Dennis Fong

Dennis Fong (CIBC World Markets) asked about Ovintiv's inventory depth, specifically how the 'ground game' helps with existing depth and influences capital allocation between North and South assets, which appears balanced. He also inquired about any innovation or techniques learned from the NuVista teams that could be applied to Ovintiv's existing Montney or Permian operations.

Answer

President and CEO Brendan McCracken explained that the efficient 'ground game' sustains inventory duration, funded within the existing framework, and capital allocation between assets is currently balanced to hold production flat. EVP and COO Greg Givens highlighted learnings from NuVista, including optimized gas lift designs applicable across the Montney and Permian, and precise landing zone techniques that could improve drilling speed in Canada, demonstrating a strong culture of learning from acquisitions.

Dennis Fong inquired about the key characteristics Ovintiv seeks in long-term gas contracts and how its supply chain management group is managing risks like potential tariffs.

Answer

Executive Brendan McCracken described a portfolio approach to gas marketing, seeking a mix of LNG and local demand while avoiding long-term, fixed-cost transport contracts into uncertain markets. Both McCracken and Executive Gregory Givens detailed a proactive supply chain strategy, noting they have secured most 2025 tubulars domestically and have traced supply chains to mitigate tariff and security risks.

Dennis Fong inquired about the integration of the newly acquired Mac asset, focusing on the immediate next steps for Cenovus teams, the application of Cenovus's best practices and technical understanding to enhance performance, and the realization of outlined synergies.

Answer

CEO Jon McKenzie highlighted rapid progress on corporate synergies, with the CAD 120 million corporate component largely captured. EVP and Chief Operating Officer Drew Dahlin detailed operational focus, including a 40-well redevelopment campaign starting next month, implementation of wider well spacing and longer wells for lower development costs, facility debottlenecking, and expansion to over 150,000 barrels per day by 2027-2028, alongside delineation of boundary land opportunities.

Dennis Fong inquired about the Lloyd Thermals' development towards over 145,000 barrels a day and sought elaboration on the solvent enhanced oil recovery (SEOR) techniques, its opportunity, and implications for the field.

Answer

CEO Jon McKenzie and EVP and Chief Operating Officer Drew Dahlin detailed the Spruce Lake solvent project, which received FID with a CAD 250 million spend in 2026-2027. This technique injects condensate with less steam, lowering the Steam-Oil Ratio (SOR), driving higher production, and increasing ultimate recovery. They see immediate benefits at Spruce Lake and future application across other oil sands assets and lower-quality reservoirs over the next two to three decades.

Dennis Fong asked for details on the capital expenditure sizing and spending cadence for future growth projects, and inquired about what was learned during the Toledo and Lima turnarounds that provides confidence in future reliability.

Answer

President & CEO Jon McKenzie explained that the current major investment cycle concludes in 2025, with 2026 capital expected to be significantly lower. He noted that during the Toledo turnaround, teams were 'pleasantly surprised' by not finding significant unexpected work, which boosts confidence in achieving a 'good clean run' and higher reliability.

Dennis Fong asked for details on the capital expenditure sizing and spending cadence for upcoming growth projects, and what was learned during the Toledo and Lima turnarounds that provides confidence in future operational strength.

Answer

Jon McKenzie, Director, President & CEO, reiterated that 2026 capital would be significantly lower, using a 'low $4 billion' marker, and outlined a potential $150-$200 million investment for the Lloydminster heavy oil business. He added that during the Toledo turnaround, inspections of major units revealed no significant unexpected issues, which increases confidence in future reliability.

Dennis Fong asked about further optimization opportunities at the Toledo refinery post-turnaround and the expected trajectory for operating expenses and steam-oil ratios (SOR) at the Sunrise asset.

Answer

CEO Jon McKenzie highlighted a medium-term goal to operate the Lima and Toledo refineries as an integrated unit and improve market access via all egress options. For Sunrise, he stated the plan is to increase production to 75,000 bbl/d, which will drive the SOR down towards 3.0 as operations move into the higher-quality East development area.

