Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Suncor Energy second quarter 2022 results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone keypad. At this time, I would now like to hand the conference over to your host today, Mr. Trevor Bell, Vice President of Investor Relations. Please go ahead.
Thank you, operator, and good morning. Welcome to Suncor's second quarter earnings call. With me this morning are Kris Smith, Interim President and Chief Executive Officer; and Alister Cowan, Chief Financial Officer. Please note that today's comments contain forward-looking information. The actual results may differ materially from the expected results because of various risk factors and assumptions that are described in our second quarter earnings release, as well as in our current annual information form. Both of those are available on SEDAR, EDGAR, and our website, suncor.com. Certain financial measures referred to in these comments are not prescribed by Canadian GAAP. For a description of these financial measures, please see our second quarter's earnings release. Following formal remarks, we'll open up the call to some questions. Now I'll hand it over to Kris for his opening remarks.
Great. Thanks, Trevor, and thanks to everyone for joining us today for our quarterly results call. As previously announced, I've been asked by our board to lead our company forward during this period of transition. I've been with Suncor for 22 years, and I've held various operational and business roles across the company. Since this is my first time speaking on Suncor's earnings call, I'd like to briefly introduce myself and discuss my priorities. During my time with the company, I've worked in our Oil Sands, Downstream, and Corporate Divisions, as well as in both our Canadian and U.S. businesses. For the past 10 years, I've led the company's Downstream business, which is the most profitable in North America on a per-barrel basis.
I have a great appreciation and understanding of Suncor's assets, business, and people, and will be drawing on that experience to lead the company through this period with a focus on rebuilding confidence in Suncor. To be clear, as Interim CEO, my mandate is not to simply maintain the status quo, but to work with our board, executive team, and all of our employees to make the changes necessary to improve our performance and deliver the value you expect. I believe it's important to step back and clearly assess where we are, confirm what is going well, identify what needs to be different, and keep the momentum moving forward through executing the changes necessary to accelerate our progress towards improved performance. Safety is the most important value at Suncor, and our safety record is unacceptable and improvements must be made.
This was brought home by the recent death at our Base Plant site in the mine area. I want to express how deeply saddened we are by this loss, and I am fully committed to doing everything necessary to build a better safety culture and improve performance so that everyone at Suncor goes home safely each and every day. To that end, my number one priority is improving our safety and operating performance. To me, safety and operating performance are strongly connected. We cannot have great operating performance without great safety. It's simply non-negotiable. Safety is not only living up to our core values, but integral to delivering the industry-leading operating financial performance we expect. I'll speak to this in a bit more detail later in our call.
In addition to driving improvement in our safety and operating performance, I want to be clear, our strategy and debt reduction and shareholder return commitments and priorities are not changing. Suncor's strategy, which is fully endorsed and supported by our board, is to optimize and sustain our base business while increasing shareholder returns, reducing our carbon footprint, and prudently investing in lower carbon energies. The capital allocation framework, as outlined last quarter, will support increasing shareholder returns. We announced a 12% dividend increase in the first quarter, and by quarter end, we've already repurchased half the targeted buyback of 10% of our public float. Once net debt reaches CAD 12 billion, which we expect in the second half of the year, we remain committed to further increasing shareholder returns to 75% of excess funds after capital expenditures and dividends.
Physical integration and Suncor's unparalleled integrated asset base will continue to be an area of strength that we will optimize to unlock incremental shareholder value, as demonstrated by our second quarter results. However, we are reviewing options for our retail business to ensure that we are maximizing the long-term value of that business for our shareholders, and we will disclose the results of this process in the fourth quarter. We also remain focused on delivering on our free funds flow growth initiative and unlocking synergy with Syncrude. While we have to acknowledge headwinds from higher commodity costs and inflation, including in our mining costs, we continue to make very good progress on our initiatives. We continue to optimize our portfolio to ensure our business is set up to deliver superior long-term returns to our shareholders.
