Suncor Energy, Inc. Stock

Good day, and thank you for standing by. Welcome to the Suncor Energy Third Quarter 2026 Financial Results Call. [Operator Instructions] 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 Director of Investor Relations, Mr. David Johnson.

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 expected results because of various risk factors and assumptions that are described in our third quarter earnings release as well as our current annual information form, both of which are available on SEDAR 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 third quarter earnings release.

We'll start with comments from Rich Kruger, Chief Executive Officer; followed by Peter Zebit, President and Chief Financial Officer. Also on the call are Adam Albidawi, Executive Vice President, Upstream; Dave Oldrieve, Executive Vice President, Downstream; and Shelly Powell, Executive Vice President, Development and Projects.

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 involved completing major maintenance for the year, positioning for a strong finish and maximizing value in today's business environment, we accomplished all 3. We also announced the sale of noncore offshore East Coast assets and a series of senior leadership transitions, actions that will position us well for the future. I'll discuss operational highlights, and Peter will follow with financial starting with safety.

The third quarter was our safest quarter of the year for both personnel and process safety. But rather than recite data, I want to recognize an employee, Emma Todd, Projects Manager and EHS leader, Emma was recently awarded the Alberta Mine Safety Association's 2026 and Trailblazer Safety Leader award, recognizing her passion and commitment in leading people to work safely. Emma first came to my attention a few years ago on a project that was struggling. She rolled up her sleeves put or boots on the ground and got things back on track, but most impressive was the Emma by name, every contractor on site. She epitomizes safety leadership at today's Suncor, and we are extremely proud of.

Upstream production. 853,000 barrels a day in the quarter a rebound of 92,000 barrels a day from a very wet second quarter and our second highest third quarter ever, only behind last year's record, achieved despite SynCo's 47-day coker turnaround which was successfully completed in the first half of October. Upgrader utilization, a very strong 98% in the quarter and 96% year-to-date. Base plant in Q3 achieved an exceptional 107% of nameplate capacity. Syncrude was 88% given the coker turnaround. Performance, which is extremely valuable, given today's synthetic price premiums. Refining throughput 488,000 barrels a day in the quarter, on par with last year's best ever. Here again, performance delivering tremendous value in today's business environment. 95% utilization in 3Q throughput 28,000 barrels a day higher than our internal business plan and consensus achieved despite a 37-day turnaround at Edmonton and a 3-day event at Montreal and despite temporary curtailment at Sarnia due to Line 5's unplanned outage.

With all this activity, how did we achieve this exceptionally high throughput, story time historically, a turnaround of the Edmonton refinery's fluid cat cracking unit would require reduced crude throughput and equal to about 30% of the refinery's capacity or 45,000 to 50,000 barrels a day. Because when this unit is offline, there's no ability to process the heavier gas oil stream coming off the larger crude distillation unit. This is where the story gets interesting.

Joel Alum downstream production coordinator came up with the idea to temporarily store gas oil and to blend it with production streams from our oil sand upgraders, 400 kilometers away in Fort Mac, creating a new marketable suite synthetic crude. This innovative idea enabled full crude throughput during the entire turnaround, preserving 46,000 barrels a day of throughput that historically would have been filed. Adding 3% to Edmonton's annual average utilization rate and 1% to Suncor's overall utilization rate.

The best part, it generated in excess of $50 million in incremental free funds $50 million, 1 idea by 1 person, Joel, embraced and implemented by our team, leveraging Suncorp's fundamental competitive advantage are unparalleled physical integration. This idea wasn't in our annual business plan, and it wasn't in our March investor deck. It illustrates our culture to continually add value and compete. My thanks to Joel and his upstream and downstream colleagues. You guys rocked it.

Product sales, 677,000 barrels a day in the quarter, a record by a whopping 30,000 barrels a day and nearly tied with our highest quarter ever, continuing a string that every month in 2026 has achieved a new sales record. Now the ninth quarter in a row above 600,000 barrels a day after never reaching 600,000 barrels a day in any previous quarter. Retail, our highest value channel with #1 market share. Year-to-date, volumes are up 4.3% year-on-year. Jet sales at 38,000 barrels a day are up 65% year-on-year and exports at 75,000 barrels a day are up 80% year-on-year.

We continue to operate at industry-leading refining utilization to meet our customers' needs, achieving both value and record sales in Canada as well as in this global markets. So third quarter was a big turnaround quarter for us. You'll recall, historically, we spent $1.25 billion per year on turnarounds. In 2024 on our Day, we committed to reduce turnaround cost by $250 million a year over 3 years. We achieved that commitment in 2 years. In mid-'25, we increased our ambition by another $100 million to $350 million a year in reductions. We achieved that this year.

2026 being a big year with the third quarter being a big turnaround quarter, Edmonton and Montreal, the largest events in the downstream and Syncrude in the Upstream. Results, Montreal, best ever cost and duration, Edmonton, best ever cost and duration. Syncrude best ever cost and duration. 3 for 3 is Suncor Hetrick. 2026 is now the third consecutive year with turnaround cost below $1 billion. Our schedule performance has improved from third and fourth quartile to first and second quartile in North America.

Cost has similarly improved with further improvement planned. Specifically, we have an additional $150 million reduction included in our 2028 targets.

On October 4, we announced an agreement to sell our interest in Terranova, White Rose and West White Rose to Ithaca Energy plc for $1.2 billion in upfront cash and potential additional payments of up to $350 million based on future oil prices over a 27-month period. With the transaction, Ithaca assumes all future obligations associated with the assets, including a $500 million regulatory well compliance program starting in 2027 at TerraNova and estimated abandonment liabilities, which totaled 1.4. Through the first half of 2026, these assets contributed about 18,000 barrels a day or 2% of our upstream production. But most importantly, this transaction is consistent with our strategy and our value proposition.

We create value through our unparalleled physically integrated upstream and downstream asset base underpinned by large long-life oil sands resources. These assets certainly value, frankly, were not in that family photo. In Ithaca, we found a buyer whose strategy and core competency is aligned with these assets and consequently was willing to pay us accordingly, win-win for both parties. As stated in our press release, our 2026 IDA commitments to grow free funds flow by an additional $2 billion a year and reduce our WTI breakeven by a further per barrel through 2028 remain unchanged, reflecting our confidence in continuing to deliver exceptional shareholder value.

A quick wrap up, Suncor remains focused to excel, to compete to win with best-in-class operating performance ambitions, definitive value-based priorities and plans, organizational alignment top to bottom, and a team-based results-oriented culture, delivering reliable and ratable high-performance literally built to win in any and all business environments.

With that, I'll turn it to Peter.

Well, thanks a lot, Rich. And we want a quarter for me to begin my role as CFO. As I reflect on the quarter, I'm incredibly proud of the progress we've made over the past 4 years. That hard work has fundamentally strengthened the business and positioned us to maximize value in today's commodity environment. Not only have we improved our resilience in lower price environments by reducing our WTI corporate breakeven by more than $10 a barrel, we've expanded our earnings power at higher prices even more significantly.

The third quarter of 2026 was proof of that. We delivered a record $6.7 billion in adjusted funds from operations and a record $5.2 billion in free funds flow. Those exceptional results, however, only tell part of the story. To fully appreciate how much this business has changed. Let's compare where we are today versus 2022 when we also had record high AFFO and free funds flow.

Let's start with oil sands. Through the first 9 months of 2026, the benchmark crude prices for WTI SIM and WTS averaged roughly 15% below 2022 levels. On price alone, that would have reduced Oil Sands AFFO by $1.5 billion. And yet today, our oil sands AFFO increased by $160 million to $11.1 billion. How do we do this? Higher production, higher-margin pure performance. The improvement in the downstream was even more remarkable. Through the first 9 months of 2026, New York Harbor 2-1-1 crack spread, net of RVO, averaged 16% higher than in 2022. We yet downstream AFFO grew by over 60% to an astounding $7.9 billion.

How do we do this? Record throughput and a much stronger margin capture in a business that may have thought was already at the top of its game. The value we've created is clear. Q3 year-to-date AFFO, 15% higher than 2022, free funds flow 18% higher. On a per share basis, both were roughly 40% higher. We are generating more cash flow and significantly more value per share, and it's not simply the result of commodity prices. This is the result of a fundamentally stronger business.

The value we create extends well beyond our shareholders when Suncor succeeds Canadian government share in that success. Q3 year-to-date, our operations have paid nearly $8 billion in income taxes and royalties to Canadian governments, reaching record high levels. This equates to about 40% of our free funds flow, pre-royalty and pretax. This performance reflects years of improving reliability, strengthening integration across the value chain and capturing higher margins from every barrel we produce in refine, and we're not done yet.

There is no finish line when it comes to improving this business. Every improvement creates the opportunity for the next one. And this is precisely why we did not change our normalized refunds flow growth or WTI breakeven reduction targets even with the sale of Terranova, White Roads and West White Rose. We have a clear line of sight to delivering those targets.

So let me highlight a couple of examples on how the team keeps finding new ways to raise the bar. At our Canadian West Coast Brad terminal, we have more than doubled our export capacity, helping Canada supply much needed energy to global trading partners and giving our teams greater flexibility to capture value. Between Berard and Montreal, we exported 92 cargoes over 9 months. That's nearly 60% higher than in all of 2025 and at much lower contracted costs than the freight rates we saw in the market.

At our refineries, we continue to find and capture improvements across the business. In July, the Commerce City team identified and addressed the constraint of the planned 3 furnaces after never having run above 38,000 barrels a day, the unit is now operating at 43,000 barrels a day, a full 5,000 barrels a day increase throughput, that improvement alone is expected to generate roughly $50 million of value in the second half of this year.

We have built a business that is consistently finding and capturing opportunities beyond what was visible only a few short years ago. And that same discipline extends to how we manage the balance sheet and allocate capital. We ended the quarter with $1.8 billion in net debt and I know many on the call today are forecasting a net cash position by the end of the year. This is an exceptionally strong balance sheet.

During the quarter, we returned over $2 billion to shareholders, including $1.4 billion of share buybacks and $700 million in dividends. Beginning in October, we increased our monthly buybacks from $500 million a month to $750 million a month, reflecting our ability to sustain that level for an extended period of time. On the dividend, our philosophy remains unchanged. That is to sustain our integrated asset base, deliver a reliable and growing base dividend, return capital through consistent and ratable buybacks and invest in high-growth opportunities.

We look to give long-term investors a predictable framework that they can count on through the cycle. To be very clear, every member of our Board and our executive team treats our dividend as an unbreakable promise to our shareholders. The only way to grow it is by building a stronger and more resilient business and that's exactly what we've been doing. The 10% dividend increase we announced is underpinned by structurally higher earnings power, a materially lower share count and confidence in our Investor Day plan.

The absolute dividend level will remain fully sustainable through the cycle. With sizable increases in both dividends and share buybacks, we are on track to deliver record annual shareholder returns in 2026. Today, Suncor is generating more cash, maintaining a stronger balance sheet and returning more value to shareholders.

And with that, I'll turn the call back over to David, and we can take some questions.

Thanks, Peter. I'll turn the call back to the operator, and we can go to the questions. .

[Operator Instructions] And our first question will come from the line of Greg Pardy with RBC Capital Markets.

All right. So this has not been the first quarter where you have just talked about how much the downstream business is delivering and so forth. I mean it's such a bigger business than it was 5 years ago. Just curious in terms of thinking around projects, growth projects aimed at either margin improvement or growth in the downstream. .

Greg, I'll take a shot at it, and then I'll ask Dave to comment for -- what -- again, what makes us different is this uniquely physically integrated upstream and downstream. Our downstream is historically, Peter alluded to it, but thought to be among the best parts of our business. And what we found is you can take something that's already good and make it better and better with the re-rate in capacity last year, that was a big part of it. The further supporting of the growing refined product sales is another part of it. And we've said over and over, we're not done yet.

We don't see it necessarily as building a new refinery, anything like that, generally, refineries are closer to the markets. But the idea of continuing to incrementally expand capacity, continuing to create value not only in that headline throughput number, but in the secondary units that all make custom products to fit for the market. Our -- part of our story this year has been our ability to dial up, dial down to meet market needs at home and abroad. We don't see any of that changing. Dave, I don't know if I left anything left for you, but if I did man...

I think you covered it. Maybe I'll share a couple of examples of some of the things that we're doing to give some color to where we're finding value. Rich, you mentioned in your remarks the $50 million benefit that Joel found on optimizing during the Edmonton refinery turnaround. But in Edmonton refinery, we're really focused on filling out our intermediate units, our conversion units with custom blends from our Oil Sands operations.

We've done that over -- we increased that by 8,000 barrels a day so far year-to-date, generating $75 million of value. And in addition to that, we're getting more diesel yields out of these units for a total of $140 million of value in Edmonton so far year-to-date. And I would say that's not done yet. We continue to -- as Peter mentioned, we've hit a constraint, we must do the constraint. We hit the next constraint. We keep working on those opportunities. We haven't seen the end of that yet.

And that's all in addition to what Rich mentioned on the turnaround. So Nick Remondo and his team are doing an awesome job there in Edmonton. I'll give you an example in Sarnia. It's a small volume, but it pays off really well. This is a value opportunity in Sarnia Kyle Hills and Arslan -- there in Sarnia found that we had this 800-barrel a day specialty stream, a solvency that we made off of our reformers and Sarnia that was causing us to have to run the reformers and higher severity.

They worked with our integrated team found a different product that we could make that could allow our reformers to run at lower severity, and that reduces our downtime due to catalyst change-outs. It increases the yield on our reformers, which ultimately produces more high octane gasoline and provides a total benefit of $40 million a year. Peter mentioned Commerce City. Lots of great work going on there. He mentioned Plant 3. We're doing similar things in Plant 2 with some new crudes that help fill at the bottom of our crude pipe stills. And we've got some things going on in Montreal, which I'll find to share on the next quarter, but we're not done yet.

I think Greg, cutting through that is when you have technical and operational teams that are provided the right focus and leadership, they continue to find opportunities, and we were beyond scratching the surface but we're far from done. And so I think you can continue to have very strong -- expect very strong results, upstream, downstream as we go forward because of the culture that we continue to create here.

Yes, the downstream is a super impressive. The overall business is super impressive. So I want to maybe just shift gears on to the -- just anything you want to say maybe about progress on the MOU. I know the negotiations are still pretty heavy duty there. But also related to that, back at your Investor Day, you framed a very, very large resource base as well as upstream growth optionality. I'm just wondering pretty open-ended question, but just wondering how those pieces fit together? .

We do have a huge high-quality resource base. And in many instances, it has advantages synergies because of our existing footprint, whether that's Lewis, expansions at Firebag, et cetera. The -- if you talk about growth in general, we're less concerned about what today's oil price is and more concerned about what will the oil price be 5 years, 10 years 15 years from now. So high prices, inevitably, questions come up about growth and are you changing it? The question we ask ourselves is, has the world fundamentally changed. And we don't know if it has yet.

There's a lot of theorists and so-called experts. I haven't met anyone in my career, Greg, who can accurately predict long-term oil prices. So we look at generating attractive returns through mid-cycle prices, when we can enjoy good business environments and we can withstand weeks. Now as it relates to the MOU and the interactions between the industry and the government, I think it's important to step back, what's the goal? The goal is that Canada is globally competitive on a fiscal and regulatory risk framework so that we can attract and incent capital. That's the goal.

So the MOU has many components to it, the so-called 3Ps, pipeline production pathways. We've seen some things occur the new mega deduction. There seems to be some momentum on the West Coast pipeline. There's -- we're all anxiously waiting to hear more from the province on royalties and incentives there. The parties are all sleeves rolled up, meeting endlessly, working hard together with that goal is the global competitiveness of the industry. And from a Suncor standpoint, we would far rather have a good deal when we're ready or versus a Badran incomplete deal at an artificial date or deadline.

So we're working hard. And the days on the calendar are just other days to me, November 15 is coming up. Whether we have something on November 15 or not, I don't know, but I know we're all working hard, and I believe we're sharing that all provincial and industry the same objective of a globally competitive Canada.

And that will come from the line of Dennis Fong with CIBC.

And congratulations on the solid quarter. My first question here follows along the lines of, I guess, Greg's first question but kind of expands on some of the prepared remarks there. And so when we think about, we call it the interconnection between Syncrude base plant, Firebag in Fort Hills, this was, frankly, critical in terms of maintaining upgrader utilization and throughput through the year and obviously through very challenging conditions. And further, I think in Q3, you were able to showcase how that interconnection was helpful with respect to obviously, you're refining turnarounds and so forth.

My question here is, what are you looking to due to bolster that physical interconnectivity beyond what has already been outlined like or sharing at Fort Hills or interconnect pipeline and/or obviously, the physical connection between your Fort McMurray Oil Sands and Edmonton and your Eastern refineries?

Adam, you want to -- you just -- at the end, you linked into the refining, but Adam, why don't you start out in terms of kind of the vision and our priorities in the upstream overall.

Yes, happy to do that, Dennis, you actually captured 1 of the main things that makes us quite unique in the upstream. And that is the ability to have physical integration across all of our assets in the upstream. So whether that is Firebag bitumen going to the baseline upgrader, whether that's Firebag bitumen going to Syncrude, whether it's Fort Hills Bechman going to the baseline upgrader or sours in between Syncrude and base plan. So when you take a step back and take a look at what makes us unique, that is 1 of the main things that makes us incredibly unique in the upstream business. So how do we leverage that? .

There's a couple of ways we leverage that. The first way is when you look at the performance in our upgraders over the last several years, 1 of the main focus areas for us has been increasing the utilization. And as we increase the utilization, clearly, that increases the bitumen fee that we need from our mines and from our institute assets. So the physical integration that we have across the assets enable us to actually continue to increase upgrading rates. And that's where you see some of the higher price realizations that you saw in Q3.

The second main way we take advantage of this is during maintenance events. So when there's maintenance events at our mine production assets, we now have the ability to move bitumen from different Nest assets to the upgraders to keep the upgraders full again, ensure we maximize value from those big, big money makers. So there's a couple of examples of how we leverage integration that we have. As we look forward, we are always looking to see how we can maximize that even further. So for example, the record transfers that you're seeing from Fort Hills to the baseline upgrader as a result of the continued debottlenecking activities our team has done to maximize PFT bitumen to the base plant.

And we are continuing to find opportunities to do that even further.

I think a key part of all this is as we have improved underlying asset performance, now we can continue to optimize and create incremental value. But when you have assets where you have too much variability in their performance, you can't optimize. And I'll take just the tail end of your question and extend that to the downstream. I would bet a week's pay. I think the Edmonton refinery is the only refinery in North America that runs 100% on feedstock from the refineries owner. I would guess, if not it, it's probably a day will kick in part of that we pay.

But -- so what we were able to do is Edmonton with its pots and pans, primary units, secondary units, we can literally moderate what Edmonton can maximize value on from our upstream operations. Sarnia far further away runs with well over half of its feedstock with Suncor crude. As you get further away to Montreal, the percentage goes down but that interconnectedness is still a key differentiator with us, and that allows our upstream and downstream teams to work hand in hand, maximizing every dollar and every barrel that is at the core, that is what makes us different and unique relative to a broader peer set.

Great. My second question. And, if we go back in time, Rich, you've made past comments on Suncor's ability to provide craft cocktails to refineries, whether it be your own or third-party with what they need for, frankly, feedstocks to optimize frankly, your own upstream and downstream realizations. Can you talk towards maybe from taking a step back and thinking about this strategically, how kind of a combination of logistics, global marketing, obviously, the tanker capacity that you have time contracted as well as your ability to expand kind of your network to market globally, how that's really improved, we'll call it, market intelligence, your ability to act more opportunistically, especially given the volatility of the market and what that maybe means for kind of value generation for both upstream and downstream?

This has been a really fun area. And of course, it gets back to that again, the predictability, stability of the underlying assets and sometimes, a dentist, we'd rather be lucky than good. And in this case, we A few years ago, we started to look at the opportunities beyond our core domestic markets. You've heard the story about how Dave came in and we philosophically changed our strategy on sales and said, run our facilities full out. We will find profitable homes for that. That extended beyond Canada, whereas in the 24 I-Day, we said we could market in 21 countries. This year, we said 45 countries. .

Did we have a vision that we would necessarily do that? No, not necessarily. But with events in the world, started by Russia, Ukraine, now in the Middle East, as we've had those opportunities and as we've locked in logistical capabilities, not only pipeline access to the coast, but you mentioned time charters. We've got, what, now 9 time charters that can be in crude or product service off of the coast. The -- I mentioned now export volumes were up 80% year-on-year. These have -- where typically an export market is a market of last resort. You kind of get your barrel there because you don't have a better home for it.

Those markets now have been particularly valuable because of acute shortages so that this full holistic integrated model extends well beyond upstream and downstream. It is logistics. It is markets is customers abroad, and that is an area we have changed materially. But here again, our rallying cry is we're not done yet. We keep seeing opportunities. Our traders, both particularly in Calgary and Houston, we've got some folks in London as well. They're extremely sophisticated on the markets we compete in.

We're not trying to be a global trader, but the markets we compete in they're extremely knowledgeable, seeing opportunities. And it's one of the reasons you see if you start doing realizations per barrel, this than that because those profits we put back into the business that generated them you have seen and you will continue to see premium prices for Suncor production and products because of that level of sophistication. It is -- we have a lot of fun with it candidly. And, we have -- we believe we'll continue to create more value that our peers are unable to replicate.

Next question, and that will come from the line of Arun Jayaram with JPMorgan. .

Rich and Peter. I was wondering if you could give us an update on your Institute growth plan and the 400 kbd opportunity. I know that you guys are focused on selecting an EPC under the design one, build many concept. And I want to just maybe provide a little bit of update on that as you look to scale Lewis and Firebag over the next decade.

Sure. One of our announcements here recently was the shift in Shelly Powell to her broader portfolio. to the EVP of the -- in particular, the in-situ growth plan to create that level of senior executive focus and time on that. So Shelly, why don't you tell a room what the heck you've been working on?

Great opportunity. So all of the projects that we talked about in our Investor Day plan are actually progressing quite well. they are exactly where we would expect them to be. I was actually in the field last week and toured quite a few of them. All of them are fully staffed. We've got materials on the ground. So things are progressing in a way that we would absolutely expect the shorter-term wins. I think to your broader question on engineering and the larger projects, you are right, we are right in the middle of evaluating who do we want to partner with long term, not only on the engineering side but also on the field construction side.

We are setting ourselves up to enter longer-term type relationships with these organizations, really thinking about what we've been talking about as a portfolio rather than individual suite of projects. We think that gives us the opportunity really to utilize the economies of scale to look at optimization, to ensure we have construction workforce security over the longer term, and we think we have a really attractive portfolio that we can deliver over the long term. So really excited about where we're at and things are off to a very strong start.

And in anticipation of a question, I'll answer it ahead of time. We're also looking at right now relative to that March Ida plan, doing the what-if -- what if we wanted further growth. What if we wanted to go a bit faster, what would be the incremental investments we would make, where the timing? So that's 1 thing. And the second part of it is also looking at the progress we've made over the last few years on debottlenecking our facilities and giving the incremental 5,000 to 10,000 barrels a day.

What further opportunities remain on that. So we have a plan we laid out. It's in situ growth. It's fundamentally 6 phases of in situ projects over a decade. That's the base case. But we're asking ourselves and doing some preliminary work saying, well, what if we wanted to do more, what if we wanted to go faster. We haven't landed on that yet, but that is -- it ties with this conversation about the fiscal and regulatory environment in Canada, the MOU, if all that turns out to create that globally competitive business environment. That may be something we do.

And we're able to look at all these because we're underpinned by a tremendously large, long-life high-quality resource base. Without that, these would be academic exercises for us, they're not academic exercises their real-life opportunities.

Great. And my follow-up is, you made the decision, obviously, to monetize some of your noncore offshore assets in the Eastern Canada, yet you are maintaining your 2028 Investor Day objectives, the $2 billion of free lens flow growth by -- at 65%. Can you just talk about what what's outperforming in the portfolio for you to maintain those targets? And does the 100 kbd growth target still intact?

Yes. I'll take it in reverse room. The 100 kbd doesn't. We don't add up to that right now. We -- if you take 2028, the assets that we are looking to sell will be about 40,000 barrels a day of our -- of the grand total. And then so the 100 kbd becomes 60 kbd. But at the end of the day, production throughput, those are drivers but our fundamental objectives are free funds flow per share. That's the growth we're after. And our confidence in either the breakeven or the free funds growth remain because on May -- March 31, folks saw a snapshot in time but this organization continues to work and make things better.

And I think that little example I shared with Edmonton, $50 million during the turnaround. Peter shared an example or 2. These are -- they illustrate that we keep coming up with new ideas to add value. And when the executive team sat back, looked at that, we did the adjustments for the asset sale, which would have said, well, production is going to be lower, the free funds flow would have been lower, the breakeven wouldn't have been as high, and we sat there and looked at each other, all held hands and said, "No, we're still going to deliver on these commitments that we made because we have confidence in this organization, the people and the ideas with the momentum we've established and we said we're still going to achieve those, if not exceed those.

And so it's not really any 1 or 2 things or 3 or 4. It's just the cross-organization alignment, commitment and momentum we have that gives us confidence we will achieve those.

And that will come from the line of Doug Leggate with Wolfe Research.

Thanks for having me on. I wonder, Rich, we've heard a lot about incredible reliability utilization rates and so on. And I wonder in the context of your dividend breakeven trajectory, are we seeing a reset in the underlying production capacity, I don't want to say you're understating what you've achieved because it looks like is it utilization that's getting better? Or is it the debottlenecking and the capacity that's actually increased in which case, what does that imply for your dividend breakeven trajectory different questions, I guess?

Thanks, Doug. Every time I go out there and make a commitment, these sort of guns that I'm sitting around the table with prove me wrong because they do better. We rerated our downstream from 466,000 barrels a day to 511,000 barrels the full capacity. And this guy sitting to be the left, he's been telling me that lately, we've had days north of 520. And like I thought capacity was 511,000 barrels, so things keep getting better. But you're exactly right. As that continues, that breakeven, which, for us, of course, includes our full dividend we continue to drive it down. The downstream kind of subsidizes or enhances that breakeven.

So as we said, the new year, new plan this year was going to be going from around 43% to 38% this year, in part because of some special circumstances, we're going to we're going to achieve more than we thought we would have achieved this year. We're not necessarily sure if those will -- that will endure over time. But these fundamental improvements, whether it's debottlenecking those incremental barrels they greatly add to our ability to drive down that breakeven. And I think dividend increase is illustrative of the confidence that we have going forward.

We've been kind of 5% year after year, roughly equal to the fraction of shares we've been buying back, so Peter ramped up the buybacks to $750 million here. The dividend has gone up by 10%. The 10% probably is a pretty good indication that with the amount of shares we think we'll be buying back and our confidence in the underlying business. The -- you can continue to expect further shareholder returns, whether it be a dividend and/or buyback.

I guess we'll wait for the update. But Rich, my follow-up, I'll try and ask this as succinctly as I can. But years ago, we all used to think about pre-royalty and post royalty payouts and how they were ring-fenced and so on. And with the tax change in September, clearly, you're getting accelerated. I don't want to call it tax shield, but depreciation that maybe makes the previous discussion somewhat less relevant. And I guess what I'm going with this is when you laid out your strategy through 2028, you didn't have that tax treatment in your capital plan. So I'm wondering in the context of what you just answered before about maybe you want to look at growth options, as the tax treatment changed your thoughts on how you -- whether you decide to...

3-year period. It enhances the calculation of a rate of return, and it can accelerate a payout of an investment. So fundamentally, these accelerated depreciation rules help derisk long-term capital-intensive investments. Are they game changers in terms of do you do something or not do something. Maybe, but I don't think it fundamentally changes the long-term investment profile say, wow, we will now do a whole bunch more.

But if you couple accelerated depreciation with a an incentivized royalty system that starts to do some of the same things. if you clear up some of the regulatory complexities that would extend approval time frames upfront, you start coupling several of these things together, which are all part of the component parts of MOU. Now you're changing the fundamental underlying fiscal and regulatory regime. And yes, that in aggregate can lead us to be more ambitious, more aggressive on long-term capital investments. Any 1 item is nice, but probably on its own, not sufficient to materially alter the capital allocation framework.

One moment for our next question, and that will come from the line of Menno Hulshof with TD Securities.

I'll start with a question on your global markets push. It didn't look like you were impacted in any significant way by the spike in freight rates in the quarter. And you did touch on some of this, but can you just elaborate on how the freight rate risk is currently being hedged out through contracting and how that challenge is generally being managed? And while we're at it, could you maybe put the bookends on sort of the number of cargoes that potentially get shipped in Q1 and call it, Q4 and Q1? And anything else within your global marketing push that you would want to flag.

Dave, why don't you take that? You and your team manage those for us.

Yes. thanks, Menno. Rich mentioned our 9 time-chartered vessels, which we fortuitously locked in before the rates went up dramatically. We're able to use those vessels for crude, particularly off the West Coast. So that goes to typically China or into the California markets. And we're seeing massive savings relative to current spot freight rates, and we take that back as our netback. We also have for MR vessels. Those are 300 KBB product vessels, mostly working off the West Coast to move diesel to markets.

And same thing, we're seeing much, much lower freight rate, which helps us with our netbacks, Combine that with our advantaged logistics, we get really good value for our diesel sales. If you think about export cargoes, we exported 92 cargoes year-to-date. That's about 60% more than we did in 2025 as a whole. What we do is we optimize based on our product netbacks, our alternatives domestically and we balance between diesel and jet mostly. There's very little gasoline that we export. And we will optimize that based on price based on market conditions and hard to say what Q4 and Q1 will bring, but we will make sure we optimize that to maximize value to Suncor in the current market.

Without saying it's been a huge part of our performance this year. Have that level of flexibility. And although the terms on those time charters are proprietary just for competitive purposes, they don't go forever. But we have that well into next year, we'll still have those before any of those will be looked at being renewing and things. And that gets back to that comment I made earlier. Sometimes we'd rather be lucky than good. And we took a lot of these actions, not anticipating the the unique benefits we'll see now, but they have been extremely valuable for us. And I think in the quarters ahead, they're going to continue to be.

Okay. And then I guess the second question is for Peter on the balance sheet. You talked about net debt falling a lot in the quarter. Like a lot of everybody else, we have clear line of sight to a net cash build. And given I've chatted with you about this in the past, but it seems like that is more of an output rather than something that the company wants to get to. So how are you thinking about sort of free cash allocation to the extent that oil prices and crack spreads remain elevated. I think there's probably limits to how much you want to grow. You recently increased the monthly buy back to $750 million. How should we be thinking about that into 2027?

Yes. Thanks a lot, Meno.obviously, the balance sheet is an exceptional shape right now. And as we spoke about before, our philosophy on share buybacks has always been to buy back proportionate to our overall dividend. We're certainly doing that right now. And so that philosophy remains unchanged. We believe in returning excess funds to shareholders. We're always going to maintain the flexibility to respond to any material changes that may happen in the market. But this is the power of Suncor. This is the power of the integration that we bring to the table, and that's to provide reliable and predictable and ratable shareholder returns through the cycle, and you can count on us to continue that. .

And Mel, maybe if I'd just add 1 other point to that. Yes. We we choose to grow faster than we outlined in our IDA plan. The incremental capital that we're looking at is not overwhelming in any regard. So if the business environment stays strong and we would choose to invest more in the near term, the ability to return cash, the reliable and growing dividend and material buybacks, we think we're going to be able to do all of that. We don't have any particular goal or driver to build up a war chest of cash for any particular reason with a net debt at or near or below 0.

We have a lot of flexibility for whatever we choose to do. So you can interpret that as there'll be continued material cash return to shareholders, in particular, that incremental dollar via buybacks.

