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Operator: Good day and thank you for standing by. Welcome to the Suncor Energy First Quarter 2025 Financial Results 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] 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. Troy Little.

Troy Little: 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 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 Kris Smith, 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.

Rich Kruger: Good morning. Suncor’s first quarter was about maintaining momentum and starting 2025 strong. I believe we successfully accomplished both objectives. I’ll comment on some operational highlights, and Kris will further focus on financial performance. I’ll start with personnel safety. Previously shared that 2024 performance was as good or better than 2023’s best ever, with recordable and lost time events down significantly. I’m pleased to report the positive performance has continued year-to-date 2025. Special call out to Dean Wilcox’s base plant team, winners of the John T. Ryan 2024 National Safety Award for outstanding safety performance in major projects and civil work. This is awarded annually by the Canadian Institute of Mining, and it’s the Holy Grail in mine safety.

Process safety previously shared that 2024 performance was best ever first quartile in North America. While the first quarter of 2025 performance demonstrated continued improvement significantly better than 2024. Personal belief, you can’t be a well-run company without being a safe company. Upstream production, 853,000 barrels a day, our highest first quarter ever and our second highest quarter ever, 18,000 barrels a day higher than our previous best first quarter, which was achieved last year. Upgrader utilization a very strong 102%. It’s the fourth quarter out of the last five where we’ve been at 99% or higher. Continued high performance from our profitability pacesetter Firebag at 248,000 barrels a day, results particularly good, considering harsh weather for much of February in Alberta.

Refining throughput, 483,000 barrels a day, far and away the highest first quarter in our history, 28,000 barrels a day higher than our previous best first quarter again, set last year. Refining utilization exceptional at 104%, the third consecutive quarter above 100%. In fact, every refinery achieved higher throughput and higher utilization year-on-year. And our overall bottom-line is within 5,000 barrels a day of our best-ever quarter of any quarter. Refined product sales 605,000 barrels a day. Here again, far in a way the highest first quarter in company history, 24,000 barrels a day higher than the previous best first quarter again set last year. The third highest quarter ever with the top two quarters being the last two. In fact, the past five quarters have been our highest in company history.

In 1954, a gentleman named Roger Bannister, the world’s first four-minute milers and records are meant to be broken, and that is exactly what Suncor teams continue to do break records. Total cost, OS&G $3.3 billion, down $143 million or 4.2% in absolute dollars versus the first quarter of last year despite higher production and throughput across the board. 3% to 4% higher absolute volumes, 4% lower absolute costs operating leverage achieved with a culture and a mindset that every barrel and every dollar matter. I want to take you back 12 months ago, Investor Day, May 2024. We established several objectives for the three years, 2024 through 2026 to improve performance, create shareholder value, they were tied to production growth cost reduction, free funds flow growth, and net debt.

At the end of last year, end of 2024, we reported on the first year progress, production growth. We have achieved 75% of our three-year target. Breakeven reduction, 70% or $7 a barrel or the three-year target. Free funds flow, $2.3 billion or 70% of the three-year target And of course, net debt achieved our $8 billion target in the third quarter of last year. The bottom-line, one year into our three-year plan, we’ve exceeded every single target, essentially achieved two years of our planned improvements in the first year. But the best and most important part we aren’t done yet. What gives me this confidence in the first four months of the year, I’ve spent a lot of time in the field, at our plant sites, in our minds, meeting with and talking to hard-working, card carrying, operational and technical experts.

I spent time at the base plant looking at our U1 coke drum replacement project in reviewing autonomous haul truck operations. Time at Syncrude’s, Mildred Lake and Aurora mines, observing best-in-class truck and shovel operations. Touring Syncrude’s heavy equipment maintenance shops; at Fort Hills, inspecting the major new state-of-the-art heavy equipment arrivals. I’ve been at our Montreal and Sarnia refineries with teams driving industry-leading utilization touring our retail site network, meeting Petro Canada associates across the country. Why do I and my colleagues spend all this time in the field because Suncor’s leadership team knows the game is won on the field with the players and on the field is where you’ll find us. So, what did I see that reinforces were not done yet, base plant autonomous haul truck operations, Mike Gartenberg’s [ph] team.

