expectations, largely leaving each site to determine exactly how to achieve the expectations. Today, we sit back and we've judged that our original system is too complex and fundamentally insufficient in meeting our high performance expectations of today. Consequently, we're implementing a new revised operational excellence management system. It consists of 21 processes associated with the work we do and how we want it done. Processes like managing maintenance, addressing risks, completing turnarounds. Each process consists of a standard how-to embedded with industry best practices. We've developed this with subject matter experts, frontline employees, and leaders across the organization. And our fundamental objective is to reduce site-by-site performance variations and institutionalize improvements. In other words, operationally, our vision is to become consistently and boringly excellent. Our new system is clearer, simpler, and more focused. with tangible leader-specific accountabilities. Implementation has started at each and every operating site and will continue throughout 2024 and throughout the bulk of the first half of 2025. I want to shout out to Shelly Powell and her leadership team for driving what I believe will be this game-changing work. So with that, I'll turn it over to Chris, who will provide additional comments on financial and operating performance.