Good day, and thank you for standing by. Welcome to the Suncor Energy Third Quarter 2025 Financial Results Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Suncor Energy's Chief Financial Officer, Mr. Troy Little. Troy, please go ahead.

Thank you, operator, and good morning. Welcome to Suncor Energy's third 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 third quarter earnings release as well as in our current annual information form, both of which are available on 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 third quarter earnings release. We will start with comments from Rich Kruger, President and Chief Executive Officer; followed by Kris Smith, Executive Vice President. Also on the call are Peter Zebedee, Executive Vice President, Oil Sands; Dave Oldreive, Executive Vice President, Downstream; Shelley Powell, Senior Vice President, Operational Improvement and Support Services; and Adam Albeldawi, Suncor's Senior Vice President of External Affairs. Following the formal remarks, we'll open the call up to questions. Now I'll hand it over to Rich to share his comments.

Our third quarter was about completing this year's major maintenance and building momentum for a strong finish to the year. We accomplished both. I'll highlight operational performance. Kris will cover financial. First, I'd like to make a few comments on safety. I've shared before that 2023 and 2024 were the safest years in Suncor's history, while the first 9 months of 2025 have been even safer across the board, with fewer incidents and lower severity, both in personnel safety and process safety. I strongly believe that being a great company in oil and gas starts with being a safe company. Our performance now places us among the safest oil and gas companies in North America. Upstream production reached 870,000 barrels a day in the third quarter, far and away our best third quarter ever, exceeding our previous best by 41,000 barrels a day. Furthermore, we are now within 5,000 barrels a day of our best quarter ever, accomplished despite turnaround activity at both Firebag and Syncrude. Over the past 2 years, our third quarter has averaged 850,000 barrels a day, 145,000 higher than the prior 3-year average. Upgrader utilization was 102% for the quarter, with base plant following the successful coke drum replacement project at 106%. Year-to-date utilization stands at 96%. Refining throughput also achieved a milestone, with 492,000 barrels a day in the third quarter, marking our best quarter of any quarter ever. Product sales reached 647,000 barrels a day, another record for Suncor, while we maintain a focus on balancing both volumes and margin growth. Operating costs, year-to-date for Oil Sands and Gas, totaled $9.7 billion, essentially flat with year-to-date '24, despite higher upstream production and refining throughput. We are focused on continuous improvement and efficiency, having completed turnaround activities at significantly lower costs and durations compared to industry benchmarks. All measures indicate that we are firmly on track to surpass projections for both production and refining for the 2025 fiscal year, and I am increasingly confident in our team's ability to manage the performance of our integrated asset base effectively.

Thanks, Rich. Good morning, everyone. Since this will be my final earnings call, I want to start by first thanking the investment community for your engagement, your questions, your partnership over these last 3 years. It's been a privilege to engage with all of you during my time here at Suncor. Let's talk about what is an exceptionally strong quarter. The Board of Directors has approved a 5% dividend raise for an annualized dividend of $2.40 per share, which aligns with our commitment to reliably and sustainably grow the dividend. This dividend increase is a direct result of the great progress our team has made in sustainably growing incremental free funds flow. The third quarter also saw another strong quarter for shareholder returns, consistent with our disciplined capital allocation framework, returning just over $1.4 billion to shareholders, including $688 million in dividends and $750 million in share buybacks. We are making strides in our retail market with our highest margin retail sales up 8% year-on-year while recognizing the need for our buyback program to support dividend growth without affecting our breakeven price. The environment in Q3 was marked by slightly higher commodity prices with WTI averaging USD 64.95 per barrel. Operating earnings were $1.8 billion or $1.48 per share. The strength of our integrated model has allowed us to capture margin at every point within the supply chain from extraction through to sales, contributing to our robust margins and service offerings. This reliability and predictability in cash flows positions us well in any market condition, and despite global fluctuations, we expect to sustain our operational resilience moving forward.

