IMO - Earnings call transcript Q3 2019

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Imperial's Third Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]

I would now like to hand the conference over to your speaker today. Mr. of President Vice Hughes, Investor Relations. Dave you. Thank please ahead, sir. And go

Dave Hughes

good everyone. you, our third Thank to quarter morning Welcome operator, earnings call.

Let who is let you room. by me in start the know

John Chairman Senior Lyons, President, President, Finance Theresa Brad We Commercial Upstream; and Vice and Administration; Senior Rich Vice President, Kruger, Corson, have President; Redburn, Whelan, and and Senior Dan Development. CEO; Vice Corporate

guarantee may to of contain future operating going, factors get a noting by we is actual start not performance, number I information future want a information. and financial forward-looking results today's materially Before Any could of forward-looking comments depending assumptions. that and and differ on

this factors Form on detail information third Web that SEDAR, those quarter and the risk described earlier as site. our are release all available in as most our and morning, Forward-looking XX-K, documents well recent our EDGAR, further in are earnings on and issued and assumptions we

them. please to So, refer

prior will and And follow our Rich start we us some will same as provide offering format our with to to today We go back performance. have to on the I to more operating once overview then opening financial operating going we Dan quarters. go through are Q&A. those through color Rich take is will I'll then some remarks to in we remarks,

So with that, I will to Rich. turn it over

Rich Kruger

the pretty environment much a $XX MSW really focus relatively with in line around I'll are despite quite with year-to-date. nine with throughout quarter with $XX the the and overall $XX pricing activities world year-to-date; will on the them Canadian brief. at of And we've experienced. and quarter a prices year-to-date where or Okay, very the line at be basis; good WCS if we upfront largely months; first in were of consistent also light WTI consistent at My in morning. the kind you stable lot comments crude XXXX on look

$XX WCS in and absolute from WTI roughly MSW prices of Year-on-year to $X 'XX year-to-date $XX Similarly averages minus the quarter On to barrel to slightly WTI as from differentials and about months. down and down the minus average crude unchanged in year-on-year WTI or average third been the considerably the differentials a and respectively. as by largely are barrel MSW relatively well terms $XX light first narrower on $X. third quarter both $X nine have a

kind Alberta average, -- year is storyline prices dollar light prices, Brent to Canadian This prices due increase that mandatory absolute of heavy in So and of par prices year-to-date year on have with continues course what of seven this when crude effect line to this imposed XXXX the largely the WCS on of prices that global a down government said earlier curtailment artificially course all over been caused production done has crude year-on-year be the or dollar, eight to which WCS up of phenomenon benchmark 'XX generally 'XX. the with is with bump a to in the

the turn performance and to to there it financial So go pause think I over through quarter. just our in I'll Dan

Dan Lyons

Thanks income margins Rich, from million primarily 'XX due down in net Our third quarter the to third was $XXX the quarter million of $XXX lower Downstream.

were tax earnings $X.X from the rate government's June. XXXX in reduction included million nearly quarter second a income gain and $XXX our sequentially Looking slightly Alberta over enacted billion corporate

was third second million quarter of net the 'XX. impact million income down this $XXX from of Excluding quarter $XXX

'XX second decreased quarter-on-quarter tax quarter I quarter Upstream talked drove million above. excluding of $XX this earnings the of Third about from prices $XXX Lower the impact million crude decrease.

performance. quarter $XX offset million reliability and by margins of million impacts lower from the due of earnings primarily $XXX partially to turnaround Downstream Third 'XX down second improved quarter were lower

billion from year capital to effects that interesting same essentially 'XX effects XXXX. $X.X for cash generated note from negative onto of generated $X.X million $XXX about cash $XXX On Moving those flow, basis the activities of working million been increase full third by had year-to-date nine positive It's the operating we of also nearly cash of quarter, was 'XX. quarter operating $XXX a second an increase of in And XXXX of million. offset year-to-date quantum. activities was from the billion working the capital months have from an about the

and million Moving Upstream onto Kearl down about $X.X on Aspen capital represent third $XXX Spending and expenditures totaled cogen the the year-to-date. Upstream billion. including crusher expenditures year-to-date projects $XXX to albeit million bringing products year-to-date expenditures, CapEx $XXX the quarter pipeline total. key 'XX million XX% capital ramped Strathcona in Downstream totaled of the Alberta of now

the that guidance. in modified billion $X.X quarter $X.X to from to for consistent the full to we corporate CapEx billion the with year first Our outlook billion billion communicated to January, Recall $X.X down our year $X.X guidance original billion is after $X.X an current $X.X billion

guidance Day XXXX anticipate at can in our you ahead Toronto Investor for Rich? XX. November on Looking CapEx

Rich Kruger

that Sorry about talk dividends. about

Dan Lyons

generally. I'm share quarter, shareholders returns $X.XX and In of quarter increase from $X.XX an going $XXX a more talk we dividends about paid a third to at $XXX share third 'XX. the to the million dividends in at million in

our NCIB $XXX share with third continued program. also the in totaling million Stock buybacks Toronto consistent approved We Exchange quarter

billion quarter end debt balance $X.XX billion the strong. a payable per $X.X fourth XXXX. XXXX and a in Our of of third of share we declared $X.X the have today sheet of Earlier ratio debt-to-capital quarter quarter. we at XX% first Total dividend cash of remains the

Now back to you Rich.