To that end, we have signed a sales agreement for the Norway assets for gross proceeds of approximately $400 million, which we expect to receive on closing later this year. As well, we have moved into the final round in our sale of our wind assets, and we're seeing very strong market interest. We've begun the sales process for our U.K. North Sea assets. All of these actions are to improve fit and focus in our portfolio aligned with our strategy. Finally, we will continue to advance our strategies to meet our long-term carbon reduction objectives and develop new low-carbon businesses, ensuring that we prudently manage investments in those areas. In summary, you should expect me to drive improvement in the safe and reliable execution of our operations while advancing our strategy, strengthening our balance sheet and growing returns to our shareholders.
Now let's take a look at our second quarter results. In the second quarter of 2022, Suncor reported the highest quarterly adjusted funds from operations in its history at approximately CAD 5.3 billion or CAD 3.80 per share, as well as free fund flow after capital expenditures of CAD 4.1 billion or CAD 2.88 per share. We returned record adjusted fund flow right back to our shareholders. Upstream realizations were on par with WTI and Downstream captured strong product market values of near 100% market capture. Both of these things highlight the strength and competitive advantage of our integrated model and our focus on higher value products beyond bitumen. Our upstream production of 720,000 bbl per day reflects both planned and unplanned events in the quarter.
Oil Sands operations production of 365,000 bbl per day included planned maintenance of Firebag and Upgrader Two. While the significant ten-year turnaround at Firebag, which was the largest in its history, was completed with solid execution and a smaller production impact than expected, our production from this area of the business was below our expectations due to unplanned events at our MacKay River in situ operations and Base Plant Upgrader One. At the same time, we achieved 189,000 bbl per day production at Syncrude, which exceeded our plan for the quarter. We produced 87,000 bbl per day at Fort Hills, which is in line with our plans and reflects planned maintenance at that asset. We produced 79,000 bbl per day in our offshore segment.
Looking at our Downstream results, we generated record adjusted funds from operations on both the LIFO and the FIFO basis. Our throughput of 389,000 bbl per day reflects planned maintenance activities across all our Canadian refineries, as well as unplanned events at the Commerce City Refinery, which had approximately a 15,000 bbl per day impact on the quarter. We have no further planned major maintenance in our Downstream segment for the balance of the year. Now let me turn to our full year guidance. After careful review, we've updated our annual production guidance to 740,000 bbl-760,000 bbl per day, reflecting the performance year to date July and our expectation for the remainder of the year.
As well, we've updated our capital guidance to a range of CAD 4.9 billion-CAD 5.2 billion for 2022. This increase in capital reflects the White Rose offshore project restart and our increased working interest in that project, as well as increased spend during turnarounds and maintenance to improve safety and reliability and general inflationary pressures that we're seeing across the portfolio. With that, I will pass it to Alister to walk through the financial highlights.
Thanks, Kris. As you just noted, this quarter was the highest ever adjusted funds from operations quarter for the company at approximately CAD 5.3 billion or CAD 3.80 per share. Second quarter adjusted funds flow was strong and a record in Oil Sands and Downstream, where they were approximately 25% and 30% better than prior periods, prior records, respectively. We returned CAD 3.2 billion or nearly 60% of adjusted funds from operations through dividends and share buybacks back to shareholders. For this quarter, we focused on share buybacks over debt reduction and bought back nearly 4% of the public float. Our net debt did increase due to the FX translation loss from a weaker Canadian dollar.
However, our second half 2022 cash generation will allow us to achieve our CAD 12 billion net debt target this year and continue to execute on our share buyback program. While the market conditions were exceptionally strong during the quarter, it is our strong asset base and the physical integration between them that drives industry-leading realizations and margin capture. Our SCO average price realized was CAD 141 per barrel, and the bitumen average price realized was CAD 120 per barrel. I note our realizations on both crude types trended above headline benchmarks due to the investments in our marketing and logistics capabilities, which forms an integral part of our CAD 2 billion free funds flow improvements. For Downstream, this has been an exceptional business environment, which is reflected in our results.
