Good day, ladies and gentlemen, and welcome to the Suncor Energy First Quarter 2018 Financial Results Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions for how to participate will follow at that time. As a reminder, this conference call is being recorded. And now, I'd like to introduce your host for today's conference Mr. Steve Douglas, Vice President of Investor Relations. Please go ahead.

Well, thank you, operator, and good morning to everyone. Welcome to the Suncor Energy first quarter earnings call. I have with me here in Calgary this morning Steve Williams, our President and CEO; Mark Little, our Chief Operating Officer; Alister Cowan, EVP and Chief Financial Officer; and also Trevor Bell who is our current Vice President of Tax but the incoming Vice President of Investor Relations with my imminent retirement. I'd ask you to note that today's comments contain forward-looking information. Actual results may differ materially from expected results because of various risk factors and assumptions and these are described in our first quarter earnings release, as well as our current AIF. And both of these are available on SEDAR, EDGAR and suncor.com. Certain financial measures referred to in these comments are not prescribed by Canadian GAAP. For a description, please see our first quarter earnings release. After the formal remarks, we'll open the call to questions first from members of the investment community and then if time permits members of the media. With that, I will hand it over to Steve Williams.

Good morning and thank you for joining us. I would like to start by taking a moment to recognize the contributions of Steve who is taking as he describes a well deserved retirement after almost 28 years with Suncor. I mean, Investor Relations has clearly been a genuine strength here at Suncor and Steve's leadership has been greatly appreciated. I would also like to welcome Trevor Bell, who is transitioning into Investor Relations role and I know that he will provide equally strong leadership as we continue to tell the Suncor story to an expanding shareholder base around the world. So turning to our results, the first quarter of 2018 featured the highest average oil prices since the fourth quarter of 2014. The combination of positive supply/demand fundamentals and global oil inventories finally moved into balance and has begun to shift both industry and I think investor sentiment. In Canada, the story is complicated by wide light/heavy differentials as a result of increasing market access challenges. And just as an aside, I will cover those differentials later in more detail, but for Suncor it has no impact. Amid all of these developments, I think it's important to come back to the guiding principles that underpin the Suncor story and to remind everyone of the unique advantage that continues to enable our outperformance. And these are constants that will not shift with oil price cycle or investor sentiment. And as I've said many times, it starts with capital discipline. As rising production and higher oil prices drive increased free cash flow, we will maintain our focus on rigorous allocation of capital. We will meet our commitments on reduced capital spending. We will avoid growth for growth's sake and instead focus on growing free cash flow and returns for shareholders. And we…

Great. Thanks, Steve, and good morning, everyone. As Steve mentioned, we dealt with some operational challenges in the first quarter which reduced production at both our Oil Sands base and at Syncrude. However, strong performance from our offshore projects and record refining and marketing results largely bridged the gap. I just wanted to go through a couple of the details here. Total Oil Sands production averaged 572,000 barrels per day, which was down about 3% from the first quarter of last year. At our Oil Sands Base Plant, a leak in a waterline damaged electrical equipment and led to a power outage, which shut down the plant in mid January. This event was complicated by extreme cold winter weather, which extended the time required to restart the plant. We returned to normal operations in February and I just wanted to acknowledge the terrific job done by the team to safely return the plant and manage through this event. At Syncrude, we experienced a partial blockage in the pipeline that carries bitumen from the Aurora North mine to the upgraders. As a result, the Syncrude plant was short bitumen feed and forced to operate below capacity. To reduce the impact of this event, the planned Syncrude turnaround was advanced by approximately one month so that the issue with the froth line could be resolved during the turnaround window. This issue has been fully resolved and the line is back in service with several mitigations implemented to prevent the reoccurrence. We expect Syncrude to complete the turnaround and return to normal operations in the next couple of weeks. In situ operations continued to be extremely reliable as Firebag and MacKay River combined to produce 241,000 barrels per day of bitumen equal to 100% of the nameplate capacity. As Steve mentioned earlier, the…