Rich Kruger

oil This day XX,XXX third our third Syncrude. quarter highest third Upstream at And from Very It's result the both X.X% production a or third in year Kearl is years. of turnarounds quarter the ago. XXX,XXX good, year a noting worth barrels represented equivalent achieved quarter. that maintenance with and start in the Upstream, Let's quarter in XX significant the the despite production some this this we quarter averaged

at an XX,XXX about day was barrels Imperial share barrels day from an work Kearl estimated a and a this a at barrels of Syncrude. our impact combined XX,XXX The day share XX,XXX

look kbd Syncrude quarter range major XXX October production the total work comment the I'll more and XXX and both November we fourth of a here to we turnarounds As a in coming would on maintenance moment. out Kearl in bit and to to in anticipate those respectively be

gross on produced basis last highest. third Kearl, the our being highest on a quarter XXX to XXX,XXX Kearl production kbd second quarter at and the quarterly barrels was Moving with from year's record the we This second up day quarter. this is in in third

the quarter Kearl. suggesting XXX,XXX day between recall second quarter may guidance earnings You call would during and third produce at gave we somewhere barrels third a in quarter our some I XXX,XXX

first a result's kbd XXX,XXX thousand Year-to-date day these through about barrels of days year XX at at completed to up this in actual nine the ago. the We two Kearl planned began earlier our -- in one our five and of day our and regarding So plants above about expectations. months successfully it a turnaround turnaround puts total us was a versus September months duration. barrels half a we're couple nine we at XX mid-October by

million days. startup the water line Cost then XX-some our mentioned slurry very regulatory here for $XX transport activities The at inspections work work turnaround and hydro ores million prep thereafter. I overhauls $XX to supplemental utility share. of that key and about tie-ins the are million Kearl crusher and our equipment installation duration total froth operation $XX was its scoped

scope quite turnaround terms ago work the in to of getting at better lower. and We're of at the we And continues plant was plant cost I the the KX duration project. a the turnarounds. this in here our start-up. on executing and a had what and for crushing bit our capacity a similar supplemental we schedule earlier impact year-end at project year planning That year better call mentioned

in down final work weeks XXXX support a And of lot day to barrels this coming annual we're again the and So beyond. a XXX,XXX in ready. will getting commissioning production

year-on-year Given annual how XX effect other the not Investor Day the due November bit but constraints. of give of what lower annual we'll and in average the of during occurs the the that we'll increase to quarter a sense on average first Kearl seasonalized to a give and kind mining in terms big with an expect you than being weather only our

maintenance. Second quarter often has some

is of a big XXX,XXX would a running way. standpoint. profiling and when we kind in that get But take will how that give and you Third we quarter up from suggest we you consider

barrels in Cold quarter. later factor Lake Moving similar production more somewhat quarter the produced But fourth a ago Lake, big onto Lake to we Relative lower conveyed in quarter a X,XXX the quarter Cold largely in potential day the anticipate barrels earlier in point November the management anticipate than second we although had somewhat always to we'll a to day on this XXX,XXX about overall much have the and that to again quarter steam variations Cold quarter X% X,XXX I weather XX. we from this is third a guidance get quarter. what be as this Fourth a wouldn't year dependent. at the for the on up

than expected ago XX,XXX Syncrude one a was planned XX of XX August the work is here, as half Syncrude's share barrels third our double-digit or bit The it's of on of anticipated is share X-X XX November. integrity day into high units. reliability earlier a quarter The bit kbd. processing cokers of extend at of at I on the so mentioned a with coker cost a first where we communicated to scope had this of our X a on A big Continuing to began work. in the end lot quarter, and course more and expectations a and turnaround this for hydrogen about work days improvements itself of upgrades lot million, of XX plant our $XX the

that. it anticipate release to share the be barrels fourth in impacted We third commented a day about our in comparable quarter. would We production to XX,XXX quarter the a impact

And year the improvements that Syncrude Investor to fourth would about XX,XXX a Syncrude. of to achieve So we pointed day as XX,XXX to at if barrels XX,XXX And a the all third were share. barrels a to quarter we a over the our suggested at look minus year time of to expect our point barrel a roll similar that a and plus quarter's production ago full to striving or day you target day. would we outlook together we Day at XX,XXX

September Crude-by-rail, of think on XXXX. through against thought yesterday. We're to the announced with put in over in weak. what of context make month here each for declined now the Shipments kind from damaged kbd and to even a more the third that up July curtailment the But into crude-by-rail year I XX government day I'd to throughout I order continued barrels for in XX,XXX this we have some quarter XX,XXX were in with important barrels us bumping largely quarter day when have the Alberta's today quarter. it's -- comments economics average government be the of information certainly the it a

rail curtailment was fourth the third level. fourth point And key kind I TC but -- this would itself year in it's unintended expected more to the volatility I our would yesterday with rail leak September. highlight decrease I -- of an on And of quarter shipments course what rail at be, made from last of giving kind in any based of than late fact is to government's announcement outlook negative has been point based the the the be continued -- quarter at have would this Energy's the over to shipment think we consequence on quarter Well to quarter saying Keystone the say determined confident expect the specificity do overall. this and have movements

to Provincial continued and quarter stayed a over the drop inventories bit. have

curtailed the however, there's that of at this year volumes largely have to You'll the and or a year Genscape seen over did recall this of provides The the of million we and barrels export industry late second flex-in year through incent months year. past months. not inventories million October. per continue kind nor the additional or cushion report five or of so. months end near tops of largely several through provincial that rail roughly And Inventories first to several first for data reduce capacity believe then lot XX or the alleviate were in of the the would most recent tank and exist late four, the inventories XX.X I've last system at in barrels half that XX declined year million somewhere last

announced threshold government the the curtailment XXth, for operator to program XX kbd August subject On some the those curtailment to to revisions from increasing XX.