At year-end 2024, we achieved our objective of 91 autonomous haul trucks moving all productive ore. Since then, we’ve increased our fleet to more than 100 trucks on the way to 140. In nine months, we’ve achieved performance equal to staffed operations versus a typical industry benchmark of two years. We’re leveraging data analytics, creating a new world-class AHS command center. We’re collaborating with our partners Komatsu and SMS to upgrade AHS software to improve all weather or what we call mud mode operating performance. The productivity expectations we have in AHS at the base plant is expected to yield the equivalent of 10/3, 400-ton of haul trucks by 2026. Coke drum — coke boiler replacement and cogeneration project, Mike Hague’s team, where we replaced three old coke drum — our coke-fired boilers with two new 40-megawatt gas-fired generators, added new high-efficiency heat recovery steam generation we completed the project and achieved startup in the fourth quarter of last year.

We’ve now tested each unit at over 400 megawatts. The project will meet steam needs for the base plant with surplus power exported to the Alberta grid, improves reliability, lowers cost generates power revenue, and lowers emission. Syncrude Aurora mine truck loading operation, Alex Stark’s team, Aurora supplies two-thirds of Syncrude’s mined bitumen. The mine is supported by a fleet of 70 to 75 Caterpillar 797 400-ton haul trucks. Historically, we’ve loaded each truck to 93% of capacity or 370 tons per truck. Alex’s team has increased its load factor to over 100% now, a full 10% increase, 30 to 40 more tons of productive ore on each and every truck, achieved through shovel operator best practices and load sensing technology, the impact, lower unit costs, higher productivity equal to 73 400-ton trucks.

Fort Hills, new hydraulic shovel Alisdair Gibbons team, last Thursday, I attended a ceremony commissioning the world’s largest hydraulic shovel the PC 9000, first of its kind, serial number one, designed in partnership with Komatsu and SMS, purpose built for Suncor to be perfectly paired with our Komatsu 400-ton truck fleet, larger bucket, longer reach, greater digging for us, swivel capacity for dual side loading, the results, faster loading, less repositioning, less village — having seen it and walked on it personally, the PC 9000 is a beast. Personally, Todd, I personally pulled out my stop watch on my phone and time loading operations, four scoops, 404 tons in one and a half minutes, folks, that’s fast. Deployed in Fort Hills Center pit, we’ve got a second shovel scheduled for delivery in July and two more next year.

This is an example of vision, partnership, technology and scale, driving productivity and lowering costs. Refining operations. I spent time with Conor Poutney’s Sarnia team and Isabelle Arbour’s Montreal team, seeing how maintenance and reliability best practices are driving higher utilization. How turnaround benchmarking and risk-based work selection are reducing capital and operating costs, how low-cost debottlenecking is achieving record-setting refining throughput. Two examples I want to share with you of grassroots focus on driving performance and adding value. Brad Jones, process operator, Sarnia refinery. Brad had the idea to spend $200,000 for tie-ins to maintain flow flexibility during our recent April turnaround added $4 million in jet fuel margin, a 20:1 payout in one month, well done Brad.

[indiscernible] crude unit operator, Montreal refinery whose idea for minor pump or piping modifications at a one-time cost of $300,000 to increase refining capacity by 500 barrels a day, it adding more than $1 million in margin every year. 2025 will be the first full year. These examples illustrate the power of clear, simple priorities, focusing on the fundamentals, understood and embraced top to bottom, delivering results. Supply trading and marketing. In the first quarter, I witnessed Paula O’Shaughnessy, Paul [indiscernible] teams supplying and trading in volatile east-west crude and refined product markets to capture premium margins at lower cost. And lastly, I spent time with Pat Ritchie, Petro-Canada retail and wholesale associates working in partnership to increase market share and site margins nationwide.

I’ll stop there, but here again, these are only a few examples I can share of Suncor teams technical, operational and commercial working together to deliver industry-leading results, teams with the drive of fierce competitors, in the determination of champions, teams unstoppable in their commitment to be the best of the best. With that, I’ll turn it over to Kris.

Kris Smith: All right. Thanks, Rich, and good morning, everyone. Building on Rich’s comments, it was yet another strong operational and financial quarter as we continue the positive momentum we built in 2024. But first, with respect to the business environment in the quarter, there was obviously a lot of uncertainty around the impact of U.S. tariffs, but in the end, the commodity prices across the quarter remained constructive. In the quarter, WTI and the light heavy differential remained relatively flat versus Q4 and at $71.4 a barrel and $12.65 a barrel respectively, while synthetic crude decreased about $3 a barrel average a discount of $2.35 a barrel to TI. On the refining side, New York Harbor 211 cracking margins improved versus Q4 by $2.25 a barrel, driven largely by improving distillate cracks.

