Scott Stauth: Yes, so a couple of things with that, Dennis. Our teams have been working on expansion opportunities for the long term. We’re looking in and around that 195,000 barrels a day opportunity. What’s key to all of it is two fronts. One is we need to ensure that we have a carbon policy in place and with that we’re looking towards the pathways project and having the alignment on a fiscal policy that works for the pathways company in collaboration with Alberta and the Canadian government. So that fiscal policy is absolutely key for us to be able to move any additional expansion volumes forward. And also what’s important in terms of that would be securing and working on enhancing egress capacity as well out of the basin.
Dennis Fong: Great. Thanks. I appreciate that color as well. I’ll turn it back.
Operator: Thank you. Your next question is from Mike Dunn from Stifel. Please ask your question.
Mike Dunn: Good morning. Thanks for taking my question. Just following up on that on the longer term expansions at horizon. Perhaps I’ve missed it previously, but looking back through your prior disclosures, this is the first time you’ve outlined 195,000 barrels a day as the potential expansion at horizon from PFT and IPEP. I believe the last number you guys were giving for a while anyway was 75,000. Just wondering what’s changed there and whether or not to move forward with such an expansion you’d be just using your horizon barrels or some of the AOSP leases for the north? Thanks.
Scott Stauth: So your research is 100% correct, Mike. And this is the first time we’ve talked about 195,000 previously. It was 75,000. Really what’s evolved out of this is the teams continue to work through this is the scalability side of it and working with, through engineering enhancements on the IPEP project for extraction and just increasing the sizeability of the froth treatment. That’s what’s led us towards the 195,000 barrels a day. And yes, it’s primarily related to the Horizon operations piece of it there, so yes.
Mike Dunn: Okay. That’s all for me. I appreciate the answer. Thank you.
Operator: Thank you. [Operator Instructions] Next question is from Neil Mehta from Goldman Sachs. Please ask your question. Hello, Neil. Your line is now open.
Neil Mehta: Anyone there?
Scott Stauth: Yes, go ahead.
Neil Mehta: Okay, great. Terrific. I’m not sure what happened there. Okay. My first question is just on the natural gas environment. Obviously it’s very soft right now in Western Canada and throughout North America. But I just love your perspective as you think about the natural gas out of the portfolio recognizing that you’re also a large consumer of it. But how do you see local prices playing out over time? Especially as we work through, the startup of LNG Canada, which would hopefully improve local netbacks?
Scott Stauth: Yes, you bet. A great question. So as you pointed out, we are a large consumer of natural gas in our oil sands operations. So we’ve got about a third of it. acre pricing, a third export and about a third is for our oil sands operations. In terms of looking forward on the price side of things, of course, yes, with LNG Canada coming online, we’re seeing strip movements in the $3 range. And I think what’s also important to remember here as well is that lot of the economics are on the Montney side are driven by the liquids production. So that carries the strong most weight in terms of the economics there. So, we do see price improvements as LNG Canada goes forward. And we’ll look to capitalize on those opportunities as much as we possibly can with our balanced portfolio ensuring that we are directing our capital towards the highest return projects.
Neil Mehta: And then, Tim [ph]. one of the hallmarks have seen you over the last 10 years has been systematically driving down your cost structure. And the question we often get asked is, what’s the low hanging fruit at this point? Just love your perspective as you guys think about the next couple of years. What are structural cost reductions that you still see within the business? And can you help bucket them for us?
Scott Stauth: I think I would just say in general that for the most part, the cost reduction opportunities are going to come forward simply through our continuous improvement plans that we put in place with our teams. We challenge our teams to bring forward ideas, concepts, and execute on those concepts on an annual basis. And we continue to do that year-over-year. And so really, I think that’s all we’ve always looked at doing our business. It’s making sure that we’re focused on continuous improvement piece. You saw over time what we were able to achieve at Horizon with cost reduction, running up into 2019. And so it’s that same type of mentality across all of our business assets, whether it’s on the natural gas side, heavy oil side, oil sands mining and thermal, we carry that concept to continuous improvement through.
So I’m confident our teams are going to be able to continue to dig through and find opportunities to both decrease the cost and optimize the production, which obviously helps to cost for barrel as well.
Neil Mehta: Are there any specific initiatives you’re willing to speak to at this point, or we’ll see them as they come?
Scott Stauth: I think we’ll see them as they come. I mean, if you think about the vastness of our operations and all the teams that we have working on in these areas, there’s significant amount of work activity that they’re looking at for continuous improvement. But I would say that when it gets down to the ground or you’re low for the teams, they’re small incremental cost savings opportunities. But of course they all add up. We have our teams focused on saving dollars everywhere in operation. So it adds up everywhere.
Neil Mehta: Perfect. Thanks, Tim.
Operator: Thank you. There are no further questions at this time. Please proceed.
Lance Casson: Thank you, operator, and thanks everyone for joining us this morning. If you have any follow-up questions, please give us a call. Have a great day.
Operator: Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may all disconnect.