Thanks, Mark, and good morning. With an average WTI price of US$62.90 and a New York Harbor 3-2-1 refining crack of US$15.50 per barrel, the business environment in Q1 was stronger than we've seen in some time. Now, as Steve mentioned, the WCS price was heavily discounted in the quarter, but our integration completely shielded us from the wide WCS WTI differential. And just as a reminder, when looking at our results, we use market prices to transfer production from our upstream to our downstream refining operations. So the realized pricing for Oil Sands crudes net of transportation expense range from CAD76.85 per barrel for Syncrude SSP then to CAD27.57 for in situ bitumen, reflecting the unusually high Western Canadian light/heavy differential. Fort Hills higher coal to PFT bitumen realized a premium of approximately CAD5 per barrel over in situ bitumen. And the offshore production realized very close to Brent pricing with East Coast currently averaging CAD82.78 per barrel and the North Sea averaging CAD81 per barrel. Our refineries benefited from running significant volumes of the discounted Western Canadian heavy and sour crudes and downstream achieved an average refining gross margin of CAD30.25 per barrel versus the New York Harbor 3-2-1 crack of CAD19.60 per barrel. With the strong realized margins across the business, we delivered strong financial results again in the quarter. We generated $2.16 billion in funds from operations and $985 million in operating earnings in the first quarter and our return on capital employed improved to 7.8% excluding major projects in progress. Our funds from operations for the first quarter significantly exceeded our sustaining capital plus our dividend, leaving $755 million in discretionary free funds flow to invest in growth and return to shareholders. I said that there were a couple of unusual items in the quarter…

Well, thank you, Alister, Mark and Steve. Just a couple of things to note before we go to questions from the phone. We did have rising crude prices through the first quarter. As a result, we had a FIFO gain after tax of $53 million, stock-based compensation was a net cost to us of $82 million after tax. On foreign exchange, the Canadian dollar weaken by $0.02 from the end of the year to the end of the first quarter resulting in a $329 million after tax charge but that of course has no cash impact. That is a balance sheet item on our forward debt payments denominated in U.S. currency. We did reference our guidance for 2018. There are no changes to production cash costs or capital but we have adjusted the business environment to reflect actual pricing in the first quarter and forward curve pricing through the end of the year. The only change that that results in is an increase to our cash taxes. With that, I will turn the call back to the operator to take questions first from the analyst community, and then if time permits, from the media.

Thank you. Our first question comes from Phil Gresh with JPMorgan. Your line is now open.

Yes. Good morning. I would be remiss if I didn't start off by congratulating Steve Douglas on his retirement after 28 years. You're definitely going to be missed.

Thanks. Thank you, Phil. I appreciate it.

So first question, Alister, a couple questions on the quarter if you don't mind. One would be if we look at -- obviously, there are some transitory effects and you guys kind of went through all those. But if you could just maybe quantify for us how you think about the headwind that came from the lost production and the OpEx headwinds in the quarter. And secondarily, just on this working capital that you briefly mentioned, how do you think about how much of that will reverse as we go through the year? Just thinking about cash balances and the balance sheet?

Yes, that's a good question, Phil. Thanks for asking that. I would say the headwind from the lost production we estimated roughly $270 million from a cash flow perspective. And then on our working capital, let me just kind of highlight. I mentioned some of the key things but I'll just give you some quantification around those. Price related because of the increase in price (27:02) from December to March really is about $450 million of the $1.4 billion. Now, if prices stay where they are that will reverse. We had some timing of receivables. We sold the cargo towards -- an offshore cargo towards the end of March so that was sitting in receivables. They are always lumpy, as you know. That's about $225 million. We did build out the inventory as we talked about in the script, so that is about $200 million and that should reverse in Q2 as we draw that down. And then on the payable side our annual incentive comp gets paid out after working capital movement and then we paid the final installments of the 2017 cash taxes, so that was about $570 million. So of the $1.4 billion, obviously, about half of it will reverse during the year.

Okay, all right. That's very helpful.

And the rest is related to price, so if it goes -- if price goes down, you will see some of it reverse. If price goes up, you will see more going into AR.

Okay. That's very helpful. Thanks. I guess the second question would probably be for Mark, just around the ramp-up here at Fort Hills. You gave some color about why that is but it sounds like you didn't want to declare victory yet. So what are you looking for to get more confident that, I guess, in the run rate through the back half of the year? And if you could just update us on your latest thoughts around what the long-term cost structure of this asset would be from an operating cost perspective. I think in the past you've talked low 20s but just based on what you've seen so far if you have any color.