Dennis Fong inquired about specific projects improving U.S. Downstream utilization, the drilling plan and cost controls for the West White Rose project, and learnings from the product supply agreement with BP for the Toledo refinery.

Answer

CEO Jon McKenzie detailed reliability improvements at the Lloydminster Upgrader and Lima refinery, and outlined upcoming work at Toledo. For West White Rose, he stated drilling will begin in Q4 2025, targeting first oil in H1 2026. Executive Geoff Murray added that the BP supply agreement for Toledo is a relatively small but useful tool for placing physical volumes, which is continuously evaluated for optimization.

Dennis Fong from CIBC World Markets questioned the operational status of the Lima and Toledo refineries following reported hiccups and inquired about the strategy for bolstering production at thermal heavy oil assets.

Answer

Executive Keith Chiasson confirmed that Lima and Toledo experienced process upsets but were undergoing maintenance and expected to restart shortly. He emphasized ongoing work to improve reliability across the U.S. refining fleet. For thermal assets, he highlighted the deployment of Cenovus technology, resource delineation, NCG injection, and new well pads at Sunrise as key drivers of resilient production and future growth.

Dennis Fong inquired about the backlog of field-driven optimization opportunities across Suncor's upstream and downstream segments and their impact on cost structure. He also asked about the Fort Hills facility's performance, specifically its single train capacity and opportunities to consistently run above 220,000 b/d with the North Pit opening.

Answer

Rich Kruger (CEO) stated that optimization opportunities are tackled immediately, with a continuous replenishment of ideas. Dave Oldreive (EVP of Downstream) cited a CAD 100,000 investment at the Montreal refinery that yielded a 20,000 b/d throughput increase. Peter Zebedee (EVP of Oil Sands) confirmed testing Fort Hills' stream day capacity over 220,000 b/d, focusing on reliable delivery from the North Pit and plant enhancements. Rich Kruger (CEO) set a near-term ambition of 200,000 b/d for Fort Hills.

Dennis Fong asked for an update on the backlog of field-driven optimization opportunities across Suncor's upstream and downstream segments, and how these initiatives have improved the cost structure. He also inquired about the performance of Fort Hills, specifically opportunities to consistently run at or above its 220,000 barrels per day capacity.

Answer

CEO Rich Kruger stated that Suncor now 'team tackles' optimization opportunities, continuously replenishing ideas. EVP of Downstream Dave Oldreive provided an example from the Montreal refinery, where a CAD 100,000 investment in control valves, a pump impeller, and a motor yielded a 20,000 barrels per day increase, translating to CAD 100 million annually. For Fort Hills, Rich Kruger identified it and Firebag as key growth areas. EVP of Oil Sands Peter Zebedee confirmed testing rates over 220,000 barrels per day, focusing on reliable delivery, sequencing material from the north pit, and front-end plant enhancements to sustain higher throughput.

Dennis Fong from CIBC Capital Markets asked for details on the systematic approach behind Suncor's improved turnaround performance and requested an update on the Fort Hills North Pit development and its impact on future production.

Answer

President and CEO Rich Kruger and EVP of Downstream Dave Oldreive explained that improved turnaround performance stems from a disciplined, two-year advance planning process involving benchmarking, risk-based work selection, and strong execution. EVP of Oil Sands Peter Zebedee confirmed that Fort Hills is exceeding its plan, with the North Pit development progressing on schedule, supporting future production increases. Kruger added that they are exploring debottlenecking opportunities for the asset.

Dennis Fong of CIBC Capital Markets inquired about Suncor's strategy for managing oil sands operations during harsh winter conditions and asked for an update on the 'Mine Connect' optimization tool's performance and any incremental benefits.