Thanks, Kris. We should all acknowledge the significant improvements made during your tenure here. The entire team has played a crucial role in steering our success, and I commend your outstanding contributions in leading Suncor's initiatives. Let's transition back to the operation. While we have achieved record performances and improved efficiencies, we continue to aim for operational excellence across the board. Our focus on continuous improvement and reduced turnaround durations will further enhance our capacity for future growth. I want to take this moment to congratulate Troy, our new CFO and Adam on their new roles. It's a result of their performance and a reflection of what's to come as we further drive shareholder value.

Thank you, Rich. I'll turn the call back to the operator to take some questions.

The first question comes from the line of Greg Pardy of RBC Capital Markets.

I thought your conference call commentary was excellent. First, Kris, I wish you all the best and hope we can connect again soon. Congratulations to Troy, and I look forward to working with Adam. I have a couple of questions on my mind. Rich, I wanted to revisit the prevailing view on Suncor before your arrival, which suggested that old assets couldn't be improved. I've heard this from various sources. How do you reconcile this with the maintenance interval extension we're seeing at U1, along with the planning, turnaround, and enhanced turnaround performance? It's a broad question, but I'm looking for a clearer understanding of how these elements come together.

Well, 2 things, Greg. First of all, I appreciate you saying 'first quartile' because that gives us room to improve. Our goal is best-in-class. The second thing, I think I'm living proof that age shouldn't directly correlate with performance in a negative way. But I'm going to turn this over to the team to help expand on this. We are approaching our business operations with an analytical depth that enhances our planning and execution processes. Shelley, maybe I'll start with you, but then I'll ask perhaps Peter and Dave to provide additional insights.

Yes. The first thing I would say on that, like the intervals as well as performance improvement, really starts with benchmarks. We want to look at global performance levels and our aim is to be the best in that cohort. We analyze those benchmarks to understand what it would take for us to achieve those levels. The work is primarily about making the right decisions at the right time.

Adding to that, Greg, we are extending intervals at U1 to 6 years, which results from upgraded metallurgy on the drums and investments we made with the coke drum replacement project this year. This, coupled with improvements to the coker fractionation section of our operations, enables us to achieve this extension, which reflects our confidence in the capability of our assets.

I want to use Edmonton as an example of how similar principles apply across all our assets. The downstream starts with our benchmarking, and we recently completed a sour crude and hydrocracker turnaround block that increased our interval from 3 years to 4 years, indicating improvements in catalysts and maintenance. Our approach is consistent application of proven practices leading to significant improvements in turnaround intervals, trending upwards across all units.

And Greg, just to conclude on this thought, I believe there’s not a new refinery in North America, and our asset's age should not be used as an excuse for poor performance. This company no longer makes excuses.

Yes. Okay. No, I think you've captured it. So let me relate this then to your share price relative valuation and your trajectory. The trajectory that you're on right now would suggest your outperformance will continue. But there's this gap between your relative valuation and others. So the market is either impatient, has recognized it, or what have you. If you look at your $8 billion net debt target in the context of improved mid-cycle cash flows plus the trajectory, does that not suggest either moving the $8 billion up, number one? Or secondly, maybe taking a more aggressive stance with respect to share buybacks, like doing a substantial issuer bid or what have you?

Let me say that when we established that target about 2 years ago, we anticipated a certain pace of improvement over three years which we are exceeding. We continually assess the most prudent levels of leverage and how best to manage our balance sheet while increasing return of capital to shareholders. The dialogue around this is active and evolving based on current performance.

Just to add, we are committed to managing the balance sheet carefully while ensuring steady growth in free funds flow and consistently returning excess cash to our shareholders. We are committed to a robust buyback strategy that emphasizes predictability and consistency in our returns.

How we view debt depends on several factors such as our underlying cash flows and the stability of our operations. As leaders, it's our duty to ensure we're navigating the business environment wisely and delivering consistent shareholder returns.