this a result only as subject are So Alberta in to are we of that order. XX one producers

barrels average. months XXX,XXX in a refining to Moving we're on closer throughput Downstream we year day ago. couple on and that in range to XXX,XXX the September This the July first of the in quarte, XXX,XXX to August the compared XXX,XXX quarter averaged the get to a

a our by of September Nanticoke was impacted start planned at facility. turnaround

and work replacement other the part or periodic estimated regular X, that impact Specifically four be the fourth million roughly catalyst a general XX-day duration. a to quarter service activities. in an on roughly maintenance will so large XX,XXX plus September The barrels for we are so a minus was out units as of started quarter or barrels third quarter this activities. in -- day of the maintenance even XX,XXX day more a $XX in fourth complete turnaround over XX,XXX

in about as duration. work we've our limited a million XX-day very and of just billion somewhat about work with challenges in would more one turnaround the November. XX-day is a unit -- be longer the cost as had over fluid also a late activity we me here it. on and inspection XX-day restart key in had cracker more quarter and the Sarnia, a workforce suggested a some bit I the At $XX The repairs. second $XX than higher is This That discovery second productivity half about had or September estimate But current start XX. with the bit scope quarter duration excuse is in and

of the duration, work. throughput Total basis, $XX quarter are anticipated million quarter on and Work of incident based of into outlined for our this we'd arrived in the is be On also small place. quite bit the going replace had work second tower been when the this Sarnia at just of XX nature these impact The early that is the to this for a cost that the turnaround third course mid-October. minimal in quite earnings during at we million, $XX fractionation to on the little into precisely to fourth and occurred successfully lifted shared new Sarnia continues update April. we an call. quarter has It's tower. be tower A estimates

on about and XX,XXX and before the quarter in of are -- a half the It'll quarter a in running in it at expected was throughput commented we're it second about generally was manner. consistent quarter. Installation point regular up the call of and barrels have day feel in XX,XXX restart earlier of the third December. cost second ongoing and a is our a half commissioning that margin The was in first more impact I what I day And target fourth sometime and time. earnings did for tower quarter barrels impacts the about impact with we're it that the in Sarnia

at year Sarnia level work full of very a quarter barrels at XXX,XXX major work comments kind time back XXX,XXX new somewhere. look outlined that ramping factoring would turnarounds commissioning maintenance a the in similar year. major much day in range XXXX put The at or the turnarounds the a I turnaround about XXX,XXX the we anticipate and year last up remainder when to tower to we we a turnaround and Sarnia goes that that two the over estimate at If had minus continuing major than to out and plus higher fourth with And were year the of would the throughput typical is I've fact a in XXXX of Nanticoke. with and be at and high of just refining

consistent -- day product terms various is communicated barrels what sales turnaround see units kbd up news you XXXX. were a And again XXX,XXX the XXX,XXX be in periodic of a third XXXX at whatever This second lower our barrel is largely earlier with specific somewhere in this cycles is had petroleum between five on the This to is quarter three-year day the we seven in impacts for to the refineries. related and but can topic year a the quarter. good On and timing happen another we year XXX,XXX to XX from I'd what that say the we day they expect expectation. year

third year And versus year. where a we the was us were the in last me to of addition where sites third quarter XX-year the in our the addition across refinery the record sales. maintenance or issues terms of last we quarter is were our planned Sarnia The quarter behind year product high high a than really excuse for in this largely higher third record in

Over the the were September of coming quarter here by increased they turnaround but in then start impacted course Nanticoke. and planned unplanned outages of the second of volumes out the again the -- third in quarter, volumes in sales

look the think reasonable something assumption in we the kind the barrel range year rest back would day XXX,XXX of seen pretty of consistent over the a so the season. quarter over fourth the end we history have summer terms fourth if last of years recent mid-range of Looking range in a of be driving XXX,XXX five years what quarter a the sales. would or be I And with

with of characterize and continued though from activities at Upstream the particularly record by flow So most maintenance and also the Nanticoke. performance was I the quarter third we from impacted but again have operation more financial cash performance generally third production Upstream in quarter Downstream to tower turnaround performance would significant planned and even that, of notably strong operating kind terms in and as recover incident Sarnia

back Dave kick think, turn I'll he and can I it So Q&A. to there stop our off

Dave Hughes

the for most had questions have the We when addressed But just that to probably that pre-submitted. you. part. look felt them remarks through them some we Thank Okay. heard did you

straight live So to I the to Q&A. move think operator we're going

Operator

Chieng from of Instructions] our And comes Emily Goldman Sachs. question the line with Thank you. [Operator first

open. now Your line is

Emily Chang

around the the particular is an to first respect yesterday crude-by-rail Imperial a think change there Or about the that? is increase with do curtailment strategy to announcement just My here? versus we economic government. decision of in the still it in really utilization rail? question Is from for How