And our 521 refining index remained strong at $26.80 a barrel. Finally, natural gas prices increased by CAD0.60 at DJ versus Q4, averaging about $2 a GJ in the quarter, but obviously remain attractively priced for natural gas consumers like our business. Rich has already detailed our Q1 operational performance as remarks, so I won’t repeat them here other than a few points. Oil sands production in the quarter was 791,000 barrels per day with in situ averaging 283,000 barrels per day in the quarter. Fort Hill is continuing to deliver solid operations with 176,000 barrels per day in the quarter, while upgrading was strong at both base plant and Syncrude, at 103% and 100% utilization, respectively. E&P averaged 62,000 barrels a day in the quarter, which is up 5,000 barrels per day from Q4 despite some temporary logistics challenges at Newfoundland loading terminal in the quarter, which has since been resolved.

In addition to very strong refining throughput and refined product sales in the quarter, our refining business also posted a very strong margin capture, averaging 99% on a LIFO basis when compared to our 5221 index. This high asset utilization and margin capture is a reflection of the powerful combination of strong asset reliability and our best-in-class supply and marketing business which maximizes value across our various trade channels. We also continue to demonstrate operating leverage with total OS&G expense of $3.3 billion, which is down quarter-over-quarter, while production and sales were up in both the upstream and the downstream. While capital expenditures totaled $1.1 billion in the quarter, including $600 million of economic investments, and $500 million of sustaining and maintenance capital.

This strong operational performance and cost management led to very positive financial results in the quarter. We generated $3 billion of adjusted funds from operations, or $2.46 per share in the quarter and adjusted operating earnings of $1.6 billion or $1.31 per share. I think it’s worth noting that when comparing quarter-over-quarter Q1 2025 to Q1 24 despite a 7% decline in WTI an average 24% decline in New York Harbor and Chicago 211 cracks, you see that our AFFO per share is the same and our free fund flow per share is actually 6% higher. This is a clear demonstration of the impact of our improving performance. As Rich just said, at Suncor every barrel and every dollar matters, and this is proof of that. In the quarter, we also returned nearly $1.5 billion to shareholders, including $705 million in dividends and $750 million in share buybacks, which was 1.1% of our float.

We continue to focus on returning 100% of excess funds to shareholders while prudently investing in the business to grow returns to our shareholders. As expected, we saw a working capital increase during the quarter of about $1 billion, contributing to net debt at quarter end being $7.6 billion, which is aligned with our debt management and capital allocation strategy. Overall, first quarter operational and financial performance demonstrate a continued relentless focus on executing the fundamentals of our business and generating value for our shareholders. Now, before handing it back to Rich, I just want to make a few comments on the second quarter. We’re into our second quarter turnaround program, and it is on plan for our 2025 guidance. The Sarnia refinery started its crude unit 1 turnaround on March 29, which includes planned maintenance work on the cat cracker and alkylation units, and I’m pleased to say the team has made great progress on the event against the plan.

As well, the Edmonton refinery spring turnaround, which includes the sour crude unit, hydro treaters, sulfur train and delayed coker unit started on April 15th and is also proceeding very well and on plan. And lastly, the base plant Upgrader 1 turnaround, which includes the coke drum replacement project is also underway. The event started on May 1st and is a planned 91-day outage. We are extremely pleased with the planning and preparation the team has done going into this event, and we’re very well-positioned for the execution of both the turnaround and this important project. And we look forward to completing all these events and reporting on them at the end of our second quarter. Finally, I want to take a moment to acknowledge the market conditions we’re currently facing.

With WTI prices currently bouncing around $60 a barrel amid the market uncertainty we’ve seen over the last few months. I’m very pleased that the significant strides we’ve made over the last two years to improve our operational and financial performance, significantly reduce our WTI breakeven and strengthen our balance sheet has significantly improved our company’s resiliency, position Suncor to weather these uncertain times and continue to generate solid free cash flow for our shareholders. Suncor is a resilient company with a best-in-class integrated business model and a highly focused and capable team. You heard many examples from Rich both of which will prove to be a significant advantage during these times like these and position us extremely well into the future.

