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Suncor Energy Management Discusses Q2 2012 Results - Earnings Call Transcript

With that, I will hand over to Steve Williams.

Steven W. Williams

Thanks, Steve. As everyone knows, this was my first quarter as CEO of Suncor and it was certainly an eventful 3 months. We saw crude prices drop by $25 per barrel in the quarter, and large swings in price differentials for our basket of Oil Sands crude, as the markets reacted to the volatile supply and demand dynamics in North America and a very uncertain macroeconomic global situation. Through all of that, I'm pleased to say that Suncor's integrated business model and our focus on operational excellence enabled us to produce strong results once again through the quarter. So despite crude prices dip, were on average $9 to $10 lower this quarter than in quarter 1, we actually produced very comparable operating earnings and cash flow, and that speaks to the strength of our integrated model as our 3 inland refineries took advantage of the discounted feedstock costs to generate what were exceptionals -- exceptionally profitable results.

Our overall production remained within the range of our guidance, thanks to the steady ramp-up of Firebag and increased fall-ins from the North Sea and Libya, and we were able to complete a substantial amount of the maintenance at our Oil Sands plant, but we expect will position us well for the second half of the year and some reliable production.

On the capital project front, Firebag 4 is now over 90% complete and we expect to begin steaming the formation in the fourth quarter, and that will lead to first oil very early next year. We're continuous on our other growth initiatives with a relentless focus on cost and quality rather than on schedule for the oil sands during venture projects. That's resulted in timelines extending from the original estimates. However, we are quite comfortable with taking the necessary time upfront to ensure these projects can deliver strong value for our shareholders. At this point, we're anticipating that in 2013, we'll present a development plan for each of the 3 projects to Suncor's Board of Directors for a sanctioning decision.

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