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

Rich, you kind of talked about who made the family photo and who did not. But there were a couple of assets, I think, Heron which did make the family photo. And I'm trying to understand what drove the decision to keep those members in the family photo?

Hebron and Hibernia, of course, they're nonoperated, and a big part of who's in the family photo and how close to snuggle up to me and my wife is what do you bring to the party? And can we add value to what you do. Hebron and Hibernia bring a lot to the party. They're longer life, they're a stable operation a rock-solid operator who knows how to operate in the offshore quite well. And the -- fundamentally, we cash dividend checks each month from them. and they run it really well.

So they add material cash flow. It's not to say the other the assets we're looking to sell don't, but they're not our core competency. I don't think people buy Suncor because we operate a single FPSO off of the East Coast. So there are some there are some distinctions there. And we've always talked about the East Coast is really a tale of 2 cities. There's the platforms they have run in Hibernia and the floaters. And we make -- we look at them in different ways and make different decisions based on how we see them.

My quick follow-up here is, we are seeing WCS differentials widen -- but given your refining capacity integration and the diesel margin, the impact of those differentials will be minimal for you compared to your peers. Can you talk about that?

Yes, you hit on it well. Our level of sensitivity or immunity to differential is uniquely low relative to a pure set. And the -- everyone is talking about what's going on. It's not so much that there's the pipes are overstuffed so you can't get more out. In some of this unique freight situation you're seeing in the Gulf Coast. There's a Venezuelan crude. There's a number of other factors here. So yes, they've certainly widened although the underlying WCS price is still at a historic level is quite high. We don't see this as kind of the new the new norm. We don't see these widening differentials as enduring. But while they do, we are less affected by them than the rest of our peer group. Again, we keep going back to that unique construct of our upstream and downstream asset base. .

And 1 moment for our next question. That will come from the line of Patrick O'Rourke with ATB Cormark.

Obviously, you've covered a lot of ground throughout the entire business, particularly the downstream. So that's been terrific. Maybe I'll keep it brief here then. When I look at year-to-date capital spend and we think about the normal cadence for Q4, it seems like it puts you down 1 or 2 paths here. One path where you're at or below the low end of your full year CapEx guide or another path where maybe you start pre-investing in 2027 and some of the strategic initiatives you've spoken to. I guess, as of where we sit today, which path would you think you'd prefer to deviate down?

Yes. Fair question, Patrick, we are tracking towards the low end of guidance on the capital. And in part, we didn't talk about it a lot in the second quarter, but these unique rain events also slowed some of our capital activity that involves moving dirt things because of the weather conditions. So but track into the low end, given where we are, we've been asking ourselves some of the monies that we had planned on spending in '27. Does it make sense? Given we have the capacity to move some of that to '26, if it makes sense, we've been looking to do that, that's probably lost in the round off, though, it's not big, big numbers, but we're -- we have said that we're planning a future at or below $6 billion in capital. That's still where we are.

We'll have guidance here in about a month or for the next year. I think you can probably guesstimate what you might see on the capital side of it. So we're just looking at other good thoughtful wise things to do versus macro changes and part of that, make no mistake, part of that coming on the low end of guidance is continued good performance. We've talked about turnarounds. I just flagged 3 of them that were best ever. So our organization continues to do a good job of being very thoughtful, fruit and wise with capital allocation, and that's part of the reason we're tracking to the low end. .

Okay. Great. And then just thinking -- you touched on it a little bit, but WTS differential here. You've touched on your time charters. I mean, typically, the locational discount has been sort of between Hardisty and the Gulf. But now it's between the Gulf and maybe other waterborne crude markets. based on the assets you have to move barrels here, what sort of ability do you have to mitigate WCS differentials by, say, pushing those heavy barrels that are not upgraded further out the value chain here in the fourth quarter and into 2027?

Dave, do you want to comment on that?

Yes. Patrick, as you know, we export off of the West Coast on our TMX volumes, and we get to capture full market value for those products. We have commitments on pipe into the Gulf for some of our volumes. But at the end of the day, really -- and we'll maximize into our refineries, but make mistake, we're always maximizing heavies and hours into our refineries regardless of where the dip is. It's pretty much always economic for us. So really, we see ourselves continuing to do more of the same in that space. And like Richard said, we're pretty indifferent to the WCS DIF overall. What we -- if the dip is wider, we make it up in the refining business or are we making up in our upgraders we see it as pretty indifferent to our operation through the fourth quarter. .

Because of those time charters when and how we contracted them we don't have that same exposure to the differentials on the heavy crudes that are exported because of our freight rates. That won't last forever, but we also don't think the current world we're in will last forever either. .

One moment for our next question. And that will come from the line of Travis Wood with NBC Capital Markets.

And apologies if this was touched on. I logged in a bit late. I think in the opening remarks, and you've done this last quarter as well, just continue to talk about efforts to capture global pricing largely through the refined product market given where global cracks are. But could you walk through some of the detail and maybe some color around what that is exactly and what you're debottlenecking, whether it's kind of egress to Tidewater to be able to export to those markets? And then what type of volume would we be thinking about in the product sales for Q3? And what do you think that contributed on the margin for the quarter as well without giving away too many of the trade and marketing secrets, obviously?

Sure. Travis, we're going to cut it some slack for join us late as long as you go back and listen in to the earnings call song on your own time. You've got to hear that. It's 1 for the ages. Dave, I want to comment on that .

Yes. So Travis, we optimize our exports of both coasts, and we have some unique, efficient logistics with rail to the West Coast and then ability to trade direct to direct to customers through our own chartered time charted vessels on the West Coast as well as the same thing on the East Coast. We have niche markets that we deliver to where we see a unique value for our products, which tend to be lower class into Alaska on the West Coast in Scandinavia, Iceland on the East Coast.

And then there's a big short in Central America that we have an established relationship with some counterparties there that is very profitable for us. We see our ability to grow that trial, we've grown it already, particularly the West Coast volumes and it has historically been a rail loading and unloading constraint, and we've been busting through that, and we think we have more room to go on that through the -- into the first quarter.

And then the setup you have, Dave, again, not to get into commercial terms, but that getting products rail to the West Coast, the way your team has set that up, that's quite competitive without pipe products to the West Coast.

Okay. And are you able to share what type of volume we're thinking about versus kind of domestic consumption like using the 677 of sales for this quarter, how much would reach the Tidewater of that number approximately?

Yes, Travis, we exported about 75,000 barrels a day year-to-date.

Out of the 6 plus still more than 10% .

And we have an opportunity to do more if the market directs us in that direction, we have opportunity to do more, and we have an opportunity to flex between diesel and jet molecules as well, depending on where the market goes.

If round numbers, we'll give a little numbers of that, a little less than half of that export has been -- if I remember right, there's been crude . And a little bit more than half products. Is that about.

That's the product volume. The crude volume is in addition to that.

You're using Ships for the crew.

But that's just the product. Yes.

One moment for our next question. And that will come from the line of Lydia Gold with Goldman Sachs.

Could you talk more about costs and how you're driving improvements in your operating costs across assets? Or any other areas of the business where you see opportunities to take out cost or drive structural efficiencies?

Sure. I'll make a general comment, then I'm going to turn to Adam particularly in the mining side of it. We recognize you got -- you have to identify who you are, what you are. We're a global commodity that is cyclical in nature. We generally can't control the prices of our products. So we have to just have an endless ruthless unwavering commitment to cost management. For us, our refineries are extremely competitive. Our upstream is 2 components. It's a large and growing in situ, and it's the large mining, the mining has a higher ongoing operating cost structure. So Adam, why don't you share some of the things we're doing there to just contain, control, reduce cost in the upstream mining sector in particular..

Yes. So in upstream, and Rick spoke about this already. When you look at the 2 main businesses that sit in the mining pieces, the situ assets are already at a very competitive top quartile cost perspective, there's always work we are doing to continue to drive that down. But the big opportunity for us in the upstream is in the mining business. And when you look at the costs that we have in the mining business, there's a number of things we are doing to drive those costs down further.

I could speak about a number of examples to increase our productivity. But perhaps the example I'll speak to is the work we're doing to scale our autonomous hauled system. So you may recall that we have scaled and we've deployed AHS to Hall system at our base plant operations. We have around 140 trucks or so ultra-class trucks fully autonomous. In addition to the increased safety performance we get from that, we are seeing a reduction in our operating cost resulting from the deployment of AHS.

So the decision has been made to now deploy AHS and scale AHS at the Syncrude Milder Lake facility. We currently have just under 30 trucks kitted with AHS at Miller Lake. And by the end of this year, we will have close to 40 trucks kitted with AHS on operations. So that is an example of the work we're doing in our mining business to continue to drive our productivity up and reduce our costs.

So just to add to that, really 2 big levers productivity in mining, little things make big differences with a large fleet and then technology. AHS is a technology on it. So those are the 2 big levers we're operating, and we know and internally, our mining has to be cost competitive to attract capital. And the teams understand that and are working hard to do that.

I'm showing no further questions in the queue at this time. I would now like to turn the call over to Mr. David Johnson for any closing remarks.

Thank you, everyone, for joining the call this morning. 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 all for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Suncor Energy Second Quarter 2026 Financial Results Call. [Operator Instructions] 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 Senior Vice President of External Affairs, Mr. Adam Albeldawi. Please go ahead.

Thank you, operator, and good morning. Welcome to Suncor Energy's Second 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 second quarter earnings release as well as in our current annual information form, both of which are available on SEDAR, 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 second quarter earnings release.

We will start with comments from Rich Kruger, President and Chief Executive Officer; followed by Troy Little, Suncor's Chief Financial Officer. Also on the call are Peter Zebedee, Executive Vice President, Upstream; Dave Oldreive, Executive Vice President, Downstream; and Shelley Powell, Senior Vice President, Operational Improvement and Support Services. Following the formal remarks, we'll open the call up to questions.

Now I'll hand it over to Rich to share his comments.

Thanks, Adam. Our second quarter involved completing major maintenance and positioning for a strong second half and that's exactly what we did. Troy will cover financial performance, I'll first discuss operational starting with safety. I'm pleased to report that our Base Plant mining received an industry safety award, the John T. Ryan Award for best-in-class safety performance as recognized by the Canadian Institute of Mining. This marks the second consecutive year a Suncor Mining team received this award, extremely proud of our team for this well-deserved recognition for excellence in an area that represents our highest overall priority.

Moving to upstream production. 761,000 barrels a day in the second quarter. Before I continue, though, a pop quiz. What's the difference between the story of Noah's ark told in the book at Genesis and the Fort McMurray region in the second quarter of 2026? In Noah's ark the torrential rains stopped after 40 days and 40 nights. In Fort Mc, record rain and snow melt continued throughout the quarter, with total precipitation the highest in more than 30 years, 50% higher than the 10-year average and unfortunately, a materially affected mining productivity and quarterly production with an estimated 50,000 to 60,000 barrels a day impact in the second quarter.

Clearly, this was an unusual one-off event, but we learned from it to build resilience for future events by improving our planning and preparation with new 48- and 72-hour weather outlooks, by stockpiling mine in the most -- or excuse me, in the most vulnerable areas within each mine, by pre-securing critical minerals and equipment such as gravel and graders, by using technologies such as drones to monitor mine conditions real time. The takeaway is we can't eliminate weather risk, but we can better mitigate the impact.

The good news, since late second quarter, things are back to normal, with production at expected rates. In fact, July's preliminary production is on the order of 870,000 barrels a day which would be our second highest July ever. Despite this year's weather over the last 3 years, second quarter production has averaged 59,000 barrels a day higher than the second quarter of the prior 3 years with better turnarounds and higher asset performance driving the results.

Upgrader utilization, 93% in 2Q with our spring turnaround at Base Plant now complete. Year-to-date, we're at 94%, a new record, 1% higher than the first half of last year. Refining throughput, 471,000 barrels a day in the quarter, our second highest 2Q ever, 28,000 barrels a day higher than our previous best 2Q, which was last year. Montreal and Edmonton, our largest refineries led the way at 151,000 and 161,000 barrels a day, respectively, and a combined utilization of 99%. Overall, 2Q network utilization, 92% on our new higher rerated capacity of 511,000 barrels a day.

With major maintenance activities completed at both Commerce City and Sarnia, year-to-date utilization is 95%, a new record, 4% higher than the first half of last year. Here again, over the last 3 years, '24 through '26, 2Q throughput has increased every year, averaging 78,000 barrels a day higher than the 2Q of the prior 3 years, continuing to raise the bar and improve performance.

Product sales 655,000 barrels a day, like refining throughput, our highest second quarter ever, 54,000 barrels a day higher than the previous best second quarter, which was last year. Our eighth quarter in a row now with sales greater than 600,000 barrels a day after never achieving 600,000 barrels a day in any quarter over our history. A note of interest, jet sales were a record 51,000 barrels a day, 90% higher than our previous record of 27,000 barrels a day in the first quarter, achieved by fine-tuning our product slate to maximize global market value.

Over the last 3 years, '24 through '26, 2Q sales have increased every year, averaging 101,000 barrels a day higher in the 2Q of the prior 3 years. Here again, raising the bar, improving performance.

Over the last several years, we've talked a lot about turnaround performance, improving cost and schedule. As a reminder, historically, greater than 20% of our capital, roughly $1.25 billion per year was spent on turnarounds. During our I-Day in May 2024, we committed to reduce turnaround costs by $250 million per year over 3 years. We achieved that objective in 2 years versus 3 years. In mid-'25, we increased our ambition to $350 million per year in capital reductions. We now expect to achieve that in 2026 again earlier than expected. And this year, on March 31, we upped our goal to $400 million a year.

With that context, I'll highlight 2Q performance focusing on Firebag, illustrating ways in which we continue to improve performance. Our Firebag turnaround involved major maintenance of the 2 largest of our 4 plants, 93 and 94. Combined, the 2 plants processed roughly 2/3 of the field's 250,000 barrels a day capacity. In our guidance for the year, we included an estimated impact of 85,000 barrels a day in the second quarter. This was our longest duration, biggest volumetric impact event of the year.

The last turnaround of similar scope was completed in 2022, 4 years ago. It took 58 days at a cost of $150 million. This year, with a slightly larger scope, we completed the work in 44 days for $118 million, 24% reduction in duration, 21% reduction in cost. This work to achieve this started more than 2 years ago included innovations and equipment inspections and work practices. Examples using ROVs for internally inspecting long steam line sections, using drones for inspections inside large diameter pipes and vessels, circulating mineral oil inside process vessels to accelerate cleaning cycles.

An idea by Firebag coordinators, Max Bombardier and Samantha Snow. Max literally observed a contractor years ago using Johnson & Johnson baby oil to clean equipment. He contacted Samantha, the process engineer at the time, to research it. Samantha identified Petro-Canada lube product, we tested it over time. And this year, we applied it at scale in plants 93 and 94, cutting 2 full days off of vessel cleaning by one simple idea, save time, save money, kept people safer. This is one of a litany of examples of what Suncor people are doing today company-wide.

Firebag results, lower cost, lower duration and faster production restoration. The second quarter impact was 60,000 barrels a day from the turnaround work, a 25,000 barrel a day improvement versus the plan. We also completed prep work for future tie-ins and further plan debottlenecking, working smarter today and smarter for tomorrow.

The final prize is with the work we did, we will now be extending plant 93 and 94 next turnaround cycle to 5 years versus the historic 4 years, a total team accomplishment complements to Nabeel Jafri and his regional turnaround team, Miles Fleming and his operational management team and Jason Gaudette and his central support team working together focused, collaborative results-oriented.

I've highlighted Firebag, but we also completed other second quarter work successfully. Base Plant U2 Coker completed in 46 days versus 60 days in 2021. $203 million cost, 10% less than the last event at $225 million. Commerce City refinery completed in 50 days versus 74 days in 2021. We've got more work to do in the third quarter, but our second quarter results position us well for a strong second half.

My overriding message, Suncor remains focused like a laser to perform, compete and win by operating standards, best-in-class performance ambitions clear definitive plans, priorities, short term and long term, a deep team-based results-oriented high-performance culture focused on what we can control and what we can execute. We believe we offer a compelling value proposition, reliable, ratable high-performance, reliable, ratable high cash flow, a literal machine built to deliver in all business environments.

With that, I'll turn it to Troy.

Thanks, Rich, and good morning, everyone. This quarter was a powerful demonstration of just how much Suncor's ability to generate cash has changed in the past 4 years. You may recall in our Q1 conference call that I highlighted that not only has our resilience improved, through the lowering of our corporate breakeven by $10 per barrel. The earnings power of today's Suncor at higher prices has been improved by an even greater measure.

Proving this point, we finished the second quarter of 2026 with $5.3 billion in adjusted funds from operations, nearly double that of a year ago, and tying our all-time quarterly record set in the second quarter of 2022. The difference is that this time, WTI averaged $93 per barrel for the quarter, roughly $15 per barrel lower than in the second quarter of 2022, with an averaged $108 per barrel. Even more meaningfully on a per share basis, AFFO in the second quarter of 2026 of $4.52 per share is nearly 20% higher than the AFFO per share in that same historical quarter of 2022.

We're delivering more cash flow and more value per share with less help from commodity prices. That's the result of building a stronger, more reliable and more profitable business over the last few years. And what's important to remember, this wasn't a perfect quarter. Unprecedented weather conditions impacted production and left value on the table. Even so, we matched our all-time AFFO record and delivered our highest-ever AFFO and free funds flow per share. As we continue to advance our Investor Day plan, we see further opportunities to improve and grow earnings power from an already record level of performance.

Now I want to highlight our downstream business, which has, again, taken advantage of a strong margin environment to generate record segment AFFO. Suncor generated record downstream AFFO of $2.3 billion this quarter, nearly $200 million above our previous record in the second quarter of 2022. And we did that with the New York Harbor 2-1-1 crack margin, net of the renewable volume obligation or RVO more than $10 per barrel lower than in the second quarter of 2022. Margin capture this quarter came in at 89%. Not bad, but that number [ understates ] the underlying strength.

This is because, unlike many of our peers, our benchmark does not deduct our [indiscernible] even though the gross margin we compare it to nets out our own RVO compliance costs.

With average RVO pricing jumping $5 per barrel from the first quarter to the second, the single factor drove a variance of 10 percentage points of capture. Excluding this increase, we saw a very strong margin capture of 99% for the quarter.

How did we achieve such strong margin capture? Our sales and marketing and supply and trading teams, again, turn to market dislocations into value, in particular, in export markets. Through ports in Burrard in Montreal, we exported 56 cargoes in the first half of the year nearly matching the 58 cargoes shipped in all of 2025. That's our integrated model at work, providing flexibility, capturing stronger netbacks and turning market volatility into value. Years of logistics and commercial buildup paid off once again this quarter.

Now let me spend a minute on our balance sheet as well as our capital allocation. Suncor ended the quarter with $4.5 billion in net debt, 75% lower than where we started this decade and placing us at less than half of our guardrail of 1x net debt to cash flow at $50 per barrel WTI. Just like our low corporate breakeven, this amount of net debt gives the company a level of resilience that it has never had in its history.

With our balance sheet in excellent shape, backed by a business that is able to generate meaningful excess funds across the commodity cycle, our focus is then on getting funds back to shareholders in a reliable and predictable way.

From a shareholder return perspective, in the second quarter, we returned $1.8 billion to shareholders in the form of $1.1 billion in buybacks and $706 million in dividends. And starting this week, those buybacks will increase to $500 million per month or $1.5 billion per quarter, reflecting the substantial growth in excess funds this business is generating in the current environment as well as the benefits of the improvements we detailed at our recent Investor Day.

This marks our second increase in shareholder returns this year. As a reminder, we entered 2026 with a buyback of $275 million per month. We then increased it to $350 million per month in April, and now we're increasing it again to $500 million per month. Put simply, the better this business performs, the more shareholders should expect to share in that success. And while we will always retain the flexibility to respond to material changes in market conditions, we believe that predictable and ratable shareholder returns can be achieved even as commodity prices inevitably move around.

With that, I will turn the call back over so that we can take some questions.

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

[Operator Instructions] And our first question will come from the line of Greg Pardy with RBC Capital Markets.

Thanks for the rundown. Probably the most obvious question is just with the increase in the buyback now to $500 million per month, is that sort of a forever number? It certainly has good legs as you move into '27, just given free cash flow generation in the balance sheet. And let's just say the $500 million level you still have net debt kind of trending down to 0, which would be an incredibly good problem to have. But are there other levers that you could pull in terms of returning cash to shareholders?

Troy?

Yes, sure. Thanks, Greg. I think you should look at our actions to answer that question. Recall that in 2025, the crude price moved between the low 70s and the high 50s per barrel. Throughout that entire time, we kept our buyback constant at $250 million a month until we actually increased it in December by 10%. And that increase came at the lower part of that year's commodity cycle. More recently, look at Q2, we started the quarter with WTI at over $100 per barrel and ended the quarter was at under $70 per barrel. Our buyback continued ratably and predictably at $350 million per month.

So like any company, we have to maintain some flexibility for extreme events, but it should be clear by now that we want to deliver something that's unique and has value to investors, and that is predictable and ratable shareholder returns through the commodity cycle.

And that's not the only thing we're doing that we think is unique. We also do not have an absolute dollar net debt target that includes thresholds for when we pay shareholder returns. We don't because we don't think shareholder return should be driven by what our debt is, but rather should be driven by what our performance is. That is why we instead have a guardrail of 1x net debt to cash flow at $50 per barrel WTI. That allows us to manage our leverage alongside how our underlying business evolves.

So as to specific timing, I would recommend you all take your view of commodity prices, even if it's a low one and run it through your models for the foreseeable future with a $500 million a month buyback and see how long that would last. That duration is what a rock-solid balance sheet and a top quality business can offer.

Okay. Well, I'm glad I asked that question. I think we got the answer. Rich, love the reflection with like a multitude of things you've already kind of come up with in terms of mitigation and how you're prepared for this. I know you're always thinking through things. Are there any other just observations, the earnings from the quarter operationally, whether it's upstream or downstream and how you're continuing to shape the company for resilience that you'd like to share?

Greg, you're cracking up quite a bit, but I think I got the gist of it. And I'm going to turn it over to Peter in just a second to use an upstream example. What we're seeing as we've institutionalize a high-performance culture in the organization, we can't always stop things from happening or things we can't control, but we can very much control we respond and recover when things off-plan happen. And I think the example of the rainfall is a good example in it that we stepped back and learned from that and just didn't accept what we were given and said, how can we change this outcome in the future? And Peter, you and I were talking yesterday, why don't you share a further example of what we're doing to learn as we go on.

Yes. Thanks for the question, Greg. I would say we've really taken the time to step back and understand what the learnings are from the significant rainfall events that we saw through the first quarter and really start to proceduralize even more our response to adverse weather conditions. Rich mentioned a couple of them in his comments there, but strategically placing stockpiles of ore in around the mine, strategically placing materials for road construction and support equipment to make sure our road networks come up quicker are just a couple examples of that.

We've also looked at implementing technologies such as drone technologies and overlaying that on some maps to look at where are we most vulnerable and where do we have to deploy our equipment more rapidly. And we've seen some success post Q2 in recent rainfall events where our response times are much quicker. Our ability to ramp back up to full production capacity has increased significantly.

And maybe one more example, Greg, we had talked about on previous calls, implementation of a Mud Mode in our AHS system in Base Plants. In fact, we've now moved to Mud Mode 2.0 and seen a lot of success in reducing the slippage events on the trucks as a result. In fact, the slippage events were down 80% relative to the initial version of this software, and that's -- I think that's a good example of the continuous improvement mindset that our teams have, working collaboratively with our vendors to be able to do that and deploying that at scale. So lots of learnings and pleased with the results in -- with recent performance.

One other thing I'll just add to that. Thanks, Peter. We have the ELT, I'm looking around the room, we have a text thread that we're we communicate with pretty continuously. We'll talk about everything from Flames draft picks to movie quotes to performance. And looking at Dave, as I say this, Dave will share with us a particular unit at a refinery that went down. And about the time I catch up with the text thread, he's already put another note in there, and we fixed it. We're back on at full rates again. It's just an organizational capability that rallies and focuses when something goes off plan to correct and rectify it ASAP. And we can give you dozens of examples of that are different today than they were at points in time in the past.

[Operator Instructions] And that will come from the line of Dennis Fong with CIBC World Markets.

And I appreciate the prepared remarks there, just around how you're managing through a very tough quarter. My first question Hartman back to the Investor Day, where you discussed thoughts around near-term growth as well as long-term resource development, but with like a large focus on value and volume. As we look towards scenarios where egress out of Western Canada have the potential to increase and increase quite significantly, how does that necessarily maybe shift or shape your thoughts around managing options to either accelerate development from some of your in situ opportunities at Firebag? Or how have your teams maybe found opportunities to showcase that same amount of growth, but maybe with like lower capital or more efficient deployment of that capital?

Thanks, Dennis. It's like you sat in on our Board meeting last week. You recall in -- on May -- or excuse me, March 31, we defined or describe that plan as largely within our control. It didn't need fiscal and regulatory reform. It didn't need new pipelines. This is something we had confidence that we could deliver and execute. Of course, it was underpinned by the large high-quality resource base, predominantly in situ. That gives us a lot of optionality.

We're very much embracing this design one, build multiple strategy approach for a whole host of reasons. But today, we're also looking at what's the right cadence of that. We have optionality to accelerate that if growth were to be valued by us and our shareholders. We're not -- we've not shifted to that mode at all, but we have that flexibility. Certainly, things in Canada have been more encouraging over the last year or so than the prior decade. But the beauty with us is we have the optionality to go at a quicker pace at a ramped-up growth if and when market conditions would say that is the right strategy. We're not there yet but we're paying very close attention to the signposts and doing some prework that would preserve our options to do that if we selected it.

Great. I appreciate that background. And I promise I was not sitting in your Board meeting.

You're welcome. You're welcome any time, Dennis.

I appreciate that. I want to ask a secure question just on regional integration. Clearly, through the second quarter, that benefited a lot of situations, and we'll call it avoiding, we'll call it the worst outcomes associated with the unprecedented weather conditions that you guys experienced in the second quarter. Can you talk towards, again, I know that's, frankly, a backbone and a staple of the way that you think about operating your assets. But can you talk towards, again, in light of the potential growth optionality and even maybe the increased demand for [indiscernible] or even solvent for some of the technologies you're planning to employ? Can you talk towards how that regional integration really helps drive, we'll call it, confidence in terms of your ability to execute on some of those operations?

I've been known to say corny slogans now and then there's integration, there's Suncor integration, and you hit right on it. And of course, it's the unique level of [indiscernible]. I'm looking down the table really, Peter, Shelley, Dave, you all can comment on this because it's how your operating committee, how you work day in, day out, maximize value. Peter, do you want to start?

Yes. Maybe I'll start by saying, yes, you're right that we did move a large amount of -- over 90,000 barrels around the region in the quarter that certainly helped to make sure we got the bitumen to those upgraders and maintain high upgrader utilization. Syncrude was a classic example of that, where we saw impacts due to wet weather conditions in the Syncrude mines. We move Firebag bitumen over and cut the upgraders running full. And that's really the name of the game. We -- having that operational flexibility for us, we now as a competitive differentiator, moving lots of Fort Hills barrels into the Base Plants as well.

Just to touch on the diluent side, we are fully integrated. We make our diluent at the Base Plant upgrader. We can ship it up to Firebag via a pipeline that's in place and operating today. We actually have a spare line in the ground as well today should we choose to scale up, and that will be one of our in-situ development projects that we're going to bring on here in the next couple of years. And so it's one thing being integrated on the bitumen side, being integrated on the upgrading side between upgraded products, but also on the diluent side, which will help our in situ operations. So yes, it's very handy to have as an operator when things don't quite go as expected.

Just to double down on that, the flexibility that provides us and the resiliency, market conditions, reduces our reliance on third-party providers and any operational upsets they may have that flexibility is just is tremendous, and you see it in our results. Dave, why don't you make a comment a little bit as well. And I'm thinking in terms of the integration of the upstream with Edmonton and the flexibility it provides.

Yes, absolutely. So we integrate our Edmonton refinery directly with our oil sands operations. We run a single what we call it linear programming model to optimize that. Think of that as a big AI tool that optimizes the region with the Edmonton refinery and all the way to our markets and to our export sales globally on our domestic markets. With that capability, we can do a lot of interesting things. One of those things is if there's an upset in the region, we can adjust the crude slate at Edmonton take some special streams to help keep the Base Plant operator full, for example, while Edmonton refinery is optimized.

We also have diluent processing capability. So if we're short of diluent, we can send some diluent up north. But more interestingly, we can run intermediate streams, special blended crudes to fill at the Edmonton pots and pans, and you'll see that in this quarter. Rich mentioned we had record throughput. We also had record sales. And you'll note that the record sales are much a much bigger gap than the record throughput and the difference, a large part of that difference is these intermediate streams that we ran to Edmonton refinery over the quarter. 10,000 to 15,000 barrels a day is our capability. We continue to grow that. And that really translates into pure diesel production that we sell really globally to our export markets around the world. So really from the oil sands, all the way to diesel sales in Europe and Panama and in Asia, we integrate this business.

So if we invited you inside our tent, what you'd see is operations teams driving the safety, integrity, reliability at an asset-specific level. But we've added as our performance has reduced variation elevated integrated teams that are continually looking at maximum value. Where molecules move, how do they compensate when we have an operational upset, again, the whole goal is maximize value. At an operational level, you can't always see that. But when you rise above it, you see the interconnectedness. And that is a difference today than the past. And you see it in our results, I thought Troy described it very well. The ratable, predictable nature that has less reliance on underlying market conditions. It's how we work.

One moment for our next question, and that will come from the line of Menno Hulshof with TD Cowen.

I'll start with a question on global product sales, which were clearly very strong and continue to increase. Where do you stand in terms of building out access to global markets? And would you frame this as a more sustainable improvement to the business? Or would you characterize it as being more transitory and largely driven by ongoing volatility in pricing for global refined products?

Thanks, Menno. I'll start and then Dave will comment further. The strategy we put in place didn't just start with the recent volatility in global markets. We had a vision a few years ago of a broader presence that could open up markets and open up avenues of value for us. So at our Investor Day, we talked about how a few years ago, we could sell in 20-some countries around the world, and now that's in the mid-40s. We have described how we've expanded our logistical capabilities with time charters on vessels, so we can move products in crude off the West Coast, products off of the East Coast. So it has been a several year in creation. And what you've seen now most recently, you've seen the benefits of that.

Dave, do you want to comment a little bit about particularly this kind of -- do we think there's a structural benefit here versus is this a one-off transient? And I'll tell you what the right answer is, but go ahead.

I think I know. Yes, Menno, I'll comment a little bit on our -- Rich commented on how we've been building out our trading platform over the last number of years, selling into multiple countries around the world. And I've commented before how we have unique capacity and capabilities to export off both coasts. So I'll talk about each coast separately.

Off the West Coast, we've been -- that is our terminal in Burrard. We rail and pipeline those molecules, almost all diesel from our Edmonton refinery, a highly competitive asset that can sell globally at competitive netbacks. We've been growing that logistic. Just to attention to detail, constraint busing mindset, the integrated team kind of optimizes our rail loading, our rail movements, our rail offloading. We blend that with the pipeline shipments that come in on TMX. We optimize vessel loading windows, and we maximize a sufficient logistic.

And with that, last year, we could do 3 to 4 cargoes a month on a good month, the end of last year and into early '26. Through that constraint busing activity, we've moved that up to 5 cargoes a month. And in May, we actually achieved -- in the calendar month of May, we achieved for the first time 6 cargoes a month. So yes, it is structural. We can continue to do more from that efficient logistics and that competitive asset base, and then we market that through our trading organization off the West Coast.