And with that, Rich, I’ll turn it back to you.

Rich Kruger: Thanks Kris. A couple of comments before we just dive into the Q&A. Our objective, today’s Suncor high-performance sustained excellence. 2024 was a good year, 2025s off to a good start. Kris talked about our strength and resiliency. I’ll end with a quote from the late Academy awards-winning actor Gene Hackman. In the 2,000 film, the replacements Hackman started with Keanu Reeves, “winners always want the ball when the game is on the line.” Folks, I am seeing Suncor teams company-wide continue to show me they want the ball. With that, I’ll turn it back to Troy.

Troy Little: Thank you, Rich. I’ll turn the call back to the operator to take some questions.

Operator: Thank you. [Operator Instructions] And our first question will come from the line of Dennis Fong with CIBC. Your line is open.

Dennis Fong: Hi, good morning and thanks for taking my question as well as congratulations for a very strong first quarter. My first question here, just you had to contend with the impact of colder weather in January and February. Can you talk towards your strategy around managing the various Oil Sands assets and operations that you have through kind of those challenging conditions?

Rich Kruger: Yes, I’ll take it. Thanks Dennis. I don’t mean to be adhere, but the last time I checked, it’s always cold in Canada in the first quarter. So, we have taken a strategy of philosophy. We’re not going to be a weather taker. We’re going to be a weather maker. And so what Peter and Dave have done is they focus, they design into our operation, the resiliency for extremely cold weather conditions, whether that’s the fuel in our haul trucks whether that supplemental winterization at our refineries. We faced this this uncertainty, there’s variability every year. And for the last two years, we have been very focused on how do we engineer or design out that risk of that variability. So, if you want any further examples, I can ask Peter and Dave to comment, but we — like so many other things in our company, we’ve looked at it and just not accepted the outcome but say, what can we do that can change or improve our performance independent of what the circumstances would be.

And I think our winterization program is — you didn’t read about winterization in our press release because we’ve engineered to accommodate and deal with it.

Dennis Fong: Appreciate that color. I’m not sure if Peter was going to step in there.

Rich Kruger: I don’t know — Peter, do you have anything particular to add?

Peter Zebedee: Maybe I’ll just add a couple of things, Dennis.

Rich Kruger: I didn’t leave you much.

Peter Zebedee: You really start to see the strength of our integration across oil sands come out here. So where if an issue crops up in a single asset, we can really lessen or buffer out that impact by moving barrels our integrated production ecosystem. And you saw that in the high asset transfers that we reported on this quarter. That’s really the strength of Suncor and the strength of Suncor integration coming through.

Dave Oldreive: I can add a little bit from a refinery perspective as well. It’s Dave here. If there’s thousands and thousands of things you have to get right for winterization to work at a complicated refinery and I’ve seen these things all over the world. The key really is to learn from past winters and make sure you capture learnings of the instruments and the various things that frees up and make sure you have a disciplined approach to ensure that they’re in good shape for the following winter. And the other thing that is probably interesting and people may not appreciate is we start our winterization program sometime around July, right? It’s the middle of summer, and that’s when we’re starting to focus on it because we know winter comes every year.

Dennis Fong: Thanks. Really appreciate that underlying context. My second question shifts a little bit towards technology in aggregate, improving operations. I know back with the May Investor Day and update, you guys talked a little bit around the Mine Connect tool, which really kind of helps optimize the mine fleet in aggregate. But I think the other thing that you’ve mentioned at least a few times in conference calls, is that while you present some of the really interesting opportunities, a lot of those kind of new ideas come from, we’ll call it, within the organization. So, I wanted to kind of like address like how is the mine connect tool doing in terms of optimizing operations? And secondarily, what does that maybe spun out in terms of incremental benefits that you maybe didn’t realize right when you kind of implemented the tool to begin with?

Rich Kruger: Peter and I got, we were up at Fort Hills last Thursday. And we went — folks took us through and they were giving us their dashboards and their screen. Peter, do you want to comment on some of the things we’re focused on.