Answer

CEO Richard Kruger stated Suncor aims to be a 'weather maker, not a weather taker' by engineering resiliency into its operations. EVP, Oil Sands Peter Zebedee added that their integrated system buffers asset-specific issues, while EVP, Downstream Dave Oldreive noted that winterization planning begins in July. Regarding 'Mine Connect', Zebedee explained it provides real-time data for immediate operational action, which Kruger highlighted as key to optimizing fleet efficiency without delay.

Dennis Fong from CIBC World Markets requested an update on the Fort Hills mine progression, including the transition between pits and heavy equipment deliveries. He also asked about risk mitigation and cost control measures for the significant 2025 turnarounds, particularly the 91-day coke drum replacement project.

Answer

EVP, Oil Sands, Peter Zebedee, reported that the transition to the center and north pits at Fort Hills is well underway, with ore delivery now predominantly from these new pits. He confirmed that 45 of the 55 new haul trucks were received in 2024, with the remainder arriving by February 2025. Regarding the turnaround, SVP, Operational Improvement, Shelley Powell, detailed the extensive planning for the coke drum replacement, noting that 2.3 million of the 2.8 million total project hours are already complete and all major equipment is on-site. CEO Richard Kruger added that the project's duration was already optimized from over 100 days down to the planned 91 days.

Dennis Fong from CIBC asked for details on the MineConnect technology's impact on mining fleet efficiency and the effect of new ultra-class trucks. He also requested an update on downstream marketing, inventory management, and the strategy for utilizing the TMX pipeline.

Answer

EVP of Oil Sands Peter Zebedee explained that MineConnect drives performance through data transparency and internal competition. CFO Kris Smith noted that strong downstream margin capture was driven by high utilization, effective channel mix, and actively marketing into TMX end-markets. CEO Rich Kruger added that Suncor's refined product sales growth is outpacing the market due to reliability and strategic relationships.

Dennis Fong asked about the learnings and implementation of new operating procedures at Kearl to mitigate production impacts from wet conditions, and inquired about the background, reservoir type, production ramp-up, and impact on field SOR and operating costs for the Cold Lake Mahican SA-SAGD project.

Answer

Chairman, President and CEO John Whelan explained that Kearl experienced exceptionally wet conditions in October, impacting equipment mobility and access to high-quality ore, but the team recovered strongly in December. He noted plans to learn from the event regarding road design and drainage, reaffirming confidence in Kearl's guidance. Regarding Mahican, Mr. Whelan stated it uses the same SA-SAGD technology as Grand Rapids but in the Clearwater reservoir, with a planned startup in 2029 and peak production of 30,000 barrels per day, expressing high confidence due to Grand Rapids' success and deep knowledge of the Clearwater reservoir.

Dennis Fong asked about Kearl's production impacts from wet conditions, inquiring about learnings and new operating procedures to mitigate future downtime. He also asked for background on Cold Lake's Mahihkan SA-SAGD project, including reservoir type, production ramp-up, and impact on field SOR and operating costs.

Answer

John Whelan, Chairman, President and CEO of Imperial Oil, explained the extreme wet conditions in October, which impacted equipment mobility and access to high-quality ore at Kearl. He noted strong recovery in December and confirmed plans to review road design and drainage. For Cold Lake, Mr. Whelan clarified Mahihkan SA-SAGD will be in the Clearwater reservoir, leveraging learnings from Grand Rapids, with a planned 2029 startup and 30,000 barrels per day peak production.

Dennis Fong of CIBC World Markets asked for details on the operational changes and technologies providing confidence in extending Kearl's major maintenance intervals to four years. He also inquired about the company's strategic thinking on deploying capital opportunistically given current market uncertainty.

Answer

Chairman and CEO Bradley Corson and SVP of the Upstream Cheryl Gomez-Smith detailed that the extended turnaround intervals at Kearl are supported by integrated technology, data analytics, benchmarking, and a focus on separating essential turnaround tasks from other maintenance. Incoming CEO John Whelan affirmed that the capital strategy will remain consistent, focusing on maximizing existing assets, targeted growth, and structural cost improvements to deliver leading shareholder returns.