Hi, Phil. It's Steve. I'll just start and then quickly hand over to Mark who can run us through his views. I mean overall, Hebron and Fort Hills coming up very well. I mentioned it in passing although we didn't put it in print. We are in excess of 150,000 barrels a day at the facility as we speak. And just to context it before Mark presents a little more detail, I mean remember that we've got the vast majority of that plant up. It is only the final parts of secondary extraction which need to come on and we've started the first two of those. So we've got a pretty high degree of confidence. So whilst not stealing Mark's thunder, we will be bringing the third one on in a couple weeks. And if history is anything to go by, we will be hitting full run rate on this thing well ahead of our schedule. So let me hand over to Mark.

Great. Thanks, Steve. Yeah, Phil, it's interesting that with Fort Hills, part of the challenge with secondary extraction is parts of it are fully on. We have 100% of the capacity, the flare systems, the solvent recovery systems and such. So what will happen as we bring on the third train is we will end up running into ultimately the constraint of the facility. And so then is there debottleneck beyond that will be determined by exactly where the constraint is which is true in any facility. It's exactly what we saw at Firebag. And as Steve mentioned, because we're in the process of bringing on the third train here in the coming months, we expect that we will be seeing stable rates likely by the end of the third quarter here as we go through it. But it's never over until it's over and that's the word of caution in it because you never know where the constraint is going to be and whether we're going to find some issue through the startup. But so far, it's going extremely well and we are very optimistic about finishing this off.

Great. If I can just sneak one last one in for Steve. You continue to find small bolt-on opportunities as we look at the portfolio. How do you feel about the rest of this year? Do you still see opportunities ahead or is it more business as usual from here from your perspective?

We talked, Phil, about that $500 million a year adding up to $2 billion a year in cash flow between now and the early 2020. You've seen our track record over 10 years. We understate and over-deliver, that's our plan. You've not seen us change guidance with any of the operating challenge we've had and that's because we have a high degree of confidence we will deliver through our operational excellence for the rest of the year and that includes continuing some of these projects. So the Fort Hills is, as Mark said, he's going to get there second throughout third quarter. We won't change guidance; we'll report once we've actually achieved that. Syncrude is moving ahead very well. I think Mark said it fairly quickly in his update there, but we've already addressed that pipeline (32:35) issue that we had. So we are fully confident we are past that. So we've got to be realistic, but we're cautiously optimistic we're going to hit (32:35) and beat guidance this year. So yes, you will see some continuing improvement. You'll get a chance to see what we're capable of in the third quarter and fourth quarter as we unconstrained these operations.

Okay. I apologize. I was just referring to M&A bolt-ons, if you see further opportunities ahead or if it's just operating the business as usual.

I would start from – we love the base case. We got 10% growth this year, 10% growth next year and then $500 million a year. We keep an active look in the market, but we're in a great position where the base case is so good we're not chasing anything. There's still a lot of sellers in the market. We keep looking. We've got nothing eminent though at the moment.

Okay. Perfect. Thanks a lot.

Thank you. And our next question comes from Guy Baber with Simmons and Company. Your line is now open. Guy Baber - Simmons Piper Jaffray & Co.: Good morning, everybody. First off, Steve Douglas, congrats on a great run, man. I hope your future is filled with a lot of golf and a lot of really fun places.

I'm sure it will be. Thank you. Guy Baber - Simmons Piper Jaffray & Co.: And then for my questions, I wanted to talk a little bit more about the resilience to the light/heavy differential here. So you all highlighted no impact to cash flow during the quarter. Can you maybe talk a little bit more about how you are outperforming relative to the framework you gave of the $25 million sensitivity? Maybe some examples of what the midstream and marketing team are doing there, which is pretty impressive, and whether that's sustainable through the rest of this year? And then can you talk about maybe at a high level how you see that sensitivity evolving over the next couple of years and the extent to which your team might be putting plans in place to continue to mitigate some of those spread headwinds?

I'll start and I'm sure the guys will jump in and help me with some of the details. I mean, first of all, it's as we designed it not because we are clairvoyant and can see it, but because our strategy is an integrated strategy. And we balance with the bitumen we produce in Canada upgrading and downstream. We don't do a perfect balance. So we're about 70%, 80% of those ratio to the upstream which is why we never say we have no exposure forever going forward. But you can assume, we already purchased, that was part of the strategy, the long-term access to pipeline to accommodate the Fort Hills production. So it's not zero exposure to differentials going forward, but you can see with the physical asset integration we have and the management in the midstream, we were able to be completely immune from it in the first quarter. And we put a – it's an impossible number to give exactly because it's so market specific on the day. But we put in what we believe is a very conservative number into the IR debt, which is the one you are talking about. But we don't expect to see any significant exposure to the light/heavy differentials through the peaks. One of the questions as we look at M&A is, are we prepared to accept more exposure to that. And when we look, we factor that into the economics. So we look at what we think those differentials will be and for how long they will be. I don't – we've seen some – just a few comments and then the guys can jump in after – we've seen some spikes in that differential over the last few months. We expect as rail contracts start to get negotiated that the spikes may not be quite as high. But we still expect there to be a large light/heavy differential until pipelines get built because rail is more expensive than pipelines. And of course, the annual 2020 regulations start to put pressure in there too. So we like our position. If we do any M&A as we go forward, we will factor in potentially more exposure if that's heavy without the corresponding downstream integration. And we think they are going to remain modestly high for a number of years until the pipelines get built. I don't know if you guys want to add anything.