On the East Coast, we have similar capabilities. We have our new Perichem asset, which we can rail supply. We also have our Montreal refinery, which we can, what I call, orbit shift. We can decide how much of Montreal refinery supplies domestically versus exports. And the big story for Montreal in this quarter is our ability to export jet. Jet fuel, as you know, blew in the kind of late first quarter and into the second quarter. We recently started making jet fuel in Montreal really in the fourth quarter of last year and continued into the first quarter. And that was meant to be [ less than ] 5 kbd domestic sale opportunity that we would ultimately grow.

In the first -- in the second quarter, Nelson Couto from Montreal, he's production control coordinator in Montreal. He went out boots on the ground, walked the lines, looked around and said, I need to figure out how to export jet. What's the logistics that can do that and found a zero-cost opportunity to go export jet fuel out of Montreal. And we were able to then take a #1 diesel stream, which also meets jet qualities, convert it to jet quality and continue to export. So we exported 22,000 barrels a day of jet fuel out of Montreal. That's a structural capability that we can continue to do if the market is there. The market, at this time last year, that was 0. And our vision was less, was 5 kbd. So we're -- we can now do 25,000 barrels a day of jet fuel out of Montreal. So lots of opportunities there to continue that program.

So that's a long answer for both of us that says this is a structural change that will add value on an ongoing basis long term.

Terrific. Yes. And maybe second question is on the Commerce City refinery. In the past, you've suggested that you may not necessarily be married to it, but more recently, you've suggested that the asset is performing at a higher level and holding its own. So there's a couple of questions here. How much of that is stronger regional cracks versus fundamental improvements to how the asset is operated?

And then just in terms of refined product egress out of the Rockies, we're seeing some initiatives that point to improved egress from the Rockies to the West Coast. And how is that all dovetailing into how you're thinking about the longer-term fit for that asset?

Just for clarity, I've never used the word married on any asset. That's a very high bar. But we've talked about there's certain assets fit in the family photo. And make no mistake, Dave and I, a few years ago, went to Commerce City, and we took a photo and showed at landscape and portrait and said, if you want to stay in it, here's what you need to do and what you need to deliver. And that facility and that team has delivered, improving their performance, fundamental safety, operational integrity, reliability, cost discipline, still work to do, but they have changed their fate in a material way.

Now we also have some market benefits in our favor. But as we look at it, and we'll differentiate from that, we'll take the market, we can get it, but we really want to look at our underlying performance, and that facility's value to us has grown materially based on their performance, and we think that is also sustainable.

I don't know, Dave, if you have anything specific on egress or the Rockies to add to that?

Maybe just a couple of quick comments. So yes, Menno, you're absolutely correct. We've seen some -- with the growing short in California, particularly in the Los Angeles area, we're seeing refiners in that Mid-Continent kind of West Texas and into the Mid-Continent, find ways to move product towards markets that have historically been supplied by California refineries. We see that as constructive for Commerce City margins over time as that -- as those opportunities present themselves. We've also started our own ability to move product out of the region. We started rail loading gasoline, and we can move that to other markets outside.

And with that, we're seeing -- Rich mentioned, we've seen Commerce City turnaround performance. The first couple of years was really focused on safety and reliability. We had to get that right. And then in recent months, we've been focused on profitability. And pleased to say we set a record all-time rate at Commerce City back in June, and we think we'll beat that again in July. So Commerce City is looking like a pretty good asset at the moment.

One moment for our next question, and that will come from the line of Manav Gupta with UBS.

It's great to see that despite all the weather challenges that were thrown at you, you did not change your upstream guidance. And given your track record in the last 2 or 3 years, then most likely you'll still come in at the top end of the guide. So help us understand a little bit, should we model a very strong rebound in upstream volumes for the third quarter, given that you did not change your guide at all?

Our second half is typically when you get outside of turnarounds, the strongest time of the year, and there's a host of reasons, major maintenance tends to get behind us, weather -- so we expect a much stronger second half than first half, that's built into our plans. And in terms of guidance and stuff, I've broken down old athlete at half time, I've never given up on anything. And there's no reason that we should -- well, we fully expect that we will meet our guidance this year. And you noted in the last few years on the higher end of it, we have high expectations. So we expect a very strong second half.

We are absolutely confident you'll hit the top end. My second question is, I always appreciate your outlook on the refining macro. You have -- in the North America, you report strongest margins because you have an integrated business model. So can you help us understand what you're seeing in terms of refining macro out there and the sustainability of these cracks and how Suncor benefits from them?

Go ahead, Dave.

Thanks, Manav. You've said -- you mentioned sustainability. We've seen record cracks. We've seen sustained cracks. And we're seeing the refined product market really be much more resilient than the crude market to geopolitical news. It's largely a distillate story, diesel and jet. We've talked about how we've sold diesel and jet to markets around the world. Hormuz is a big piece of that, but also Russia. We're seeing Ukraine is continuing to be very proficient at taking out Russian infrastructure and Russian refineries are at greater than 20-year lows in output, and we took -- they took about 1.2 million barrels per day of diesel off the market with an export ban. So we see that continuing to be resilient for at least the medium term.

For Suncor, that our downstream business, we designed to win in any environment, but we sure like the diesel cracks. This is set up for our success. Our integrated model, as you talked about, can deliver the full value all the way to the customer. And we continue to grow diesel production preferentially over gasoline, which is also a good fit in this market. So we'll continue to leverage our trading platform to be flexible and sell globally around the world as well as domestically, and we're not done yet.

And we appreciate you raising the buyback again this year. Investors really appreciate that.

One moment for our next question, and that will come from the line of Doug Leggate with Wolfe Research.

Rich, I've got 2 things perhaps, some of -- one topic has already been hit already, which is growth. But if I try to frame it like this, some of your peers appear to be at least considering an acceleration in growth projects. You've obviously laid out your 100,000 barrel a day organic thesis through 2028. But I guess my question is not so much about individual projects or your appetite, but it's really more about the reinvestment rate. When you think about the appropriate level of sustaining capital and growth capital on top of that, how should we think about the reinvestment rate as the macro environment changes perhaps over time?

On growth, Doug, the way I would describe the things we're doing because of this resource base we've described, because of our design one build multiple strategy, we're doing preparatory work, whether that's shooting seismic, drilling delineation wells, so we have optionality. And that -- we were doing that candidly before the market disruptions of this spring. We're just doing that because we think that's good business.

And when it gets then to capital allocation, I hope we've increasingly demonstrated that we very much believe in a measure once cut twice. We are -- we're not only frugal, but very thoughtful on what we spend. And the model we've described how we see ourselves when we look in the mirror, this industrial machine like that has incredible resilience in kind of any and all business environments, the ability to deliver so you can become a foundational part of an investment portfolio. That's who we are.

So it's hard to see us maneuvering around reinvestment rates or capital year-to-year to chase a rabbit. We just -- that's -- we don't see that. We look longer term. We are -- you're talking to our -- I'm going to -- there's a few people that will hear this that I don't mean this, who it is you're talking to our corporate planning department right here. We look at oil prices over the last 25 years. They've averaged about $65 a barrel. We say, what are they going to average in the next [ 25? ] $65 sounds like a reasonable number. We plan our business on that. If we have more than that, we certainly enjoy it. We share it with shareholders. And if we have less than that, which we do, we're strong, resilient, and we don't have to slam on the brakes.

So we just -- we really spend a lot of time thinking about the business we're in and not trying to overreact or pursue the flavor of the day. I'm not sure if I got at your question a little bit, Doug, but I think it's important that when you think about capital allocation, you understand how we see our business because there will be a direct correlation between that vision and capital allocation.

I guess we'll wait on the strategy update or the Investor Day later for the year. But it's a great answer. My follow-up is, look, there's a lot of spot about share buybacks. And we know that share buybacks are means to an end. What we care quite honestly, more about on a business like yours is dividend growth per share, where buybacks obviously play a role. My question really is therefore, when you think about cash returns, you're really targeting that $38 breakeven number by 2028. What's the split in your thinking between the role of buybacks and the potential to raise that dividend more aggressively in the context of cash returns as opposed to just opining on whether buybacks are good or bad?

Fair question. I'll ask Troy to expand upon it here in a second. When we start -- as we went over the last 3 years from a low to mid-$50 of breakeven to the low to mid-$40s, we feel very comfortable where we are now that we are strong, resilient. The integration gives us level of less volatility in market conditions. So it becomes less about a specific number targeting. In the Investor Day, we kept with the same kind of vernacular to describe $2 billion increase in free funds flow, $5 a barrel reduction, but we're not wed to we're going to get to $38 or $39. We are wed to creating value in it. So the balance between how we return to shareholders, dividends or buybacks, it's not like it's absolute, but let me ask Troy to comment because we talk a lot about this. Troy, do you want to offer some additional insight?

Yes. Thanks, Rich. We do talk a lot about it. I mean our shareholders really have a diverse set of objectives. While the vast majority favor buybacks as their preferred method of receiving shareholder returns, some others have a preference for dividends or a balance of both. Now in my career, I found that keeping the most shareholders happy is generally the best path to success. So you can count on us monitoring both methods of returning cash to shareholders to ensure that each is optimized, including from a competitiveness point of view, so as to create the greatest demand for our stock.

And we like Doug to be happy too.

I think you know where we stand on this topic, but I appreciate the time.

Yes. And I think just one last comment on that. We don't have -- we're not governed by hard and fast targets, thresholds, rules. We want to be outstanding operational executives and outstanding financial executives. So we look holistically, we talk holistically, we engage our Board. And again, this is one of these kind of behind the scenes that you don't see, but it's not -- when we get to x, this happens, when we get to y, that happens. We really -- we think we're -- we can be better than that, looking at market conditions, our unique financial position, our competitive strength. And Troy said it well, we're trying to appeal to a very broad set because we think we can and should be that foundational investment for most any investor.

One moment for our next question, and that will come from the line of Patrick O'Rourke with ATB Cormark Capital.

Congratulations on a strong quarter there. Just wondering, I guess, you have a little bit of turnaround activity in the downstream unit in the third quarter here. Obviously, with the second quarter, we saw a bit of a push to strike while the iron is hot and despite challenging conditions, maximize to the extent possible output from the mines. I'm wondering when you think about the scale and the scope of the turnarounds here in the third quarter and where cracks are presently, what your flexibility around sort of your approach to that is in this environment?

I'll make a comment, then I'm going to look down the table at Dave. One of the things we have talked about from day 1, the importance of safety and operational integrity. And so we want to do the work we need to do to maintain our assets in the right condition. We don't want to do more, and we certainly don't want to do less. But we're also not looking at, okay, margins are high, can we slide this a year? Can we slide this 6 months? That introduces risk that we just don't think is prudent.

Are we looking at optimizing things? Certainly, but not any material movements because, wow, the crude price is high or cracks are high. So we won't change the oil in the [indiscernible], let's say, a month, we'll wait till next month. That's just not how we do things.

Dave, Peter, comment quickly on the third quarter, particularly in a frame of reference to, okay, the work we did in the second quarter, we had some pretty material things. How do you see the third quarter in terms of either scope and/or complexity relative to what we just accomplished?

Sure, I can start. So Dave here. For the downstream, we have 2 turnarounds planned. Montreal has some crude units offline in the third quarter. We would expect that to be a fairly minor scope of work, pretty typical turnaround activity. And I'd expect to do that in less duration than prior events, and we would set ourselves up for longer intervals going forward. On the Edmonton turnaround, that's cat cracker turnaround, those are typically fairly complex turnarounds, but the team is well prepared. They've met their turnaround planning milestones well ahead of schedule and have been optimizing that plan for the last 6 months. So we're in pretty good shape to execute that. We're going for flawless on that one.

Peter?

Yes. On the upstream, we have one major event left in the third quarter, and that is the Syncrude coker outage. It's -- I characterize it as a routine outage planned to start here August 20, planned for 50 days, and it's extremely well-planned event. All of our turnaround preparations have been going on for many months now. So we're confident that we're ready to execute that. And the team has obviously got some stretch targets that they're shooting for in that event. So look forward to that.

More work to do in the third quarter, less overall than the second quarter. Our confidence in our preparation and expectations on execution and success are extremely high, and that positions us for what we believe will be a sprint in the second half of the year to deliver outstanding results.

Okay. Great. And then maybe this is a broader strategic question. You kind of touched on this a little bit. But in terms of the growth opportunity, the MoU, the trilateral MoU, what needs to happen there? And then if this opens an opportunity whether you need to underwrite a pipeline to access growth or something of that nature, how prepared would you be to sort of push forward or accelerate some of this future growth if it's sort of a window of opportunity there for Suncor?

For those that aren't as familiar here a month or so ago, 5 oil sands companies is the alliance. We signed this nonbinding MoU with the federal and provincial government. It outlined kind of shared ambitions around carbon policy, expanded market access and the fiscal and regulatory conditions that would be required to attract capital and incent growth. There's a lot of work to do to turn this 9 nonbinding set of ambitions into definitive agreements. And as I said earlier, it's a very different mood and tenure today than it has been in the past. So we're encouraged by that.

But in terms of how it may or how it has or may affect our plans, that's still to be determined. I would just echo, Patrick, a little bit of some of the comments I said before is we look at the business long term. We want to be very thoughtful on long-term commitments and capital allocation. If there's opportunity for selective high-quality globally competitive growth, our shareholders value it, we see it. We have the ability to pursue it, but it -- our position today isn't materially different than it would have been 6 months ago on the outlook. We're still in the -- let's just see where things go.

One moment for our next question, that will come from the line of Neil Mehta with Goldman Sachs.

The offshore results were really good this quarter, Rich, and it's not something we tend to spend a lot of time on these calls talking about the E&P business. But just curious on your thoughts around the sustainability of sort of that strength in production and you got West White Rose kicking in. Anything that stands out to you in the E&P side?

Certainly, we have seen the benefit from the market environment. Those assets generally are pretty -- in aggregate, are relatively low cost overall, certainly, Hebron and Hibernia. You've seen it much like the Commerce City story, we've seen tremendous turnaround in our performance at Terra Nova and the contribution that it has. So they have been a big part -- on a relative volume basis, they've been a big part of the contribution. We expect that to continue.

There's -- at West White Rose, there's still drilling activity and what the resulting production is to be determined on it. But although they are a smaller part of our percentage in terms of upstream production, we've been quite pleased with how that East Coast that overall set of assets has delivered, particularly in the current business environment.

And the other one is just on Petro-Canada. I know there's a retail growth focus here as we think about other economic investment in your capital budget. And so just update on how you're thinking about that business? How would you characterize it as something that has synergies with the rest of the company? And how do you see it scaling over time?

Several years ago, the plan was put together for the retail side, and we believe in delivering on commitments when we established plans. So Dave and I rigorously steward that plan and that team has been delivering on it. And one of the things I'm excited is they have been delivering on it in the last, particularly about 1 year, 1.5 years at lower capital than we originally had envisioned. They're just finding new and creative ways to deliver value through partnerships, other people's money.

And as we've asked the entire organization to bring about more capital discipline and rigor focus on things, they've been subject to the same scrutiny. Nobody gets blank checks around here just because it has been put in place at a point in time. In the market, we've seen this year, in particular, the ability to run our facilities at full capacities, knowing in the vast majority of scenarios, we have comfortable homes for those volumes, whether those are retail. Our retail now, Dave, remind me, it's above the pre-COVID levels, our retail sales. That is our most profitable product.

So they are there -- in that family photo, I got my wife on one side, my grandson, Tommy, on the other. Petro-Canada is pretty clearly in that photo. And as long as they keep delivering, they'll be right there with their big grin and smile.

I'm showing no further questions in the queue at this time. I would now like to turn the conference back to Mr. Adam Albeldawi for closing remarks.

Thank you, everyone, for joining our call this morning. If you have any follow-up questions, please don't hesitate to reach out to our team. Operator, you can end the call.

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

Good day, and thank you for standing by. Welcome to the Suncor Energy First Quarter 2026 Financial Results Call. [Operator Instructions] 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 Senior Vice President of External Affairs, Mr. Adam Albeldawi. Please go ahead.

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 described in our first quarter earnings release as well as in our current annual information form, both of which are available on SEDAR+, 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 first quarter earnings release.

We will start with comments from Rich Kruger, President and Chief Executive Officer; followed by Troy Little, Suncor's Chief Financial Officer. Also on the call are Peter Zebedee, Executive Vice President, Upstream; Dave Oldreive, Executive Vice President, Downstream; and Shelley Powell, Senior Vice President, Operational Improvement and Support Services. Following the formal remarks, we'll open the call up to questions.

Now I'll hand it over to Rich to share his comments.

Thanks, Adam. Our first quarter was about maintaining momentum following a very strong 2025, and that is exactly what we did. Troy will cover financial performance, and I will focus on what we can control, operational performance, starting with a quick comment on safety, our highest priority. I'm pleased to report the first quarter represented best ever performance in process safety as our teams navigated the often harsh conditions of a Canadian winter.

Moving on, upstream production, 875,000 barrels a day, our highest first quarter ever and our second highest quarter overall on record, only exceeded by the fourth quarter of last year. 22,000 barrels a day higher than our previous best first quarter, which was last year, achieved with Fort Hills at a record 187,000 barrels a day, higher than the quarter a year ago. E&P at 76,000 barrels a day was 14,000 barrels a day higher year-on-year and our highest quarter since our North Sea asset sale in 2022. Lastly, Firebag, our large high-value in situ, continued near record rates at 247,000 barrels a day.

Despite these results, it could have been better. We were negatively impacted by 14,000 to 15,000 barrels a day due to a natural gas curtailment from a third-party unplanned outage. Fortunately, the issue was resolved with production restored by the end of the quarter.

Upgrader utilization, 96%. Here again, good, but it could have been better. An unplanned decoke of Syncrude's 83 coker following the discovery of cracked valves on the reactor with temperatures approaching minus 40 degrees C. On an abundance of caution, we shut down the unit, completed repairs and had it back online in March.

Reflecting back over the last 3 years, first quarter production is up 133,000 barrels a day, no costly acquisitions, no major new start-ups, simply performance. Refining throughput, 498,000 barrels a day in the quarter, again, our highest first quarter ever and our second highest quarter overall, only exceeded by the fourth quarter of last year. 15,000 barrels a day higher than our previous best first quarter, which was in 2025.

All 4 refineries exceeded last year's quarterly throughput. Edmonton, our #1 moneymaker, maximized distillate and achieved best ever throughput of 160,000 barrels a day. And Montreal introduced much needed jet fuel into the market and also achieved a best ever quarter at 155,000 barrels a day. Refining utilization, 107% on our previous 466,000 barrel a day capacity or 97% on our new 10% higher re-rated capacity of 511,000 barrels a day as communicated at our recent I-Day.

Excluding our Commerce City refinery, which undertook its spring turnaround, our network averaged a 100% on the higher re-rated capacity led by Edmonton at 101% of its new capacity. Over the last 3 years, first quarter throughput is up 130,000 barrels a day, no costly acquisitions, no expensive new projects, performance.

Product sales, 681,000 barrels a day, our highest quarter of any quarter ever, 34,000 barrels a day higher than our previous best, the third quarter of 2025 and 76,000 barrels a day higher than our previous best first quarter, which was last year, achieved through a strategic shift starting in the second half of 2023. Previously, we were value over volume. Now we're value and volume. Challenging ourselves to not only place more total barrels into the market, but also place more barrels in the highest value chain within the market.

To illustrate, Petro-Canada retail volumes, Canada's #1 brand were up 9% year-on-year. After never achieving 600,000 barrels a day sales in any quarter, we've now exceeded 600,000, seven quarters in a row. Over the last 3 years, first quarter product sales are up 166,000 barrels a day or 32%. No costly acquisitions, no expensive new projects, again, performance.

So how are we continuing to establish record results period after period through crystal clear priorities, ambitious daily, weekly, monthly, quarterly performance targets, collaboration and teamwork, applying best practices, focusing on value and by recognizing and rewarding our teams when they deliver. Our continuous improvement is not limited to a select area or two. It's across the board, systematically raising the bar, delivering higher, more reliable, more ratable operational performance and with that, higher, more reliable, more ratable cash flow.

I'll share an example, a recent example of our teams adding value. We've described how our Fort Hills plant has capacity above its nameplate with stream day capacity of about 220,000 barrels a day versus an original design basis of 194,000. During our recent I-Day, we detailed how we will monetize this capacity over time, increasing annual production from 175,000 barrels a day in 2025 to 200,000 in 2028. However, for our teams, that timing wasn't good enough. As a result, in late April, we negotiated a commercial agreement with Syncrude's owners, whereby Fort Hills purchases ore from Syncrude's Aurora mine and processes it at spare Fort Hills plant capacity. Everybody wins Fort Hills, Syncrude, the province of Alberta Royalties and with Suncor on both sides of the deal, we win twice.

Incremental volumes, incremental value in today's price environment. We moved the first load of ore literally before the ink was dry on April 29, an example of today's Suncor, operationally excellent and commercially opportunistic.

The nonoperational highlight of 1Q was on March 31, our I-Day in Toronto, with the agenda as follows. First, we talked about today's Suncor, how the company has been rebuilt to compete and win with superior performance in safety, reliability, cost management and volumes. And the delivery of our 2024 I-Day commitments in 2 years versus a plan of 3, a 114,000 barrels a day of upstream production growth over those 2 years and a 10% higher refining capacity. $10 a barrel, reduction in our corporate breakeven and more than $3.3 billion per year in incremental free funds flow. The day continued with the theme of we're not done yet, outlining an ambitious set of new commitments over the next 3 years, another 100,000 barrels a day of upstream production growth, a further $5 a barrel reduction in enterprise breakeven and an additional $2 billion a year in free funds flow.

Then the long anticipated topic of our long-term oil sands outlook where we detailed our large long-life, high-quality reserves and resource base. 2P reserves of 7 billion barrels, the longevity with a 25-year reserve life, contingent resources of 30 billion barrels, literally a century of development opportunities and a 11 billion barrels or 60% higher than our last assessment a decade ago, contained within 22 billion barrels of high-quality in situ adjacent to existing assets, commercial with today's technology and expected future prices with the entire assessment validated by third-party independent experts.

Development plans. We discussed standardized modules, design one, build many, focused in the resource-rich corridor south of Firebag and east of our base plant, all 100% Suncor owned with regulatory approvals in place. We highlighted extensive regional synergies, synergies unique to Suncor, providing lower capital costs well below greenfield development. Sequence to maximize efficiency and capture lessons learned, a 400,000 barrels a day portfolio at an average capital cost of about $30,000 per flowing barrel.

But the best part, we described how all barrels are not created equal, quantifying the structural shift over time from mining barrels to in situ with cash flow per barrel of in situ roughly 2x mining's current level, a resulting outlook of long-term value growth with moderate volume growth.

Finally, we detail what's in it for our shareholders, double-digit annual growth rates in free funds flow and free funds flow per share, increasing cash returns via dividend growth and ratable buybacks and importantly, achievable in a $65 a barrel WTI environment with upside if prices are higher.

Bottom line, we have a clear definitive plan to compete and win short term and long term, plan built around what we can control and what we can confidently execute and a plan coupled with high performance that we believe offers a compelling value proposition, ensuring Suncor will stand on the podium in any and all business environments. Delivering reliable, superior shareholder value, a must-own oil and gas stock or a foundational building block for any investment portfolio.

With that, I'll turn it over to Troy.

Thanks, Rich. We ended the first quarter in a very different place than where we started with March's average WTI price being 50% higher than January. For Suncor, this is exactly the environment we're built for. Our integrated model was constructed to capture opportunity when others cannot.

Our Q1 financial results reflect that. $4 billion in adjusted funds from operations, up $1 billion or 32% year-over-year. $2.9 billion in free funds flow, up $1 billion or 53% year-over-year. And we returned $1.5 billion to shareholders, $825 million in buybacks and $712 million in dividends. And that doesn't reflect the increase in our buyback on April 1 to $350 million per month, the second increase since last November.

Rather than walking through our quarterly report, I will focus on a few specific items. Let me start with downstream margin capture, an area where our business results are differentiated this quarter. Our 99% capture will likely be a surprise to many in a rising crack environment, where it's often difficult to fully capture increases in real time because of lags in market pricing response. The strong margin capture this quarter is a testament to the great work by our sales and marketing and supply and trading teams who took advantage of market dislocations in real time, in particular, in export markets.

In March, for instance, we were able to capitalize on our existing trading relationships in 45 countries to send diesel and jet to places like the Philippines and Puerto Rico, both at significant premiums to market pricing. We have spent years building out the logistics and commercial capabilities to act on opportunities just like these, and that investment paid off meaningfully this past quarter.

Moving to our balance sheet for a moment. As you would have seen, Q1 included a working capital build of $1.7 billion. almost all of which was directly related to the strong positive move upwards in the business environment in March. At the end of Q1, our accounts receivable and inventory balances stored significant amounts of cash from higher prices, a lot of which has already been released to us in the past 2 weeks through the normal industry settlement cycle.

Recall that working capital is a tool that Suncor uses to drive returns in our downstream. Sufficient inventories in the right place and at the right time can provide opportunities for our supply and trading colleagues to take advantage of margin opportunities that others cannot. So we manage our working capital very tightly, but with a view that we don't want to miss solid business opportunities. This working capital increase contributed to a temporary increase in our net debt of $500 million versus Q4 2025 despite much higher free funds flow, again, driven by the timing of the normal settlement cycle. We remain very pleased with the current state of our balance sheet, continuing to be significantly within our guardrail of 1x net debt to cash flow at $50 per barrel WTI.

Turning to capital allocation. Let me be clear about how we think about returning cash to shareholders. We believe that a steady growing base dividend plus consistent ratable buybacks provides long-term investors with a predictable framework they can count on through the cycle. Supporting this ability to deliver consistent cash returns to shareholders is a world-scale, long-life, high-quality resource base with no exploration risk, an integrated model that delivers through all cycles and a clear phased plan to develop our assets and grow value while maintaining capital discipline.

The recent increase in our buybacks to $350 million per month wasn't a short-term reaction to recently improved market conditions. It reflected our confidence in the business plan that we put forward in our Investor Day.

Let me close with a discussion around profitability and long-term repeatable earnings power. You are all familiar with the reduction in our breakeven of the last 2 years of $10 per barrel. These reductions make Suncor highly resilient in lower commodity price environments. What is perhaps not as well understood is how the improvements we have already made have even more impact in a high commodity price environment.

As an example, if we applied the business environment of 2022 when we last saw a strong commodity price environment to an annualized Q1 2026, today, Suncor would generate the same AFFO or higher at oil prices that are over $15 per barrel lower than 2022, assuming all other pricing was consistent with that year.

So we are not just well suited amongst our competitors in a lower commodity price scenario. We are also positioned to capture significant value at higher prices also. And this will only grow as we continue to improve further in the years ahead, in part driven by our structural move towards higher-margin in situ production.

Bottom line, this quarter again demonstrates the strength of Suncor's uniquely integrated model, strong operating and financial performance, delivering reliable value to our shareholders.

With that, I will turn the call back over to Adam so that we can take some questions.

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

[Operator Instructions]

And our first question will come from the line of Greg Pardy with RBC Capital Markets.

Rich and Troy, you've both delved into the downstream, how the dynamics are changing and how you're running that business. So the question is almost like twofold. One is if -- is 680,000 in the first quarter in terms of refined product sales, that certainly looks very conservative vis-a-vis what your annual guidance looks like. But perhaps more important questions are around what's going on in terms of maybe your -- how much market share are you capturing domestically, do you think? And then does the international hold that much more promise? I'm just trying to get a better understanding what the dimensions of that refined product sale number could look like going forward.

Yes, Greg, I'll offer -- this is Rich. I'll give you a quick comment or 2, and then I'll ask Dave to comment more fully. As we've evolved this kind of -- I refer to it as a strategic shift over the last few years, we're -- it's still a work in progress. We are continuing to find ways to add and create value and it's underpinned obviously by refining performance but it further integrates into the distribution logistics. On Investor Day, we talked about how a couple of years ago, we had reach into 20-some countries around the globe. Now that's 45 countries. So this is a strategy that continues to develop and unfold. And with it, you're seeing the higher sales volumes. Clearly, there were opportunities in the market that also created value for us to the point of, for example, we were able to buy competitors' volumes on the dock or at a tailgate and then turn around and because of our unique capabilities, deliver it with material uplifts. So I think it's a little bit less of characterizing that outlook as conservative. And really, it's more about our teams continue to aggressively pursue and capture value, and that is resulting in higher volumes.

Dave, any comments you'd add on to that? I know I gave a mouthful there.

You had quite a bit of it. Greg, maybe I'll just comment on the sales number specifically. I think about the sales is where did the volume come from and where did it go? Because you got to produce it to sell it and then we have to find the right channels to sell it. So where did it come from in the first quarter because we did hit a record plus throughput. Throughput was up versus first quarter prior year. That's pretty obvious. We also had some non-crude inputs, custom blends, particularly into our Edmonton refinery, which created more products for us to sell. We'll continue to do that going forward. So I think there's some good news on that.

We drew some inventory, and that's really -- as Troy talked about, we had a pretty unique market present itself in March, and we took the opportunity through to scale up our logistics systems on export to capture margins that were uniquely more profitable than Canadian alternatives. And that's kind of our commercial intensity, our ability to be flexible and our superior trading skills allowed our team to do that.

And just as an example, our Burrard Vancouver dock is where we do most of our West Coast diesel exports. And that's our most profitable logistics and lowest cost logistics option for exports. We did 14 cargoes in the first quarter. That's compared to 28 cargoes in the full year of last year. So we've been able to scale that up to capture a pretty unique opportunity. I'd expect us depending on where the market goes to have that ability going forward.

Yes, that's terrific. Maybe just to shift into the upstream. And Rich, I know there's a big, big focus, obviously, moving ahead in terms of the shift towards in situ and the better netbacks and so on. But if you come back to Fort Hills, you're through the remediation plan. I hear you in terms of what you're saying around increased volumes and higher plant utilization. But with the streamlined move into the north pit then, is there a unit cost reduction story that will begin to take shape potentially in '27 '28 beyond the volumetric numbers you're talking about simply with the plant?

No doubt about it. And again, I'll have Peter comment a little bit more fully. If you dial the clock back, and I guess it was about 2 years ago now, when we had the 3-year, we called it the recovery plan at Fort Hills. It had a premise of getting up to 175. But a change we made in that was not explicitly to the recovery plan years 1 through 3, but it was years 4 through 44, where we said opening 2 pits in the north will make -- will create more value over the long term. And so what we shared with the market, there were some incremental capital costs as we bought some new equipment, trucks and shovels. And then we said, we appreciate your patience because you won't see that bend in the unit operating cost until we put that -- those 2 mines in play. So I think that outlook remains the same. It's just -- it was a bit deferred from what we would have earlier characterized in the recovery plan.

Peter, though, you want to comment more generally about Fort Hills, your progress priorities?

Yes, I would say our short-term focus, Greg, is to fill out the Fort Hills plant through the use of these incremental volumes that we're getting from Syncrude Aurora that will also directionally support reducing unit costs given the denominator is going to increase. Longer term, as you said, our focus is opening up North Pit 2. We expect the first ore from North Pit 2 to come in the first quarter of 2027. And as that North pit opens up, and the mining volumes reduce due to reduced stripping, we do expect improvement in unit cost in that '27, '28 time frame.

So Greg, between the 2 of us, that was a long answer to yes, we expect to be driving down unit costs as we put all the building blocks in place at Fort Hills.

One moment for our next question. And that will come from the line of Dennis Fong with CIBC.

The first one for me, Rich, is you've alluded in the past to the flexibility around your base plant upgraders as providing "crafted cocktails" to some of your customers and differentiating your offerings versus other peers or competitors. Can you talk -- you and the team talk about the opportunities this affords you in terms of improving profitability, especially in this obviously very tumultuous commodity price environment. And that's mostly from the upstream, but I also recognize that there's opportunities in the downstream as well.

