Suncor Energy Inc.

Good day and thank you for standing by. Welcome to the Suncar Energy 4th Quarter 2024 Financial Results 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. You will then hear an automated message advising your hand is raised. To withdraw your questions, simply press star, one, one again. Please, be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Suncor Energy Senior Vice President of External Affairs, Mr. Troy Little. Please go ahead.

Thank you, Operator, and good morning. Welcome to Suncor Energy's fourth 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 described in our fourth quarter earnings release, as well as in our annual information form, both of which are available on CDAR, EDGAR, and our website, suncor.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 fourth quarter earnings release. We will start with comments from Rich Krueger, President and Chief Executive Officer, followed by Chris Smith, Suncor's Chief Financial Officer. Also on the call are Peter Zebedee, Executive Vice President, 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. Suncor's fourth quarter was about finishing 2024 strong and building momentum for 2025. I believe we accomplished both objectives. I'll focus my comments on key aspects of the full year 2024. Chris will primarily focus on the fourth quarter results. Let me start with personnel safety, our top priority. As you've heard before, 2023 was our safest year ever. I'm pleased to report 2024's performance was as good as or better than 2023. Some statistics, the number of lost time injuries were down 30% year on year and down 60% over the last two years. Our lost time incident rate is tied for our best ever. Number of recordable injuries were down 16% year on year or 30% over the last two years. And our recordable incident rate in 2024 was indeed best ever. Process safety, a function of our people, our work management processes, and our facilities. 2024's performance was best ever, a significant 30% better than our previous best, and it positions us within the first quartile in North America. Upstream production, full year, 828,000 barrels a day, far and away the best year in company history. 51,000 barrels a day, or 6.5% higher than our previous best, and 82,000 barrels a day, or 11% higher than last, than 2023, and 18,000 barrels a day above the high end of guidance. Full year upgrader utilization, 98%, the highest annual average ever, 6% higher than our previous best. Three and four quarters in 2024 had utilization of 99% or higher, and both the base plant and Syncrude achieved best ever performance. added perspective on the 82,000 barrel a day increase from 2023 to 2024, about half of it is related to the fourth quarter 23 acquisition impact of Total's 31% interest in Fort Hills. The other half is straight up performance within the exact same asset base. Monthly, quarterly, and annual records were set across the company, led by Firebag at 234,000 barrels a day in 24,000 up 17,000 barrels a day or 8% year on year. Over the last two years, Firebag added 35,000 barrels a day or 18%. It is our most profitable asset and internally known as the gift that keeps on giving. Refining throughput, full year, 465,000 barrels a day. Again, far and away the best year in our history. 24,000 barrels a day or 5.5%, better than our previous best. and 44,000 barrels a day are 10.5% higher than 2023. And again, 20,000 barrels a day above the high end of guidance. Full year refining utilization, 100%, our highest annual average ever, 5% higher than our previous best, All four refineries were outstanding, ranging from 94% to 105% utilization. Edmonton, our most profitable refinery, led the pack with a record 105%. A fact for you, every major asset company-wide, upstream and downstream, operated at greater than 100% utilization for the entire fourth quarter. This is extraordinary performance and a credit to Suncor teams company-wide. Refined product sales, full year, 600,000 barrels a day, again, far and away the best year in company history. 46,000 barrels a day or 8% higher than our previous best, and 47,000 barrels a day or 8.5% higher than 2023, 20,000 barrels a day above the high end of guidance. All four quarters in 2024 were the highest quarters in company history. In fact, it was back to back to back to back quarterly records. Suncor, we call that a four-peat. Even Pat Riley, former coach of the LA Lakers, would be jealous. Total OS&Gs. $13.1 billion, down $324 million in absolute dollars year on year. And this is despite 11% higher upstream production and 10.5% higher refining throughput. Let that soak in for a minute. 10% to 11% higher volumes and 2.5% lower absolute costs. Every major operated asset, upstream and downstream, delivered lower absolute and or unit costs in 2013. or 24 versus 23. I'll offer another perspective on year-on-year cost management. Let's assume that that fourth quarter 23 acquisition of Total's 31% working interest in Fort Hills never happened. Take out all the impacts of the additional ownership, production costs, apples to apples, 2024 versus 2023 performance with the exact same asset base. OS&G would have been down $1 billion, yet upstream production would have been up 37,000 barrels a day and refining throughput 44,000 barrels a day. My message here is operating leverage is creating tremendous value company-wide. Volumes delivery, asset utilization, and cost management each require discipline, determination, attention to detail, and a mindset that every barrel and every dollar matter. That is the mindset and culture of today's Suncor. Total capital, $6.2 billion, more than $200 million below the midpoint of guidance. Again, discipline, attention to detail, and rigor in execution. Free funds flow, $7.4 billion in 2024, essentially flat with 2023. However, the business environment decreased free funds flow by about a billion and a half dollars year on year. Downstream cracks, sweet sour synthetic differentials. Capital was $500 million higher as planned in 24 versus 23. You'll recall the two drivers there were Peters 55 new 400 ton haul trucks and opening two pits versus one pit in the Fort Hills North mine. And in addition, we had the absence of fourth quarter 23 tax pools from the Fort Hills acquisition of about $750 million. If you do the math, organizational self-help, what Suncor teams delivered in volumes cost margins added $2.75 billion in free funds flow year on year, essentially offsetting the headwinds dollar for dollar. Of that, we returned $5.7 billion in cash to shareholders, buybacks of $2.9 billion, 4.3% of shares, and dividends of $2.8 billion. Take you back nine months to our investor day, May 2024. We communicated several big objectives over a three-year period from 2024 through 2026. Upstream production growth of 108,000 barrels a day, $10 a barrel reduction in our corporate break-even, $3.3 billion increase in annual free funds flow, and an $8 billion net debt target, at which time we would shift to 100% buybacks. We told you we would report on our progress, so here we go. 108,000 barrels a day production growth. Our target in 2024 was 60,000 barrels a day. We achieved 82. $10 a barrel reduction in our break-even. Our target in 2024 was $4 a barrel. We achieved $7. $3.3 billion increase in annual free funds flow. Our target in 2024 was $1.3 billion. We achieved $2.3 billion. $8 billion net debt. Our target was mid 2025. We achieved it at the end of the third quarter 2024. Delivering on commitments, again, the culture of today's Suncorp. We've uploaded a presentation on the events and presentations page under the investor section of our website where we detail the free funds flow update, and the material shows the progress for the three-year plan. We'll continue to provide this to help save folks some analytical time. Bottom line, one year into a three-year plan, we're exceeding every target established. In fact, we've essentially achieved target improvements for 2024 and 2025 in the first year. We're accelerating the capture of shareholder value, and that will continue this year now with a full year planned at 100% buybacks. Our objective in 2025 is to solidify the 2024 gains and proceed to capture the next tranche of value. My final comments. 2024's results are credit to our people across the company, their expertise, their dedication, their determination, Suncor teams delivered. And personally, I am so proud to work with these people each day. With that, I'll turn it over to Chris.