Yeah. The only thing I would add to that, Steve, is we have obviously been ramping up Fort Hills in the quarter. We have been moving product down to the Gulf Coast. So therefore on our existing Keystone access, so obviously we're not exposed to the Hardisty differential. So we are getting Gulf Coast pricing for our products so that's part of it but that's helpful. And you are seeing the premium that we talked about and getting for PFT bitumen of CAD5. Not significant over our $27 in situ bitumen price to get a $5 premium for Fort Hills bitumen. So it is an attractive bitumen commanding a strong premium exactly as we thought it would do. Guy Baber - Simmons Piper Jaffray & Co.: Very helpful, guys. And then my follow-up is with oil prices where they are right now, assuming that holds, once you guys get through some of this turnaround activity the back half of the year does look pretty good. So you guys should be generating a lot of free cash flow. I really like slide 11 in your deck where you lay out the fundamental priorities for the free cash over time. But as we think about the back half of this year specifically, can you maybe walk us through how you're thinking about the usages of excess cash? And specifically could we see CapEx begin to creep a little bit higher as you put more into the business? Or how do you think about a little bit more CapEx versus more buyback? Would appreciate any color there.

Yeah, Guy, I'll just make a few comments there. I mean we really mean what we've been saying in terms of capital discipline. Our capital budget this year irrespective of crude price is expected to be $4.5 billion to $5 billion. You won't see us taking any sharp left or right hand turns. We've got a well established capital expenditure program, we've got the projects being developed and the CapEx profile we've talked about covers that. So if you look at this year with the free cash because I wouldn't disagree with your analysis, we use share buybacks to handle that short-term cyclical variation that we see on the cash flow coming in. And then generally we aim to adjust dividends annually as the underlying fundamental of our cash flow profile is coming up. So clearly, dividends are a Board decision but you could expect to see dividends continuing year-on-year to come up as the earning power of the company comes up. And you will see us using share buybacks to take up that slack. Guy Baber - Simmons Piper Jaffray & Co.: Thanks very much.

Thank you. Our next question comes from Greg Pardy with RBC Capital Markets. Your line is now open.

Yes. Thanks. Good morning. Happy trails, Mr. Douglas. Really a lot of my questions have been answered, but maybe it's a question more for Mark Little. Could you dig a little bit into the Syncrude turnaround? And then specifically, I think it's one of three cokers or one of four cokers that are down right now. So how much is Syncrude actually down at this stage?

Yes. It's one of the three cokers that's down. In fact, this is an annual event. So we have this -- every single year the plan is to take one of these down. And so this is a planned turnaround. And the only thing that was adjusted was we moved it forward a little bit to deal with this pipeline restriction. So we take the coker off line and clean up the assets and take the coke out of it and kind of replenish it and get it back on line. So this is -- the maintenance and work that we're doing is very routine. The only thing that was different than planned was this restriction. And our view was instead of limping along and then go into a turnaround we might as well take the asset off line because we weren't fully utilizing the assets anyway.

Okay, that's great. And then just a quick one from me. Your exploration expense in the first quarter is really small, it was like $9 million or so. What are you doing on the exploration side, whether that's North Sea or whether that's East Coast of Canada, just curious there?

Well, it's interesting, Greg, that one of the things we found and one of the joys of our organization is we have this massive resource space. And so use all our transaction as an example when we went into Rosebank. Our view was, well, we can go and buy resource substantially cheaper than peoples' finding costs in commercial quantities that then we can commercialize and generate a commercial return for the shareholder. So at this stage of the game, we've had very limited exploration. In some cases the work that we are doing is around existing assets or improving the 3-D seismic and those sorts of things. So we are very minimal on exploration right now and that's intentional.