Our before tax CAD 2.1 billion of Downstream adjusted funds from operations includes approximately CAD 500 million of FIFO gains. On a LIFO basis, the CAD 1.6 billion of results are a significant increase from the prior quarter and reflect nearly 100% margin capture of these exceptional market conditions despite the planned maintenance across all our Canadian refineries. These margins are captured by prioritizing the highest margin channel and the flexibility within our network. To place the second quarter performance in perspective, we beat our prior adjusted funds from operations record by over 30%, and this was achieved even with our planned maintenance and with the summer travel and driving season yet to occur. Again, I have to credit the performance of our logistics and marketing team and assets in achieving this performance.
Lastly, I would also like to reiterate that our capital allocation policy remains on track to increase to 75% of excess funds towards share buybacks once a CAD 12 billion net debt target is achieved, and we are confident in achieving that later in the second half of this year. I'll now pass it back to Kris for some closing remarks.
Thanks very much, Alister. As I mentioned earlier, my number one focus is improving Suncor safety and operating performance. I've been deeply engaged with the management team on our improvement plan and its execution to drive that improvement and strengthen our safety culture. We completed independent safety assessments last year, and we're clear on what we need to do to improve our safety performance. We do not need more diagnosis, but what we do need to do is execute. My goal is to deliver on this execution with focus and at an accelerated pace. I'll be working with my team on delivering a clear accelerated safety improvement plan that is focused on building a stronger safety culture, strengthening our risk management systems, and improving contractor safety performance.
In my view, foundational to this will be engaging and enabling our front line to deliver safe work each and every day. I will also be working with my team to make sure we have the right organizational structure, capabilities, and talent in place across the business to drive operational excellence. We've already taken many steps in this regard, including assembling a strong central operational risk management team staffed by experienced operating people, as well as making key senior leadership changes in our Oil Sands and Downstream businesses. I'll continue to make sure that we have the right people, systems, and structures to drive our performance forward. I will be focused on reducing complexity and driving organizational focus across the company to deliver operating excellence, capital discipline, and our free funds flow commitments.
As you know, our compensation systems are tied strongly to our performance, including environmental, safety, operating, and cost performance. I'm going to be working with the board and our executive team to further strengthen the connection between safety performance and compensation, supporting our organizational focus on reducing serious injuries and eliminating fatalities. Again, to be clear, my commitment is to guide all company efforts and focus on improving our safety and operating performance while executing our long-term strategies, strengthening our balance sheet, and growing long-term returns to shareholders. To put it simply, what we need to do is get back to basics with focus and follow through, and that's exactly what we're going to do. Finally, we plan to hold the recently deferred investor operational day in the fall, at which time we'll describe our safety and operational improvement plans and actions in more detail.
An announcement of the date of that presentation will be coming out shortly. With that, Trevor, I'll turn it back over to you.
Thank you, Kris and Alister. I'll turn the call back to the operator to take some questions. Operator?
Ladies and gentlemen, once again, if you have a question or comment at this time, please press star one one on your telephone keypad. Stand by while we compile the Q&A roster. Our first question or comment comes from the line of Greg Pardy from RBC Capital Markets. Mr. Pardy, your line is open.
Hey, thanks. Good morning. Kris, good to connect again. Thanks for the rundown. I know you're gonna talk in more depth around the safety initiatives, but can you perhaps just shed some light on maybe what you've uncovered, whether it's from a causality perspective and perhaps just what some of the safety reset initiatives are underway right now?
Yeah, thanks for the question, Greg, and good to connect as well, too. As I mentioned in the remarks, you know, we did some in-depth safety assessments last year, and particularly related to the fatalities that we had in the mine tailings areas of our business. Out of that safety assessment, took a number of recommendations and started a number of actions. There's been a number of things underway.
Examples would be, and we've talked about this in the past, investment in technologies to make operations in that part of the business inherently safer, collision avoidance technologies, fatigue management technology, as well as teams have been working doing full reviews of high-risk areas in that part of the business to validate controls and working with the teams who are working in those areas as well. In addition, we're strengthening our risk management systems from the center, working with those areas of the company. As I look at it, and as I've been working with the team, you know, we need to continue the momentum on those things. We need to see where we can accelerate the pace, quite frankly.