Rich Kruger

long Thanks that's little go really new capacity behind curtailing And stepping several to production bit. supported Emily, terminal or in We've if that a of back takeaway rail and opposed expanded our back crude-by-rail. and pipelines decision we've as to whether Just new expanded kind you back a -- XXXX. is increasing years long build capacity

factors is industry that market this preference either that would decisions at that all incent necessary Our make the or to play and market would the forces and in here investments. be

announcement yesterday's So it's early.

has through that a would in before to bad situation. one I've still situation not going to unintended trying in been first been crude-by-rail We're times to utilize make facilities They're the of incentive the this playing a say impact cards it. the highly existing of curtailment economics. were that the dealt. The I and that government compliment to in new the facilities the course of is volatile. form consequence bad build a the they're best highlighted we're of place. the multiple over there negative incentive economics year is the on has With

was we a and getting need in to dig back in devil's announced lot to So provisions understand are what there deeper details into of the the there. it to

understanding to of XX we commented curtailment. we're rail use I significantly by it. terminal. companies would As It's to industry's prefer one been we have largest only and subject underutilized my And

the standpoint value maximize means announcement it an us. on the of Imperial whatever strive we So to will and from

we rail add at on it about value. each But every the business from that across value and the We'll going true of true money say look maximizing this for been again. and our it make forward year. in shareholders. And itself will I'd take does we month will our terminal And and everything be utilization is our actions based a rail it do Upstream has the be strategy standpoint

Emily Chang

just follow-up that taxes the me may, I you off of seeing? the And the of of roll level you're trajectory Can one years? sort if next over what is deferred of couple remind

Rich Kruger

more to Dan me to bit detail ask this but today. a XX of Yes. on We're going comment November let

Dan Lyons

Yes.

the As a benefited few we've loss years we've on last cash had significant a forward tax flow from basis. you over know carry that

through most chew all that of the quarter. in fourth to expect or We

So bit there's going work forward a taxes cash -- lag. the way a of

lost XXXX probably tax rate expect we year. loss carry So tax XXXX to as the closer tax seeing you'll But tax start relatively by be we've rate statutory to the forward. benefit that cash cash of low

Rich Kruger

we through it's going of can we work, -- still right As on that it I we'll said on can and kind we're comment if of -- November some now further XX warranted.

Operator

comes question Prashant Rao from Thank Citigroup. of you. And our line with next the

now is line Your open.

Prashant Rao

I best, and November welcome all to to say and see the in hello with wish to you Rich Brad wanted but and look wanted speaking you. forward you we'll

Rich Kruger

we're We'll when out coming November have this in all party Toronto. in

Prashant Rao

follow-up to, wanted just little the on bit. I crude-by-rail a good. Sounds

there's One the and moving bit. lot a recent think about on of I longer-term a points. question But I you two sort little as a a of announcements expectations We of lot get been mentioned. questions we talked of a is here lot parts. you, this had think

government into arguably transferring contracted volumes along. where all fully the the For have they should sector private been

of free Or more of table terms kind that gets can a firm as static has in it sort there's changing barrels think to going other reasons? the total is do secondly bit of there that can see to as bring on? bid But over of up rails the of takeaway, And now for been XXX,XXX day is north fill we're you go per number -- up. starts -- it rail little landscape by that a on that sort you or to they what contracted capacity rail ceiling structural

Rich Kruger

barrel is transportation barrel of determines and rail. that incentive of is WCS the difference it Coast to lifetime question. you what various Gulf gets And kind of really economic And incentive relates it WCS take what briefly. and versus look to fair of for oftentimes terms WCS. in a see often differentials the Alberta modes back in a relative WTI reports reference the in or in economics in take to Yes, the me their particularly barrel just, When a rail a And media valuations. at step as there's you let

often It's rail the we is reaching that too so, oftentimes, see in or not I And money basis conclusions on the a WTI-WCS money. the not really pricing in folks differential. it decide is

general consensus -- I of is there's and any But about, and the think rail it's that been at it's power? just there back you a being don't now a are think all employed offer of and but I people say bit sufficient utilized that's I get XXX,XXX you cars getting as reported are barrels a and and So largely nameplate a and day. over XXX,XXX of to When not a the to I -- -- there's the and Now and capacity. one capacity little that I tutorial. and -- service the XXX,XXX out And XXX,XXX varies a in look think when industry capacity existing that ways. XXX,XXX -- terminal time. barrel host The that's don't sufficient it's comes the itself people to other XXX,XXX the comes a terminal in railcars, capacity that day it and of whole capacity. rail And

But it's not and a switch that you flip on off. can

So months. more whatever can with day on range at the all a properly call of a available they that to that in we but business if has recently where vary get But if arrangements not make have order XXX,XXX money there's a the or by see costs crude-by-rail variable for incented CNs XXX,XXX. to of industry a on the several ramp-up existing is required. There's differential think capacity you the of can was a to that suddenly only individual XXX,XXX. you consensus CPs industry. on barrels I be that in -- operating many crude-by-rail. XXX,XXX operation there XXX,XXX on was But There been have And can and a

differential for that the very, in of this And locations tight very has been bulk WCS of two the year.