Peter Zebedee: Yes. And Dennis, Mine Connect tool is only that. It really is a tool, but it provides insights to the operations team so that they can take action. And that’s obviously where the value is generated Rich and I were up at Fort Hills last week, we talked with the Fort Hills team about their short interval control and use of some Mine Connect data and how that comes into our operating cadence and our operating performance through our operational excellence management system. So, it’s really about identifying an outlier which is delivered by the Mine Connect tool, taking immediate action and then generating the value in the field. And that’s really kind of where the power comes in from data and insights and technology, it’s a quick action by the leadership team.

Rich Kruger: And Peter, one of the things that really struck me as we sat there is the real-time nature of the team leads who the gentleman in the room with us, he talked about how they meet periodically, multiple times a day, every few hours as the opportunity is migrating from whether it’s a shovel operation or truck efficiency. And so we don’t lose a moment in the ability to optimize or improve overall performance. To me, that was a — that was really a powerful discussion that we had.

Peter Zebedee: Yes. It really is about the timely response to a variant condition.

Dennis Fong: Great. Thanks for the color. I’ll turn it back.

Operator: Thank you. One moment for our next question, and that will come from the line of Greg Pardy with RBC Capital Markets. Your line is open.

Greg Pardy: Yes, thanks. Good morning. I wondered if we can maybe just pivot to the downstream. And then specifically, progress made on retail EBITDA growth as I ride my bike around Toronto, what I see are you’re closing some stations. I know there’s enhancements going on elsewhere. Just curious how the strategy is unfolding and whether the retail — kind of the same question, but whether the retail is ultimately core to your business longer term?

Rich Kruger: Thanks Greg. I’ll ask Dave to comment in a second, but you’re exactly right. If you go back to either our retail review or our Investor Day, we talked about how that we’re looking at that portfolio of some 1,600-plus sites nationwide, and we’re high grading and upgrading major markets. the highest volume, highest margin sites. We’re growing those and then we’re rationalizing on the other end of that. Dave, do you want to comment on how we’re doing.

Dave Oldreive: Yes, for sure. and Greg, right in your bike around is not helping our retail business. We’ll have to get you the [indiscernible]

Rich Kruger: Our loyalty program.

Dave Oldreive: We do have other options out for you, Greg, and our convenience stores and our quick-serve restaurants. But we are executing plans to grow our domestic retail business. I’d say actually retail and wholesale. And we mentioned back in May that we’re committing to grow that by EBITDA by $200 million by the end of 2026. And in fact, we have plans to go beyond 2026 as well. And that serves us well in terms of finding good domestic outlets for our products. And that plan involves high-grading or transforming 20% of our network between 2024 and 2026, and I would say it is well on track. As Rich mentioned, he likes to say, we’re building sites that you can take the family to for the day and enjoy hours of fun at our retail sites.

There are larger sites with larger C-stores, quick-serve restaurants, car washes, and all really designed to achieve top returns. In the first quarter, we actually completed eight site enhancements and one new build. We also rebranded seven competitors at [indiscernible], and that’s part of a program of 20 sites, which are actually — we completed the team up until today. So, seven in the first quarter 17 today, and the final three are actually opening today. So, there’ll be 20 new rebrands there. And we’re enhancing our sites to drive increased fuel sales and reduce our overall pumping costs and have resilient sites over time. We also mentioned previously our Canadian Tire relationship, that continues to go strong. And that’s helped us over the past year, increase our Petro-Points membership by over 30%.

So, that really material increases. We’re starting to see that now in the volumes. And into the strong Canadian brand that we have that’s been really helpful through the first quarter. We saw a 6% year-on-year increase in retail a 9% year-on-year increase in our Petro-Pass Truck Stop business. So, we continue to grow on that business and it’s delivering.

Rich Kruger: And Dave, I just got to build off of that one. I think it’s important, Greg, to recognize all barrels aren’t created equal. There is a clear Pareto charter priority of the highest value barrels, the branded company-owned retail in major markets. top of the food chain and so on. And what I like at Dave and Pat Ritchie’s team’s understanding that. It’s not about volumes, it’s about value. But when you can couple volume with value, that’s when you get the exponential effect. And that’s what I see this team doing.

Greg Pardy: Okay, Rich. So, kind of a part of the same question, I mean, back of Imperial, you did that big transaction where you guys sold off the retail for a huge price at the time, not to put words in your mouth, but are you — is this an asset that you’re absolutely wet to? Or is it — how do you think about the retail ultimately as a core part or not a core part of the business?