The other part, in my view, that's really important is we have to engage to enable our front line. We have to work with the front line because that's where work happens. That's where the decisions happen each and every day, around the work we do, and managing risks. That's working with the people managing the front line, the people doing work at the front line. That's gonna be a big focus. Not that it wasn't, but I see that as an area that we can accelerate further because in my view, Greg, at the end of the day, safety culture is about the work we do. It's how we do that work, and we really wanna strengthen how we're doing work at the front line.
Okay, thanks for that. Second question is maybe could you provide us, you know, with a current status update, like not long, but just, maybe just some quick hits on where base oil sands, Fort Hills and Syncrude would sort of be sitting right now? Like, are they at full rates? Are there any issues we should be aware of?
Yeah. Maybe I'll cover a little bit of Q2 and then in talking to where we are right now, Greg, and just bridge into it. You know, as we looked at the second quarter, we saw strong performance in Syncrude. We're continuing to see that as we move into the quarter. They obviously have moved into their large turnaround event, and it's off to a very good start. Fort Hills, you know, in line with plans, planned maintenance last year and coming out of that maintenance, continuing with our expectations on plan. As well, our in-situ operations have returned from the incidents at MacKay River in the second quarter, and then Firebag completing its turnaround. It has moved forward into the third quarter at capacity.
The issue's been in Base Plant. That's what we saw in the second quarter. We saw it in U1 upgrading with some reliability issues, and we saw it in the front end in mine extraction. Those issues, some of them are persisting into the second quarter. In U1, they're gonna get addressed in the upcoming maintenance event, which we've also pulled some of the work from Q4 into that event, so we can create a really clean fourth quarter as well. The front-end issues that we're seeing in mine extraction, while we've been resolving them, they are persisting into the third quarter. They'll get resolved as well. The way I would think about it, Greg, is our Q3, so we have large maintenance in Syncrude , as you know.
We have maintenance going on in U1. The other operations, as I mentioned, are on plan. You can expect Q3 to look similar to Q2, and then we're gonna be setting up. We have no maintenance in front of us going into Q4.
Okay, understood. Thanks very much, Kris, and good luck.
Thanks very much, Greg.
Thank you. Our next question or comment comes from the line of Manav Gupta from Credit Suisse. Mr. Gupta, your line is open.
Good morning, guys. My question is a quick one. The slight increase in CapEx, it looks like more of an adjustment. Can you help us understand what part of it was some inflation, and then what part of it was the decision to go back into West White Rose? If you could give us some clarifying comments.
Yeah, no. Thanks very much for that question. Yeah, we did adjust our capital guidance up, and as I mentioned in my remarks, there's really three factors driving that. The West White Rose project restart and our increased working interest in that project. Recall as well that when we took the increased working interest, we did get proceeds from the operator for taking that on, which offset a good portion of our capital in this year from that project this year. As well, we have increased spend related to turnarounds and maintenance year to date, and that relates to found work as well as decisions to undertake other work so that we could ensure we're improving safety and reliability or strengthen it in those assets. Thirdly is the general inflationary pressure.
To give you some sense of sort of the magnitude, about half the forecast or guided increase is inflationary pressures, and the other half is related to those other two buckets.
Perfect, sir. A quick follow-up here. You have been very clear that once you kind of get to that CAD 12 billion, then 75% of the free cash would be moving towards buyback. When we look at the second quarter, it looks like you're already on that run rate where close to 75% of the free cash is moving towards buyback. Could you just comment on the pace of buybacks, which was very strong in the second quarter?
Yeah, thanks, Manav. It's Alister. I'll take that one. Yeah, if you look at the second quarter, you know, we focused on the buybacks. Our capital allocation policy is really on an annual basis, and we'll pick and choose whether it's debt or reduction or buybacks in any particular month or quarter. We made the decision to focus on buybacks in the second quarter. You'll see us move strongly in the third and fourth quarters to taking debt down. It's just really a function of cash flow generation, and where we think the opportunities are from an economic perspective. We felt they were strongly in the buyback area. With the rising interest rates, obviously, the second half will make bond redemption cheaper than in the first half, so economically better.