Thanks, Dennis. It's a good question in that because we actually benefited from that materially in the first quarter with the unplanned decope at Syncrude and then being able to move product across to the base plant. But Dave, I really why don't you even comment explicitly about our ability to continue to feed, for example, our Edmonton refinery with -- had a record refining result and yet it works off -- its appetite is pretty heavy synthetic crudes. And despite disruptions in our upstream, how we kept that thing full and that craft cocktail concept, how we're putting it in practice.

Yes, absolutely. I think Edmonton is a great example. And I alluded to this in the last question around the non-crude feedstocks into Edmonton refinery. These are these craft cocktails that Rich likes to talk about. Edmonton was a clear example of the value of our integration in the past quarter. We highlighted in Investor Day that we made some changes at Edmonton to improve diesel yields. Small investment, $100,000 that moves to add piping, to modify gas oil hydrotreater, so we could pull diesel off the gas oil hydrotreater.

What that did is gave us a 16,000 barrel a day diesel yield increase, but it also allowed us to have spare capacity in our gasoline producing assets. With that, we were able to take these craft cocktails from the base plant, run those directly into the secondary units in Edmonton and not only get the diesel yield uplift from the first part of that project, but we were able to incrementally run more rate at Edmonton of non-crude inputs, these craft cocktails of about 9,000 barrels a day. So 160 record rate at Edmonton, we actually were about 169 of inputs, and that allowed us to have great yields as well as improved volumes. So it's just a great example of Suncor integration coming together to improve not only reliability volumes as well as yields in our refineries.

One other comment I'd make, too, is much like the downstream Dave refinery by refinery and the re-rate we had last year, we've been working hard to determine what are the physical capabilities of our upgraders. And last year, we ended up at 99% for the year. And I'm smiling over at my partner over here, Peter, because if he'd had been 99.5% or higher, I would have said, okay, it's time to re-rate those beasts. So even though we ended up 96% for the quarter overall, and we've described that as something that we left something on the table. We were disappointed in that. The base plant was well over 100%. And so we have capacity there. And the same philosophy we've applied to all of our facilities is determining that limit. What can we do to further extend that limit safely, reliably. We're doing the exact same thing in the -- across the upstream and seeing similar results.

Great. Really appreciate that color and context from the entire team. My follow-on is on Fort Hills here as you kind of answered my question about the -- or my question on the upgrader throughput for the quarter. At Fort Hills, and I appreciate the context around, we'll call it, regional integration with proximity to Aurora north mine site. How does this opportunity set help maybe adjust mine progression, mine plan and the ability to manage both, obviously, the higher fines content resource to the Western edge as well as the opportunities to, we'll call it, optimize and push beyond the 220,000 barrel a day productive capacity at the facility.

Peter?

Yes. Thanks, Dennis. And obviously, this gives the Fort Hills team and the Aurora team, frankly, more degrees of operating freedom in terms of blend management, as you said, managing out the right blends into the Fort Hills plant to optimize bitumen recovery. I would say we are -- our mine plans for the development of the Fort Hills mine remain the same today. This is essentially a shorter-term opportunity that we're taking to fill out the Fort Hills plant, and then we are going to transition to full Fort Hills volumes in the coming years. We will obviously look for opportunities to reduce operating costs, stripping volumes, et cetera, should those be warranted by the use of these incremental volumes. But for now, the Fort Hills mine plan remains as intended.

I'd just add to that. The vast majority of our assets in the region are certainly operated and 100% owned. Syncrude is the exception of that. But how we look at it is we look at it is what's the economic maximization or optimum across it. And we try not to get fussed with that ownership. And then when we see an opportunity, we work it with the partners via a commercial solution. And this ore transfer is an example of that, where there can be more value created by doing that than if we each just stuck with our own individual assets and kept them separately. And that mindset has been a huge part of our story over the last few years of optimizing Suncor the whole and not a series of individual assets.

One moment for our next question. That will come from the line of Neil Mehta with Goldman Sachs.

Rich, one micro question and one macro question. So the micro question is, can we spend some time talking about your favorite child Firebag? And specifically, what are the things that you're watching here over the course of this year to see if it stays in your good graces?

It is. It's got a place in my heart that lasts a long time, decades, I'm sure. Peter just literally got back from there yesterday. We're in the middle of our spring turnaround, and we've described that as that's a pretty big event for us this year. It's the biggest turnaround Firebag's had for a while. It's a key part of the volume story, and we're what, Peter, a few weeks in right now. And we never declare victory until the whistle blows, but things are going quite well. And that asset, in particular, its size, its quality, the expertise we have on the technical and operational personnel, whether that's looking at improved drilling techniques, whether that's looking at expanded solvent applications, steam reliability. It just -- it's literally a playground of opportunities. And with the quality of the people we have and the focus they've been providing, we keep seeing ways to make it better.

In Investor Day, we talked about growth from some of the near-term priorities, infill drilling, the ultimate use of noncondensable natural gas, but it doesn't stop there. We're looking at what are the limiters in any particular piece of equipment or ongoing debottlenecking. And even though it was just literally a month ago or 5 weeks ago that we put out an Investor Day plan, that just is a point in time. And we're already looking at avenues to go above and beyond and add value. And those are things we'll talk about over time, but I really, really love all my kids. I just happen to love a few of them, maybe a little bit more at times and Firebag sitting there right on my knee getting all my attention.

That's great. Was there -- Peter, was there anything you want to add from your recent trip?

Well, yes, sure. A couple of things, Neil, I spent some time with the Firebag team yesterday. We're right in the midst of our spring turnaround, as Rich mentioned. It is our single biggest opportunity this year to deliver above our plans. The team is laser-focused on bringing that turnaround in on schedule, on budget. It's going extremely well. So that's kind of job one at the moment. And then secondary to that, to the second biggest opportunity for us is to continue drilling out these sidetrack wells that we have in inventory at the Firebag site. We plan to do 20 of them this year. Again, these are just producing wells. So high-return wells, quick returns for us. And the pads team is out there actively working to bring these online.

Neil, we haven't talked a lot about it on this call, but we're in the midst of kind of the 2 big upstream turnarounds for the early part of the year at the base mine and Firebag, and we anticipate that those should be wrapped up before the end of the second quarter, and that will position us for the kind of the typical second half of the year sprint that we do in our business. And then if I flip to the downstream, Dave has had in the first quarter, he had work at both Sarnia and Commerce City, which are now largely behind us. And he's got pretty clear sailing until late in the third quarter before we do some work in into Edmonton and Montreal. So we -- it's focused on getting that planned work done over the next several weeks. And then thereafter, it's getting -- it's that sprint that really delivers in the second half of the year, and we're right on target to do exactly that.

Yes, Rich, as a follow-up to the macro, I mean, you've been in this business since what, 1981 when you started with Exxon. And so -- you still look younger than most of us. The question that I guess a lot of us would love to get your perspective on is put this moment in time in history where we're dealing with tremendous volatility and there's a lot of geopolitical risk and we're moving headline to headline. What do you think are the long-term implications of the current conflict? And does that change the way that you think big oil should be thinking or running their business? Or do you stay the course?

Well, one of the benefits -- one of the few benefits of getting older is you do see things in perspective a little bit. And obviously, this is just the fundamental nature of a global commodity. We've got ups and downs in the cycle. And we've seen those before. I would say that each of them have a level of uniqueness and this one has even more uniqueness. I think the fundamental question is, does it reset? Does there become a geopolitical premium or something on security of supply? I would also say, though, that in our business, given the long-term capital-intensive nature, I think the best companies over time don't overreact to what could be short-term phenomena either in the upside or the downside.

And I think the plan we put out in Investor Day gives us a rock-solid value-creating plan. And our vision today is that we will march along that plan and continue to deliver on it.

If, as time goes on, the dust settles, we determine that we're in a different world in a more enduring basis than we perhaps were a few months ago, we'll reexamine those. And I think what we shared with Investor Day, we have material upside potential to do more if the world calls for that. But I don't mean to make light of the current environment.

But at Suncor, we are acutely focused on what we can control and delivering on it. And in times like this, I think Troy described it well. You really see the synergistic effects of the asset base and the organization we've built in times like this, whether prices are going up, whether they're going down or whether they're stable, this company is built to deliver, generate cash in any and all of those environments. So kind of a long answer, Neil, to very, very interesting in it, but we are continuing to focus on the plans we've already laid out.

One moment for our next question. And that will come from the line of Patrick O'Rourke with ATB Cormark Capital Markets.

Congratulations on another strong quarter here. Just going back to the refinery business downstream here. just taking a look through some of the numbers, one thing that stood out to us was the sales to throughput ratio, the sales to refinery output ratio. And we've seen sort of a bit of progression of that over the past couple of years, and I realize it will ebb and flow a bit. What's sort of the outlook for squeezing some incremental value out of this for the rest of the year?

Patrick, this is a really cool question. And the reason it is, is we spend on these calls and things, we talk so much about crude unit throughput and utilization, and that's kind of the barometer that we use. But as we all know, it's -- there's more to it than that. There are other dimensions of ability to add value. So Dave, why don't you talk about as your team has maximized the utilization of the crude units, what you're also doing and some of the impacts you're having in other areas?

Yes, for sure. And we talked about a little bit of this already. Retail growth is part of our sales story and where did the volume go. We talked about the export channel that we've maxed out to capture the market and the non-crude inputs into the refineries. All of that really does contribute to the growing sales, not only growing sales, but growing sales through some of our best channels. One -- maybe I'll give another example of what we've been doing in the last couple of quarters is jet fuel in Montreal. In December of last year, we started making jet fuel in Montreal as that turned out to be pretty good timing to start jet fuel for the first time.

That -- we're at lower rates now, but that has the potential to grow up to 16,000 barrels a day of jet fuel production. And the original plan was to sell that domestically into airports in Montreal area, a little bit into Ottawa. And then we saw this unique market blowout in the first quarter and continuing into the second quarter where jet fuel became pretty short in certain markets.

Team in Montreal was able to work across our -- really through our whole value chain to come up with a logistics option and quality certification to export jet. And we were able to sell jet, as Troy mentioned, into the Caribbean at $10 or $15 a barrel above our alternatives, which was pretty awesome. And then just last week, we certified our jet fuel to sell into Europe and has some pretty unique quality requirements, and we sold our first cargo into Rotterdam last week. So that's where some of the sales are going, where we're upgrading the value chain and using our unique logistics and flexibility to try to capture value.

Just maybe comment -- one other comment, too, on the -- what we refer to as more explicitly the secondary units. And I know you're kind of hitting on that, but I guess I'm asking, but I'm kind of answering. The same priority and focus Dave and Peter's teams have been putting on asset utilization where we've made investments, they don't stop at just the headline units, the upgraders, the crude units, they apply into each and every asset. And when there is spare capacity that can create value, we just don't talk about those smaller assets or smaller components as much, but they create value, and they give us optionality and flexibility, whether that's custom cocktails coming out of the base plant or whether that's creating value in the downstream. And this is a part of why I think you see when -- for at least a few quarters in a row, you see, okay, they kind of -- they got a little bit of a beat on volumes, but they got more of a beat on value, and that is not done yet.

Absolutely. Okay. Great. And then I know you just sort of give your philosophy there in terms of not overreacting to strength in the price or weakness in the prices. But when we take a look at things, net debt in the quarter, even with some working capital build at, call it, $6.8 billion, you've got the $10 billion net debt target. How do you think about timing and how you sort of release that to the equity shareholder? Or is this -- that spare capacity between where you are now and $10 billion just sort of a rainy day fund for now?

Troy, do you want to comment on it?

Yes, sure. Patrick, so obviously, the first thing we're going to look at is what our expected cash flows are for the year. And obviously, those have been significantly impacted by the change in business environment. But the second thing we do is we look at the sustainability of any change in our buyback, wanting to offer something to shareholders that others can't replicate, which is consistency. So while we're absolutely going to be responsive to market events, we do actually want to remove as much variability as we can because we've actually removed a lot of variability from our business results. So it's really just a question of timing and an attempt not to be procyclical.

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

I wanted to run on the theme of we are seeing a lot of interest from the U.S. refining side on pipelines, which are coming out of Canada given the current geopolitical situation. There's also a news article circulating that there's another pipe project, which could have secured minimum level of commitments to move ahead. Can you talk a little bit about the incremental egress capacity that is coming out of Canada and why U.S. refiners would really benefit from getting more Canadian crude into their refineries?

Yes, Neil, thank you. The -- fundamentally, the U.S., if you just look back over the last 15 years or so and the whole U.S. energy situation has changed so dramatically, whether it's crude or gas. But there's fundamentally a mismatch in the U.S. of the crude they produce and the crude that they refine. Now that's not everywhere, but there's a large mismatch. A lot of the U.S. refining network has been designed and geared and rebuilt over time for heavy crudes, and that's what we provide.

And my personal belief is that North America is a better, safer, stronger, more prosperous region when we optimize across the energy network. And just like we've talked about how maximizing the utilization of existing assets, debottlenecking, low-cost expansions, the exact same philosophies apply on these logistics systems.

When you can incrementally add a capacity on an existing pipeline, you can typically do that faster and much cheaper than building new. So I think this is a natural evolution. I think it's economically rational to keep looking at where we can expand existing capacities.

In Canada, we also have that now increasingly to the West with, like TMX, how can that further debottleneck and get more capacity. And those would be the fastest, cheapest ways to move more crude or more products to customers. So we're quite supportive of those initiatives.

My quick follow-up is here on the capture, which was pretty strong, 99%. I think it was flat versus the same quarter last year and probably just like 100 bps or 200 bps lower than the last quarter. I'm just trying to understand, as the cracks spike, what are the challenges of keeping capture elevated at higher cracks level? If you could talk about the headwinds and tailwinds to the capture for you as a system?

Troy briefly commented on that in his comments. But Dave and/or Troy, why don't you both take that one?

Sure. And I think it's really -- Manav, it's a summation of some of the comments I've already made. We have been able to be nimble and move quickly to capture market opportunities, not just domestically in Canada, but really globally. And that is a unique advantage that we have in Suncor. So that -- I see that continuing to be something that we can continue to do and not create a particular headwind. In terms of yields, we've improved our yields. We've improved our rates. I would see that continuing through the quarter. We'll see maybe a little bit of noise around turnarounds as we get in and out of turnarounds in the second quarter and into the third quarter. But our ability to capture the market, given our integrated nature, our strong supply and trading business and our export logistics, I think, continues to be really strong.

I would just add, Manav, with respect to pricing responsiveness, that's also where we see an impact that differs depending on the region and the market we're in. It also actually is somewhat driven by the speed at which the prices are changing. So if there's a very, very fast reset, then the impact of a delayed response is smaller. If there's more of a ratable increase over time or decrease as can be the case, you'll actually find the impact is different. You also actually have a difference depending on what level of profitability you're at. When you're at a very high level of profitability, -- we will find that our -- we do find that our competitors are willing to give away margin to get volume. At lower levels of profitability, they are less willing to do that. So that's where the duration aspect comes into it.

One moment for our next question. And that will come from the line of Menno Hulshof with TD Cowen.

I just have one follow-up question on your global marketing push, which you've addressed from a number of different angles already. But Rich, you mentioned that you moved, if I got the number right, 14 cargoes in Q1. How much of that uptick is repeatable versus lumpier and more opportunistic? And how would you frame the potential margin uplift from marketing this year relative to last year or even 2024?

Menno, I think the repeatable question, I think the jury is still out on that. I think it depends on 2 parts, kind of what -- the current situation in the Middle East, how and when it resolves itself, that will be part of it. But I think the other thing is that as we've established these trade routes and that when we can compete and relative to our alternatives or relative to a customer's alternatives, you create new markets, markets that we can increasingly or confidently supply. So I think the repeatability, it's -- I don't know that we can answer that explicitly yet. But I do believe we are expanding our marketing reach and capabilities that will endure over a point in time. Dave, do you want to add anything to that?

Sure, Rich. I would first confirm that, that's absolutely correct. It will depend on the market opportunity. That's where the repeatability may have some noise. But in terms of ability to capture if the market opportunity presents itself, we have the logistics. We've actually been growing and debottlenecking our logistics in the same way we've been growing and debottlenecking our refining capacity. So we have the logistics. We're preferentially moving logistics, particularly diesel exports to the West Coast and jet exports off the East Coast. We have that capability that will only actually continue to grow in terms of capability. The question will be, is the market there to capture it or not? And if it is, we'll do that.

Menno, just maybe I'd add one other comment to that. But I think it's coming out in a lot of the answers today at Investor Day, we had a chart really early in the deck. I believe it was titled Rebuilt to win. And we talked about the integration of all the way kind of the leadership that we provide, the strategy or the strategic focus areas, the structure and then kind of our organizational culture. What you're seeing is as all that continues to work together, that it's creating opportunities above and beyond what we could estimate at any point in time. And so our own ambitions continue to rise.

I chuckle when I read some of the reports and things that Suncor is -- they're conservative on this or conservative on that. That's not how we feel at points in time, but our organization with just crystal clear objectives continues to find ways to add and create more value. And as we've raised the bar on our operating performance, reduce this variability we've talked about, you can do that. You can talk to customers far afield because when they know you can confidently and consistently provide them product, they're willing to enter into agreements with you where previously you couldn't have entertained because you didn't know if you could hold up your end of the deal. So the interrelationship of our underlying operating performance and what that creates for us commercially, that is a big part of the story here.

And I think you're going to continue to hear us share examples of how we're increasingly commercially astute to go along with operationally excellent.

I'm showing no further questions at this time. I would now like to turn the conference back to Mr. Adam Albeldawi for any closing remarks.

Thank you, everyone, for joining our call this morning. If you have any follow-up questions, please don't hesitate to reach out to our team. Operator, you can end the call.

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

Good morning, everyone. It's 10:30 a.m. Mountain Time, and I'm calling the meeting to order. My name is Russ Girling, I'm the Chairman of the Board of Directors of Suncor.

We are hosting this year's annual meeting virtually so that shareholders can participate, ask questions and vote regardless of their physical location. I'd like to introduce Suncor's senior leadership team with me today: Rich Kruger, our President and Chief Executive Officer; Troy Little, our Chief Financial Officer; and Jacquie Moore, our General Counsel and Corporate Secretary.

On behalf of the Suncor directors and management, it's my pleasure to welcome you all to Suncor's 2026 Annual General Meeting of Shareholders. I'd like to turn it over to Jacquie Moore for a traditional land acknowledgment.

Thank you, Russ. We acknowledge that Suncor's operations are located on the traditional lands of indigenous peoples. In the spirit of reconciliation, we acknowledge and pay tribute to the traditional territories of the peoples of Treaty 7, which includes the Blackfoot Confederacy comprised of the Siksika, the Piikani and the Kainai First Nations, the Tsuut'ina First Nation and the Stoney-Nakoda including Chiniki, Bearspaw and Goodstoney First Nations. We acknowledge this region is also home to many Métis people. Suncor is committed to continuing to advance our journey of reconciliation.

Thank you, Jacquie. Before we begin the formal business, I'll explain how the voting and questions will work for this meeting this morning.

The meeting is accessible to registered shareholders, proxy holders and guests. However, only registered shareholders and proxy holders can ask questions and participate in this meeting. We encourage you to submit your written questions as early as possible, and please follow the steps set forward in the Lumi virtual meeting user guide.

Please identify if your question relates to the motion, which is part of the formal business of the meeting, or whether it is more general in nature. We'll try to address your questions directly related to a particular motion at the appropriate time in the meeting. We will save general questions for the question-and-answer period following the formal business. We were unable to -- if we are unable to address your question during the meeting, a member of our management team will follow up directly with you after the meeting.

We will conduct the voting by virtual poll. Every eligible shareholder has 1 vote per share that can be voted on each matter. The poll will be open for all resolutions at the same time. You can choose to vote each resolution immediately or wait until the discussion concludes on each resolution prior to casting your vote. Following discussion of each item, you will have additional time to enter your vote before the voting is declared closed for all resolutions.

There are several matters on our agenda this morning. To move things efficiently, 2 of our shareholders have agreed to make and second our formal motions.

We will now proceed with the business of the annual meeting, starting with the appointment of the scrutineers. Computershare Trust Canada is the transfer agent and register of the company and is represented here today by [ Chris Parsons ]. If there is no objection, I appoint him to act as scrutineer. As scrutineer, he will report on the number and percentage of shares represented at this meeting and record and report on the votes cast on any poll that may be taken.

You've all received notice calling the meeting. Jacquie Moore will report on the mailing of that notice.

The notice calling this meeting was mailed on March 20, 2026, to all shareholders of record as of the close of business on March 13, 2026, and has been provided to each director and to the auditors of the company.

A copy of the notice and proof of mailing will be filed with the minutes of this meeting. I am advised by the scrutineer that a quorum is present today. Jacquie, can you please read the scrutineers' interim report?

Today, we have 507 shareholders holding over 842 million common shares represented at the meeting. This represents over 71% of the issued and outstanding shares.

With that, I declare the meeting regularly called and properly constituted for the transaction of business.

The 2025 annual report, which includes the financial statements for the year ended December 31, 2025, and the auditor's report has been tabled. It is accessible in the Documents tab on today's meeting platform. The annual report was mailed to shareholders who requested the report.

I will now move to matters to be voted upon, and I declare the polls open on all resolutions.

The first item of business to be voted on is the election of directors. Under Suncor's bylaws, the number of directors to be elected shall be the number of directors then in office or such other number as has been determined by the Board. The Board has determined that 10 directors will be elected at the meeting. Of the 10 directors nominated, 9 are independent and 1, Rich Kruger, is a member of management. Their backgrounds and experiences are described in Suncor's circular. The circular is also accessible in the Documents tab on today's meeting platform.

May I have a motion to nominate for election to the Board of Directors the candidates named in Suncor Circular.

Good morning. My name is [ Christine Randall ], and I'm a Suncor shareholder. I move to nominate the following candidates for election as directors: Ian Ashby, Russell Girling, Jean Paul Gladu, Jennifer Kneale, Richard Kruger, Brian MacDonald, Lorraine Mitchelmore, Jane Peverett, Christopher Seasons, Jacqueline Sheppard.

Thank you, Christine. Can I have a seconder for that motion?

My name is [ Matilda Lo ], and I am a Suncor shareholder. I second the motion.

Thank you, Matilda. I declare the nominations closed. Ten directors are to be elected at this meeting, and 10 persons have been nominated. I'll pause now and see if there's any questions directly related to the election of directors.

Hearing none, Jacquie, will you now give the additional instructions on the voting procedure?

On this vote, all shares for which proxies in favor of management have been received will be voted in accordance with those instructions. The 10 nominees named in the circular are listed on your screen. To vote for each director, please complete the ballot by clicking either for or against in the appropriate spot beside the name of each nominee.

So please cast your votes on the point -- on the appointment of directors.

[Voting]

As I mentioned earlier, you may submit your vote on the election of directors now or wait until the end of all the motions before submitting them at the same time. We will proceed to the next item on the agenda.

The next item of business is the appointment of the independent auditors. Management has proposed that KPMG LLP be appointed as the company's auditors. Can I have a motion to appoint KPMG LLP as auditors?

My name is [ Christine Randall ], and I move that KPMG LLP be appointed auditors of Suncor Energy Inc. to hold office until the next Annual Meeting of Shareholders or until a successor is appointed.

Thank you, Christine. Can I have a seconder for that motion?

My name is [ Matilda Lo ], and I second the motion.

Thank you, Matilda. Any questions directly related to the appointment of the auditors?

Again, please cast your votes on the appointment of the auditors.

[Voting]

And we will now proceed to the next agenda item. The next item of business is an advisory vote on our approach to executive compensation. These types of advisory votes are often called say-on-pay resolutions. The results are considered nonbinding, but allow shareholders to ensure their views are made known to the Board for consideration in the company's approach to compensation in the future. The form of the motion set out in the circular aligns with the recommended best practice of the Canadian Coalition for Good Governance.

May I now ask for a motion.

My name is [ Christine Randall ], and I move on an advisory basis and not to diminish the role and responsibilities of the Board of Directors that the shareholders accept the approach to executive compensation disclosed in Suncor's circular.

Thank you, Christine. Can I have the seconder for that motion?

My name is [ Matilda Lo ], and I second the motion.

Thank you, Matilda. You've heard the motion. Are there any questions or comments?

We have received proxies representing a total of 94.72% of the votes cast on this motion, which direct that they be voted in favor of our approach to executive compensation.

Please cast your votes on our approach to executive compensation.

[Voting]

We'll now proceed to the next item on the agenda. The next item of business is the consideration of the shareholder proposal received from the British Columbia Investment Management Corporation as a primary filer and Addenda Capital and the University Pension Plan of Ontario as co-filers.

I understand that a representative of British Columbia Investment Management Corporation, Anne-Marie Gagnon is in our attendance to speak to that today. May I ask that you now share your remarks, Anne-Marie, and make a motion to approve the proposed resolution set forth in Page A1 of Schedule A to Suncor's circular.

Mr. Chairman, members of the Board, fellow shareholders, good morning. My name is Anne-Marie Gagnon. I am a Director of ESG at the British Columbia Investment Management Corp., a long-time shareholder of Suncor Energy. So BCI has constructively engaged with Suncor for more than a decade on fundamental and sustainability matters, both individually and collaboratively as part of Climate Action 100+. So with this history, we highlight our appreciation of the recent operational, financial and safety performance of the company.

So while we've had productive meetings with Board of Directors and Chair prior to 2024, the finding of the proposal follows more than 2 years of multiple and successful requests to meet with directors. So the proposal filed by BCI with Addenda Capital and the University Pension Plan as co-filers requests enhanced disclosure detailing the company's governance processes and controls used to monitor, manage and oversee carbon-related risks and opportunities. So although the proponents were not given an opportunity to engage with the company and the proposal, we believe our request is a modest accountability expectation, especially considering Suncor's history of TCFD, ISSB and CSSB support.

So based on public disclosure, the Board governance of climate risks has materially changed in recent years. So for example, carbon was the only principal risk not under the responsibility of at least 1 Board committee in the 2025 annual risk review. And in the 2026 proxy circular, carbon has been removed as a stand-alone principal risk and only carbon regulations are now captured as a subset of government risk. So despite recent changes to regulatory and geopolitical environments, shareholders require additional information to ensure continued oversight beyond only regulatory compliance. So access to capital, investor demands, operational efficiency, physical risks and strategy resilience need to be evaluated under both short- and long-term scenarios.

Secondly, while we do recognize risks introduced by the anti-greenwashing provisions of the Canadian Competition Act, the proposal does not request emissions performance data, metrics, targets or forward-looking strategy. In our view, descriptions of oversight structures and governance processes are not environmental benefit claims and do not pertain to environmental performance. Finally, requested reporting could be part of any standard securities filings or voluntary disclosure, hence minimizing the reporting burden.

So in conclusion, I move that the proposed resolution as set forth on Page A1 of Schedule A of management proxy circular of Suncor Energy Inc. in respect of its 2026 Annual Meeting of Shareholders be approved. Thank you.

Thank you, Anne-Marie. Can I have a seconder for that motion?

My name is [ Matilda Lo ], and I second the motion.

Thank you, Matilda. Suncor uses our current regulatory filings and reports to disclose information about governance and oversight of climate-related risk. The issuance of additional -- of an additional report would be redundant and require significant company resources. We are and intend to remain in full compliance with all legal, regulatory and industry reporting obligations with respect to our governance and oversight of climate-related risks. Suncor's full response to this proposal is set forth in the management proxy circular. Suncor's Board and management have recommended that shareholders vote against this motion.

You've heard the motion, which has been seconded. Are there any questions or comments on the motion?

If there are no further questions or comments, we will now vote on the matter by ballot. We have received proxies representing a total of about 80.39% of the votes cast on this motion, which direct that they be voted against shareholder proposal #1. We will follow the same ballot procedure as described by the Corporate Secretary earlier. Please complete the ballot by clicking either for or against in the appropriate spot beside shareholder proposal #1.

[Voting]

We'll now complete the business of the meeting. The Secretary will give the results for the -- from the report on the proxies.

Thanks, Russ. On the election of directors, all directors received over 92% of the votes in favor. On the appointment of auditors, we received over 99% of the votes in favor of the appointment of KPMG LLP as auditors. On the advisory resolution on the approach to executive compensation, we received 94.72% of the votes in favor of the resolution. On shareholder proposal #1, we received over 80% of the votes against the proposal. The final voting results will be filed on SEDAR+ today and the final scrutineers' report will be incorporated into the minutes of the meeting.

I declare that the Board of Directors will consist of the 10 nominees named in the circular. I declare that the shareholders have approved the appointment of KPMG LLP as auditors. I declare that the shareholders have accepted the approach to executive compensation disclosed in Suncor's circular. And I declare the shareholders have not approved the resolution proposed in shareholder proposal #1.

If there are no other matters to be properly brought before this meeting today, may I have a motion that the formal part of this meeting be terminated.

My name is [ Christine Randall ], and I move the meeting be terminated.

Thank you, Christine. Can I have a seconder for that motion?

My name is [ Matilda Lo ], and I second the motion.

Thank you Matilda. Ladies and gentlemen, I declare that the meeting be terminated.

I will now turn the microphone over to Rich Kruger, Suncor's President and Chief Executive Officer, for some remarks.

Thank you, Mr. Chair. Over the past 3 years, Suncor has undergone a tremendous transformation, literally rebuilt brick by brick through leadership, strategy, structure and culture with the objective of creating an enduring team-based, results-oriented, high-performance enterprise. Our commitment and determination has translated into record results quarter after quarter, in particular, in 2025, with the strongest performance in company history from safety to operational integrity to asset reliability to profitability, best ever across the company and the market took notice, rewarding us with Suncor ranked first in our peer group in 2024 and second in 2025 on share price appreciation with a 44% increase over those 2 years.

Our improvement journey began with safety, the clearest indicator of organizational discipline and the foundation of operational excellence. Over the last 3 years, injuries and operational events are down 75% with 2025 being our safest year on record for the third consecutive year, making us one of the safest oil and gas companies in North America. That same discipline and determination was applied to our operations, where we delivered record-breaking results in asset utilization with upgraders at 99% and our refineries at 103%, well above industry benchmarks and the highest levels in company history.

High reliability, in turn, delivered record volumes with upstream production of 860,000 barrels a day, refining throughput of 480,000 barrels a day and refined product sales of 623,000 barrels a day, all best ever. Capital spending was tightly managed with expenditures reduced to $5.7 billion, outperforming the midpoint of our guidance by $500 million, while executing our business plan as designed. Operating expenses were held steady at $13.2 billion despite higher volumes, combining high reliability and volume growth with cost discipline, the definition of operating leverage. All this translated into $5.8 billion in shareholder returns, $2.8 billion in dividends and $3 billion in share repurchases. We raised our dividend by 5% in November and repurchased shares at a steady $250 million per month from January to November, increasing to $275 million in the month of December.

We delivered this consistent shareholder return profile despite a year of oil price volatility with WTI fluctuating between $55 a barrel and $80 a barrel in U.S. dollars throughout 2025, underscoring both the resilience of our integrated business model and our unwavering commitment to shareholders. Our performance in 2025 resonated with the market, driving a 19% share price appreciation, outperforming the average of Suncor's 11 company peer group by a remarkable 14%.

To put our performance in perspective, I'll return to our 2024 Investor Day, where we committed to a bold and ambitious 3-year plan, including $3.3 billion in incremental free funds flow per year, a USD 10 a barrel reduction in our corporate WTI breakeven, production growth of over 100,000 barrels a day, capital spending reduced to $5.7 billion and net debt reduced to $8 billion and the return of 100% of excess funds to shareholders. By year-end 2025, 2 years into a 3-year plan, we not only met but exceeded every one of those commitments a full year ahead of schedule. Trust and credibility in business and in life are based on delivering on commitments and today, Suncor delivers.