Okay, great. Thanks very much.

Thank you. And our next question comes from Roger Read with Wells Fargo. Your line is now open.

Yes, thanks. Good morning. I guess maybe one of the things that wasn't really talked about on the opening area and I know it depends on the pipeline access but the replication, your target to get to $50 WTI breakeven, just where do you think you are at this point? What do you think the biggest hurdles are to get there? And quite obviously, let's assume this is a post-2020 event given what's going on in the pipeline world.

Yes, I mean if you look at how the schedule pans out, it's looking to -- the schedule works very, very well for us. So we're still continuing to work on the details of the replication and the design but it's looking very promising. We're already starting to get into the ranges where we could approve these projects. But as you say, our plans would be we don't see major investment in the Canadian Oil Sands until we see an improvement in the competitive position of the industry. And one of the big pieces of that is market access. We then have a number of projects which it is possible for us to execute and we think those will have good returns. So the technology is developing well, the plans are developing well and we need to see some of these pipelines get nearer to fruition. And as I said in my opening remarks, we are reassured by the provincial and federal governments standing up and being prepared to take these pipeline challenges on now. And we look forward over the next few weeks to see what exactly what those plans look like. But it's working really well. So as I said, we've got about 10% growth this year, 10% growth next year. We've got these $500 million per year building up to the $2 billion by 2023. And then we've got this set of projects coming in. So that whole sequence is looking very strong now.

Yes, no doubt, really good visibility on that front. I guess my follow-up question, what are you watching here in terms of the pipelines? What do you want to see coming out of both governments, provincial and the federal? And what do you see as more likely the access due South or the access to the West Coast -- in order?

Yes, I mean, first of all, we need to see -- particularly the Alberta government and the Prime Minister himself came over to look at Fort Hills. We spent some considerable time with them going through the competitive challenges the industry has and what we would look to gain confidence to be able to start to allocate capital into the region. Clearly, one of those was pipeline access because we don't want these new projects to have to bear the burden of some of these differentials. So we'd be looking -- the simple measure will be we want to start to see shovels in ground and pipelines being built. Degree of confidence, I don't think in the last five years I've had a higher degree of confidence that these lines are going to be built. I think TMX will be built, I think line three will be built and I think the other lines to the South will be built. So I'm greatly encouraged.

Okay, thanks. And Steve, I forgot to mention at the beginning but congratulations to you and I hope you do have a good retirement.

Thanks very much, Roger.

Thank you. And our next question comes from Paul Cheng with Barclays. Your line is now open. And again, our next question comes from Paul Cheng with Barclays. Your line is now open, sir. If your phone is on mute, could you please unmute it? Your line is currently open to ask your question. All right. Our next question comes from Neil Mehta with Goldman Sachs. Your line is now open. Neil Mehta - Goldman Sachs & Co. LLC: Hey, good morning and, Steve, congratulations, I'm looking forward to celebrating with you in person next week. I guess the first question I had was just around IMO 2020. And you alluded to it, Steve, in your comments about the impact it could have on the light/heavy differential. But want to talk about how you see it both from a macro standpoint for the light/heavy for the refining margins, but also just talk about your business because, in theory, you should be a net beneficiary of it given your downstream business.

Yes. I mean let me start and then I'll hand it over to other Steve. I mean you're right. From a macro point of view for Suncor, we think net-net we will actually gain by the IMO 2020. And that's to do with the diesel yields off of our average barrel across the company and the fact that we think demand and prices will be relatively strong there. So overall the impact for Suncor is a positive one and Steve can talk to the trends.

Yes, I think there are kind of three things to look at. One is light/heavies are expected to be wide. And we've already talked about the fact that we are really well cushioned against light/heavies because of our integration and because of the amount of our bitumen that we actually upgrade or refine. The second piece is not often talked about and that's that sweet synthetic crude or upgraded synthetic actually has a very, very good distillate yield. So I would expect that it will be in demand and will price well versus, say, tight oil which is more of a gasoline crude and doesn't have the same distillate cut. And then the third thing is we produce far, far more low sulfur distillate from our refineries than we do bunker fuel. And so, while there will be a heavy discount for high sulfur distillate, we produce a great deal of low sulfur distillate and we should benefit from the wider margins. So we are actually looking at this as a net pretty significant positive for Suncor. Neil Mehta - Goldman Sachs & Co. LLC: I don't know if you can comment on this, either of the Steves, but for your planning purposes, what are you using in the early 2020s from a differential – light/heavy differential standpoint, TIW (sic) WTI versus WCS as a result of IMO?

