Suncor Energy Inc. (NYSE:SU) Q2 2023 Earnings Call Transcript

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Neil Mehta: That’s really helpful, Rich. And then, the follow-up is just your perspective on Fort Hills as you’ve spent time now touring all the assets. Investors are trying to evaluate whether the issues here are structural or there’s a clear line of path to fixing it? And then, how does that affect the way we should think about 2024 capital spend as well as you think about the plan to get that up to capacity?

Rich Kruger: Well, I think the overall reset that was developed last year and communicated last year is solid. There’s not a lot of margin for error in that, we’ve got to execute. Fundamentally, that’s true in all aspects of our business. It’s execution that’s key. And so I like that. And what it — Peter uses the analogy with me is now we’re able to put on the high beams. And we’re looking not just in front of us month by month, quarter by quarter, but we’re able to look longer term. And my confidence of the value in this asset is high. And so, as we look at that, I made the comment in my earlier remarks of years 4 through 40, what is the best way to maximize that value in 4 through 40. I’ll be very explicit what we’re looking at.

In the north part of the mine, you’ve got an area that has a higher fines content and another area that has a lower fines content. So, as we’re looking to go to that north mine, we’re thinking about are we better opening up two pits and blending bitumen volumes over time, getting to more ratable, stable, predictable production profile versus ups and downs that may occur quarter-to-quarter, year-on-year as you put a variable bitumen supply, higher fines content, lower fines content. And that’s a value based. It’s a strategy based. And that’s where we’re digging in right now. And what it may mean on capital, as we move activities around, we may move some capital around. Is it fundamentally different? Is it at the end of the day — is it different plan or a different overall capital profile?

No, I don’t think so. I think it’s just what’s the best timing and sequencing to do. And that’s — we’ll have more to say on that. I would say, as we complete our work, which will largely be over the rest of the year. But it’s not — I would just finish up there, it’s nice to be not hand-to-mouth and figuring out the short term how we’re responding to things, but with the confidence in the short-term plan, and I really mean the next few years. And now we’re looking at, okay, how do we maximize long-term value, which is the name of the game.

Operator: One moment for our next question. And that will come from the line of Manav Gupta with UBS.

Manav Gupta: I wanted to switch a little to that refining site. You are one of the most profitable North American refiners. In the third quarter, we are seeing a very strong rebound in cracks, almost $5 to $6 higher quarter-over-quarter. And then you indicated you’re running much harder in 3Q. So, when we look at the third quarter in terms of refining, should we think of earnings closer to the first quarter versus second quarter? I think in the first quarter, your cash flow is about $400 million higher. So, trying to get a hang of the refining is looking in the third quarter from you guys.

Rich Kruger: Yes. I’m going to turn it over to Dave here in a second. But Dave has been with us here a couple of months, which is plenty enough time to get up to speed. And his focus is on those same things we’ve talked about, safety, operational integrity and reliability. Kris commented how as we — with a lot of the major work behind us, we’re positioned for a good strong run. So Dave, why don’t you comment on kind of how you see — we’re halfway through the third quarter and how you see the months ahead playing out?

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