On March 31 of this year, we declared we're not done yet, unveiling a new 3-year plan to grow production by an additional 100,000 barrels a day, increase free funds flow by another $2 billion a year and reduce our WTI corporate breakeven by a further $5 a barrel to below $40 a barrel in U.S. dollar terms.

How are we doing this? With strong, decisive leadership, crystal clear priorities, collaboration and teamwork, embracing the industry best practices and by recognizing and rewarding our teams when they deliver. Central to our effort has been the development and implementation of a new operational excellence management system, a system we call OEMS, a playbook of 21 core operational work processes built on industry best practices detailing how to achieve operational excellence. It has helped us reduce site-by-site performance variation while elevating overall performance, delivering a level of consistency and excellence unmatched in our history.

In addition, to reinforce that we win and lose as a team, we redesigned our fundamental pay practices to reward team-based, results-oriented high performance with revisions ranging from how employees' annual bonus payments are determined to the number of people who receive stock-based compensation each year. In each case, increasingly aligning compensation throughout the organization with the experience of our shareholders.

You win, we win. You don't, we don't. This philosophy underscores our commitment to excellence to compete and win to continually raise the bar on performance standards and expectations to ensure that we are a company employees are proud to work for and a company shareholders are proud to own.

With our uniquely integrated asset base and our value chain business model, our commitment to both operational and financial excellence transcends business cycles with reliable, ratable operational performance, generating similarly reliable, ratable cash flow. Cash flow to invest and grow shareholder value while at the same time, returning value to our shareholders via dividends and buybacks. We believe Suncor's stock ownership should represent a foundational investment in an investor's portfolio, an investment that consistently and confidently delivers superior industry-leading returns in any and all business environment. That is what drives us.

While we at Suncor remain acutely focused on what we can control, it is encouraging to see energy policy discussions in Canada evolving in a more practical and balanced manner. There appears to be a growing recognition among policyholders and Canadians nationwide of long-term value and importance of the energy industry. The conversation is moving from whether Canada should more fully develop its resources to how Canada should do this. We have a resource base enviable throughout the world sufficient to create an energy superpower, but it will take national resolve to grow and compete globally with fiscal and regulatory policies to attract capital growth. For Canada, supplying growing levels of reliable, affordable and abundant energy is how we can strengthen at home and influence abroad, offering the world what it values.

Returning to Suncor. I'm proud of what we've accomplished and excited about what lies ahead. The best companies never stand still recognizing there is no finish line for excellence. To our shareholders, on behalf of Suncor's Board of Directors and the entire Suncor team, thank you for your continued support and confidence in us.

Mr. Chair, that concludes my comments.

Thank you, Rich. I'd now like to open up the floor to respond to any questions. We'll take questions submitted online. A reminder that only those who have logged in as registered shareholders or as proxy holders are able to ask questions.

I had my microphone turned off there, so I will repeat that. Thank you, Rich. And I'd like to open the floor to respond to any questions. We'll take questions submitted online. A reminder that only those who have logged on in as registered shareholders or as proxy holders are able to ask questions. To do so, simply enter the question in the platform tool. We do have a couple of questions.

Yes, Mr. Chair, we have a question for the auditor. Auditing standards require the disclosure of critical audit matters, which communicate highly material areas that involve significant estimation uncertainty. In your audit of Suncor, how did you determine that decommissioning liabilities did not meet the threshold to be included as a critical audit matter? And what procedures did you perform to assess the sensitivity of these liabilities to core assumptions such as expected asset lives or the discount rate?

Thank you, Jacquie, and thank you for the question. I'd invite Shane Doig from KPMG to answer the question.

Thank you, sir. The provision for decommissioning liabilities in our judgment did not meet the threshold for being a critical audit matter in our 2025 audit as the estimates involved such as the expected asset life or the discount rate did not involve especially challenging, subjective or complex judgments. Based on our audit procedures, which were conducted in accordance with the standards of the Public Accounting Oversight Board, which included consideration of expected asset life and the discount life -- sorry, the discount rate, my apologies, we issued an unqualified opinion on the consolidated financial statements of Suncor.

Thank you.

We have received another question. As members of Suncor's Audit Committee, you're responsible for overseeing the transparency of the company's financial reporting. In late 2025, the Alberta Mine Financial Security Program required Suncor and its fellow owners of the aging Syncrude mine to post $869 million in securities due to depletion of reserves. It is estimated that the regulator will collect $10.7 billion for the site over the coming years. Despite the scale of these obligations, Suncor's annual financial reporting for fiscal years 2024 and 2025 failed to mention that these payments would be collected. How has the Audit Committee addressed this major oversight? Specifically, have you followed up with management to ask why these obligations were omitted from previous year's reports? And what concrete oversight measures is the committee implementing to ensure that future financial reports accurately disclose all upcoming regulatory payments?

Thank you, Jacquie. And again, thank you for the question. I'll ask Troy Little, our CFO, to answer your question.

We report in accordance with International Financial Reporting Standards and are required to make reasonable assumptions of future-oriented scenarios for the purposes of presenting our financial statements, including with respect to the Mine Financial Security Program. Mine Financial Security Program deposits do not represent an additional economic obligation and are already reflected in the asset retirement obligation on our balance sheet. Our assumptions have been reviewed by our external auditor as part of their annual audit of the company's financial statement.

Thank you, Troy. And are there any more?

Mr. Chair, we have no more questions.

All right. Thank you. I'd like to thank everyone for joining us today. We appreciate your continued interest in Suncor and your support, and we look forward to connecting with you again in the future.

Thank you again. Stay safe, and have a great day.

Good morning, everyone, and welcome to Suncor's 2026 Investor Day. My name is Adam Albeldawi. I'm the Senior Vice President of External Affairs and the Chief Human Resources Officer. On behalf of the executive leadership team, we thank you all for joining us here today. I hope that video gave you all a sense of the energy behind today's program. We have a great presentation and morning ahead of us.

Now before we begin, I do need to start with a quick but important housekeeping note. Today's comments contain forward-looking information. Actual results may differ materially from the expected results due to a variety of risk factors and assumptions, which are outlined in our 2026 Investor Day materials and in our most recent annual report available on SEDAR+, EDGAR and on our website, suncor.com. We will also reference certain financial measures that are not prescribed by Canadian generally accepted accounting principles. For more information on these non-GAAP measures, please refer to our most recent annual report and quarterly report.

With that, it is my pleasure to formally start today's presentation by introducing Suncor's President and Chief Executive Officer, Rich Kruger, to the stage.

Well, let me start by adding my good morning and welcome to those in the room, those online. I got to go back to that video for a minute. To my team, who put that together, thank you, extremely well done. If you felt any of the energy, the pride and the determination that I did, you get a sense of what working at Suncor today is like, a highly skilled team, motivated, energized, committed to excellence driven to compete and win. Our mission is not to be the best we can be, our mission is to be the best of the best, the undisputed industry leader respected for our people, our performance and the value we add. Value to our customers, our communities and our shareholders which is what brings us here today.

Here's the agenda as well as pictures of Suncor's executive leadership team who are here with me today. There is no other team I would rather work with in the industry. After a brief executive summary, we'll talk about today's Suncor. We'll describe not only what we've accomplished but just as important, how we've accomplished it. We'll continue with the theme of we're not done yet, unveiling a new set of bold, ambitious commitments for the next 3 years.

Troy Little, our CFO, will then take the stage and highlight shareholder returns, detailing our plan to reward you for your trust and commitment. I'll return and talk about a highly anticipated topic, our Oil Sands future, describing our plan to compete and win in the decades ahead. Lastly, we'll wrap up with our sales pitch. Why buy Suncor. We believe we offer a unique and compelling value proposition to investors, one which will earn us a place on the podium in any and all business environments.

So with that, let's get started. A brief recap of the morning's main messages. Today's Suncor rebuilt to win, new and improved, high performance, constructed with a comprehensive integration of leadership, strategy, structure and culture. In terms of we're not done yet, an additional $2 billion of free funds flow growth by 2028 on top of the $3.3 billion that we've delivered over the last 2 years. An additional $5 a barrel reduction into our overall enterprise breakeven, again, on top of the $10 a barrel recently delivered. A further 100,000 barrel a day upstream production growth by 2028 from our existing asset base, following 114,000 barrels a day of growth over the last 2 years. And the long anticipated refining rerate, rerating our entire refining network by an increase of 10% based on the performance and the improvements we've made again with the existing asset base.

I'll detail our 25-year 2P reserve life and an additional 95 years of contingent resources. We filed a regulatory report last night on this contingent resource, and I'll describe it further later, but it is developable with today's technology and know-how and expected future oil prices. We will share with you 400,000 barrels a day of undeveloped production capacity that we can develop at a capital cost of about $30,000 per flowing barrel on average. We will describe unique Suncor-specific competitive advantages that enable us to do this, specifically synergies with our existing asset footprint. And last but not least, we'll talk about increasing cash returns to shareholders through a capital allocation philosophy that prioritizes a reliable and growing dividend and substantial ratable share buybacks.

With this recap, let me talk about today's Suncor. I've heard our story characterized as a turnaround, which a dictionary would define as a reversal of direction. What we've actually done would more accurately be described as a comprehensive transformation. The fact is we are no longer the same company we were 3 years ago. Today, Suncor is driven to excel, team-based, results-oriented, high performance. Pictured here is the blueprint behind our transformation. Each of the 4 dimensions shown are essential to the change and thoughtfully integrated to create the company we are today. This blueprint was on the table literally from day 1. Where did it come from? 40 years of experience leading global teams. It all starts with leadership, assembling the right management team, like-minded, deep functional expertise, bottom line results oriented, individuals driven to compete and win.

Total executives at Suncor today are down 22% from what they were 3 years ago. You do not need a top-heavy executive team when you have crystal clear priorities and you're acutely focused on what matters the most. Of the 45 executives at the company today, benchmark 45 against any other $100 billion market cap company. Of the 45 executives today, 60% of them are either new to the company or new to their current roles. It's a team I'll go -- I'll win with any day.

Strategy, it's about clarity and focus. Looking at what is it that we do or can do extraordinarily well to compete and win. In our particular case, I'll talk more about this uniquely integrated asset base. It's ensuring that you have an acute focus on the fundamentals. If you get the fundamentals right, most everything else tends to fall in place. And it's establishing best-in-class performance ambitions in each of our businesses across the company. At Suncor, we do not believe in participation ribbon.

Structure enables strategy. It's about creating a line of sight to value. We have delayered and consolidated work groups above the operating group into natural teams that produce products that drive our business forward. We've standardized management systems to work a common way and have a common language. At each of our operational sites, we've configured them in the same consistent manner to accelerate lessons learned and best practices sharing. And we've created a central organization that has a value-added mindset that supports the performance at each and every operating unit. Above the field, our nonoperating personnel are down 2,300 people compared to 3 years ago today, 24%, and they add more value than they've ever added.

Culture, the last component of it, some of you have heard me use this analogy. Culture is like Fight Club. What's the first rule of Fight Club? We don't talk about Fight Club. At Suncor, we don't talk about culture. We talk about what determines culture. What are those component parts that when they're assembled in an enterprise, establishes the culture of an organization to deliver the team-based high performance we're after. The value mindset, a clarify, simplify, focus mindset. We believe in paying for performance. Our compensation system today is entirely different than it was a few short years ago. You perform, we perform, you make money. You don't perform, we don't perform, you make less money. It's that simple. Those are the kind of individuals we want on our team driving toward excellence.

As I said, this template or blueprint has been in place since day 1, and we've rebuilt this company brick by brick with the vision, the goal of institutionalizing excellence. Critically looking at our past performance, it was clear we needed to reduce variation asset by asset. We had too much performance variation in everything safety, reliability. We needed to reduce that variation and elevate overall performance as we did that. We tackled this with an urgent priority in a very comprehensive and systematic way.

Most notably, we developed an entirely new way of working in our field and in our plants, a new operational excellence management system. Internally, we call it OEMS. It replaced a 15-year-old legacy system that we'd worked under during that entire time. Custom-made for Suncor, not a copy and paste, proprietary design based on industry best practices assembled.

We rigorously developed this throughout 2023 and 2024, and then we urgently implemented it across the company in 2025, consisting of 21 standard work processes such as working safely, managing maintenance, managing turnarounds and so on, provides a consistent road map for specifically how each asset will achieve excellence. Its common construct across our enterprise enables fast learning and knowledge sharing across the company. Its effectiveness is further enhanced by the common site structural design that I mentioned earlier. Our new OEMS is a game changer in institutionalizing operational excellence for the long term.

That said, we didn't wait for OEMS to drive performance improvement, starting with safety. I've repeatedly said, you cannot be a great company without being a safe company, and Suncor's safety history is well chronicled, but that's all changed. For the past 3 years, we have achieved a step function improvement in both personnel and process safety with personnel injuries and process safety events down 75% in 3 years to the point that today, we are one of the safest oil and gas companies in North America, a company employees can be proud to work for and investors proud to own.

In a capital-intensive industry such as oil and gas, the utilization of existing assets is imperative, imperative to maximize return on capital. This is also an area that Suncor historically fell short in, but not any longer. Since mid-2023, we have achieved a step function improvement in asset utilization across the company, setting and then breaking previous best to reliability levels some didn't consider possible. Now we're at industry-leading levels upstream and downstream. Incremental barrels are the most profitable barrels, delivering the highest operating leverage. We've embraced a mindset that every barrel matters.

Trust and credibility in business and in life are based on delivering on commitments. A few short years ago, we were not earning your trust or earning credibility. But that is no longer the case. Today's Suncor delivers on its commitments. In the upstream, having failed to achieve guidance for years, it was achieved in 2023. And in both 2024 and 2025, we not only achieved but exceeded the high end of guidance with record years, all accomplished with the same asset base. Downstream, correlated with reliability, we also exceeded the high end of guidance in '24 and '25. And although not shown, the same is true with product sales, record high sales above the high end of guidance in both '24 and '25.

Perhaps the best proof that today's Suncor delivers relates to our 2024 Investor Day. We established a series of bold, ambitious performance targets to be achieved over 3 years. Upstream production growth, enterprise breakeven reduction, free funds flow growth, capital spend reduction and achieving a net debt target.

As summarized here, we met or exceeded every single commitment in 2 years versus a plan of 3. Every single commitment, look at the numbers, they're big, including 114,000 barrels a day of upstream production growth, a 15% increase. Same asset base, no expensive acquisition, no major new capital projects, growth from within and a $10 a barrel reduction in enterprise breakeven from $53 a barrel to $43 a barrel, a 20% lower in 2 years. Free funds flow growth of more than $3.3 billion, a 65% increase in 2 years. Who does this? There's only one answer to that question, today's Suncor.

This chart was developed by RBC Capital Markets a month ago. It puts our improvement in a broader context. It displays breakeven levels in U.S. dollars for the majority of the world's oil and gas companies. The numbers are slightly different in that RBC includes total capital here versus our earlier breakevens that included sustaining capital. But the story is the same. Suncor has lapped half the field in 2 years, moving from the best of the worst in the fourth quartile to now working to wrestle our way into the first quartile. We leapfrogged 21 companies out of the 48 shown in 2 years. And the best part of this story, we're not done yet.

One last chart before I discuss what's next, our playbook. If Suncor had an executive dining room, which we do not, this would be our place book -- our place mat, excuse me, given I bring my lunch and eat it at my desk every day, this -- a copy of this is front and center on my desk at all times. It displays the attributes that we believe are essential to compete and win in today's oil and gas world.

Size and scale, upstream production, your downstream capacity, integration synergies, longevity and durability, your reserve life, your resource quality, reinvestment requirements, financial resilience, upstream supply cost, downstream profitability, enterprise breakeven, capital allocation, the strength of your balance sheet, investment discipline and return of capital. Lastly, the ability to win, operational expertise and excellence, differentiating competitive advantages, all leading to the ability to consistently, reliably and ratably deliver superior returns. We use this as the lens through which we look at our business to plot our strategy and make decisions. Our belief is if we get these right, we will win.

So here it is, our new commitment. An additional $5 a barrel reduction in breakeven on top of the $10 a barrel recently delivered and an incremental $2 billion per year in free funds flow growth by 2028. You can see the stair step going from $43 a barrel to $38 a barrel and going from a normalized $6.1 a barrel to $8.1 a barrel over the 3-year period. The next set of charts will depict where this incremental value will come from to turn it into a reality, where are we working? Where will we capture this? But first, our competitive advantage.

What is it that makes Suncor unique and different? I'll give you a few minutes to study this diagram. We're going to then pass out the quiz and -- but in the meantime, guys, you were supposed to laugh. That was funny. Tough crowd this morning. It displays what makes us different. It's our unparalleled physical integration, far and beyond the typical upstream and downstream characteristics of an integrated company. It is this construct coupled with high performance that enables Suncor to always stand on the podium based on our unique ability to deliver value in all business environments.

From the face of a mine or the bottom of a well, molecules move from left to right to upgraders, to the market, supplying our own refining network with custom feedstocks tailor-made for our processing units. Thereafter distributed domestically, internationally through a comprehensive, diverse network of logistics, ultimately reaching our customers, retail, wholesale, other, fueling planes, trains and automobiles. We have scale in each of these aspects of our business as illustrated by the 2025 volume shown at the bottom of the chart. We are effectively peerless as it relates to this unique construct of assets an ensemble that cannot be easily or affordably replicated.

Since our 2024 Investor Day, we have added value in each of these areas of our business and our forward plan is no different. I'll now walk you through the heavy hitters or where we envision capturing the most value in the years ahead. I'll start with upstream production. I mentioned the 114,000 barrels a day over the last 2 years from on the order of about 750,000 barrels a day to 860,000 barrels a day. We envision over the next 3 years, taking that 860,000 barrels a day to 960,000 barrels a day. Shown here profile by year with the ramp-up and then by segment. I'll talk about each of these segments here in a moment. But you can see it's -- mining is about half of the anticipated growth, in situ, about 1/3; and E&P, the remaining share.

Let me continue with in situ. Our plan is to increase in situ production by 30,000 barrels a day to greater than 300,000 barrels a day by 2028. We will accomplish this through continuing debottlenecking of the Firebag facilities further optimization of our steam plants and our performance, additional infill drilling sidetracks, drilling single producers between injector producer pairs and increasing gas co-injection in lieu of steam. And these 2 points, the infill drilling and the additional gas co-injection, we've seen what others have done, benchmarked others, saw we've done less of this than others, and it is an opportunity for us to further improve. That is a characteristic of today's Suncor, extensive benchmarking.

We want to know who's the best, what do they do? What do they do differently from us? We embrace that, shamelessly steal it and immediately apply it in our operation. And in both of these areas, we'll get material growth out of that. Utilizing solvent technology, I'll talk more about that in a minute. So from an asset basis, Firebag which produced a little bit under 200 -- Firebag is our most profitable asset, under 200,000 barrels a day in 2022. In '25, it was 245,000 barrels a day without any major new capital project. We're going to take the 245,000 to 275,000 by 2028. The remainder of the in situ is our MacKay River assets.

On each of the charts that I show here now, we'll have a box at the lower right, and that depicts the incremental free funds flow that's part of our $2 billion that we anticipate from this activity. It comes in a variety of ways from cost reduction, capital reduction, margin improvement. So we've annotated how it comes from, but the 30,000 barrels a day, we believe will lead to nearly $400 million a year in incremental free funds flow by 2028.

Continuing with mining growth. We plan to increase our mining production by 45,000 barrels a day of bitumen to greater than 700,000 barrels a day by 2028. You can see the distribution here. Fort Hills is more than half of the total. You've heard the story previously. We had a 3-year recovery plan at Fort Hills. We executed that plan to the T. 2025, Fort Hills averaged about 175,000 barrels a day. Over the next 3 years, we envision getting it to 200,000 barrels a day. This is enabled by 2 main factors. These Ferrari-like plants that Peter has built, twin plants, where originally the nameplate capacity of the 2 was 194,000 barrels a day. We've tested them individually and concluded that we have closer to 220,000 barrels a day of the 2 plants. So going from 175,000 with the 194,000 capacity to 200,000 with the 220,000 capacity. That's the plan at Fort Hills.

Additionally, going through now depleting the south mine in the center pit and going to the north, where we've opened up 2 pits gives us the elbow room to optimize and drive our mining to then deliver the bitumen to these plants. Additionally, in all areas, blend management the mother nature deposits are not all created equal. But as we blend them, we can get more consistent feedstocks to our plant and higher performance to our plants. Precision mining techniques. These world-class PC9000 hydraulic shovels, the world's largest, of which we are the only ones who have them. We have 3 in operation, a fourth on the way, allows us to selectively carve the type of ore we need at a point in time. In mining, little things make big differences, and we are focused on every little thing to make big differences.

We're also looking at our long-established kits in terms of our extraction capacities, the hardware, the extraction recovery, the processes around that, temperatures, solvent use, and we believe we can continue to extract more. That's the other 20,000 barrels a day on the mining growth, all resulting in nearly $0.5 billion of additional free funds flow over the next 3 years in a $65 a barrel -- with a $65 barrel price deck. I should have mentioned that earlier. All these are based at a $65 barrel price deck.

Mining improvement. The biggest component of our mining -- the cost infrastructure is the literal mining itself, the delivery of bitumen to a crusher before it goes into extraction and before it goes into any upgrading. That is the lion's share of the cost. We have a very focused plan on improving that performance, and it starts with our mobile fleet, getting a 10% improvement in productive hours, reducing the hauling cycle time from receiving a load to dropping off a load and getting back. Peter reminds me the phrase in mining, roads make loads.

And our plan is to not only improve the equipment reliability, performance-based contracting with our original equipment manufacturers, but enhancing our key mine roads, for example, using advanced geotextiles below our mines, so we're less immune to weather conditions, wet, cold, hot, dry. And it's systematically looking at infrastructure and how do we make it better. Road management is a key aspect of it. Optimizing our mine fleet with a fleet of 1,000 vessels, centrally controlling who goes where and ready to receive loads as shovels are ready so that there's no downtime in that system, getting more scientific about it. Operator scorecards on how our employees are measured and judged on their effectiveness, whether you're a shovel operator or a truck driver, little things make big differences.

AHS deployment. Over the last 1.5 years, we've talked about how we deployed autonomous haul at the base mine ultimately to the point where at the end of last year, we were fully autonomous in all ore movements. Next month, we start our autonomous journey at Syncrude with the first autonomous vehicles on not the Komatsu, but the Caterpillar trucks. We will propel that forward and then we'll move on to Fort Hills over time. All of these are continued opportunities to achieve best-in-class mining performance.

And last but not least, one I'm quite excited about, we refer to it as mud mode operations, using AI and algorithms to how do we get the best performance on haul trucks, particularly autonomous haul trucks in all weather conditions. As I've said before on earnings calls, when it rains, we put on a raincoat when it's cold, we put on mittens. We deal with all of that. How do we get the most out of our massive vehicle fleet independent of what the external environment imposes on us. We see more than a few hundred million dollars of additional improvement here in the short term.

Even better turnarounds. We've talked about turnarounds repeatedly now for several years in our performance progress, all informed by external benchmarking, the holy grail of turnaround benchmarking Solomon. We are driving toward first quartile performance. In 2024, we outlined a $250 million improvement plan to take our turnaround spend from about $1 billion -- $1.25 billion a year to about $1 billion a year.

Last year, I flagged and said we're going to do better than that, and I added another $100 million to that $250 million improvement target. Today, I'm adding another $50 million to that. We believe we will achieve a $400 million improvement in our turnarounds from that $1.25 billion starting point. 2024 and 2025 were the first years we were ever under $1 billion a year in turnarounds. That's the new norm now. Our outlook for the next 4 to 5 years, we do not have any year that approaches $1 billion in turnaround spend.

How? OEMS managed process. The risk-based work selection, improving our job planning, our readiness reviews, literally locking scope 6 and 12 months before we go into work, so you can do the rigorous planning, securing resources, whether that be equipment or materials or personnel. So when we hit the deck, we can get the work done as fast and efficient as possible.

The next -- another tranche of improvement is not only improving the performance of individual turnarounds, but extending the intervals between them. Again, risk-based work selection. This is an area -- this is one of these gifts that keeps on giving. The more we dig into it, the more improvement we continue to find. We've made a lot of progress over the last few years. We believe we're somewhere near that second quartile now. But as I said, our goal is to be the best of the best. Our plans would drive us into the first quartile and improve free funds flow over the next 3 years by the tune of about $200 million a year.

Maintenance is the new turnarounds. We are envisioning a step change in our maintenance cost. Maintenance is about, as it is with turnarounds, the work selection, the timing of when do you do work, the right work at the right time, all based on risk and conditions of your equipment. What we have found ironically is that we were doing more work than was warranted. We were doing more maintenance than the equipment warranted.

And what you do is ironically, when you do that, you are taking facilities down, you're bringing them up, you're creating transient conditions. You're introducing more risk when you do that than running them at steady state. So we brought a very, very comprehensive risk-based assessment process led by our central teams, so our sites don't bring any personal bias they may or may not have to look at that, and we believe we have several hundred million dollars of improvement opportunity ahead of us in the maintenance side, again, informed by Solomon benchmarking, directly tied to how we integrate, plan and execute our work having greater materials management efficiencies from a workforce management, having the right people with the right skill sets in the right numbers at the right time and technology and data-driven efficiencies.

And one example, drones. We flew over 4,000 drone flights in 2025. That is the most of any industrial in Canada by a long way. What did we do with those? We -- they helped us plan turnarounds early by instead of building scaffolds and putting people at the top of towers to look at the condition, we could accomplish that with drones. We took it a step further instead of confined space entry, which can be a very hazardous environment for individuals, we put drones inside vessels to inspect. And so we can better understand the work we need to do. We have less surprises when we then get in the field, open things up and we can better plan and execute our work.

AI, our digital technologies, data-driven, tremendous opportunities in the maintenance front here, as I said, to add many hundreds of millions of dollars in free funds flow in a relatively short time.

Perhaps the least kept secret was our need to rerate our refining capacity. When you're averaging over 100% utilization now for, I think it's literally 2.5 years from mid-2023, the time was right. Well, it's official. We're re-rating our refining network 10% higher from 466,000 barrels a day to 511,000 barrels a day. Every single refinery is part of this rerate because the philosophy and the approach we've been applying to look at limiters, to find debottlenecks to unlock capacity has been consistent across the board and has led to improvement across the board. What that, of course, will lead to is growing throughput. So low-cost debottlenecking, low or in many cases, no cost.

Turnaround performance has been a part of it. What that does now as we fill our crude units, we're able to further utilize secondary units to make whatever the residual products or flow streams are. Relentless focus on reliability and materially improving our respond and recover when we do stub our toe, which inevitably in an industrial enterprise happens. But our ability to get back on our feet and things become a blip versus a valley or a trench, that is part of our process.

In 2024 and '25, we -- our throughput was 465,000 barrels a day and 480,000. By 2028, our plan is more on the order of 500,000 barrels a day through our network. That would be about a 98% or 96%, 97% utilization. And of the 45,000 barrels a day, we've captured about 2/3 of that. Our next 3 years would be the remaining 1/3, and that would be on the order of about $150 million a year in additional margin improvement.

In 2023, we fundamentally shifted our strategy from value over volume to value and volume. And what we mean by that is we wanted -- under Dave's leadership, we wanted to run our refining network at its capacities and put the pressure on our sales and marketing team to find profitable homes. Whereas in the past, we are often informed by what we thought market demand would be, and then we would back into it and adjust our manufacturing capabilities accordingly. We turned that around 180 degrees.

And what you've seen is the record high sales over the last several years now, but we've also been climbing the food chain on value. And what this chart shows the width of each bar is the proportion of sales from retail owned network partner network and so on and the relative value. We've been expanding total sales and moving up -- climbing the ladder, moving up the food chain on value. Most notably, I'll highlight retail. We've increased retail volumes 12% over the last 2 years. That is without question -- those are without question, our highest valued sales.

On our controlled network, we've upgraded more than 100 sites over the last 2 years. Over the next 3 years, our plan includes an upgrading of about another 100. On our strategic partnership, Canadian Tire being perhaps the most notable. We've added more than 200 sites to our network that will carry our premium brand.

Our loyalty program, so we get repeat business, repeat customers. Our branded wholesale, our Petro-Pass, our Truck Stops, growth there. And then the logistics optionality so that we can ensure we can reliably meet our customers' needs. Fuel is a cost to many of our customers, but it's not their core business.

So what's important if you're flying an airplane or running a locomotive is that you have what you need, when you need it in the quantities you need. So reliability, our customers are willing to pay when we can be increasingly reliable. So focused on volume and value, and we think there's, I would say, conservatively another $100 million in value we can capture here over the next few years.

This segment of our business is somewhat unique relative to the competition. We refer to it as differentiated value capture. The concept is maximizing the value of each and every barrel while driving down our cost. You can see our scope here shown on the map. We produce on the order of 100 crudes. That's up from 95 the last time we presented at an Investor Day. 265 products is also up. 45 countries we have the reach, the ability to market in. That is more than double what it was 2 years ago, more than double. And in today's volatile world, that has come in handy and created value. And we have 1,400 customers up more than 200 since the last time we showed you a comparable page.

Growing our trading activities. We trade around our assets, asset-backed, physical, not speculative trading. Optimizing our logistics utilization. And when you're as big as we are and have the scale, we are in a strong position to negotiate tariff terms and minimize tolls or costs, whether they be truck, rail or marine and expanding this export capacity that I flagged here to reach markets when the opportunity, whether that's in South America, Europe, in Asia. We've grown this business. We believe we will continue to grow it to the tune of a couple of hundred million more free funds flow in the next 3 years.

Now these last several pages are some of the bigger opportunities being pursued. But I'd be remiss if I didn't say this is not a comprehensive list. We have 15,500 employees aligned and focused on adding and creating value across our enterprise. And as they do that, we -- just like the delivery of this most recent 3-year plan in 2 years, it's not that we accelerated everything. The impact of many of the things we did was greater than we anticipated and our organization found incremental or new ways to add value. I anticipate that is going to continue to occur.

So at this point, I'm going to turn it over to Troy, and he will talk about the -- what's in this for you from a financial implications.

Thanks, Rich. Let me start with revisiting our new commitment of a $5 per barrel reduction in our breakeven and a $2 billion increase in our annual free funds flow. It's important to remember that it was only 22 months ago that we launched a similarly ambitious plan.

Bringing those 2 plans together, the net result is that Suncor will have reduced its corporate breakeven by $15 per barrel and increased its annual free funds flow by over $5 billion. The benefits of this improved resiliency and a much higher cash generation flow directly to shareholders, and I'm going to talk about that more specifically now.

At our 2024 Investor Day, we outlined a 3-year plan to deliver over $40 billion of AFFO at a $75 oil price. As we are outlining today, between 2026 and 2028, we expect to generate that same $40 billion of cumulative AFFO, but at an oil price of only $65, a $10 lower basis. At $80 WTI, it would be over $50 billion in AFFO. Over the next 3 years, that supports AFFO growth of 6% per year and AFFO per share growth of 11% per year. And it's per share growth that matters as we all know. It is a direct indicator of how we are building value for our shareholders over time. This increased level of sustainable cash generation reflects the growing strength of our business and the durability of our integrated model, a model that is designed to generate strong returns over and across commodity cycles. This leads to more capacity to increase returns to shareholders and supporting that returns capacity is continued capital discipline.

Consistent with prior messaging, we expect capital expenditures to remain at or below $6 billion per year. This is even as upstream production grows by an additional 100,000 barrels a day and our refining and sales and marketing businesses continue to produce and sell more volumes.

Our confidence in delivering on our plans without increasing our spending is based on a laser focus on building upon the gains we have already achieved in reducing our sustaining capital requirements in both turnarounds and maintenance. This same level of total spending, along with a shift from sustaining to economic capital results in a higher profitability for every dollar we spend. Our economic capital portfolio also continues to shift in character.