Rich Kruger: The only thing I unconditionally love are my kids and my grandkids. Everybody else has to earn their seat at the table. And I’m not making a statement about retail at all. But we look at all of our assets for their ongoing contribution and their value to us. And with right now with the value that’s being created here, this is a very, very valuable part of our portfolio where we think there is continued growth in an uncertain world like we’re in today, that full integration all the way through the value chain is another set of value opportunities for us. So, I never say never, but right now, that is a very, very valuable part of the company’s operations.

Greg Pardy: Okay, thanks for that. And if you oblige me maybe just on a second one. So, if I roll back the clock this time last year, you talked about $3.3 billion of incremental free funds flow. You’ve accelerated it. in terms of what you’ve been able to achieve. But I’m just curious, from what I understand that, that number was actually bigger that there were headwinds that you kind of factored into the estimation of that number. And I’m just curious what are you seeing in terms of — are the headwinds as acute as you expected or what have you?

Rich Kruger: I think we’re seeing examples where the — if you talk about inflation or things like this, that’s part of it. But I also like the proactive things both Dave and Peter are doing that also affect those headwinds. As we, for example, and I’ll use a simple example, as we deliver and take ownership of bigger haul trucks, we send home rental trucks that are smaller. Well, that also influences the market. And so I would say that the headwinds we’re facing and [indiscernible] put words in your mouth are, we’re probably counteracting more of those headwinds than we would have anticipated a year ago. Fair?

Unidentified Company Representative: I’d agree with that. It is all about driving efficiency and productivity and getting more out of the assets that we have than what it’s been historically generated. So, something that is at the forefront of our lines and our daily drive each and every day.

Rich Kruger: I’ll come back to a point I made just a few minutes ago, Greg, though, we’re approaching everything is we don’t want to be a market taker a market maker. And so whether that’s for goods and services, whether that’s how we participate in the refined product sales is historically, you could look at things and well, this is up, this is down. What can we do to alter that for a better outcome for Suncor? It’s a mindset. It’s a culture. It’s just a — it’s a passion for making things the absolute best they can be. And I think this area on the headwinds is the same thing. We didn’t get there’s — whatever that number was in our Investor Day, it was an offset and we’re saying, okay, well, that’s just like everything else. What can we do to reduce that impact and create more value?

Greg Pardy: Got it. Thanks very much.

Operator: Thank you. One moment for our next question, and that will come from the line of Manav Gupta with UBS. Your line is open.

Manav Gupta: Good morning. I wanted to first focus on the refining side, a 99% capture, one of the highest we have seen in North America. Help us understand a little more what’s driving this high amount of capture versus relative to your peers? And how you continuously on a per barrel basis remain one of the most profitable North American refiners?

Rich Kruger: Dave, how are we doing it?

Dave Oldreive: How we’re doing it? It really comes down to our integration and capturing value all the way through the value chain. Our Suncor integration helps us we grow our branded channels. We’re leveraging our trading capacity. We’re optimizing our production in upstream and downstream assets. And as I mentioned, in response to Greg’s question, one of the big things that drove margin capture is improving our channel mix. And we saw that specifically in the first quarter. We saw retail volumes up 6%. We saw our Truck Stop business up 9%. And more importantly, even with increased throughput, record throughput at the refineries, we saw our exports down 25% in the quarter, and that’s really what helped drive — that’s a big factor in driving the margin improvement. So, we’re capturing — or yes, the margin capture and the improvement of the margin capture. So, we’re capturing the full value and we’re trying to keep more and more of that domestically.

Rich Kruger: And I’d say the other thing I’d add to it, Dave, I think the kind of the philosophy that over the last couple of years is our — we have said to our refining teams run your facilities to the full extent of their capacity. That drives down unit cost. It increases the throughput. And then the opportunity for your marketing teams is go out there and capture that improved volume mix. So, as opposed to in the past, at times, we have said, okay, well, here’s what the demand is, so we might have and we have actually adjusted refining throughput to meet an anticipated demand or our expectation of the market. Last time I checked, I can never sell a barrel I don’t produce or refine. So, we’ve turned that around and said, get after it, and we’ll find valuable homes. And I think our teams have risen to that opportunity.

Manav Gupta: Thank you. My second question is you do have a big turnaround on upstream coming up. Help us understand the risk planning around it and how you will make sure that this turnaround completes on time and on budget? Thank you.