Dennis Fong requested more detail on the factors giving Imperial confidence to extend turnaround intervals at Kearl to four years and asked how the company is strategically thinking about deploying capital opportunistically given its balance sheet strength.

Answer

CEO Bradley Corson and SVP of Upstream Cheryl Gomez-Smith explained that the confidence in extending turnaround intervals comes from a long-term journey of optimization. This includes integrating technology, data analytics, benchmarking, and a relentless focus on defining essential turnaround tasks. On capital strategy, CEO Bradley Corson reiterated that the M&A bar is high. Incoming CEO John Whelan added that the strategy will remain consistent, focusing on maximizing existing assets, targeted growth, and leveraging competitive advantages rather than major shifts.

Dennis Fong from CIBC World Markets asked for details on the specific initiatives driving record performance at the Kearl asset, including the autonomous fleet and technology. He also questioned the company's capital allocation priorities between organic growth, M&A, and shareholder returns, and how it evaluates its portfolio against external opportunities.

Answer

SVP of the Upstream Cheryl Gomez-Smith detailed Kearl's success, citing reliability improvements, an 8-10% productivity increase from automated trucks, and digital optimization. CEO Bradley Corson added that turnaround durations have been cut from 70 days annually to under 20. On capital allocation, Mr. Corson and SVP of Finance Dan Lyons reiterated their framework: a growing dividend, sustaining capital, high-return growth projects (with a high bar for M&A vs. internal options like Aspen), and returning all surplus cash to shareholders.

Dennis Fong from CIBC World Markets inquired about potential redevelopment opportunities at other Cold Lake regions, similar to the Leming project. He also asked about the company's comfort level with its cash balance and how that influences shareholder return decisions.

Answer

Bradley Corson, Chairman, President and CEO, confirmed the team is evaluating the entire Cold Lake resource base for future redevelopment opportunities. He also reiterated that the company does not target a specific cash balance and aims to return surplus cash to shareholders, feeling comfortable with the lower balance seen at the end of 2023.

Dennis Fong asked for an update on the Grand Rapids project's production ramp-up and the criteria for sanctioning Phase 2, and also inquired about learnings from the Kearl digital twin.

Answer

Bradley Corson, Chairman, President and CEO, reported that Grand Rapids is progressing as planned, with initial production expected in the coming weeks and a ramp-up to 15,000 bpd by Q4. A decision on Phase 2 will follow after capturing learnings from Phase 1. Simon Younger, SVP of the Upstream, added that the digital twin technology at Kearl and Cold Lake has been a major success, improving maintenance, project execution, and production optimization through AI, with the technology now being adopted more broadly by ExxonMobil.

Dennis Fong requested more detail on the factors giving Imperial confidence in extending turnaround intervals at its Kearl facility to four years. He also asked how the company is strategically thinking about opportunistic capital deployment given current market uncertainty.

Answer

SVP of Upstream Cheryl Gomez-Smith explained that confidence in extending Kearl's turnaround intervals comes from a combination of integrating new technology, data analytics, global benchmarking, and a relentless focus on optimizing maintenance scope. Incoming CEO John Whelan addressed capital strategy, stating it will remain consistent, focusing on maximizing existing assets and maintaining a high bar for any potential M&A, ensuring any new opportunity competes with their high-quality internal portfolio.

Dennis Fong of CIBC Capital Markets inquired about the potential operational upside and benefits from the recently closed Albion Oil Sands asset swap, specifically beyond inventory consolidation, given the proximity of the mining assets. He also asked about efficiencies from developing proximal resources like Grouse near the Jackfish and Kirby facilities.

Answer

Scott Stauth, President of Canadian Natural Resources, indicated that additional benefits from the Albion swap include enhanced utilization of large haul trucks and support equipment. For both questions, he directed listeners to the upcoming investor open house for more detailed discussions on cost savings and development plans for adjacent assets.