In 2024, $2 billion of our economic capital was made up of just 6 projects. In 2026, that same $2 billion is made up of 18 projects. This change in portfolio makeup results in a more flexible, more easily manageable set of projects that often bring faster payback periods. The broader point is simple. We are continuing the capital discipline we have demonstrated over the past several years, and we're only getting better. It is now embedded in how we operate and is a key part of how we drive stronger returns for shareholders. That discipline on capital is a direct contributor to growth in free funds flow.

The result of growing our cash flow and maintaining a disciplined capital spending program is a meaningful increase in our annual free funds flow over the next 3 years of $2 billion at $65 WTI. This represents a compound growth rate of 10% versus 2025 on a normalized basis and 15% on a per share basis. Put another way, we will grow normalized free funds flow by 33% between 2025 and 2028 and a full 176% since 2023. That is cumulative free funds flow of $22 billion over the next 3 years at $65 WTI, reaching over $32 billion at $80 WTI.

Just as important, we are doing this from a position of balance sheet strength. Let me turn to that now. We are fully committed to maintaining a strong and resilient balance sheet through the cycle. Over the last 3 years, we have reduced net debt by $3.5 billion or 36%. And compared to mid-2020, our net debt is down $11 billion. But this is not just about reducing a number. It's about maintaining balance sheet flexibility and quality over time. We are managing the balance sheet proactively across the curve with a healthy maturity profile and a disciplined approach to improving term, pricing and market access over time.

At December 31, 2025, net debt to AFFO was 0.5x, and our available liquidity was over $9 billion. As we think about the right long-term net debt level, it needs to reflect several factors: the company's underlying cash flows, the consistency in the performance of our assets and the external environment. These factors will evolve and a balance sheet must evolve with it. Our continued goal of maintaining a ratio of 1x net debt to AFFO at $50 per barrel incorporates these factors and based on our plan would equate to roughly $10 billion of net debt. This capacity underscores the growing strength of our business. This strong credit position recently allowed us to refinance $1 billion of debt at the lowest pricing in the Canadian energy sector in over 15 years. And this prudent management of our balance sheet positions us comfortably to return excess cash to shareholders through the cycle, something I will return to now.

Let me close with what this means for shareholders. We remain committed to a reliable and growing dividend. This commitment is supported by our plan to grow free funds flow and further lower our corporate breakeven. As we continue to buy back shares, we also create more room to grow dividend per share over time. Two years ago, we outlined a plan to return $18.5 billion to shareholders at a $75 WTI price. Today, we expect to return over $23 billion through dividends and buybacks at $65 WTI. At $80, that's $33 billion. That is more cash to shareholders at a lower price. Between 2023 and 2028, that would mean a reduction in our outstanding shares of over 25%. That grows to a full 33% at $80 WTI. This is enabled by a resilient balance sheet, capital discipline and a business model that is built to win across the cycle.

We also want those returns to be reliable, predictable and ratable. That is why we previously announced monthly buybacks of $275 million starting last December, a 10% increase on the previous amount. Based on the confidence in the plan we are putting forward today, beginning tomorrow, April 1, we plan to increase that monthly buyback to $350 million per month for the remainder of 2026. That is a 27% increase from just 3 months ago.

Rich will now take you through a discussion about our long term and the significant resource base that supports it. I hope you will look at that as a sign of the repeatability of what your company has delivered and is about to deliver. I hope you -- we have built a stronger business with stronger financial foundation and a plan that delivers even more value to shareholders in every environment.

With that, I'll turn it back over to Rich.

Earlier, I listed resource longevity and durability as a key attribute to compete and win in today's oil and gas world. Candidly, when I joined the company, it was one of my biggest questions. I had read the reports questioning the company's long-term future, questioning if the growth potential existed. If so, at what cost. As an outsider at the time, I didn't know the answer. And I was wondering when I got there and opened the cupboard, what would I find or would it be bare?

So for some time now, we have comprehensively assessed our resource base, drilling -- increasing delineation drilling on undeveloped deposits, shooting seismic to better define reservoir boundaries, obtaining cores and core analysis to assess reservoir quality and characteristics, completing screening studies on development economic scenarios; and lastly, by engaging third-party experts to validate our assessments.

The short answer is when you open Suncor's cabinet doors, it's like walking into a Costco warehouse. We have a large abundance of high-quality opportunities. We not only have a 25-year 2P reserve life with 100% replacement over more than the last decade, but we also have 30 billion barrels, nearly 100 years of quality contingent resources to develop, 11 billion more barrels than the last external assessment we shared more than a decade ago, $11 billion more.

Contingent resources developable with today's technology, techniques and know-how, demonstrated capabilities and capacities, nothing new required and considered economic at expected future prices. And we prepare -- we did this assessment before the last few months. So when I say expected future prices, I mean $65 to $70 a barrel. We have 11 billion barrel resource base that we think would make economic sense, a wealth of opportunities with absolutely no exploration risk. The timing, pace and scope entirely up to us. Without a doubt, this has been the most positive surprise since I joined the company.

Now let's look at this tremendous resource base in more detail. Instead of 3 years ago, this story starts 110 million years ago during the early Cretaceous stage. Mother Nature blessed Canada with the world's fourth largest energy endowment. And giving mother nature was a conservative, she elected to put the majority of it in Alberta. Sand, silt, clay, marine organisms transported by giant river systems converged north of Fort McMurray, depositing shallower mining amenable resources to the west, deeper in situ resources to the east.

But here's where Mother Nature faced a dilemma. Who do I entrust with developing these resources is, mining? Mining takes bold pioneering spirit, strong determined custodians, in situ shrewd creative, innovated. And recognizing the antitrust laws of the day, Mother Nature couldn't grant all the resources to one party. But after careful consideration, she granted Suncor a lion's share of the best of both resource types, in particular, the corridor between Firebag and the base mine, where literally 2 giant river systems converged depositing some of the thickest, highest quality bitumen resources. So this is the story on how Suncor obtained its resource base.

Now I watched last week, just like the TV series Peaky Blinders, I may have taken a little bit of liberty with the characters, the timing and the events. But fundamentally, the message is true, the unique size, quality and concentration of our resource base that provides us operational and development synergies that our competitors cannot replicate at scale.

Let's dig into the 22 billion barrels. It's safe to say at 22 billion barrels, this is among the largest, if not the largest, undeveloped in situ resource base in the industry, and it's not only large, it's high quality. Quality is a function of many factors. You've got permeability, porosity, thickness, depth, SOR, cost. For simplicity here, I've used a third-party reference using average pay thickness as a proxy for quality. The key takeaway is with 9 billion barrels on each lease, Firebag and Lewis are among the biggest and best undeveloped resources in the industry that, again, Suncor enjoys specific synergies.

I learned long ago when buying or building a new house, it's all about the quality and the location. Firebag and Lewis are both high quality and they're both in good neighborhoods. Our opportunity is not only to build a house or 2, it is literally to build a master planned community over time. This chart depicts how we will build this community, standardization and replication, design one, build many, standard development sizes and scopes, facilities, well pads, optimized and repeatable, tremendous benefits, execution efficiencies, shorter durations, lower cost, operability and so on.

Quick story. 15 years ago, I put in boys. They were about 9 or 10 years old. I was buying them new night stands for their bed, and I made the horrible mistake to go to IKEA. And I bought 4 of these night stands. The first one, I was ready to throw them all out the second story window by the time I got it together. But by the time I put that fourth one together in the middle of the night, you'd have thought I was the company's Swedish founder. You get really good at it when you do the same thing over and over again. That is our plan, except not scr***** up the first one. We want to get it right and then just get better and better and better and better.

In a past life, I have led global teams where I have successfully executed this exact same development strategy from large-scale FPSOs off the West Coast of Africa to satellite platforms in the South China Sea. The benefits and merits of it are real and tangible. It starts with having the right resources, large, long life, which are amenable to standardization and replication. This, we believe, is the winning formula in capital efficiency with flexibility to pace as warranted.

I've mentioned Suncor synergies. What are they? Surplus steam generated at the base plant that we can redirect for perhaps up to 80,000 barrels a day of SAGD production. Regional field infrastructure ranging from roads, utilities, pipelines, lodges, the aerodrome and more, internally produced solvent for ES-SAGD, avoiding cost and transportation -- or purchase cost and transportation cost, internally sourced diluent for shipping, avoiding the same cost, integrating water management for both process use and disposal capacity, increasing our feedstock optionalities and our upgraders to keep those moneymakers full at all time. The list could go on.

It's important to reemphasize that these synergies are enabled by 2 things, both unique to Suncor, our resource size and concentration and our existing asset footprint. It's the 2 of those together that enable this. They'll add material value, lowering both upfront capital, ongoing operating costs. It's really the cornerstone of our value proposition and how we see envisioning competing and winning for the long term.

Assets are like children. We always have a favorite, even though if we don't like to admit it, while I'm here on stage and admit it, Firebag is my favorite. This thing, it's the gift that keeps giving. It's our most profitable asset. It has material growth potential. And our plan here will be to scale a large, high-quality asset with already industry-leading performance. We have a regulatory approval today within lease a productive capacity of 370,000 -- 368,000 barrels a day. We produced about 250,000 today. We literally filed yesterday an amendment to expand that capacity to 700,000 barrels a day in the large Firebag lease.

We will be leveraging existing infrastructure, all those things I mentioned, and we will be deploying ES-SAGD or solvent technology. We picture developing this in phases, 4 of which are shown here, lookalikes in terms of 60,000 barrels a day. You see the estimated start-up timings, capital intensity, sub-$40,000 a flowing barrel. Each one of them comes online and then has a 30-plus year life thereafter at very attractive operating costs in the $10 to $12 a barrel range.

Let me comment on the solvent technology quickly. We have been piloting solvent technology at Firebag on a well pad with 8 pairs for 4 years, 2021 through 2025. What we have observed, experienced is we've been injecting about 10% solvent in the steam mix, a 30% production uplift, 20% SOR reduction and an 80% or higher solvent recovery. That leads us to say this is commercially -- commercially deployable technology. And so now our new well pads, all of our new pads at Firebag will be ES-SAGD. We funded and I've signed off and approved the first 4 of those late last year.

We're also participating in a joint venture that's looking at a higher solvent concentration. And if the learnings out of that will inform us to adjust our plan over time, we have that flexibility. One of the benefits also with the solvent, of course, is you use less steam, you have less emissions that go with it. There are a number of benefits that go with a successful application of solvent technology.

If Lewis were my favorite child -- or excuse me, if Firebag were my favorite child, Lewis would be my future unborn favorite because here, we will be able to use the proximity to the base plant where we will not need a central processing facility. We will be able to leverage those existing regional assets as shown on this diagram, cogen, steam, water extraction. We have an existing regulatory approval at Lewis of 160,000 barrels a day now, leveraging those assets, sequencing Lewis development with when the base mine depletes because of the synergy in the assets. And you can see we have 2 phases outlined there, 40,000 barrels a day each at a less than $30,000 per flowing barrel capital cost. Again, long life, low operating costs.

This chart displays the opportunities I've just discussed, each of those phases and takes the Fort Hills and Firebag debottlenecks that I mentioned in the earlier section and puts them together ordered from left to right on capital efficiency measured by development cost per flowing barrel again, scaled across the X-axis by production capacity for each project or phase. We have 400,000 barrels a day of undeveloped capacity at an average cost of $30,000 per flowing barrel.

Also shown based on the size of the resource base is a representation of further growth potential. That will involve decisions around business environment, shareholder value at another time. But this is in no way depletes our inventory. I described that earlier. This -- in fact, this would -- this has on the order of about 4.5 billion barrels developed with what's shown here out of this massive, much larger inventory.

This chart builds on the prior and displays how we would intend to execute our strategy. On the left, project phases are delineated by relative maturity. Where are we today? Are we in detailed engineering work? Are we doing the development planning? Are we in the preliminary screening? So you can see increasing maturity at the top, decreasing maturity down the page. Also shown are the initial capacities and the resources that would be developed consistent with earlier pages.

The stages of project execution shorten over time, whether that's engineering design, project execution ramp-up with the design one, build many, the benefits of that approach. The circle in each case denotes first oil. Sequencing is intended to maximize capital efficiency and allow us to apply lessons learned from project to project. In other words, we are not schedule-driven in this. We are cost, quality and value driven in how we would expect to execute this strategy.

These charts depict the capital requirements and the production buildup associated with that development plan. Cumulative capital over the next decade is on the order of $13 billion over a decade, peaking at about $2 billion a year for a 4-year period. Production would ramp up to 400,000 barrels a day of bitumen with the steepest ramp-up occurring post 2032.

Developed reserves, I commented on the order of about 4.5 billion barrels on this page at a very attractive cost per barrel. As I said, once online, productive lives exceeding 30 years in each instance. Low decline rates, mitigation would be via sustaining well pads as needed over time. The repeatable modular design, coupled with what we consider to be a manageable annual spend gives us high execution confidence, confidence that we won't be biting off any more than we can chew at any point in time and confidence that we can learn, apply and improve as we proceed.

These charts also depict capital and production, but now from an overall Suncor enterprise perspective. We intend to execute this in situ plan, maintaining capital at or below $6 billion a year, closer to $6 billion during the peak execution period, tapering off thereafter, achieved via the completion of ongoing projects and reductions in sustaining capital described earlier. Production near term will climb by the 100,000 barrels a day over the next 3 years, consistent with earlier comments, flattening out thereafter for modest growth later in the period.

But 2 things are worth highlighting on this graph. One is this longer-term optionality given our resource base, if conditions warrant the future growth potential. And second, but perhaps the most important is the relative proportion over time shifting from mining to in situ as the base mine depletes in the mid-2030s and in situ ramps up. Let me drill into these implications on the next chart. The title says it all. All barrels are not created equal. In situ delivers 2x the relative cash flow per barrel compared to mining.

Today, our production mix is roughly 70% mined barrels, 30% in situ. By 2040, we expect to reverse that 60% in situ, 40% mining. The math is illustrated on the right graphic. I'll briefly explain. The dash line at the top depicts the realized price for a barrel. Using 2025 as a reference, WCS was roughly USD 52, USD 53 a barrel, Convert that to Canadian dollars, CAD 70, CAD 71 a barrel, roughly. Mining costs, all in, OpEx, royalties, sustaining capital, transportation, roughly CAD 50 a barrel, all in. CAD 70 realization, minus CAD 50, you have a $20 a barrel margin or netback.

In situ, all in, OpEx, royalty, sustaining, transportation, about CAD 30 a barrel, CAD 70 minus CAD 30, $40 left on margin or netback. $40 a barrel in situ, [$20 ] for mining, a 2:1 ratio of cash flow per barrel after cost. I realize that's a lot of math. Just stick with me a little bit longer.

Our structural shift to in situ will provide a greater than 20% increase in relative cash flow per barrel from mix alone. The diagram depicts this with each symbol representing 10% of our production mix today versus 10% of our production mix in the future. The ratio or the weighted average is shown to the right and illustrates the 20% uplift, an enduring structural change.

So despite a long-term production outlook with relatively modest top line compound annual growth rate, much greater value will be delivered, value literally as if we were to grow production at the current mix on the order of 20%, achieved while spending within our means, again, what we believe a winning formula.

This brings me to my wrap-up, humbly titled, Why Buy Suncor. Executive summary showed you this before. Main message is this company has been rebuilt to win. We're not done yet. We've delivered materially over the last few years. We expect to continue to deliver in the short term with a large high-quality resource base. We're going to be playing this game successfully for decades to come. And given your trust and confidence in us, we intend to reward you at each and all stages along the way.

This slide just recaps pulls from Troy's earlier comments and just looks at the shareholder value on a per share basis with AFFO on the left, free funds per share in the middle and cash returns on the right. Now I've taken the liberty. We've built this debt consistently around $65 and $80 price, so you can kind of hold us accountable for our performance.

So what I've done here is this is all referenced off of '25 actual. The 0 line the reference is 2025. So we see the ability to more than double free funds flow per share and shareholder returns over the next 3 years at an $80 a barrel -- if we're in an $80 a barrel world. You can see if it's a $65 a barrel world, what it would be. And of course, if it's higher than that, it would be even more so.

So last slide, Why Buy Suncor. Industry-leading safety and operational integrity, a company you can be proud to work for, proud to own. Reliable, ratable, almost industrial-like financial and operating performance in most all business environments, uniquely integrated with an unparalleled asset base that both reduces volatility and allows you to capture value as conditions change.

The large long-life resource base I've defined in terms of our 2P reserves and our contingent resources, with a cost structure now where we are financially resilient, increasingly among the best of the best in -- when you have extreme market condition swings, a shareholder-focused capital allocation philosophy and I can assure you an executive team that is aligned and driven to compete and win.

As I said earlier, we do not believe in participation ribbons. We want to be at the top of the podium.

That concludes our presentation. Thank you for your interest, your support, your trust and your confidence. We do not take it for granted. We intend to continue to earn it. With that, I'll turn it over to Adam to wrap it up.

Well, thank you, Rich. That was a very clear and thorough.

Good day, and thank you for standing by. Welcome to the Suncor Energy Fourth Quarter 2025 Financial Results Call. [Operator Instructions]. 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 Senior Vice President of External Experience, Mr. Adam Albeldawi. 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 current annual information form, both of which are available on SEDAR+, 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 Kruger, President and Chief Executive Officer; followed by Troy Little, Suncor's Chief Financial Officer. Also on the call are Peter Zebedee Executive Vice President, Oil Sands; Dave Oldreive, Executive Vice President, Downstream; and Shelley Powell, Senior Vice President, Operational Improvement and Support Services.

Following the formal remarks, we'll open the call up to questions. Now I'll hand it over to Rich to share his comments.

Thanks, Adam. Our fourth quarter of 2025 was about finishing a very good year on a very strong note and that is exactly what we did. I'll review operational performance. Troy will cover financial. Let me start with safety. 2025 was the safest year in company history, our third consecutive safest ever across the board fewer incidents, lower severity, both personnel and process safety.

Relative to 2022, injuries and incidents are down 70% in 3 years. This is a credit to our people, our priorities and our processes. Now I recognize we put out an operational update earlier in the year, so I'll be relatively brief in summarizing some operational performance.

Upstream production. 909,000 barrels a day in the fourth quarter, our best quarter of any quarter ever, 34,000 barrels a day higher than our previous past, which was the fourth quarter of '24. Full year at 860 kbd, again, best ever by 32,000 barrels a day versus '24 our previous best. And 20,000 barrels a day above the high end of our original guidance.

Over the last 2 years, we've increased production, 114,000 barrels a day with the same asset base, no costly acquisitions, no major capital-intensive projects, growth from within upgrader utilization, an outstanding 106% for the quarter and 99% for the year, again, best ever.

Refining throughput 504 kbd in the fourth quarter our best quarter of any quarter again ever, 12,000 barrels a day higher than our previous best, which was literally the prior quarter. Full year at 480 best ever, by 15,000 barrels a day by -- versus 2024, our previous best and 30,000 barrels a day above the high end of original guidance.

Over the last 2 years, we've increased throughput 60,000 barrels a day with the same asset base, no costly acquisitions, no major capital-intensive projects, growth from within. Refining utilization 108% for the quarter, 103% full year, both best ever. All 4 refineries operated at 100% or higher for the second consecutive quarter.

Product sales, 640,000 barrels a day in the quarter, our best fourth quarter ever, 27,000 barrels a day higher than our previous best, which was last year. Full year at 623 kbd, also best ever, by 23,000 barrels a day versus '24, our previous high. And 38,000 barrels a day above the high end of our real guidance. Over the last 2 years, product sales have increased 70,000 barrels a day, supported by the same assets. After never having achieved 600,000 barrels a day sales in any quarter ever, we've now exceeded 600,000 barrels a day in 6 consecutive quarters.

Capital and cost, OS&G. Full year $13.2 billion within 1.5% of 2024 despite nearly 4% higher upstream production more than 3% higher refining throughput and nearly 4% higher refined product sales, higher absolute volumes, lower unit costs. Capital full year at $5.66 billion, down $510 million versus '24 and $540 million below original guidance. Yet we executed our business plan as designed. We simply delivered it at a lower cost. How? Through rigorous value testing, challenging design bases, quality job planning, disciplined cost stewardship and superior execution once in the field. To institutionalize, we now perform detailed readiness reviews before we spend money and comprehensive post-execution reappraisals after we spend money.

Simply put, we are increasingly better stewards of our shareholders' capital. Final reflections on 2025. Best ever in most all regards, safety, operational integrity, reliability, et cetera, with volumes every category upstream and downstream, quarterly and full year was best ever, breaking records largely set a year ago for more than 2 years, Peter's upstream team, Dave's downstream team and Shelley's central support team have not only been breaking records. They have been shattering records all above the high end of guidance for 2 years in a row.

How? Through crystal clear priorities, establishing ambitious daily, weekly, monthly performance targets, embracing industry best practices, promoting collaboration and teamwork and by rewarding our teams when they deliver with performance-based incentives. We continue to systematically raise the bar delivering higher, more reliable, more ratable operational results and consequently higher, more reliable, more ratable cash flow.

Now I'll turn the clock back 2 years, Suncor's Investor Day in the spring of 2024. We outlined a series of commitments for a 3-year period 2024 through 2026, including upstream production growth, reduction in WTI breakeven, increase in annual free funds flow reduction in annual capital spend and a net debt target with 100% of excess funds to buybacks that are after 1 year ago, February '25, we detailed progress after the first year of the plan. Recall, we achieved nearly 2 full years of progress in 1 year. At the time, I hinted at the possibility of perhaps achieving a 3-year plan in 2 years.

However, behind the scenes, I challenged our team to do exactly that. Now 2 years into an ambitious 3-year plan, very pleased to report, we indeed achieved 3 years of performance improvement commitments in 2 years, 3 and 2.

114,000 barrels a day of production growth in 2 years versus a target of 108,000 barrels a day in 3. Greater than $10 a barrel reduction in breakeven in 2 years versus a target of $10 a barrel in 3, greater than $3.3 billion increase in annual free funds flow in 2 years versus a target of $3.3 billion in 3 years. Capital reduced to $5.7 billion in 2 years versus a target reduction of 3 years. net debt of $8 billion achieved in the third quarter of 2024, 9 months early, and that $6.3 billion today, our lowest in more than a decade.

Bottom line, we met or exceeded every single target of full year or more early. In life, trust and credibility are earned by delivering on commitments and today's Suncor delivers. So what does all this mean? We're bigger, better, higher performing, more reliable, more ratable, financially stronger and more resilient, better equipped to compete and win. We were previously a high-cost producer. Now we are a low-cost producer. Our balance sheet is rock solid with net debt nearly half of what it was 3 years ago. In fact, the lowest level since explicitly 2014 with tremendous flexibility and optionality, like an industrial machine increasingly generating cash with less relative dependence on oil prices.

Proof year-on-year, WTI was down at 15%. Our AFFO was down 8% and our free funds flow down 6%. In 2025, share buybacks of more than $3 billion were $250 million per month throughout the year. increasing to $275 million in December. We were $250 million a month in January of '25 with WTI at $75 a barrel, and we were $275 million in December with WTI at $58 a barrel. We previously announced our plan to continue at this 10% higher level in 2026. And buybacks were independent of oil price in 2025 despite low oil price in 2026.

Over the past 3 years, we've repurchased 163 million shares, more than 12% of our float at an average price of $50 a share. Along with dividends, buybacks are a fundamental tenet of our shareholder value proposition. So now what's next? 2026 and beyond. That's the exciting part. We are far from done yet. We know that you don't make the Hall of Fame with a few good seasons or in Bill Belichick's case by deflating footballs before a championship game. It takes sustained excellence, high performance, exceptional and consistent delivery of results, so we will detail a new value improvement plan on March 31 in Toronto, 2 horizons short term, the next 3 years, longer term in the next 15 years. The longer-term horizon will focus on bitumen supply and development options. We know it needs to be bold and ambitious, clear and compelling to keep your interest and support.

So stay tuned, I wouldn't miss it. I can't wait to hear what we have to say. With that, I'll turn it over to Troy.

Thanks, Rich. I think the strong performance of the quarter and full year have been covered very well, and you can all find the detailed financials in our quarterly disclosure, so I won't repeat any of that here. Instead, as we transition from 1 year to the next, I would like to focus in on our financial resiliency and how that benefits those who choose to invest in us over the long term.

Starting with our balance sheet. As Rich mentioned, our net debt closed the year at a greater than 10-year low of $6.3 billion, well under 1x debt to cash flow at $50 per barrel WTI and even lower current strip commodity pricing.

Looking behind that number. During the quarter, we renewed our credit facilities with a consortium of Canadian, U.S. and international banks for tenors of 3 and 4 years, providing us with $5.2 billion in available liquidity not including our cash on hand. In addition, in November, we took the opportunity to refinance CAD 1 billion debt in 2 note tranches of 2 and 5 years, achieving the lowest Canadian energy industry spreads in those tenders in more than 15 years.

When the near-term commodity price environment is uncertain, we believe investors look for companies that tangibly demonstrate their balance sheet resilience. And I would like to thank both our banks and our bondholders for the confidence they have shown in our business.

Next, as you would have seen, our year-over-year share buyback -- share buybacks and dividend per share increased by 4% and 5%, respectively, when over the same time period, average crude prices decreased by $11 per barrel. This ability to offer stable, predictable shareholder returns is backed up by a WTI breakeven in the low 40s, a uniquely integrated set of assets, the flexible character of our capital expenditure plans as well as the continuous improvement mindset that is embedded at every operation and with every one of our 15,000-plus employees to our recently implemented operational excellence management system.

At Suncor, our future is not defined by commodity cycles. It is instead defined by how well we perform through them. There is perhaps no better proof point of that than a comparison of the first and fourth quarters to 2025. Q4 AFFO of $3.2 billion was 6% higher than Q1 even though the average oil price had decreased from $71 to $59 per barrel. Finally, Rich referred earlier to the stewardship of our shareholders' capital and I wanted to expand on that a little, specifically as it relates to shareholder returns.

I hear many companies refer to returning surplus cash to their shareholders in the form of share buybacks. Suncor doesn't think of our shareholders' money that way. We don't pay you what is left open. We pay you first. We look at our cash flow results, pay our dividends, fund our buybacks and only then consider our spending on other things.

On that note, I'm pleased to say that we have continued share repurchases of $275 million per month into January and February, a level started in December of 2025, which represents an increase of 10% over the average monthly buyback in 2025.

With that, I will turn the call back over to Adam so that we can take some questions.

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

[Operator Instructions] And our first question will come from the line of Greg Pardy with RBC Capital Markets.

Incredible rundown, incredible year. Rich culture, the shift in the company's culture since your arrival and the reconstitution of the team and so forth, there's obviously been a huge driving force in underlying the performance. When it comes to successorship in the past, it almost looked as though a lot of those changes have been sort of preordained for years in the future. How does that change now under your watch?

Well, Greg, I think if I step back, I would say leadership development and succession planning. When I say leadership, that can be technical leadership, operational leadership and fundamental business leadership. To me, great companies have continuous pipelines of leadership development candidates. So more than 2 years ago, we started out with the development of a new leadership development framework. It is now in place. And Suncor is more about what you know, not who you know. And we value functional excellence and expertise versus generalist experience broad-based experience sets. But you need both, but we believe you need to know your business, know it extremely well. We conceptually target multiple candidates, 3 -- for example, kind of a 3:1 ratio of candidates for higher-level jobs in succession planning because things happen in life.

But I would just wrap that up with succession planning and leadership development in the broadest sense are extremely high priorities. They have been high priorities from day 1 when I arrived. And quite frankly, it was one of a very short list of material commitments I made to the Board of directors.

Okay. And I'll shift gears on you a little bit. Just the mining operations performed very well in the fourth quarter. You had very mixed conditions. I'm just wondering, have there been changes that you've implemented sort of year-over-year to drive that performance?

Yes. I'll make a comment or 2, and then I'll ask Peter to expand on that. The unique thing about mining, of course, is we have to operate in a wide range of weather conditions. And when you think of mining, there's really it's more than this, but 2 fundamental areas that affect your performance during weather events. The condition of the mine itself and the condition of haul roads. And so haul roads are to mining like tracks are to a rail company. You have to design, operate and maintain them exceptionally because they're kind of the tracks or the arteries of your ability to sustain. So we put a very high priority in that.

And so although there were a lot of conditions in the fourth quarter, wet conditions, of course, the cool off things like this. Our fourth quarter was our best quarter ever. And as you would expect, many of the months in that quarter were our best months ever. But Peter, why don't you comment further on what we've done, particularly around the autonomous haul system and the ability to operate in all weather conditions.

Happy to do that. And so we worked really closely, Greg, with our supplier, Komatsu in this case, a base plan to implement some technology on the truck. We call it mud mode but essentially, it reduces slippage and stoppage of the autonomous trucks and soft conditions. That was really successful. We also learned a lot during the implementation of that. In fact, we're working on a mud mode 2.0, if you will, to implement here by the spring of this year. So we're excited about kind of the next iteration of that technology.

But really, in reality, it's a combination of multiple improvement activities across our mining operations both in our autonomous operations, which were now fully deployed at base plant up to 140 haul trucks running autonomously and in our staffed operations where we're continuing to work on the fundamentals, improvement activities such as more increased load factor on our trucks, reduce fueling time for pieces of equipment, optimizing our shift change. Just across the Suncor mining portfolio, last year, we moved 1.4 billion tons of material. It's a 12% increase year-over-year in total material movement at essentially the same cost base. And so we're just continuing to drive that efficiency year-over-year. We always talk to our teams about how little things add up to a lot in the mining business. And that's what the teams are focused on these little opportunities, adding up to a lot over the 1.4 billion tons to drive value.

Yes. I'll just make one last comment, and then we'll continue. You mentioned the word culture or cultural changes, Greg. One of the big things and it's hard to see from the outside is our shamelessly embracing industry best practices wherever they exist in mining, whether that's hard rock mining, in Canada outside of Canada, oil sands mining. So increasingly our leaders, our teams observe, listen, learn and apply. And that is looking from the outside in on how we can get better. And so we have embraced and modified historic practices across the board when we see someone who does something better than us, that is a very cultural a cultural aspect of today's Suncor that I believe is quite different than we were not too many years ago.

One moment for our next question and that will come from the line of Dennis Fong with CIBC.

First off, congrats on obviously another very strong quarter. My first question here, I wanted to follow a little bit along the lines of what Greg was addressing the second question. But I wanted to maybe remind the call back to Q1 '25 where you Rich highlighted a lot of field-driven optimization. Can you provide maybe a bit of an update on like the backlog of these field-driven optimization opportunities that you see, frankly, across upstream and the downstream. And obviously, how that has really improved cost structure despite headwinds in things like mine plan or some of the mining KPIs.

One of the things that start with, Dennis, is it's a bit less of a backlog of field-driven optimizations because what we do now when we see that opportunity, we team tackle it. We get on with it. And what we see is, again, it ties a little bit to that cultural is that we continue to replenish our ideas and opportunities. And it's been a huge part of why our refining network is now consistently at or above 100% utilization. Because we have been optimizing those assets, pots and pans and fundamentally increasing the denominator. And Dave, do you have an example or 2 you maybe share with Dennis.

Sure. Maybe Dennis, I'll give an example out of Montreal. Montreal we've seen some pretty significant increases in our throughput 2 years ago, we were about in that plant about 120,000 barrels a day, but we knew and the team in Montreal knew they could do more and really didn't have a signal to challenge constraints. So we came up with a new philosophy in our downstream of value and volume. So we run our refineries full, and we challenge our sales teams to sell full. And with that signal, Montreal went after a few things. One of the things they went after is -- and it's in the theme of small improvements that add up big, and this is like field operators, challenging constraints and flagging ideas. We've replaced 2 control valves, 1 pump and power and a small motor, $100,000 investment gave us 20,000 barrels a day at the Montreal refinery. That's a $100 million a year improvement for $100,000 investment. We have lots of other opportunities like that and lots of improvements in that space that are similar. That's a good example of what we're...