Rich Kruger: It’s a combination of a turnaround and then a project on a coke drum replacement. So, Shelly, let me ask you to comment on that because the real determinant of the success of this is day coke drum replacement project. Talk about the preparation your teams and the risk management your teams have undertaken on that.

Shelley Powell: Yes, for sure. So, we’re in a very good spot with this project. The team is in place. And as you said, we are well into the start of execution with that turnaround now underway. And in fact, this weekend, we’ve completed one of our first important list. So it’s been very good. to get back behind us. It sets the team up well for the remaining life activities. And as we said, coming into the year that we did a lot of work focused on risk, risk management, risk mitigation, and we are really well prepared. We have all of the prework done and that included actually doing some early planning and preparatory lifts. So, we practice some of this stuff ahead of time to make sure that we had the equipment in the right spot.

We had the people trained and ready to go and everybody knew what their role was going to be. So, we’re very confident with the team that we have in place. A lot of these folks have actually done some of this type of work before, not necessarily at our site, but certainly, the crane operator they go around the world, lifting coke drums into place. So, this is just a different site for them to do that work.

Rich Kruger: And we were up there as a leadership team, what, six weeks ago, six, seven weeks ago or something. I was going to say we crawled all over that steel, but we draw over a lot of concrete as well. And so it’s a mix — it’s a project, but it’s extremely integrated with the operations. And I would say the Shelly’s your team, coupled with Peter’s team, that is the best collaboration between technical operations and projects that I probably witnessed in my career. And that’s what it will take for this to be a huge success. We have to be seamless in our execution in our handoffs in the — we won’t declare victory until we’re done, but we feel quite good about our level of preparation and planning.

Manav Gupta: Thank you so much for detailed response and congrats on another strong quarter. Every quarter, you seem to be setting new positive records. Congratulations.

Rich Kruger: Thank you. Dial-in next quarter.

Operator: Thank you. One moment for our next question, and that will come from the line of Neil Mehta with Goldman Sachs. Your line is open.

Neil Mehta: Yes, good morning Rich and team. I just want to start off with in a choppier macro capital flexibility has been a hallmark of the businesses, Rich, you’ve run over the years. And so as we think about that $6.1 billion to $6.3 billion of capital, how are you thinking about that? And how do you drive and maximize capital efficiency to ensure that there’s headroom to continue to return capital to shareholders?

Rich Kruger: Yes. Thanks Neil. If I could — let me step back just a little bit further than that. If you go back to May of last year, we outlined what our strategy, how do we win with the asset base we have. And we talked about industry-leading performance in operational integrity, reliability, we highlighted — in fact, it was on Page 4, if I remember correctly, of the deck that that driving to a cost structure that gave us financial resilience in a less than a $45 WTI business environment. I think I heard someone recently in in a call referenced their tagline that they’re built for this. Well, Suncor’s version, we are rebuilt for this. We are rebuilt for this business environment. And what it allows us to do is execute our plans without hitting the gas or jamming on the brakes and doing what we know is in the best long-term interest of the business.

And I think that’s important. We go through commodity swings in this business. whether that’s the early 1990s, the early — or the late 1990s, early 2000s, 2014, 2020. If you’ve been in this business long enough, you’ve seen this movie. It’s not new. But I’ll take your question more explicitly. You do get more judicious on your economic spend. Does it — you establish a high hurdle for the economic payout? Do we need to spend it today? Or can we let the dust settle and see where we are six months or a year from now? Those are the prudent things we’re doing and looking at. And as we drive down our sustainment capital through improved turnaround performance and just risk-based work selection, overall capital decompressors. We’re also at a stage where a lot of our economic capital is wrapping up and so we have the ability to say kind of what’s next and at what pace?

I talked about the CBR project. Shelly just commented on the U1 CD. So, as those tail off we will determine what economic capital replaces those? Does it replace it now? Does it replace it later in the macro, and I like that flexibility? But it all starts with a rock-solid balance sheet low and very, very competitive WTI breakeven and today’s Suncor is rebuilt for this business environment.

Neil Mehta: Got it. That’s fairly clear. And it might be too early to comment on this, Rich, especially given the macro. But as we start to bridge to 2026, which is coming rapidly in front of us here. How should we think about the moving pieces around capital? And is it fair to say there’s a downward bias relative to this year?