We have more cash flow generation in the second half, particularly with asset sales coming in.
Perfect. Thank you, sir. We look forward to meeting you again in the fall event. Thank you.
Thank you. Our next question or comment comes from the line of Dennis Fong from CIBC. Your line is open.
Hi. Good morning, and thanks for taking my questions. Maybe the first one to build off of what Greg was asking on, and a little bit of what Manav was asking on. Just with respect to the CapEx measures associated with improvement of safety and reliability and so forth, I was curious as to has that changed necessarily any of the timing? I know in a previous conference call, there was a discussion around installation of anti-collision technology. Has that been brought forward at all, just given some of the changes with capital spending?
Yeah. No, thanks, Dennis, for that question. Yeah, we do have these programs underway and they are over a period of time to implement this technology through 2022 and 2023. We're looking right now at where there's opportunities to accelerate that, where it makes sense. You know, we're going to obviously be limited by the pace at which we can do it just to get the technology out into all the equipment. Right now we're taking a look to see where are those opportunities. You know, these aren't. This isn't material capital. At the end of the day, it's about how at what pace can we get this, these investments in place related to those systems.
Great. Thanks. My second question here is just around the CAD 2.15 billion of free funds flow growth. Just as you've outlined a little bit around increased CapEx associated with inflation, as well as a component of, as you just mentioned, the improvements in safety measures, how does that potentially impact some of the initiatives like digital mine optimization, as well as kind of technology initiatives that you're going forward?
Yeah. Thanks, Dennis. Recall our free funds flow initiatives. There's a number of projects or initiatives that really fall into three buckets, ones that are driving revenue and margin enhancements, ones that are driving capital efficiencies, and ones that are driving cost reduction. Some initiatives will span, you know, two or more of those buckets. We're seeing certainly really good progress on a number of those fronts, and particularly on our projects early on in the program have been focused on margin and revenue enhancement. An example would be the interconnected pipeline that we put in place, which quite frankly is performing better than our expectations in terms of driving value and cash.
In terms of the cost side of it, I mean, we do see headwinds, obviously, right now on the cost side, you know, inflationary pressures that I was talking about. That's something that will cause us to take a look at those initiatives and see can we accelerate? Is there other things we can be doing to offset? With respect to the technology piece, you know, that's a big play in terms of driving efficiency and driving cash. To give you just a few examples, we just completed our ERP implementation with SAP S/4. It was probably one of the largest ones in industry. From stem to stern, upstream to Downstream, we went live in April.
We're now getting to the mode of sustaining that system so that then we can move into starting to optimize and get the benefit. There's an example of using technology to drive efficiencies in the work we do in a standard way. As well as our central teams, technology and digital teams are working with the businesses upstream and Downstream on opportunities to use data analytics and digital to drive value, particularly through revenue and margin enhancement and just operation of the business. I think, you know, to get back to the end of your question, I think as you're asking about the technology and digital part of it, we'll look to see where we can accelerate those where it makes sense.
You know, one of the things I'm going to do is take a review of the portfolio of initiatives with the team to look for opportunities to accelerate and also make sure that we're focusing on the highest value ones and driving that focus on those, and then looking for further opportunities just given the headwinds that we're seeing.
Perfect. Really appreciate the color that you've provided. I'll turn it back. Thanks.
Yeah. Thanks.
Thank you. Our next question or comment comes from the line of Doug Leggate from Bank of America.
Yeah, good morning, everyone. It's Doug Leggate from Bank of America. Thanks for having me on. Kris, I guess I know that you've touched on this already a couple of times, but I think you said you don't need more diligence or more reviews, you just need to execute. What, if I may, have you identified as the key differences between similar operations at your peers on very different safety records? Is that something you can kind of frame to say this is where, you know, what we need to address? Or how would you frame those differences?