I would also like to extend my congratulations to everyone, Kris. It's been a real pleasure. If I may, Rich, I want to address the capital outlook for 2026. Clearly, there is still a significant project in your portfolio, which is West White Rose, involving a substantial amount of capital. How are you considering the use of discretionary cash flow moving forward as some of these larger projects conclude?

As we've looked at it, we're focused on discipline regarding both operating and capital costs. This will open up opportunities for discretionary cash flow in the future. We want to maintain a consistent capital expenditure of less than $6 billion a year, allowing us to effectively fund dividends, our full capital program, and buy back shares. We intend to operate with a robust cash flow strategy while navigating through volatile market conditions.

I appreciate the answer. And I guess we'll have to wait on 2026 for the actual cap number, but thank you, Rich, for that. As a follow-up, do you think that given your past performance, you would pivot towards more aggressive dividend growth with all the improvements flowing through?

Our commitment remains to drive shareholder returns through consistent practices. The buybacks are primarily for cash return while maintaining a solid dividend schedule. We’re planning to communicate further about that strategy at the next Investor Day.

Our focus is on providing a reliable return to our shareholders. We have confidence in our potential for growth and believe we can sustain our dividend growth trend while balancing share repurchases based on investor interests. This consistency is key.

What we possess is a unique competitive position amplified through our integrated business model that allows us to navigate any volatility within the energy sector adeptly. Where other conventional businesses may fluctuate, our structure provides fundamental strength, ensuring we can weather market changes more resiliently.

First off, I'd just like to echo Greg and Doug's congratulations to the team on the quarter and specifically to Kris, Troy, and Adam for their new roles or adjusting your existing role. My first question really focuses on Fort Hills. Q3 operations and production was quite strong. Can you maybe address the progress on the second cut? What does that mean for optimization of the asset?

You're absolutely right. We are actively producing ore from the first cut, the first pit in North Pit 1 now, and that's going exceptionally well. We're also starting to open up the second pit in the North pit, which will serve as an active blending pit. So we're confident to increase production toward our target of 195,000 to 200,000 barrels per day within the next couple of years.

What I was hoping you could touch on, how does your opportunity to visit the retail logistics and distribution terminals across Suncor's Canadian operations drive comfort level or an ability to kind of press throughput on downstream?

We changed our philosophy about a year ago to focus on value versus volume, while ensuring that we enhance our channels' growth. We're seeing significant increases in our retail sales and market share, which allows us to optimize our distribution network and drive profitability.

What you are witnessing is a strong mechanism that demonstrates Suncor's unique integrated structure, which has allowed us to capture margin at every stage from extraction through sales. Some of this will be highlighted in our upcoming Investor Day presentation.

Congratulations, Troy. Congratulations, Adam and Kris, it's been a real pleasure. I guess 2 questions. The first is just on the Investor Day. What are the kind of tangible KPIs or targets you want the market to be educated on?

We are looking at an earlier Investor Day than anticipated, where we will present long-term asset value propositions alongside short-term targets to provide comprehensive guidance for stakeholders. It is not an opportunity to miss for our investors.

The follow-up is just on downstream. If you think we are in a healthy refining environment moving forward. Do you feel like you have momentum here to sustain utilization at these high levels?

Yes, our commitment to operational excellence on maintenance practices will continue to drive our ability to sustain these levels. With a focus on cultivating capabilities, we remain confident in our strategy to maintain high utilization rates moving forward.

With respect to the extension that you've done on the turnarounds here, what are the signposts around reliability? And what's the quantification of volumes to date from these extensions?

Our focus on reliability and performance is paramount. The increase in volumes seen this year correlates directly with our ability to effectively manage maintenance and turnaround scheduling. We continuously measure performance to share with our stakeholders.

Thank you, everyone, for joining our call this morning. I look forward to continuing to work with you all in the future. And I also want to sincerely thank you for all your support these past several years. If you have any follow-up questions, please don't hesitate to reach out to our team. Operator, you can end the call.

This concludes today's conference call. Thank you for participating. You may now disconnect.