Dennis Fong of CIBC Capital Markets inquired about the strategic advantages and operational efficiencies Canadian Natural Resources expects from fully owning and operating the Albion Oil Sands mines, particularly given its proximity to existing assets, and how developing proximal resources like Grouse near Kirby assets could yield efficiencies similar to the Pike-Jackfish integration.

Answer

President Scott Stauth highlighted the benefits of equipment utilization across the closely located mining assets, including large haul trucks and support equipment. He also indicated that more detailed insights into cost savings and development plans for proximal thermal assets would be shared at the upcoming investor open house.

Dennis Fong from CIBC asked for an update on the M&A environment, the company's comfort with the current policy landscape, and how it views opportunities for mine progression and optimization at the Horizon project.

Answer

President Scott Seltz stated that recent acquisitions are viewed as accretive opportunities that add immediate cash flow and inventory, balancing organic growth. Regarding Horizon, he detailed that the mine plan will progress through the southern portion for the next 7-8 years before moving to the North Pit, with other adjacent land holdings offering significant future development potential.

Dennis Fong asked about the potential integration opportunities and synergies from gaining 100% ownership of the Horizon and Albian mining assets, and inquired about the strategy to utilize available capacity at the Wolf Lake and Primrose thermal facilities.

Answer

Scott Stauth, President, explained that full ownership of the adjacent mining sites creates significant efficiencies through shared heavy equipment, warehouse inventory, and services. Regarding Primrose, he stated that following strong well results, the company will adjust development plans to ensure steam plants run at full capacity, maximizing the value of latent facility capacity.

Dennis Fong of CIBC Capital Markets inquired about the potential integration and synergy opportunities from gaining 100% ownership of the Horizon and Albian mining assets, and asked about the strategy to utilize latent capacity at the Wolf Lake and Primrose thermal facilities.

Answer

President Scott Stauth detailed that full ownership of the mining assets would enable significant efficiencies through shared equipment and inventory. Regarding Primrose, he explained that capital was reallocated to the area following strong well results, with the objective of maximizing steam plant capacity and filling available oil handling infrastructure over time.

Dennis Fong asked about potential options if AOSP mine optimization exceeds Scotford Upgrader capacity and what steps are needed to utilize the 70,000 bbl/d of unused thermal processing capacity.

Answer

President Scott Stauth stated that the next step for AOSP would likely be a paraffinic treatment facility to move additional bitumen barrels to market. To unlock the thermal capacity, primarily at Primrose and Wolf Lake, he identified steam availability as the key factor, which will be addressed through pad additions and the ongoing evaluation of solvent implementation.

Dennis Fong followed up on SCO production, asking how teams might drive outperformance beyond Horizon's stated capacity and the potential impact on cost structure. He also inquired about the long-term development strategy for the company's large conventional heavy oil assets.

Answer

CFO Mark Stainthorpe responded that while it's too early to quantify the full upside at Horizon post-debottleneck, early signs are positive and a clearer picture will emerge in the next quarter. Regarding heavy oil, he explained that development is guided by a corporate capital allocation strategy that prioritizes the best returns, and current activity levels are likely to continue into 2025 if oil prices remain strong.

Dennis Fong inquired about the company's commodity hedging strategy, including its ultimate goals and appetite for adding more hedges. He also asked for the rationale behind shifting 100% of post-dividend free cash flow to debt repayment instead of share buybacks.

Answer

President and CEO Eric Greager stated that the hedging program is anchored to the balance sheet, with the $60 floor designed to protect capital spending. He noted that while they would like to extend hedges, market conditions have been unfavorable. Regarding capital allocation, Greager described the pivot to debt repayment as a prudent, near-term discretionary move in a weak price environment to prioritize the balance sheet, while emphasizing the dividend remains a commitment.