-- it's parties down because is variable rail new most seen far putting recovery new on cost takes behind going incentive But sense. of from makes for what big commitments you differential what notably on those economic seen and most and up full rail basis all been us anyone rail. haven't new you've that So capital a it the

of in either a confident what will come new. to look kind they -- market question let or exists we a but to expand your I that's like that ours others this need differential have forces So, companies answer windy to where and invest way in into

that. a price new parties that becomes kind the in the further. government to the to -- I and relieve That of you. blowout the urged a barrels in available. We and where a more the market let capacity I would are. like will government barrels everyone until the where rail let was urge constraints relax -- pipe industry concerned with answer. that of perhaps to we avoid continuing and get think flex I an place all got after long But takeaway let and settle happened to have go is year. Put about curtailment they think into more it We last of there's out normalize inventories flow and certainly part think allow would is near be system work certainly hope those market ongoing a market sustainable part

Prashant Rao

there's sort wanted at reports as there's lot supplying of there's Rich. you follow-up, quick -- may been always means there, -- the U.S. in some on production the your appreciate level looking I really it One some that impact barrels lack a think that and U.S. what Downstream And impact I that maybe you're market is what just looking or what that where your integration your on could land? -- if potential the of Refinery. Exxon have see -- in to for been they Billings to on comment to

Rich Kruger

promise commercial Certainly, have times being question our marketing -- transactions scale can own we've periodic and to advantage in I'll and high-performing as while to of we can -- we facilities I ExxonMobil use facilities world at the started and but customers of to integration Billings commitments particularly capabilities east Billings if maintenance two -- delivering in terms in products and we of there's but to Nanticoke that help out part same those ensuring in we're Sarnia level through I kind of a a market out do take relationship supplies of of our value notionally Strathcona some your we big our to because able the east Strathcona. with stand-alone, provide refineries get at the processing of been we that. work a with

would may commercial we continue or would or change may Exxon were with what we that that far. what other meet customer case in ExxonMobil allow on manner arrangements to a Billings at -- us always that do we projecting have if that in with it can't -- a probably I parties would do do whether a other facilities. to they're Billings all ensure reliable our largely Western be So, impact. possible or Strathcona our go third-parties But would And largely look not and hands work to demands highest while do periodically the be we

Operator

from you. line And of Dennis next Thank comes Canaccord question the with our Fong Genuity.

Your now line is open.

Dennis Fong

I fact on in? about associated like fair feel the a they about project you lines translate as amount curtailment what call you kind Rich, program spending commentary view how guys around thing seems the First of are the government your that curtailing well we'll are it situation given crude-by-rail hasn't between to the the of the sounds just to the Should alleviated. it potentially respect still and guys namely reading there, to into allocation maybe been be mandatory as itself completely potential that it with Aspen thinking there's risk -- capital adjustment you

Rich Kruger

Yes.

and has a series gas those. said our added for. as readily curtailment the it that of we of we pen been and a need business what in to of market need in the evaluate we make curtailment assets. the see decisions we and the out -- our projections thoughtful equation. And away and/or take With a the modifying where of that before the from see, to altered whole -- a future quality to think go take when hard of it market incremental We are risks conditions risks look are manage beyond altering affecting oil there but predict I we I've makes stroke ability government -- one

the a for So talked there's lot investor -- about confidence.

I for but speak Imperial from Oil. other speak won't I will investors

money to you involvement. a long was are of of Aspen continue is need opinions involvement out For government inherited to and Government amounts sense form making best I being the this, bad production situation. get of on in a of particularly government see history, growth large complementary. we special described worked about But a here of kind crude-by-rail to we business. Upstream what crude-by-rail of moderately the the It's it our the how it's government confidence capital lot invest worry on it And another of allowance trading and in it. for to one form mentioned a

at incremental capacity. details. look So, -- yes, going We'll the in we'll the rules. those as rules But takeaway in I It's direction us. right provides anything those that the it concerns the we'll are said and devil's operate whatever within

start you outcome not read in markets messages give parameter been trying lines when between to and or another changed. So now early you It's predict has too I'm to changing parameters the the yet.

Let's consistent to has trying I've the that I've quite what as comments I we'll the on sell impact any said investments I be don't months. just been see not last market over accordingly. -- on nine additionally that. negative it make to and

as And I said as aligned recognize the fast and as we continue government into got out my to that future of get And what -- that has this near in hope really can how we we it possibly statement possible. is that this just see we hope that's And its intents there with as it to be. situation.

Dennis Fong

follow-up crusher from it you're Is was online bits to component there to still the your and commissioning the expecting there, then there all to around the able into of prepared come end the that of How colder turnaround pending treating have sounds forth? before on the supplemental you be so quick about final just year. engage a piece Great. like equipment equipment? comments should in attach unit supplemental just crushing we to subsequent the thinking weather on that that is that be And stream hydro the a of especially year-end and going and of

Rich Kruger

we not the plants the this and and work of that did In one early work. just there's turnarounds the we did in any completed tie-in No, turnarounds supplemental year two those year other some the the facilities of work. on preparation in earlier the we one Yes. in

the doing take we'll the sequenced supplemental we intervals so that be of each new so crusher what to project we maintenance it, advantage could two there's course planned So for of prepare facilities. -- one of crushers on

thereafter. follow of be shortly up one with them we'll starting other initially the to So

start-ups of last year with XXX,XXX next in in there that one for average the and I'm But two up in the required And second for whether will the year necessary kind start-ups deliver year is year-end of incremental of actually But on I starting first completed earlier those work they there's because weeks occur. weeks the two an not there's we've turnarounds. target quite and activities ability say is two -- first we're the one consistent when the and annual no the be turnaround yet. year-end already to the