And it starts with leadership, being interested boots on the ground, in the field, listening to people who do the work and understand it better than anyone. And then when they see that opportunity supporting it, promoting it and making it happen. And when you start doing that, you engage your workforce, and they come forward with more and more ideas. So you've heard us say multiple times, we're not done yet. It's not necessarily because we have this long list of things to do, but we are embedding and ingraining a culture of continual improvement in driving. And always, in any facility, you will always have a limiter or the bottleneck. And if you systematically identify what that is and attack it then something else becomes the bottleneck. So I think on this one -- in this particular topical area, we will never be done.

That's obviously a lot to frankly look forward to. My second question and maybe carrying along the lines of kind of continuous improvement, finding where all the limited happen to be. I believe it was in the last conference call you highlighted single train capacity at Fort Hills to be about 110,000 barrels a day. How have you looked at the after performance of the facility? Have you been able to identify opportunities to further and consistently run at that high level and maybe even further optimize beyond the we'll call it, 220,000 capacity of the 2 trains, especially as we go forward to opening up mining availability.

One quick comment, and then Peter will expand on it. As we look at this opportunity for continued growth from within, the areas where we see the most -- the biggest opportunity set are Fort Hills and Firebag with the identified opportunities where we're confident we can continue to increase their overall production level. Peter, why don't you comment explicitly on Fort Hills and your 2 Ferraris, you have up.

And yes, we have been, as we mentioned in the last call, really testing what the stream day production capacity is of the Fort Hills asset. We're pleased to rates up over 220,000 barrels a day from both trains. We are looking to ensure that we can deliver that to reliably day in, day out, and that is really going to come down to ensuring that we've got the right material movements from the mine in front of us that we're able to deliver the production volumes into the plant and do that sustainably while maintaining a healthy mine inventory. That is all really dependent on making sure that we're opening up our North pit, which is the last and final pit at Fort Hills in the right manner and sequencing the material into the plant in a way that is sustainable along with enhancements, I would say, to the front end of the plant, where we look to kind of metal up and protect against some of that erosion that comes with the higher material throughput that we're running.

So I know the team is really highly focused on doing this. And yes, we've seen some success and you've seen the calendar day rates come up through the fourth quarter, and we look forward to more of that here as we go along.

Dennis, I'm a lot like you. I don't remember all the numbers or get involved in a lot of the details on that stuff. But for example, why do you guys smile? One of the things we've had the name plate at Fort Hills is 194,000 barrels a day and had a target of 175,000 from a production level. So kind of a 90% level. Our belief is with that a bigger denominator that 220,000 or something, a production level in the order of 200,000 barrels a day should be the more near-term ambition. And you want to save a few things for Investor Day. But I think I've just established Peter, what the minimum there might be for 4 barrels.

One moment for our next question. And that will come from the line of Menno Hulshof with TD Cowen.

I'll start with a question on buyback guys. $275 million per month. You mentioned that the $250 million per month in 2025 was fairly oil price agnostic and that you've repurchased $275 million in January and February and that buybacks are quite senior within the capital stack. But presumably, there are conditions where you would reconsider your $275 million guide or maybe not. Any thoughts there would be helpful.

I'll make an opening comment, and then obviously, we'll turn it to Troy on this. A real key enabler in our ability to do this and make this commitment has been to reduce our overall net debt materially over a relatively short period of time and this really dramatic reduction in our breakeven. And what we've said, we wanted to buy back shares at a rate at least consistent with dividend growth so that our overall dividend burden doesn't grow and increase our breakeven and we found -- we've achieved all of those. But Troy, you want to talk more explicitly about the buyback. And Menno, my sense is you might be suggesting what if we were in a lower oil price world, what might that mean? But Troy, do you want to comment further?

Yes, sure. I would say to answer that question, I would look at the makeup of our business because I think when you do, you will see something unique and how we're going about this. Our level of integration and I don't just mean between the upstream and the downstream, I mean within the upstream itself allows us to capture margin opportunities over the short term that others can't. It also drives greater utilization of the assets, both under normal conditions and also when anyone ask that experiences planned downtime. Both of these allow us to maximize and make more predictable and stable our profitability. I would also point to this attitude that I think we've conveyed about paying our shareholders first. So ultimately, they'll rather than count on my own words, much as you pointed out, Menno, look at our 2025 track record and just watch what we're going to do in 2026.

Terrific. Maybe I'll just -- I'll follow up with a follow-up question to Greg's on Q4 production, which was clearly very strong. Do you think production would have been even higher in the absence of wet weather in October and extremely cold December? Or was there no weather impact at all, given the mitigation work that's been undertaken.

We run an outdoor business. We mine. We mine come hell or high, wet, dry, cold, hot, and we got to design and operate for that and maintain our assets. So we put on -- when it rains, we put on raincoats. When it's cold, we put on mittens. But no, we delivered throughout the entire quarter.

One moment for our next question and that will come from the line of Neil Mehta with Goldman Sachs.

I guess, Rich, just wanted your perspective on the refining market, particularly in Canada, you ran well, but you also captured very well in the margin premium relative to the U.S. has kind of been sustained. And so for those of us who probably have less visibility into the Canadian refining market in particular? Just how do you think about the sustainability of the Canadian refining premium relative to the U.S.?

Neil, if you look back and you can look back over quite a long time. 15 years or so, you were going to -- if you were choosing to be a refiner anywhere in the world and profitability was at the top of your list, I think you had to pick Canada. And then when you say, well, why is that? Well, we've got product pricing based on import parity, we have locally advantaged crude prices. We've got a lot of structural things that contribute to an advantage but then what you've seen here for this company now for 2.5, 3 years, is an advantaged structural setting with high-quality asset base but increasingly run and operate it better and better and better, more opportunistic for the market. So I think that's part of the commentary that Troy had a little bit, the integrated nature, how we manage and maximize the value of molecules and as craps go up and down, I think those -- the majority of those fundamental advantages we will retain those here. Dave, do you have anything else, particularly around margin capture or whatever to add?

Yes, Rich, what I'd add to that, and I think you characterized it well. I mentioned earlier, we have our signal of value and volume. And really, we run our refineries full. We have a signal to cellphone. And then over time, we improve our yields and our sales channel mix. And over the last year, we had record crude throughput, as you know, but we also had record gasoline production, record diesel production and record jet fuel production. So we're translating those that throughput into valuable products. And we've also increased our percent branded channel mix as well by growing our retail mostly and a little bit on our wholesale side of our business. So we're selling that through our most profitable tiers. So that's probably the biggest thing we've been doing is making sure the yields are strong with the additional throughput and selling through the optimal channels to keep our margin capture.

One other thing I'd add to it, Dave, I think what your teams have done in the collaboration between the operations, the supply and trading and the marketers. Those are 3 functional areas of expertise, but how they work together, increasing jet fuel production in the East, optimizing diesel in the West, things to really target the market and to fine-tune or moderate our facilities to meet the market demand I think that's been -- I mean, I've been a part of seeing that evolve. I think that is stellar. And every molecule and every dollar matters. And last time I checked, your teams aren't dropping too many on the ground.

No, they're not. And tune in for Investor Day, we have some really great stories to tell on yield improvements as well.

That's great. That's great color. Just a follow-up is as some quarter earned the license to do M&A at this point, I mean your mousetrap seems to be working really well. And for a long time, it was about fixing the business organically and getting the multiple up but a lot of that's happened. And to the extent that there are other companies that could benefit from the way that you are running your business. Are you a natural consolidator? Or is the story you're going to tell at the end of March is one of organic and more stay-the-course? Just your perspective on that would be helpful.

Yes. I'll start out with what our goal is to be a value creator for our shareholders. And that largely starts on a per share basis, whether that's free funds flow or whatever. In terms of earning or credibility trust, we talked about that, it's based on delivering on commitments. I think we're past -- wow, these guys had a good quarter or 2. I think we've passed that. So I hope there's probably others listening that can answer this better than I, that we've earned the trust and credibility that any and all actions we do internal or organic or inorganic will be in the shareholders' best interest to increase their ultimate value.

One moment for our next question. And that will come from the line of Doug Leggate with Wolfe Research.

Rich, I know you don't want to get in the front any more than you already have perhaps of March 31. But I wonder if I could ask you to maybe put some gating items around your spending levels beyond 2026. Should we expect the $5.6 billion, $5.8 billion to be like a cap? Or how do you think about it in terms of the proportion of cash that goes back to shareholders. Now if I may just add on to this, some of your peers talk about a percentage of cash flow. Some talk about a percentage of free cash flow. You've obviously talked about 100% going back to shareholders because of where your debt is. But but that's free cash flow, which is discretionary on your level of spending. So what's the capping item on CapEx.

Yes. Doug, I think it's a really relevant question in things. As we look at this, our view is competing and winning in today's oil and gas world, there's a whole bunch of components. Obviously, your size and scale, the quality and longevity of your resource base on and on. But when -- in capital, we were increasingly talking about it's not only return on capital, but return of capital. And I think Troy's introductory comments were aimed at amplifying what we believe is important to the majority of our shareholders and what we strive to provide. And so I've kind of hit on this at some investor meetings and broadly on calls, we have been constructing a longer-term plan where we can have our cake and eat it too, where we can develop incremental resources over time and we can continue to return capital to shareholders while we're doing that.

We won't have to stop the presses for a multiple year period while we have our capital expenditures blows out. And key in doing that is having the optionality within the resource base, which will be a big part of our conversation on March 31. One is our resource base, not only our 2P reserves, but our contingent resources, what we believe we have there, the advantages we believe those have in terms of capitally efficient development, Lewis, Firebag South or Firebag Phase 5 as we call it, but how we think we can do all that and do it within a capital construct that stays kind of at or below about that round numbers about that $6 billion level. And then in a $60, $65 a barrel world, we continue to grow dividends. We can invest and replace production decline, perhaps even grow it. And we can continue, and this was not in a priority order, to return cash to shareholders via buybacks. So we are carefully assembling this orchestra in such a way that we think we can offer the most value, not only long term but each and every quarter, each and every year to shareholders.

Troy, do you have anything you'd add to that?

Doug, I'll just add. I think if you look at the model of the company that we've built here, a lot of it is around stability and predictability. You've seen that the last 3 years with respect to our OpEx, which is roughly remained in the same range even though we've significantly increased both our production and our refining utilization. I think you're going to see that in CapEx. And I think we've demonstrated that so far. It's certainly our plans for the long term. And you've also already seen it shareholder returns. We really want to be a company that investors can count on largely regardless of what's going on in the external environment.

I'll just add one comment to that. It's not like we operate and perform and then see, okay, what are we? What can we do? We have had a very conscious-focused vision of what we want this company to be and where the unique space in investors' portfolio, we believe we could occupy if we achieve that. And all of our efforts have been geared toward creating that company. And I think you're seeing that more and more predictable, ratable, reliable, industrial machine like the ability to return on and return of capital. All of this has been part of a very deliberate vision or plan for several years running, and we've been putting the building blocks in place and you're starting to see it now. And we're having fun with it and we're not done yet.

I appreciate those answers, guys. Rich, I wonder if I could do a quick follow-up. I know it does not affect you because your model is uniquely integrated. But obviously, there's a lot of focus on what's happening to crude spreads in Canada. I just wonder if I could ask you to just reiterate your immunity to any weakness that we see in WCS and perhaps offer any color as to what you see as a dynamic beyond the normal seasonality. Are you seeing anything materially different because your colleagues over at Imperial didn't seem to think there was anything materially changing. I'd love to hear your opinion on that.

Well, I think, Doug, you accurately flagged one of the really fundamental attributes that makes us different. And it is this immunity or the lack of any material movement in our economic performance with WCS differentials. And that gets back to again, this integrated aspect all the way from our upstream to our downstream, our ability to upgrade bitumen or heavy crudes to light crudes and things. There is a unique asset base that is different for us. And so when we look at like world events and things, you just look back over the last decade or so, what differentials have done here. They've been tight of late, they've widened here a little bit. They bobble around when there's news on Venezuela and other things and/or tariffs and I don't mean to dismiss it at all but much of that outside noise from a Suncor perspective is kind of much to do about nothing. Because of, again, what we are, who we are and how we're constructed.

Now we look for opportunities in that. And there may be opportunities for us when others catch COVID or catch flu, we might sneeze and have a little bit of a sniffle. So there's opportunities in that for us when others have more volatility than we have. And we think the creation of shareholder value often occurs under weaker or distressed market conditions more so than it does under strong and growing market conditions. So our vision for a number of years now has been to strengthen ourselves to build that resiliency that flexibility and optionality. So when we see something we like or we want to do something that makes sense, we can do it confidently and without hesitation. And I think I'm kind of getting off the track of your question a little bit, but I think that's where we are.

So the market conditions were largely market takers. But I think our unique construct gives us a -- we don't overreact or panic as things change. And our view right now is there's things going on around the world, but I don't think any of them are going to be fundamentally material to how we continue to deliver value.

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

I actually wanted to follow up a little bit on the refining macro. So if you look at last year, there was a very bearish sentiment in refining, but as the year progressed, fears were proven completely wrong. And you guys generated almost $4 billion in your cash from operations from refining. And we started this year with pretty much the same sentiment on refining, which was pretty negative. But when we look at the fundamentals, the cracks Jan to Jan are actually up. And the capacity additions are more limited. So I'm just trying to understand from where you're sitting in terms of refining macro, if you can make some comments, in terms of diesel and gasoline, do you expect 2026 to be somewhat of a similar year for 2025, which was a very strong year. If you could just talk a little bit about that.

I'm going to ask Dave to comment explicitly in a minute. But I'll tell you, as a large miner and a big upstream company and understanding the geopolitical uncertainties and the importance of breakeven and stuff. When I go to bed at night and say my prayers I thank God for the downstream. Because the level of integration we have, it provides this natural hedge and support. And sometimes upstream goes up, downstream goes down and vice versa. So it is a really fundamental part of this value proposition and what we deliver.

Dave, so other than that philosophy, do you want to offer some specifics on that?

Yes, for sure. I mean, specifically, if you look even at today's cracks, Manav, and as you're aware, we're soft -- gasoline is pretty soft in the Mid-Continent. L.A. market is strong across the board. The harbor is strong on diesel, particularly with recent cold weather and reasonably good on gas cracks. Distillate margins through '25 were strong. and they really peaked in October, November. And I would expect diesel to continue to remain strong through the first quarter, and we've seen that trend over the last few years where diesel has been above gasoline. That plays the Suncor's strength. We have a pretty low G to D ratio. We also have pretty good G to D flexibility, and we can win in any environment, but we really like good diesel cracks.

In the fourth quarter, we achieved not only record refinery utilization but record diesel production. And how do we do that? I'll give you an example out of Edmonton, this is a little sneak preview of maybe some things we'll share at Investor Day. The first half of the story or the second half of the story, stay tuned. In the Edmonton refinery, we made a few simple routing changes that took advantage of some improved catalysts that we put in during our turnaround and structurally increased diesel yield by 8,000 barrels a day. And that resulted in a correspondingly lower diluent production, so much higher value product on the diesel side. We did that for $140,000 investment and that delivers about $45 million a year in incremental value. And then we were able to move that through our -- we did that through the third and fourth quarter of last year.

Third and fourth quarter. So it really had minimal impact on 2025. And it's all...

We see this into '26, and we think there's opportunity to grow that even further in 2026. And then we sold that through our domestic channels as well as we have export capacity on both coasts. But we're not done yet Tune in for more on that one, on that story in March.

Perfect. My quick follow-up is and maybe you'll again talk more about the Analyst Day, but you took over the operations of Syncrude. We are seeing some improvements. Help us understand that you -- the changes you brought about once you kind of started operating that asset on your own versus the JV entity that existed in between. If you could talk a little bit about that.

I think some of the key things is Syncrude is fully part of the Suncor family. And so what that means is best practices, central support and just the scale and efficiency that come with as opposed to being a joint venture in kind of an island, you're now part of a continent. And so we have brought the best to bear. We have also -- whether it's best practices or people. We've moved people into Syncrude, moved Syncrude individuals out to other operations. So they're just getting the full benefit of the storyline we've told how we're systematically reducing variation asset to asset. And while we're doing that, we're elevating the overall performance across the enterprise. So Syncrude being fully fledged part of the family has been a big part of that. Everything we're doing applies to them equally as it would to any other asset, and that makes a difference.

Congrats on the great result. And again, once love the choice of the song that placed before the call starts.

[Operator Instructions] And our next question will come from the line of Patrick O'Rourke with ATB.

Congratulations on a strong quarter. I was going to ask on Syncrude, but that was a very comprehensive answer there. So maybe I'll talk about sort of the refinery, the throughput levels that you've had here, been able to achieve over 100% and you spoke to raising the denominator earlier on the call, at what point do you think about sort of formalizing those levels here?

I'll give you a little bit of a peek behind the curtain with what we have been doing to systematically across the entire network debottleneck and add capacity, we now run 2 sets of books. So externally, the nameplate of our system is 466,000 barrels a day. It's been that way for a long time. As we continue to report to you, that's the denominator. But what you're seeing is you were getting north of 100%, what you really know is the denominator is bigger than that. And so the second set of books is the internal books, the drive to be the best we can be. So this team in this room sits down weekly, monthly and literally daily and looks at performance and we compare to performance to our internal books with a bigger denominator. So instead of looking at 103%, 105% of might be looking at something that's 95%, 96%. And then as opposed to patting ourselves on the back for being north of 100%, we're saying, at 95%, 96%, where is that last 4%, 5%. So that's the philosophy of how we're doing things.

And we need to think about when we go externally and say, okay, the new denominator is x because we don't want anybody to miss the memo when we do that in a year from now and say, well, how these guys, they were 103% in 2025, and now they're only 97%. Man, their performance went down. You got to look at the barrels and the percentages, but we know as we get -- as we continue to be north of 100% at some point in time, we have to come clean on what we -- what is the real capacity of this network and it's well above 466,000.

Okay. Great. And then maybe just on the return of capital, thinking about the debt position of the company here. $6.3 billion versus the $8 billion target? I know there's been a working capital impact in the fourth quarter and historically a bit of a reversal of that in the first, but let's say we get towards the end of the year and the commodity conditions have been such that you're still sitting well below that $8 billion. How do you think about the signals for releasing that to shareholders? And sort of what's the preferred vehicle if you do make that decision? Maybe I'll add this sort of since you touched on inorganic, is there any potential that you would see that as dry powder where you can create per share accretion?

Troy, do you want to comment a bit?

Yes. I don't think we look at dry powder for -- and I think you're suggesting acquisitions in terms of where the balance sheet is. I think we let the opportunities to find whether we want to do something like that. And I think we have an excellent track record of it, both from a disposition perspective as well as an acquisition perspective. When we think of return on capital, we do look at it over a longer time period than 1 month, look at it over a full year. You are right that the normal trend is for us to have a working capital release in Q4 and then actually usage in Q1. I don't expect that to be any different this year.

It's important to go back to what I said about the order in which we pay things as people think about the balance sheet and how it's used around share buybacks or capital ultimately, there's some clarity in the order we're doing or paying out our cash flow because we actually look at it as though we're looking at the benefits of what our capital spending is versus the cost of any leverage that are associated with it. So it's not so much funding the buybacks themselves off the balance sheet. It's actually funding what's at the end of the line. So stay tuned if operations continue to improve on the path they have, that gives us more direction to increase those buybacks, but it's not so much related to where our debt levels are.

Thank you. I'm showing no further questions at this time. I would now like to turn the call back to Mr. Adam Albeldawi for closing remarks.

Thank you, everyone, for joining our call this morning. 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 all for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Suncor Energy Third Quarter 2025 Financial Results Call.

[Operator Instructions]

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 SEDAR, 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 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, fewer incidents, lower severity, both 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, 870,000 barrels a day in the third quarter, far and away our best third quarter ever. In fact, 41,000 barrels a day higher than our previous best, which was achieved last year. Also, within 5,000 barrels a day of our best quarter of any quarter ever, this was accomplished despite turnaround activity at both Firebag and Syncrude.

A bit of context. Over the past 2 years, our third quarter has averaged 850,000 barrels a day, 145 higher than the prior 3-year average. I'll comment more on this performance shortly. Upgrader utilization, 102% for the quarter with base plant following the successful coke drum replacement project at 106%. Year-to-date utilization at 96%, with both base plant and Syncrude exactly at that level.

Refining throughput, 492,000 barrels a day in the third quarter, our best quarter of any quarter ever, exceeded our previous best, the third quarter of last year. The third quarter is typically the highest throughput quarter each year, that said, with back-to-back records in '24 and now '25, we've averaged 27,000 barrels a day or 6% higher than the prior 3-year period. Our third quarter results were achieved with an industry-leading 106% utilization. All refineries were effectively at 100% or higher with records set at Sarnia and Montreal. Overall, year-to-date, we're at 101% on pace to beat our annual record of 100% set last year.

Product sales, 647,000 barrels a day in the third quarter, again, our highest quarter of any quarter ever. 34,000 barrels a day or 6% higher than our previous best quarter, which was the fourth quarter of last year. Recognizing all sales are not created equal, our highest margin retail sales are up 8% year-on-year, while lower-margin export sales are down 11% year-on-year. Our strategy is to achieve both volumes and value growth. Operating costs, year-to-date OS&G, $9.7 billion, essentially flat with year-to-date '24 despite 32,000 barrels a day higher upstream production, 14,000 barrels a day higher refining throughput and 21,000 barrels a day in higher product sales, higher volumes, lower unit costs.

Turnarounds. On our second quarter call, we shared second quarter turnarounds were completed at historically low cost and best ever durations. Our third quarter turnarounds were completed equally well. A couple of examples. Montreal refinery, our hydrocracker and hydrogen plants. Previously, 55 days to complete the work, we budgeted it at 50. We completed it in 40, going from industry fourth quartile to second quarter. Previously, it cost us $80 million. We budgeted it at $71 million. We completed it for $62 million, again, going from industry fourth to second quartile. And I'm really pleased to say it was completed without so much as a cut finger or a spilt barrel.

Edmonton refinery, synthetic crude unit completed at an industry first quartile level. Firebag, Plant 92 in July, similar story, under budget, ahead of schedule. Syncrude, 81 coker completed early in the fourth quarter at best ever performance, cost and schedule. Historically, this work took us 72 days. We had a very aggressive budget of 50, and we did it in 48. Literally, every single turnaround in '25 has been completed at lower cost and best ever durations.

In aggregate, our '25 turnaround program is approaching industry second quartile in North America with second quartile in North America representing best-in-class in Canada. And the best news, we aren't done yet. We have tangible plans and a pathway to further improvement.

2025 is the second consecutive year our annual turnaround program was completed at under $1 billion. Under $1 billion is now Suncor's new norm versus $1.25 billion historically.

I'd like to -- here, I'd like to kind of pause and make a comment or 2 on a context on our performance. For 2-plus years, the last -- the past 8 or 9 quarters, we have announced performance records. Safety, production, throughput, product sales, asset utilization, turnarounds and so on. We've dramatically reduced our WTI breakeven and at the same time, reduced our net debt. We've materially grown free funds flow, fueling higher return of capital to shareholders.

We've strengthened an already uniquely integrated high-quality asset base, consolidating ownership and achieving full control of Fort Hills, debottlenecking upstream and downstream capacities at little to no cost, expanding bitumen transfer capabilities between base plant upgraders and other assets and capturing downstream synergies during and outside of turnarounds. The impact of our actions is most notably seen in our volumes, which are historically the lowest in the second or third quarters of each year. However, starting in '24 and now again in '25, our second and third quarter volumes have been higher, much higher with significantly less variation versus historic first and fourth quarters. How? By design.

We are systematically reducing variation and elevating overall performance, embracing an industrial engineering mindset, improving systems, processes, practices and tools, delivering higher, more predictable, more ratable results quarter after quarter in turn, delivering higher, more predictable, more ratable cash flow quarter after quarter.

A few illustrations. Third quarter 2025 AFFO, $3.8 billion with WTI at $65 a barrel. Last time we had $3.8 billion AFFO was the third quarter of '24 with WTI at $75 a barrel. Third quarter free funds flow, $2.3 billion, the highest operationally since fourth quarter of '22 when WTI averaged $83 a barrel, $18 higher. Year-to-date free funds, $5.2 billion, within $200 million of 2024 despite oil prices being $11 a barrel lower. Buybacks, $250 million a month in 2025 every month, independent of oil price, $2.50 when WTI was $75 in January, $2.50 when WTI was $61 in May.

Year-to-date, we bought back more than 42 million shares, 3.4% of our float at an average cost of $53. Year-on-year, $340 million more in buybacks despite oil prices being down $9 a barrel. At today's oil price, I strongly believe buying our stock is our best investment, and we intend to keep buying it month after month after month. The fact is our business model and uniquely integrated asset base now coupled with much higher performance offers investors a unique and I believe a premium value proposition, high performance with more predictable, more ratable cash flow delivered with less relative dependence on oil price.

With any large industrial complex, the highest performance occurs when systems and capabilities align in sync. What you are seeing is Suncor's unique integrated cash generation capabilities increasingly aligned and in sync with fundamental attributes that cannot be readily replicated.

2025 guidance. On our second quarter call, we revised capital guidance down, dropping the range midpoint by $400 million to $5.7 billion to $5.9 billion. Today, we believe we will come in at the low end of the revised range. Now based on third quarter performance, we're revising 2025 volumes guidance up across the board. Production revised range, 845,000 to 855,000 with our midpoint up 25,000 barrels a day. Refining revised range, 470,000 to 475,000 barrels a day, the midpoint up 30,000 barrels a day. Refined product sales revised range, 610,000 to 620,000, midpoint up 45,000 barrels a day. We expect to exceed the high end of our original guidance for the second consecutive year.

Now I recognize the temptation to conclude, well, we must have been conservative. But let me remind you, every single turnaround was completed at its shortest duration ever. Our massive coke drum replacement project was executed flawlessly and upstream and downstream asset utilizations are once again at record levels. The result, every volume category in 2025 is expected to be a new annual best ever. So was our original guidance conservative? Or is today's Suncor simply continuing to outperform. I've said before, we are institutionalizing a culture that every barrel in every dollar matter.

With that, I'll turn it to Kris.

All right. Thanks, Rich. Good morning, everyone. Well, since this will be my final earnings call, I do want to start by first thanking the investment community for your engagement, your questions, your partnership over these last 3 years. And it's certainly been a privilege to engage with all of you during my time here at Suncor. I'll have a bit more to say on my retirement in a moment. But before I do, let's first talk about what is an exceptionally strong quarter.

To begin with, I'm pleased to announce that the Board of Directors has approved a 5% dividend raise for an annualized dividend of $2.40 per share, which is in keeping 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. And because of our steady return of cash to shareholders through our share buyback program, this increase in our dividend does not affect our WTI breakeven price.

Our buyback program continues to be a key driver of per share dividend growth, creating a reliable flywheel for shareholder returns. It's yet another proof point that we are doing what we said we would do, delivering reliable growing cash returns to our shareholders. The third quarter is also another strong quarter for shareholder returns, consistent with our disciplined capital allocation framework. We returned just over $1.4 billion to shareholders, including $688 million in dividends and $750 million in share buybacks.

At the end of the quarter, we had repurchased 3.4% of our equity float, supporting future dividend and free funds flow per share growth. Our approach remains unchanged: drive growing free funds flow and returning 100% of excess funds to our shareholders on a full year basis. As Rich mentioned, our buybacks have been consistent despite commodity movements in 2025, a testament to the predictability and quality of this company's cash flows.

Turning to the business environment in Q3. It was marked by slightly higher commodity prices with WTI averaging USD 64.95 per barrel, which was up $1.25 per barrel versus the prior quarter. Notably, we saw an improvement in our downstream 5-2-2-1 custom index of USD 3.35 per barrel with improved cracking margins, averaging $31.20 in the quarter versus $27.85 in the prior quarter and contributing to strong financial performance in our downstream. This improvement in commodity prices was partly offset by a stronger Canadian dollar, moving from USD 0.72 to USD 0.73.

We have seen some weakening of crude price as we moved into the fourth quarter, but our strong operations, coupled with our integrated business model ensures the continued resiliency of our free funds flow through a lower commodity price environment, supporting continued strong cash returns to shareholders.

Now Rich talked a lot about records in his opening remarks. I do want to highlight another one of those. This quarter, AFFO was $3.8 billion or $3.16 per share, and it was the second highest Q3 AFFO in Suncor's history despite much lower crude prices. You'd have to go back to Q3 of 2022 for the record, which was in a commodity price environment over $90. Operating earnings were $1.8 billion or $1.48 per share. How did we generate $3.8 billion of AFFO with average WTI at $65? Well, to begin with, a number of those records that Rich was just talking about, record third quarter upstream production of 870,000 barrels per day, including oil sands at 812,000 and E&P at 58,000.

Record total bitumen production of 958,000 barrels per day, record quarterly downstream with refining throughput at a whopping 492,000 barrels per day and utilization of 106% and record quarterly refined product sales of 647,000 barrels per day. That's a lot of records.

Total OS&G expense in the quarter of $3.3 billion is consistent with the first 6 months of the year, further demonstrating our operating leverage with higher volumes and flat absolute costs. Capital expenditures in the quarter totaled $1.4 billion, including $565 million of economic investments and $874 million of sustaining and maintenance capital as we execute our fall turnaround schedule. Working capital use was $183 million in the quarter, primarily reflecting the timing of payments and net debt at quarter end was $7.1 billion, with net debt to trailing 12-month AFFO at 0.5x. This is all about managing our balance sheet in the best interest of our shareholders while continuing to steadily return significant cash to them.

I do want to spend a moment on what I believe is an underappreciated part of the Suncor story, our ability to consistently generate industry-leading margins across the value chain. We often emphasize the strength of our integrated model, allowing us to capture margin at every step from extraction out of the ground to the upgrader, to the refinery and finally, to customers all along the value chain. Like our peers, we make bitumen, but then we transform those barrels into high-value products. Rich has previously described this as our ability to make craft cocktails for our customers.

It's this competitive advantage, coupled with our strong logistics and trading capabilities that enabled us to sell our oil sands barrels at 96% of average WTI over the quarter. And our downstream margin capture is consistently above industry benchmarks. This quarter was no exception with margin capture at 92% of our custom 5-2-2-1 index, an index which represents the margin power of our downstream business. LIFO gross margin was USD 28.87 versus an average New York Harbor and Chicago 3-2-1 crack of $26.39. Suncor is quite simply a margin machine, and this should be recognized as a core driver of this company's value proposition.

Now this is my last quarterly call with Suncor. I do want to take a moment to express what a privilege it's been to work at this company for the last 25 years and to be part of this executive team for the last 13. Over my 25 years, I've worked in almost every part of this company, and I've seen its tremendous growth over that time to become Canada's premier integrated oil sands company. I deeply believe in the strategic importance of the oil sands to the long-term prosperity of Canada and Alberta and as a source of long-term value for our shareholders and know that Suncor will play a significant role in that future as it continues to grow its competitive advantage of maximizing value of this world-scale long-life resource through its unmatched integrated value chain.

I want to thank the Board, Rich, all my colleagues for their support over the years, and a thank you to all our employees for their dedication and drive to deliver results each and every day. As I said, it's been a real privilege to be a part of this team.

I also want to congratulate Troy on his appointment to the CFO chair and know that his experience and leadership will be critical in the years ahead. This company is so very well positioned for the future. And as I move on, I'm confident that Suncor will continue to deliver exceptional value to our shareholders through operational excellence, capital discipline and a relentless focus on value creation.