Rich Kruger: I think, again, if you go back to the investor deck of a year ago, we showed that 2024, 2025, 2026 showed that coming down. And a part of that is improvement in the overall level of sustaining spend as we just make better wiser decisions there. And then, of course, the rest of it is the economic we’ll — I think the specific number, I think, for 2026 that we showed was $5.7 million. So, it does show coming down year-on-year-on-year. And I think that’s exactly what we’ll be driving towards. And if the business environment warrants that further. That’s exactly what we will — that’s exactly what we’ll evaluate as we go through our business planning process this year.

Neil Mehta: Okay, all right. That’s really helpful. Thanks Rich.

Operator: Thank you. One moment for our next question. And that will come from the line of Menno Hulshof with TD Securities. Your line is open.

Menno Hulshof: Good morning everyone. I’ll start with a bigger question on the political landscape. And I think it’s probably too early to comment, but has there been any response from the Feds on the group industry letter that was issued in recent weeks? And I guess the more specific part of the question is, have you been given any loose guidance on pathways or the oil and gas emissions cap? It feels to me like it’s all generally a part of the same conversation, but any thoughts there would be helpful?

Rich Kruger: Yes, I think you described it well. It’s pretty early in it. But if I go back to the two letters that industry signed, the first one was seven or eight weeks ago now, before the election where 14 CEOs signed a letter to all of the political leaders on when we looked at the ambitions of the leadership for economic growth and prosperity for Canadians, that was our call to action that energy can and should, in fact, must be a part of that. And we said, for that to occur, we’re already willing and able to do that, but we need these conditions. And so the more recent letter, which was those original 14, and we had another long list. I think final amount was 38 Energy CEOs signed on to that letter where we reiterated those conditions that we need to be a part of the ambition of the economic health and prosperity of Canadians.

And it’s a bit early. I won’t get into — there are conversations going on. I won’t get into what he said or she said. But I think that the alignment within the industry the importance of the industry to the economic health and well-being of the country. I think that is understood. And I hope our call to action, which has a sense of urgency to it. I hope we see the political powers that be, the will to enable that investment environment to allow this industry to perform to its full potential. And when we do that, Canadians nationwide will benefit. And Suncor looks forward to being a part of that.

Menno Hulshof: Thanks for that Rich. And then my second question is on Firebag, which continues to perform exceptionally well. Is there anything you would want to flag in terms of recent changes to surface or subsurface best practices? Or is it more a function of improved execution on existing standards and protocols?

Rich Kruger: Firebag is one of the few big assets that I have not went to yet year-to-date primarily because I want to stay out of their way. That team is focused like a laser on incremental value. But what I will tell you is, is several of us here in the leadership team. We’ve had, what, five now. I think it’s five sessions with our technical experts, geophysicists, engineers, geologists with logs, maps, cores, looking at how can we continue to extract and develop the full potential of this asset. We’re looking at completion technologies. We’re looking at the non-condensable natural gas utilization, further infill drilling. So the folks around the table with me, we’ve rolled up our sleeves to engage with the folks that see the opportunities.

And every time I’m in one of those sessions, I walk away with a higher ambition, a higher expectation of what that asset can do not only in the short term the long term. I referred to it as everything as from a rock star to a gift that keeps on giving, I got to come up with some new phrases for it because that is a winning asset. And that team understands that. We’re prioritizing the work, the allocation of capital to achieve it. And I think you can get used to on calls to come, we’re going to continue to talk about progress at Firebag because it is just an incredible. It is a pace-setting asset that I — as I’ve said before, you give me a choice of any single in situ asset in the province, my number one draft pick is Firebag.

Menno Hulshof: Just a point of clarification, are you applying NCG already? Or is that future upside?

Rich Kruger: Small amounts, but we see when we look at — and this is a great example in today’s Suncorp. When we look over our fence line and look at what others are doing and try to capture and accelerate their learnings, we see an opportunity for us to further expand that redistribute steam, lower our steam-oil ratio and develop incremental barrels. So, yes, we’ve been applying it, but our future will be applying it at a larger scale.

Menno Hulshof: Perfect. Thanks Rich. I’ll turn it back.

Operator: Thank you. I’m showing no further questions at this time. I would now like to turn the conference back to Mr. Troy Little for closing remarks.

Troy Little: 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.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.