Operator

Jon our And of Markets. CIBC the from with Capital you. question next Morrison Thank comes line

open. line Your is now

Jon Morrison

Rich, you it with ship to want that an to. obviously you able normally fairly whether rail variable railroad your a things you are on But to rail elect how at that be point to and covers that not. to here the either your otherwise wouldn't calculations get the or that ship got diff full and different are netback you've differential on location and or costs curtailment simple depending capture on regional to when you Upstream look

So dynamic thoughts type money? as would goalpost or you because as can simple a just about what think just little any more So sort complex of out in a how in economics give just the math early isn't give can any you you be of bit the helpful. this money the of is

Rich Kruger

another Jon, spot considerations It and on. does introduce some in it. Yes. comments you're I've seen others

introduces describe second it because different there's of of can market considerations. You a kind a it set as almost

do you're terminal. or many do Upstream you and ship really the of not you produce ship we You're not economics said big or we've for is bringing but more production if that So how produce you're the looking in you And looking at at got earlier case you're why us -- equation. directly only that's talking I into about kind volume? curtailed

incentive the or that economic volumes about own if We got it's can us utilize equity capacity. third-parties we've that to our their in rail are to their So talk utilization. come if for there

So for And we have the that ability to same to use volumes it we'll the judgments can then, we terminal own provider at money our look we of as a make money that and the of others. hit in can that or just you've where should of produce it's incremental terminals. the out not kind the we on but through just barrels service use

busy. into last pretty here. come announcements I the got get details team of you course understand But when would been And of you this my had to out of say you're this. hours. doing Imperial do And in Directors And Oil's kind I provisions those And Board that always if busy the else. -- are there we to and these XX with something this from that on thing precludes I've

team just over honesty because So all my the haven't I'm predetermine in not outcome has going XX I through hours. -- it an trying to last been

producing do does with make okay compete money us? services the me than the to need rail get say mean just what otherwise to best -- just would we are I that them do its too of with off it's get providing definitive that So that. we to sit down press it's too the in hot rules be -- How for provisions and use curtailed? just barrels more and to incremental terminal most how third-party through our Brad and/or this -- -- whatever And whether we're whether I in it's and

Jon Morrison

people pursuing lot a more and both being Can in thoughts should inorganic part is precursor growth of into Canada whether share Brad's with thesis? past a Brad's you a effect? any been weight we maybe on be think basis. lengthy There's experience very that of go-forward shouldn't that just and placing over speculation CV Or any M&A Okay. recency in Exxon on M&A to the Imperial

Rich Kruger

Brad, this for all other each of known first Well literally Absolutely. year. and XX I've years

And he's when together for worked people aren't four worked XX or years. for but capacities because many the been it with has talking read assignments five things -- I that have he years kind smile about on several I I'm XX all of done. Imperial of interested that and Exxon many in continents. in in We other the now And and other why his of Brad's

-- part beyond I well don't for Directors that think for he's Imperial years his all look that was signal course Brad that's experience him M&A -- XX other current outstanding go his I less Oil experiences that at job. grasping an to what to that from or as I there'll I And smiling and of the think. be at positioned position. is trying I this is of think over I Board is I any more look at judgment look straws. it. it. be his what the elect of with to not can I'm along in area determination candidate That to be of an the

we're various operational being internationally parts of me made in that a experience months. his roles President that He's the for time say of the of can of -- candidate series we going totality would on strong Brad's was if him roles a succeeding a commercial kind have things the it we to as question XX and it's still named November And Brad say. I But series or that can of that Downstream him. going business of on Upstream he a to is good -- there you couple expand think then And out to going further. be unveil -- some to if that

Jon Morrison

stock of fact on production seen right you're of is and and a prices. buying Strathcona that you that return the of dislocations there lot are really on light from in heavy focus some disadvantaged obviously Or projects tie cash platforms a somewhat smaller is massive that in physically especially of that interest cash given Does their some more your now which public you you could operator? recently of into small have where even background focused that that producers is -- you conventional were those the become what opportunity Rich, the probably integrated?

Rich Kruger

of and value today. and add a have we performance around capture to of But interesting opportunities beyond incentives is And internal Upstream and in level of it's however also that times Downstream a that integrated opportunities at our particularly Well, we gives really as we us volatile move adding simplest asset kind value. have market base the opportunities. can like and improve focus series lots big

been But markets. to the named of you look some continue like The serve things to Corners largely ability particularly So market. things we have also at Downstream participants logistical increasingly talked ones then the size the look about you've Upstream various external? in at about ones we've our strengthen Aspens The to in and been area we've things those the doing can that. the have talked kind of

look be what it, you'll at if in to portfolio today? and not -- our think our I might that's interest adding you'd well say portfolio in are we interested

expertise or -- think in existing or -- either what that Look terms things that think model scale more can things our and to valuable bring larger our might its current at we of are high-quality our longer than technology evolving business owner new have. in resource make even our things life our it historic we

would would kinds things we interested those the in. of be be If in think you that framework

be less others in going things that. X.Xx and we to We're are take it a beyond simply where what value and going prices it's be. price we're do play interested betting It's be x be could is where can things and they're above else where to to add likely so somebody betting

this often. we've what or to well in question get last years. point I So over bought market quite I done can't look the few at the

that things there its -- had you value and to future haven't as as we've we we we investments out for mean just and felt And with think we've have today can I found we're have look at at what what that looked we anything we and interpret as I have. comfortable

to in we ears our ground have Now opportunities That's bit always that nose value. change in our does the future? our that to of add the nose speculation. ground the ground terms to But for the can more looking a