And with that, for a final time, I'll turn it back over to Rich.

Thanks, Kris. First of all, I want to thank you and congratulate you. You have been an integral part of our turnaround over the past few years. Your timing couldn't be better wrapping up with the quarterly results. And for those on the phone, I got to know Kris quite well, outstanding executive, a class act and I am proud to say a close friend. Kris, you'll be missed, but not forgotten. We all wish you, Sandra, Ethan and Catherine. I was going to add Mazie, your Golden Retriever that I see walked by the house, the best in your future endeavors.

I also want to thank -- congratulate Troy, our new CFO; and Adam, our new Senior VP of External Affairs, which includes Investor Relations. Gentlemen, it was high performance that earned you these roles. And as you've heard me say, high performance results in even higher expectations. I look forward to continuing to work with you as we create shareholder value.

With that, I'll turn it over to Troy.

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

[Operator Instructions]

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

And I probably put your conference call commentary right up in that first quartile. So great, great rundown. So first off, Kris, just all the very best. I sure hope our paths cross again soon. And big congratulations, I think, to Troy and looking forward to working with Adam.

So questions wise, there are a couple of things kind of going through my head. But Rich, I wanted to come back to maybe what the prevailing narrative was on Suncor before you got there, to some extent, which was, hey, old assets can't be fixed. And I've heard that from multiple quarters. How do you put that together perhaps with the maintenance interval extension that we're now seeing at U1, but also just the planning and turnaround and improved turnaround performance? I'm just -- it's a very broad question by definition, but I just want to get a better understanding of how all those pieces fit together.

Well, 2 things, Greg. First of all, I'll start off. I appreciate you saying first quartile because that gives us room to improve. Our goal is best-in-class. Second thing, I think I'm living proof that age shouldn't directly correlate with performance in a negative way. So -- but I'm going to turn this over to the team to I left here in a moment because the entire way we're approaching our business, the depth, the analytics upon which we plan and perform our work is fundamentally different. So Shelley, maybe I'll start with you, but then I'll ask perhaps Peter and Dave to give a quick example in the business. But Shelley is kind of at the central point of how we've redesigned our entire approach to operational excellence.

Yes. And the first thing I would say on that, like the intervals as well as just across performance, for us, it really starts with benchmarks. We want to look and see what does global performance look like, and then we want to be the best of the best in that bunch. So we look at the best intervals that are being achieved across several units in the globe. And then we do the work to understand what would it take for us to hit that benchmark. So the work is really about making the right decision at the right time. Peter?

Yes. I would also say, Greg, and you mentioned U1 there. We're moving the intervals at U1 to 6 years. That's really a function of the upgraded metallurgy on the drums, the investment that we put in with the coke drum replacement project this year and coupled with some work on the coker frac section that has enabled us, and we're confident in our ability to extend it to 6 years. So it's a real success story. And you see that replicated across a broad variety of our upstream oil sands assets, both the Syncrude, Firebag as well as Fort Hills.

Yes. And for the downstream, I'll use Edmonton as an example, but we're applying the same principles and the same logic across all of our assets. The downstream also starts with benchmarking. For Edmonton, we just completed a sweet crude and hydrocracker turnaround block. That was an interval increase from 4 years to 5 years. And going forward, that unit will be on a 6-year interval. So that's a 50% increase over 2 cycles.

In the spring of this year, we did a sour crude and hydrocracker block. And that was an increase from 3 years to 4 years due to some improved catalysts we put in back in 2021. In this turnaround, we made some modifications to the distribution of flow over that catalyst, and we're planning on a 5-year interval going forward. So that's 3 years to 5 years, 65% improvement in turnaround interval over 2 cycles. We're applying that same logic across all the units in Edmonton, but we're also applying that same principles across all of our refineries. Grounded in solid work selection and benchmarking, we're applying that same approach everywhere. We're not done yet.

And Greg, I'd just add to close this one out. There is not a new refinery in North America. The entire refinery network has some age to it. And I would say just candidly, the -- and I don't know where it all came from. It doesn't really matter, but the statement or narrative that old assets couldn't perform, that was an excuse for subpar performance, and this company doesn't make excuses anymore.

Yes. Okay. No, I think you've captured it. So let me relate this then to your share price relative valuation and then just your trajectory. So the trajectory that you're on right now would suggest that your outperformance is going to continue. But there's this gap between your relative valuation and others. So the market is either impatient, just has recognized it, 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 an SIB or what have you?

I'll start it out, and then I'll ask both our new and departing CFOs to comment on it. As we put that target in place, it was about a little less than 2 years ago now, it was on the assumption of a rate of improvement in '24, '25 and '26. We've accelerated. We've improved faster than we anticipated in that. In fact, you heard us, we talked about this 3-year plan. Are we going to achieve 3 and 2. That's kind of a separate question. But the examining of how we manage the balance sheet, looking at the business [indiscernible] the return of capital to shareholders, these are very active dialogues. These are not where we set something in stone, and that's just the way it is. We want to be outstanding technical and operational executives, and we want to be astute and outstanding money managers. So maybe I'll just give that. But Kris or Troy.

I'll make just a few comments and ask if Troy wants to add anything as well. I mean, Greg, on the back of Rich's comments, we've set ourselves up in this company to ensure that we're really managing the balance sheet well, but we're driving that free funds flow growth, and we're returning that excess cash to shareholders. We set that debt target a couple of years ago now when we kind of reset the company. We're obviously ahead of schedule on just the level of improvement this company continues to drive. I expect that Troy and Rich are going to continue to look at what the appropriate level of leverage is for the company but prudently manage this balance sheet for the long term and really -- and have that underscore of ratable, consistent buybacks to our shareholders and return of cash.

So right now, we've been at a very consistent level for the last number of quarters. We think there's a ton of value in that consistency. And I know that's something that Troy and I have talked about is really it's the brand of the new Suncor is the ability to deliver consistently, ratably, reliably to our shareholders. Will that change over time and be managed prudently and obviously looking at how we view near-term and medium-term commodity price? Of course.

I think I would just -- I think your question is, is our net debt target or how we view debt, is it static? Really, the level of debt that a company carries or should hold depends on a few things. It depends on the company's underlying cash flows, the consistency of the performance of our assets, the quality of the leadership team that's managing those assets and also the external environment. I think everyone would agree on those first 3 things, Suncor has made an enormous amount of progress in the last few years. So my intent is to manage the balance sheet, just like my colleagues in operations manage their assets, and it's to deliver consistent returns to the shareholders.

The next question comes from the line of Doug Leggate of Wolfe Research.

I would also like to add my congratulations to everyone, Kris. It's been a real pleasure. And as you'll see in a second, I'm going to challenge you on one last question, if I may. And Troy...

I've got Troy here.

All right. So let me -- if I may, Rich, I'm probably front-running a little bit 2026, but I want to try and hit the capital outlook. So obviously, there is one substantial project still in your portfolio, which is West White Rose that obviously is 2026, as we understand it. And a fairly large slug of capital. And I guess my question is that as you start to think about the use of discretionary cash flow going forward, as some of these bigger projects, one-off projects roll off, how are you thinking about the absolute level of discretionary spending versus that sort of almost $6 billion number. Does that go lower? Or does the capital get reallocated to other things?

Yes. Thanks, Doug. As we've looked at it, one of the things that I heard early on our market, we spend a lot of money. We generate a lot of money, but we spend a lot of money. So we have had a very concerted effort at exhibiting discipline on all of our operating costs, our capital costs. I think turnarounds are a vivid example of our maintenance or our sustaining capital is being -- has been driven down and will continue to do so. And that was all so we could open up headroom for economic capital for growth and quality investments.

We don't have a hard cap, but we had set internally that we want to have a year-on-year-on-year capital expenditure at less than $6 billion a year. That was a core tenet in our 3-year plan. We're achieving that now this year. If anybody is anticipating waking up on guidance and seeing a bigger number next year, stay in bed, don't get up early. We're going to deliver that. And what that does is it allows us to be very judicious about quality. And at a capital construct of less than $6 billion, you can pick the oil price world, is it $50, $55, $60 a barrel. We believe we can continue to pay a reliable and growing dividend, fund our full capital program and buy back shares.

And we want to thread the needle where we can do all of that in most any business environment. And the unique level of our integration and the kind of the natural hedges that are within our construct, upstream, downstream all the way to the customer now gives us less volatility less dependent on what the external world is. We want to be a cash machine that invests wisely and returns capital to shareholders predictably and reliably. It's taken us a couple of years to get all the bells and whistles in place to improve fundamental performance. But I think that's what you're seeing now. And to me, that's quite exciting.

So the -- we put a high bar to justify new economic capital because it really needs to be tested against an alternate use of returning that capital to shareholders. And I think at our current share price, as I said, I think we're in an extremely good buy. And so that will be the push and pull we will have internally. And we have quite rigorous discussions and debates on that, but they're all centered on how can we increase shareholder value the highest, fastest and best.

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.

Okay. My follow-up, I'm hoping this is for Kris, but Rich, I'm sure you're going to want to have an input to this. Look, you've just reiterated again, I apologize, that you think Suncor is a great buy here as you put it. We certainly concur. It's been a tremendous stock, obviously, and the turnaround has been extraordinary. But you are an oil company and oil prices are subjective and value, therefore, if your free cash flow is a function of the oil price is also subjective. So when you say you had a great buy, you're implicitly saying, I have an oil price here, which is not necessarily going to be right.

So my question is this, when you look at your relative performance to your closest peer, which is probably Imperial, the big difference has been the rate of dividend growth and your dividend growth remains somewhat glacial despite all the improvements. So my question to you is, why emphasize the buyback with a pedestrian dividend growth and not if the improvements are flowing through to the bottom line, pivot to a more aggressive rate of dividend growth?

Doug, I'm going to turn it to Kris. The next time we're together, we'll have a couple of beers and we'll go through this as well. But Kris, go ahead, comment on it.

Yes. No, thanks. And again, if Troy wants to add anything here to the answer, I mean, thanks, Doug. Like first of all, our company, obviously, we're an oil company and commodity price makes a big difference. But this company also is differentially positioned in terms of our integrated business model and how we drive value and sustainable free cash flow and growing that. So start there. In terms of the dividend, our commitment is to reliably and sustainably grow that dividend and position this company so that we have a strong WTI breakeven that can weather through the commodity price cycle. And you've seen us over the last 2 years, reduce that WTI breakeven by -- we're on our way to $10 a barrel.

So we've repositioned the sustainability of the company, which makes us more resilient in the lower end of the commodity price cycle. So we're not taking -- we're not betting on oil price in this company. What we're betting on is sustainably and reliably generating free cash flow and having a resilient company that does that. In terms of the dividend to the investors, we view that as a commitment and a promise. And this company is -- going forward, this is a commitment and a promise to our shareholders. We will grow it reliably. We have what we view is a competitive yield, but the share price is actually low, and that yield needs to be lower, and we'll continue to grow the dividend appropriately over the years.

The cash return strategy, though, of buybacks, our view, it is one of the best mechanisms to get cash back to our shareholders and really drive that per share value to our shareholders. So we think we've got a winning formula in our capital allocation strategy, Doug.

And maybe I'll just turn it over to Troy for any other comments.

Yes. I'll just add this from a perspective point of view. As a management team, our focus is on maximizing the free cash flow per share from our assets so that we can generate returns for our shareholders. We really look to our shareholders, though, to guide us on how they want those returns delivered to them. And the almost constant feedback we get is that our investors want a reliable and growing dividend, as Kris referred to, and they want the excess to be used for share buybacks. And until they really tell us something different, that's going to be our focus.

And Doug, I want to make one comment on this, too. I run the risk because I'm just thinking about it on the fly, and sometimes I get in trouble when I do this, but what they have, we're going to go for it. You talk about a peer or peers. I honestly don't think we have a true Canadian peer. I think the unique assembly of our assets, upstream, downstream, the differentiated value proposition we have, I think we have an ability under -- over a much wider range of market conditions to deliver predictable, reliable cash flow. Now at any point in time, whether it's oil price, gas price, low differential, high differential, downstream cracks or whatever, there can be parties that might stand out.

But I think if you look over the test of time, who has been assembled to compete and win for the long term, I increasingly don't think that looking around Calgary is the right lens to look at us on. So I'm probably going to get in trouble for that. I'm probably going to be challenged on that and stuff. But you ask me a question, you get what I -- you get the answer I feel, and that's how I feel.

The next question comes from the line of Dennis Fong of CIBC WM.

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, I guess, new roles or exiting your existing role.

My first question really focuses on Fort Hills. Q3 operations and production was quite strong. From our observations of the mine plan, it seems like you've opened up potentially the first cut and should have turned that maybe over to operations. Can you maybe talk towards the progress on the second cut? And maybe as you're kind of progressing through the plan, what that means for optimization of the asset?

Peter, why don't you take that?

Yes. Thanks, Dennis. You're absolutely right. We are actively producing ore from the first cut, the first pit in the North Pit 1 now, and that's going exceptionally well, blending off that ore with ore from center pit. And you have seen, as you saw in the third quarter, our production volumes start to increase. We've also just started opening up the second pit in the North pit, which will be an active blending pit. So we're just kind of in the top cut of that now, and we'll develop that over the remaining months here in 2025 and into '26. And our drive is really to take the Fort Hills volumes up to nameplate and potentially beyond in the next couple of years. And it really give lots of opportunity. So we're trying to get up into that 195,000 barrels a day, 200,000 barrels per day range in the next couple of years. That's the goal. North Pit 2 is going to be a big part of that, and we're just in the top stripping of that area of the mine right now.

We continue to test and evaluate the plant. And I think there, Peter, I don't know if you have any specific comments on that, but we have a lot of capability and capacity with that plant. So the focus on the bitumen delivery is the key because we do have a really a stellar facility there.

Yes. And we really have proven that out, especially through 2025, we've taken the opportunity to really test the range on the fix plant to really put some high throughput in it from the mine. It delivered better than what we expected even. And so our confidence in the ability of the fix plant to take the ore from the mine is extremely high. And so right now, it's all about getting that mine set up to deliver those high production volumes here into the future.

Great. Really, really, really. I appreciate that context there, Peter and Rich. My second question, and maybe it's address to Dave. Rich, in your opening comments, you highlighted record refined product sales through the quarter. I was hoping you could touch on and maybe highlight what you found in your opportunity to visit a variety of the retail logistics and distribution terminals across Suncor's Canadian operations and how that feels or drives comfort level or an ability to kind of press throughput on downstream and market those volumes in the most, we'll call it, profitable channel?

Dave, do you want to go?

Yes, for sure. Dennis, we -- as Rich mentioned, we changed our philosophy about a year or so ago to focus on value versus volume, but value and volume. So our plan is we run our refineries full and we sell full and then we improve our channel mix over time. And what's really great about what we've seen so far in that philosophy is it's all working. You've seen the records, but what you may not see in the numbers is the work that's happening to grow our most profitable channels. And that's our retail growth plans, our wholesale growth and really reducing the volume of exports that we make.

So on the retail side, just maybe a few numbers because folks probably have seen some of this as you drive around the major cities across Canada. We've enhanced 23 sites this year, including rebuilding 2 new sites. We're on track to rebrand from other competitor brands, 75 sites across the country this year. And each of those operators, as they rebrand to the Petro-Canada canopy above their site are seeing significant increases in volumes. So we see the strong brand that we have in Petro-Canada continuing to grow. In fact, our share of market is up 1.5% this year. And our retail sales, as Rich mentioned, are up 8% year-on-year and 10% over the last couple of years.

So we're growing our most profitable channels. Our distribution network is solid. And as we do need to export, we can do that incredibly profitably through our trading organization who sell direct to customer with minimizing the profit that's taken by the folks in the middle. And we can sell off both coasts. So we can sell off Vancouver and we can sell out of Montreal. We can optimize our network in between to go anywhere -- pretty much anywhere in the world with largely diesel is what we see exporting out of Canada. So our network is strong. We're growing the highest profitable channels, and we have lots of flexibility to continue to grow.

I'm looking at, Adam, as I say this, in late 2022, the company had a retail growth plan that had communicated to the market and had a series of commitments through '27 and stuff on that. I would say in the Investor Day, we need to give a good recap of where we stand on that. And just kind of a headline is we -- it's going quite well. We're delivering everything and more that in late '22, we said we were going to do.

And I think, Dennis, one other little added point I'd make a nuance on it. In today's world of commodity price uncertainty and volatility, owning all the way through the customer is a competitive advantage because that can move around, whether it's the customer has the leverage or the manufacturer has the leverage or the producer does. But this is a key part of that uniqueness of our value chain that all integration is not created equal. It's quite -- in fact, it's quite different. And our unparalleled integration is a part of our story and a part of our performance.

The next question comes from the line of Neil Mehta of Goldman Sachs.

Congratulations, Troy. Congratulations, Adam and Kris, it's been a real pleasure.

I guess 2 questions. The first is just on the Investor Day. When is -- have you put a date out for that? I'm guessing it's going to be May like you did in '21 and '24, but I might have missed that. But as you think about that Investor Day, what are the kind of the tangible KPIs or targets you want to educate the market on? And how -- what's the right time horizon? Are you thinking new 3-year targets or going out further? Just give us a little bit of a preview for that.

Neil, as I answer you, I have a room full of people that are really, really curious as to what I'm going to say. So let's have some fun with this. Our original plan was sometime before midyear next year. That's not going to work. We're going to need to come out earlier than that. So we're looking at something earlier. We're looking at calendars when all you good folks are available. Those of you that have kids, when your kids are on spring break and all that, but we're going to pull that earlier. It won't be January or February, but it will be earlier than we had originally anticipated.

And the second thing, the one area that periodically, and I read everything you guys write, every now and then when things are going really, really well, you guys look for what's the thing we can say as to why we have to justify to our bosses, we haven't all bought Suncor. So everybody wants to say, "well, what the hell is going to happen when the base mine depletes." So we owe you and will present a very compelling long-term value proposition on bitumen development and replacement. But that's longer term. And we've said in the last Investor Day that don't anticipate a whole bunch of expenditures in the next 5 years on it. So I think we're going to have to do both. We're going to have to give you what that long-term plan looks like, but we're going to have to give you kind of what is that next -- for fun's sake, we'll say, what's that next 3-year plan also going to deliver?

So I think we're going to have to give you both longer term and a new set of targets short term that will be compelling and inspiring and create the case for man, this is a stock I just have to own. So a little bit earlier than we originally thought, two-pronged short term and long term. I'll tell you, I'm going to be there that day. I wouldn't miss it.

Well, I have to have a good pump up music before you get on stage. The follow-up is just on downstream. It does seem like we're in a good refining environment. Certainly, refining equities have done okay and downstream margins continue to do well up in Canada as well. So Rich, I would just love your perspective on the sustainability of the Canadian refining advantage. And if you think that we're going to sustain in a healthy environment. And then utilization averaging 101% for a system that was running low to mid-90s for a long time, do you feel like you've got some momentum here to be able to sustain at these type of levels as you go into next year as well?

David, let me take the second part, and then I'll turn it over to you on that. On the utilization and things, the teams across the company, facility by facility have undertaken a very concerted, okay, what's the limiter? What's the bottleneck? What's the last increment that if we make small changes can add incremental capacity. And when you now see -- and I literally think it's since mid-'23. I think we're 2 years, if you average over all that, I think we're at more than 100% utilization for that long period, and you get 106%. So what is it really saying? The underlying capacity has grown.

So we need to -- and maybe that will be Investor Day, I'm not -- it needs to be soon, we will re-rate our downstream because it has more capacity than it previously had due to really smart, thoughtful, frugal work site by site by site. So there's something coming there. Is it sustainable? I think that gets right back to the turnaround discussions, our commitment to operational excellence on maintenance practices. The answer is absolutely, is it sustainable. Now year-on-year, we'll have more turnarounds here, less turnarounds there, I think you'll get a little variation year-on-year.

But at the high performance levels you've become accustomed to this year and last year, our business plan, our guidance that you're soon going to see is very consistent with continuing to deliver that. So Dave, now I'll flip it to you on kind of the value that you're going to create in that enterprise.

Yes, for sure. And I'll just build, Rich, on your comments. On the downstream, not only do we see that sustaining, we believe we can continue to incrementally creep capacity with all of the little ideas that are coming from the grassroots of the organization as folks are aligned to drive growth. You mentioned the markets are strong. We're seeing, particularly on the diesel side, low inventories, the geopolitical risks, some lagging renewables in the U.S. and a growing short in California that's really starting to drive diesel as well as some local gasoline cracks in certain parts of the continent. So we see in the short term, some really strong cracking spreads going into the fourth quarter and through the fourth quarter.

The longer-term view on Canada is we're going to continue, as I mentioned before, our retail growth plans. We have some plans on the wholesale side to do something similar. So we -- even in a market that is maybe growing slowly at a couple of percent per year, we believe our strategy is we can take market share in the most profitable channels, and we'll continue to do that. And as I mentioned, on the balance, we can run our refineries full. We have some of the lowest cost crude advantages in the globe, and we can export profitably pretty much anywhere in the world and continue to grow our refining capacity through that mechanism as well. So...

One last thing, kind of a related point. Our downstream, I think historically, folks have said, well, you guys are good downstream, high-performing downstream, et cetera, et cetera. All of that's true. But we've taken it from good to great, and our belief is it can be even greater. And it is so key to our financial resilience in uncertain times and the contribution to keeping our overall corporate breakeven at a very low and very competitive level. And I think what we've seen, the more we do in the downstream, and I'm smiling as I look at Dave, the more we do, the more potential we see. So this is a -- I've used this phrase now for several quarters in a row. We are not done yet, and that applies either equally or disproportionately to the downstream. There's a lot more value we believe we can continue to create.

And so when you look at us, it may not always be plotting volume points, either upstream or downstream, may no longer be the best way to gauge are these guys improving? Keep looking at the dollars. and where they're coming from and the dollars. Now volumes, we're going to keep doing things to grow that. But increasingly, our mindset is in the value dimensions and the downstream is going to be a big part of that.

The next question comes from the line of Manav Gupta of UBS.

I actually wanted to start on a lighter note. As you get into the earnings call of Suncor, you were playing that Michael Jackson song beat it and beat it. And every 30 seconds, you were hearing beat it and beat it. And then when it kind of struck me, that's what Suncor has become, right? Keep raising expectations and then beat it. So whoever chose that song thought through it very carefully.

Manav, a quick one for you. We started that some time ago now, and it is one of the secrets of the crown, what our earnings call is going to be. There are only 3 people who know it ahead of time. Me, my wife and Troy. And my wife and Troy have way better sense in music than I. So now we're going to bring Adam into the inner circle on it. But we do spend a little bit of time thinking what is the appropriate call for the quarter. So thank you for noticing it. Troy is smiling because he picked this one.

I kind of figured it out because a couple of quarters ago, Rich, you were playing Eye of the Tiger from Rocky. So it's kind of your focus exactly was showing what your song was playing. So I kind of figured that out. That's why I talk about it.

My quick one question here is, sir, when we look at Fort Hills and Syncrude cash operating costs, absolutely going in the right direction. Every quarter, we are seeing an improvement. I'm just trying to understand what further improvements can happen over here? And how much lower can you think you can take this both at Fort Hills and Syncrude? And I'll turn it over.

I'm going to turn it over to my operators here in a minute, but I think this gets at the very culture of the organization of spending, how we look at spending money, whether capital or operating. And I'll give you a little glimpse of my childhood. My dad would give me $2 to go to the store and get a pop and a candy bar, and I'd spend $1.84, and I'd come back and he'd say, where's my $0.16. And so it's a philosophy and it's a culture of we're not spending our money. We need to manage risk, be very thoughtful and frugal.

And the -- I think our progress on operating costs is probably one of the best barometers of is our culture permeating deeply. Capital is allocated around this table. We can add or subtract, but operating costs are the decisions of literally thousands of people every day. And that is each month, when I see the numbers, that's where I get my best sense of, yes, okay, the organization has it. But on what continued improvements or -- Peter, do you have any comments, particularly -- you spend the bulk of it.

Yes. And I would say it really -- it does start with building that culture right from the front line. And we've put a lot of time and effort into building the transparency and an understanding with our frontline leadership and operators around the decisions they make on a given shift and what the cost implications of that are. And that has proven to be really effective. You start to see that flow through at the bottom line now. We are working, as I've said in multiple calls, mining productivity, where we spend the bulk of our money in the mines and getting more out of what we have from our mining equipment is a really big part of this cost journey.

But we haven't stopped there. We've been working broadly across the rest of our operations, specifically in maintenance efficiencies on integrated activity and planning and ensuring that we're doing the right work at the right time in the most efficient way and building out that capability and knowledge of our front line, the folks that are making the decisions each and every day on what cost implications that have and then getting their creative decisions and driving efficiencies higher, and that's really what you're seeing flow through.

And I think some of the philosophical, we benchmark -- Shelley mentioned earlier, we competitively benchmark. We look at where gaps are, what actions can we take. So that was a part of our mining strategy on bigger trucks, fewer trucks, operated better, maintained cheaper. That was all part of that philosophy. The -- we have an internal philosophy around there's inflationary pressures in our business. Well, the market doesn't necessarily give us inflation on our products. So our business plans to get -- to walk in the door, you have to bring business plans to us that have fully offset inflation, and then we want to talk about how do we improve upon that.

So it's just a real deep recognition we are in a commodity business and cost, managing cost is so absolutely essential. And I say cost, I mean every dollar we spend, whether it's capital or operating.

The next question comes from the line of Menno Hulshof of TD Securities.

Congrats to everyone on the call on the changes. Most of my questions have been answered, but I'll maybe follow up with a question on nameplate capacity. You touched on this already for the downstream in particular. But with certain upstream assets like Firebag also performing well above nameplate, what are your thoughts on re-rate potential? And I think the last time you talked about this, I think you suggested you were still working through a discovery process on how each asset could perform on a sustained basis.

But on balance, and it's more of a philosophical question, but what's the real benefit to re-rating? I could make the argument either way, but curious as to how you're thinking about this.

Yes. I think it's a fair question, Menno, on what's the benefit on it. It's probably as much as anything as credibility. How do you repeatedly extract more than 100% of something. So -- but our -- I'll tell you right now, we -- internally, we have 2 things. We steward to you the historic external utilizations, but that is not at all internal. When you come into our executive meetings and we look at assets, we look at their performance relative to their best 30-day average consecutively. So we run 2 sets of numbers. And the goal is to always improve based on historical performance. So the re-rating is a bit of a philosophical question on it.

But the same approach that has been taken in the downstream has been applied to the upstream. And what is so uniquely similar in our business is our upstream has large plant operations, whereas many upstream around the world don't have that offshore platforms or whatever. So the same approaches and principles have applied. And you flagged Firebag. In 2022, Firebag averaged 199,000 barrels a day. In 2024, it averaged 234,000 and in the fourth quarter, it was 250,000, all without growth investment.

So now what Peter and his team are scrambling to do is be sure we have the well capacity to feed. We would rather be a barrel short on the facility than a barrel short on the wells. So Peter has been doing an extensive infill drilling program, which are extremely lucrative. He's been looking at the expansion of noncondensable natural gas, so we can redeploy steam. So it's a continual chasing of the limiter, the last limiter and saying, how do we unlock potential? Is that well? Is that facility? But the principles apply across our business, upstream and downstream. And I give kudos to our operating teams because they've embraced this challenge, and they are repeatedly continually finding ways to unlock capacity.

And when you're a capital-intensive business, return on capital, that -- in many cases, I came from a company where for decades, that was the holy grail. And I believe that. We've spent a lot of money. It's our job to maximize the return on that money we've spent. And I think our Suncor teams, upstream and downstream are doing a very good job on that. And I think my guys remind me, we're not done yet.

That's really helpful. Maybe my second question is on your incremental free funds flow target and WTI breakeven target as well. And last, we were -- I didn't see it in the release, but I believe the last time we were updated, you were guiding to achievement of both targets by the end of the year, which would be roughly a 1-year acceleration. Where do you stand on those targets today? Is year-end still a reasonable guideline? And is there upside to those targets over time?

Menno, we did the first year of the 3-year plan. We achieved nearly 2 years. We've kind of suggested and insinuated that we could achieve a 3 and 2. We've got 1.5 months, 2 months left in the year. But I got to tell you real quick, quick story. I'm reminded of the 2015 Super Bowl. The Seattle Seahawks were on the 1 yard line losing by 4 against the Patriots, about to punch it in with a battering ram of a fullback name Marshawn Lynch. They had victory, they were high fiving and celebrating. And for some unknown reason, they passed through an interception and they literally snatched the feet from the jaws of victory. They were celebrating before the game was over.

We still got 2 more months left. I want this team focus like a laser to finish strong, but I think it is very fair and reasonable that you will get a comprehensive update on our 3-year plan and how we're doing on that quite early in the new year. And right now, home team is looking pretty good.

So you're going to be giving the ball to Marshawn then.

I got a lot of battering rams on this team. So I could give it to a number of folks.

The last question comes from the line of Patrick O'Rourke of ATB Capital Markets.

Congratulations to Kris, Troy and Adam there.

So first question here. With respect to the extension that you guys have done on the turnarounds here, and you've obviously been very thoughtful about planning and benchmarking these things. But what are the signposts, and I'm sure you have them, but maybe you can articulate them to us around reliability, particularly later in the cycle with the assets where you've extended the turnarounds there. And then if you're thinking about this, and I know every asset has sort of a different turnaround cycle, but what's the quantification of the volumes to date that you've done through these extensions?

Tim, do you want to take a comment on the -- and I think on the first one, it's where I'd phrase it is, it's about managing risk. And it's about looking at as we extend intervals, the confidence that we can do that without having anything go boom in the night or -- and/or cost us more. Why don't you comment on that? And then maybe I'll come back on the volumetric impact.

Yes. I mean we're really employing a risk-based inspection methodology to see the state of our current units and then applying the appropriate engineering fix to be able to assure ourselves that we're able to get these units kind of to the next interval. As Shelley said at the start, we start with benchmarking. We see where other units of a similar nature are elsewhere in the world, and we set our North Star at or above that and then kind of back out, okay, what needs to be true to make that happen. We apply this risk-based inspection methodology, and we do the work that's necessary to give ourselves the confidence to achieve it.

And I think the key -- one thing I'd just add to it, too, is your interim inspection techniques is you're monitoring things. So we don't arbitrarily say, okay, we're going to a 6-year interval and then just wake up 5 years from now and start preparing. You are monitoring technical and operational data as we go. I like that you're using more sophisticated techniques. You're using drones in our business. You're using a number of things that help us ensure that those intervals are indeed the right intervals. And what I think we keep finding is opportunities to further extend.

Dave, do you have anything you'd add to it?

Yes. Thanks, Rich. And I would just build on what Peter said is when we started our turnaround journey, we really focused on work selection. And what that did is allow us to do the right work at the right time and have a much better understanding of -- to do that, you have to have a better understanding of the condition of the equipment. And then the natural outcome of that was, hey, it looks like the equipment can go longer. Now that we really understand it better from a work selection perspective, we think it can go longer from a duration or interval perspective. So it really was an outcome of the work that we've done grounded in benchmarking. We know what the best of the best do for each technology that we operate, and that's really our target.

Shelley?

Yes. I just want to maybe underline what Peter said that when we talk about interval extensions, this is really a detailed technical engineering exercise. We follow a very rigorous management of change process that is embedded in our management system. So this isn't what does the benchmark say and let's go make it happen. This is a very detailed technical evaluation to make sure that we're very confident in the long-term reliability and safety of these assets.

And if I go back to your first question, this is not a third-party certified, but the increase in volumes this year, the revising guidance upward in both production and refining throughput, the bulk of those revisions up are exceptional turnaround performance related.

I am showing no further questions. I will now turn the call back over to Troy Little for closing remarks.

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.