Yeah, no, thanks very much for that, Doug. You know, if we go back to the safety assessments and go back to where we've seen these tragic incidents happening, they're primarily in one area of the business, which is mining and tailings. When I say we don't need more diagnosis, we've undertaken very detailed safety assessments with independent analysis, with independent experts coming in, which have outlined a number of recommendations. As I mentioned, a few of them, technology we've already talked about. As well as really understand going in and looking at our high-risk activities, heavy-to-heavy vehicle contact, light-to-heavy vehicle contact, working around water, the big risks that happen in that end of the business, and just ensuring that our controls are robust.
If they're not robust enough, ensuring that we get those controls in place. You know, those incidents, they also come down to the work that's happening and how the work is happening. We're really focused on understanding how the work is happening at the front line, how it's being managed, how it's being executed. When I say we don't need more diagnosis, we've done a lot of assessment. We've done those comparisons. Those are the areas we need to focus in and work on, and that's exactly what we're going to do.
Then the other piece, you know, even though that's the area of the company where we've seen those issues, what we're committed to is continuing to drive and strengthen the safety culture throughout the company. So we're not just focused in that one area of the business. We're gonna continue to strengthen across the company.
I know it's not an easy question to answer, Kris, so thank you for the color. I guess my follow-up is for Alister, but it's a pretty straightforward one I hope. Alister, why is CAD 9 billion the hard floor for net debt? Why is that the right number?
That's a good question, Doug. If you actually look at it, any low commodity price environment, and we're usually $35-$40 WTI, and you look back at our history, we generally have made around about CAD 6 billion of cash flow in that environment. Low commodity price, much lower crack spreads. The CAD 9 billion is derived from 1.5x coverage on, or, you know, we would be 1.5x our cash flow at CAD 9 billion. I think that's a reasonable level at a low point in the cycle, gives us some scope to tick upwards, if it's lower than that for a shorter period of time. That's essentially the rationale for that.
Okay. Fair enough. Thanks very much, Alister. Thanks, guys.
Thank you.
Thank you. Our next question or comment comes from the line of Menno Hulshof from TD Securities. Your line is open.
Everyone, thanks for taking my questions. I'll start with one on retail. Kris, I know you can't say too much given the
Ongoing strategic review. As the former head of Downstream, would you be able to give us your high level thoughts on how you would expect a retail sale or spin out to impact your Downstream margins and your Downstream business more generally?
Yeah, thanks for the question, Menno. As we've outlined, we have set up that review process. We have the board committee set up and already underway undertaking that review, and the decision will be taken by the full board. We're reviewing all the options related to that business. You mentioned some of those options. We're gonna pursue that work and support the board in that assessment through the coming months and then be in a position to have a decision and get back to you with that decision in Q4. You know, in terms of your question with respect to how would it affect Downstream margins, how would.
I mean, that's one of the key pieces of doing this work and supporting the decision of the board around the business. Looking at these different alternatives and the value they create, and the impact that they will have on the integrated model and the business, and the Rack Back business as well. That's a key aspect of doing the work. Providing that really good, clear, unbiased view of both sides of that question to come to the best decision so that when we do make the decision around the retail business, it's in the best interest of driving long-term value for the shareholders.
Perfect. Thanks, Kris. Then the second one is for Alister and your expectation that you get to a 75% return of free cash flow by the end of the year. I notice that that does include a disposition proceeds. My question is, which asset sales are included in that calculation? I'm probably stretching here, but would you be able to give us a rough sense of how much is being modeled in terms of aggregate proceeds?
Yeah, that's a good question, Menno. Obviously Norway is in there, and we announced that that's around CAD 400 million. We're looking at the wind and solar sale as well. I'm not gonna disclose that amount because obviously we're in commercial negotiations.
Okay. Presumably the U.K. would not be in there?
No, no, absolutely not. The U.K. won't be in there. It'll be a 2023 number.
Okay. Perfect. Thanks, Alister.
Thank you. Our next question or comment comes from the line of John Royall from JP Morgan. Mr. Royall, your line is open.