Operator

from with our Morgan Wong And comes line you. Benny the next of Stanley. question Thank

is now line open. Your

Benny Wong

One the got around the I've in a couple just of a news. seeing the disruption pipelines Keystone. some questions is Thanks. had there. we're we've Obviously

the impact is X. that that Line risk you any court guys your can't way? a shipper perspective think remember In in decommission are around to business that. efforts pushing rulings some out of How that Just second a of Michigan back positive one your on And seen kind we've actually pipeline? I cleared does

Rich Kruger

happened Thanks before about it a interested said in all Benny. Keystone, that. to and couple industry. capacity. that we've line in days Base night read all they very we we're it. I And what's guess last TC want It's the I have finds over all ship. like material part do We're Tuesday of the things what takeaway concludes was TC the

We don't much but not I've specifically. how think important us it's to space. have contracted detailed I to but ever exactly important only industry

those whether system for third-parties barrels it's purchased whether flowing do deck keep that Downstream do we've equity those for are or in tight barrels that on barrels something hands all delivery that are to businesses. or moving barrels happens like you to a are when Upstream So in are what that's

approach how is Keystone So preparation. not may tiers long look situation typical on it be will of offline is know it be knowing our is what offline at how base or we what the

that's duration. of on the we the necessity I And crossed something whether and it's and our of industry What what that absolute on back a the something of of if that. industry in why next longer each that to comes immediate -- it do whether we fingers three Canada. can goes and takeaway do, Keystone TMX expansion that's than of Canada whether pointing that's can this need XL But that? we out in is participants several that's think days Line added not We've capacity longer got the

highlights I So that think one. this

ruled Keystone. move on of And legality The out yes continued move, going of Line do of original to state base your the question operation positive X. we back the barrels Michigan court on news the Michigan

important appealing to not that. the only also south the important of as I is general well border. contemplating many north saw of the us. attorney It's others think further five to I is but Line that border

to think and with But the Michigan. so of State on a on Enbridge smiled I'll dealings I with I one. today's and we any news comments positive all that our I world in specific leave that smile And face its read take when

Benny Wong

thoughts. airtime. doesn't get which I is on the question lot of really those follow-up a Great, appreciate And Lake Cold really

Just the moderating around where that and is it -- we volumes kind experienced forward? wanted couple asset update -- was situation spend passed we relatively ago if fluid see and area an that? was is a could that a not of an Are could little to was get with that excursions correctly there, high-level asset volumes already that higher I remember maybe going Or there. be years

Rich Kruger

Yes.

an Grand that there to reservoir. of, as wouldn't top issue where fear the much we call Rapids Lake shallower able been we November go steam be issue. Nabiye, We of put what going the or Senior but Whelan, steam deep the some is you XX, not recent pretty an as has it most only plan That will to going the steam And continues forward. a injection -- being beginning. I'll ground original commented that expect experienced in caprock to the the Upstream, pressure to then it relates current high on performance for or seal the expansion what our dive the kind Cold as from VP a to in our to that would and -- stay volumes on It lake into and with Cold John of and in not pressures give

as And of working forward we XX will XX tempted I this and a presentation next quarter-by-quarter through but John be operations say busy not on as of that the importantly at quarterly you to further speak. November nearly take of it commit are Lake then the John most good will hold is job going expect the all do what can as can what that further and so kind off where several to production been doing that November over Cold might we've can kind we in if we're you on on we're risk you only that the of And at terms I'd on detail years. what doing I call good I conversation that

I It's work it's smiling go in at So I'm looking can't much progress -- John. a further right now. because

Operator

FirstEnergy. with of Mike you. our from next And Thank Dunn line question the comes GMP

Your line is open. now

Mike Dunn

you bit to in new that a and wondering several and what Imperial if tenure Imperial? mutual -- Exxon is the of years the Board? terms of CEO there of or the the discussion are at the just typically I mean is it's guess brought nomination acceptance if of I like if process decides unrelated. candidates it's a -- through how production of second at are much wondering Board just you has walk year. an And Lake Rich, a been question I've restricted Imperial's could your and Cold due us think I Thanks. your estimate -- of the just but this bitumen predecessors Kearl can you gross you this provide at curtailments asked to little Board or guess never before Imperial's but between more

Rich Kruger

Mike, -- are I the a Mike. my opposite are but on you of it. spectrum the -- those Sure. well end They two kind specific friend. is Thank questions one of very like

are one issued first curtailment by in The the recall world orders operator. the

operator So for we Cold Lake are and both Kearl. the

and each allocation production how the month a to get much asset two decide we construct curtailed combined that's which the those have assets So order. for within we that of flexibility

flexibility. us gives that so And

not at not we when we work looking of been that and because world month-by-month getting what months can assets annual. what the have we've throughout you're the of flexibility year two that doing or actual sequence and to do quarters or asset a we produced about talked those we in we how volumes can we've been very how I intentionally significant is work maintenance And dovetail minimize do where each at quotas the large six volume not impact because activities have

by you're So, month. optimize to month having

had us I've and limits I to So to. explicitly on not what not prefer into has gotten that production

It's But what things of big been hard in those to us might the that plan had preferred say added negative can on effect at not we that has that's had a it. not curtailment on work have worked the impacts. effects done we awfully us terms minimal all. that minimize have minimize to we of on a the is doing so effect But

the Now up replacement I'm on seven on -- coming I my years. process will

not it's have so Imperial's the including Brad think make will and there it's note history been and third. in I to norm two important me CEOs non-Canadian the

senior about is that may to on Imperial Imperial look get move to the of group who important not assume the time makes that Board If succession Oil me. say anything at a you company management it's note it's ExxonMobil. I a that's when a the it Board responsibility my with as their planning. decision for in broaden course benefit me capabilities. that That in and decision independent trend. with It's unique And, folks who on would relationship so have this So think job within of readiness future. dialogue within individuals their Board's of Imperial wants we replaces row three That is for or the the executive may Directors an and publicly-traded to

have job obviously because likely individuals and ExxonMobil's ownership be. in the who they're would of would And best interested thoughts Imperial very in on

what's of can insinuated long-term, really interest I've interest just Oil case that for best That's pleased which it a the So time. had I over of known a in in happened in Brad. or on been I've pleased part that it's Board engaged ExxonMobil. is that. month input kind That's I'm something particular a my because him that a it. as period I the not so. this over and I'm significant And of happened of Imperial the with very attest forever. because to I've

now professional as respect the friends. that capabilities. what in is And make one. we're we're been two the last do his have what We colleagues think I we'll met in spending the with personal before smooth working for Board but for only not been Five big I possible. is investors. as effective we've it months now months on will have ago two XX -- that. the months Brad's full to utmost be the of and aspect not on major meetings day. participated that we've time only helping internal Board a but transition And he November next

we've the as been time possible. ensure that the outside to and as of So spending smooth Company effective transition increasingly is part also

Operator

the from America. of of Bank with line question Thank Sen you. And our last comes Asit

Your line is open. now

Asit Sen

footprint the Exxon? with a or your that given see any had I and recovery you particularly unit rail DRU. any And Any quick relationship thoughts have advantage that on whether diluent thoughts Rich, merits worked question you infrastructure on? on the of have you on economics might

Rich Kruger

that, And something there is it our more in priority described This we talked are was working bit and lot it few list start before I've I'd many subtract of And back Sure. years a then a bit on big so taking big assumptions what I'm say big economics on a number depend when one of DRU. is you another the talking terms about a a number transportation about on probably it. between as numbers what's of rates. differences higher little the left. And

the the round of transport diluent. ship barrel without So if without numbers the XX% you're to diluent you having shipping something

that you on -- are whether rail on you rail market? pay crude supplies of cost economic economic sources. transportation of pipe you're then its U.S. get you heavy so to what you're diluted availability And okay of over Gulf inputs a think or refiner and all economic availability a jump can it? go bit market It's for availability of things that versus these bitumen dilutes incentive of incentive rail many bitumen willing go the get and in DRU to pipe. So other ball, cost evaluation. into from a Coast it? when What the been versus So about cost Refining of out years what is last refiners a at worth looking couple neat product the at it's what's they looking of of

So have not been would thing plan. variables not in but I be it's that at time evaluation this That's it right say won't now our top in the point is so today. of of some to a there not many at say DRU detailed it work

and have very or neat shipping You very a a valuable rightly and point whether that's bitumen it's we be asset diluted rail out bitumen. can asset that valuable

DRU advance we talking decision. announcement safe future. well it's That's about a so in at in to anticipating it's any breath but to think continue it's final a getting wouldn't something I about the will And on we foreseeable look I -- it big start say my hold something start of serious we'll that

Operator

Thank you. would And that back does call Dave now conclude today's any question-and-answer I further session. like to to Hughes remarks. the turn for

Dave Hughes

Thanks Operator.

Just before to pass for it any I'll over comments. closing end Rich we

Rich Kruger

of your you in person today. reference for down to hopefully we not for the you get our question on XX. trying not several and many our forward if planned time thank fulsome plans the your can to -- to future times I wasn't necessarily November seeing the made but road Well, I we'll kick business but line. and today in and only a our others our detail. great outlook you're into person look in got day the of We've

from mix party it think commented spending lot call coming together. He bit. thereafter. XX put I fair time expect have on little him the of Brad's and also it into will and to jokingly a didn't said but the today I him a you November can -- I've meet him out been hear was to on I be

So and very you much to hope thank soon. you see

Dave Hughes

Thanks everybody.

do contact team have hesitate here. you if Thank questions you. any to further not always, the Relations As Investor

Operator

Thank for participating. and this conference you concludes Ladies today's call. gentlemen,

You may now disconnect.

Dave Hughes	VP, IR
Rich Kruger	Chairman, President and CEO
Brad Corson	President
John Whelan	SVP, Upstream
Dan Lyons	SVP, Finance and Administration
Theresa Redburn	SVP, Commercial and Corporate Development
Emily Chieng	Goldman Sachs
Prashant Rao	Citigroup
Dennis Fong	Canaccord Genuity
Jon Morrison	CIBC Capital Markets
Benny Wong	Morgan Stanley
Mike Dunn	GMP FirstEnergy
Asit Sen	Bank of America

Imperial Oil Limited (IMO) 1 Nov 192019 Q3 Earnings call transcript