Good morning, guys. Thanks for taking my question. In refining, understood that you're done with major maintenance for the year. Just a broader question on turnarounds going forward. I'm wondering if, coming out of this year, you'll be fully caught up on any deferrals of turnarounds you might have taken as a result of the pandemic. Is there anything beyond kind of normal course looking into next year? Any early look there?
Thanks for the question, John Royall. It's a straightforward answer. We're not managing any deferrals out of the pandemic. We are on our regular turnaround cycle, and so next year our turnarounds will be part of that normal cycle.
Great. Thank you. You had a big working capital headwind in 2Q. Was just wondering if you could speak to the source of that drag and maybe how much of it's price related, and should we expect any of that to turn around in the back half of the year?
Yeah, it's all price related. I mean, it's really accounts receivable and our inventory valuations mainly through purchased inventories of the Downstream. Certainly, as prices remain lower, as we've seen in the last couple of weeks, we'd expect to see some of that released in Q3, Q4.
Great. Thank you.
Thank you. Our next question or comment comes from the line of Roger Read from Wells Fargo. Mr. Read, your line is open.
Yeah. Thank you. Good morning.
Good morning.
Hey, good morning, Kris. I'd like to come back to the safety aspects of the company. I mean, seems like the factor that really sort of separates what's been going on at Suncor from the rest. Obviously, the board's looking for a new executive leader before the year is out or early next year. That person will wanna put their stamp on it, but what do you feel you can get done between now and then from a safety and from a culture standpoint to get the company pointed in all the right directions?
Yeah. Thanks for that question, Roger. Listen, my focus is to drive the safety and operational improvement and to really do the things that I talked about earlier. You know, the board will make its decision in terms of the permanent CEO and probably in that timeframe you just outlined. In the meantime, we can't stand still, and I have the full support of the board to drive the change if necessary, and to engage to do the things with the executive team and all our employees to get the improved performance we're looking for.
Well, I was wondering if I could just dig into that a little bit more. Do you feel that some of the safety issues, you know, is it as simple as technology and an under-investment, or does it feel like it was more of a maybe misplaced goals. In other words, focusing on one thing, but forgetting maybe some of the other important aspects. I'm just trying to get a feel for, you know, what it really will take to correct this, whether it's done in the next six months or it's done, you know, over the next 18 months.
Yeah, no. Thanks. Thanks, Roger. You know, this isn't about, you know, that we had some under-investment or missing technology. Technology is an enabler. It's one of the things that we can implement to improve our ability to manage the risks and if we do fail safely. That's not at its root the issue, the fact that those systems weren't there. Similarly, this isn't, you know, in my view, it's not about, you know, we've put the focus of the organization in the wrong places. You know, when we look at it comes back to what I was describing earlier. It's about the execution of the work.
If I go back to the instance that we have had, it's been how the work's been executed in the field. While technology will be a huge enabler, and we'll implement those things, and while we will absolutely be strengthening our systems and processes and procedures, but we have great systems, processes, and procedures. It's really enabling and engaging to ensure that work's happening safely each and every day in the field. That's really, I think, the area in my view that needs the focus and attention. This isn't a question of just saying we didn't invest in technology and therefore we've had safety issues. That's not the case.
No, that's fair. I mean, my experience with this is it tends to be more of a cultural issue and just sort of, you know, focusing on the right things. I guess in the future, if you can kind of give us an idea of, you know, where that focus has shifted, you know, and safety really being, you know, core enough to drive the changes in other processes, that'll be great. Appreciate your comments. Thank you.
Thanks, Roger.
Thank you. I'm showing no additional questions in the queue at this time. I'd like to turn the conference back over to Mr. Trevor Bell, Vice President of Investor Relations.
Thank you, operator, and thanks everyone for joining us today. If you have any follow-up questions, please reach out to myself or my team, and we're happy to answer them. Again, thank you for attending.
Ladies and gentlemen, thank you for participating in today's program. This concludes the program. You may now disconnect. Everyone, have a wonderful day.