I think we have $25 in the plan in that 2021, 2022 period. And that's on, I think, an $80 crude. Neil Mehta - Goldman Sachs & Co. LLC: Okay, that's great. And then the follow-up question is just how you guys are thinking about the cost side of the equation. And we've been – every quarter for the last four years we've revised down our cost per barrel. Crude prices are actually starting to move higher here. Are we getting to the point where we should start thinking about cost inflation on a unit cost basis for your portfolio over the next couple years?

I mean just a general comment. I mean in the real world we're not seeing much cost pressure as we speak at the moment. And if we look at the cost reductions we've done, we've always talked about it being in the 60%, 70% and in some cases 75% depending on the business. But costs are largely systematic so they are not reversible. So we are not expecting to see any significant increase. We have still got some more to deliver from our program. So if you think of the automation, when the automation of the truck fleet is fully finished, we think that that's worth about $1 a barrel to us on those barrels. So we've still got programs in place which are putting some downward pressure on cost. We haven't updated Fort Hills because it's too early, but clearly we'll get a much clearer line of sight as we start to come up to full capacity. And all I would say is the first signs are very encouraging. And between you and me, we don't mention it to many people the target we've set for the business is $20 a barrel. Neil Mehta - Goldman Sachs & Co. LLC: Okay. That's great. Thank you.

And that's right the way across that Oil Sands business. We still see $20 a barrel is a possibility. Still have some work to do to get there and that's around the reliability. But we still see that as a possibility. And the equivalent for Syncrude is we still believe with the work that Mark's team is doing now that we can get to 90% reliability and $30 a barrel by year 2020. Neil Mehta - Goldman Sachs & Co. LLC: That's great. Thanks, guys.

Thank you. And our next question comes from Amir Arif with Cormark Securities. Your line is now open.

Thanks. Good morning, guys. Just a few questions for you. The $500 million of increased fund flows, Steve, that you mentioned it from your operating and margin initiatives that you are undertaking. Just curious, how much capital would be required to achieve that? I understand it's over three years.

Yeah. Arif, it is – Amir, sorry, it's very minimal capital. We're really looking at minimal capital, low intensity spend to achieve lots of technology, but we're really within sort of $4.5 billion to $5 billion capital targets that we'll bleed out (53:59).

Okay. And is that – it seems like it's from a lot of little projects. Is that lumpy or it just linearly will come in over the three years in terms of the improvement in...

It's a lot of small projects, so we'd expect it to be relatively straight lined.

Okay, sounds good. And then at Fort Hills, the production number, again coming in strong, just shy of 30, but the sales volumes were only 8. Is that just normal startup as you do tank fills and line fills? Or are you actively holding back production based on the bitumen market?

No, no. It's exactly what you said at the beginning. You start production, you've got to fill your lines and fill your tanks. So we started production and then we started selling at the beginning of March after we filled lines and tanks exactly that.

Okay. And then on the price realization at Fort Hills specifically, it's better than your average bitumen realization in the other Oil Sands. Is there a difference in quality, or is there a difference in that bitumen grade at Fort Hills versus your other bitumen?

Yes, that's a great question, Amir. And one of the things we do with Fort Hills bitumen is we literally cut off the bottom 10% of the barrel and we remove a bunch of the carbon and put it back in the ground. So instead of waiting until it's a greenhouse gas and then spending a lot of money trying to figure out how to get it back in the ground or contain or offset it, we cut out the carbon right away. So the quality of the barrel that goes to market is much better than a normal bitumen barrel. In fact, on a full lifecycle basis, it has essentially the same greenhouse gas emissions as the average barrel run in U.S. refining, which isn't the way a lot of people look at Oil Sands. So the quality is very good, the yield structure is higher and it has a lower greenhouse gas emission.

Okay, that's interesting. And then just a final question on the downstream side. Does that mean – the crack spreads are still strong and you're running already at a 98% utilization rate? Well, is there any opportunities or is this part of some of the initiatives that you are looking at in terms of capacity creep that you might be able to do on the downstream side?

Well, one of the things we're looking at is exactly that is what is the capacity creep and how does it fit in with the markets in the various regions and such. So that's something that we are looking at as part of our planning process.

Okay. Do you feel that you could grow capacity a few percentage points without...

Well, there's definitely – sorry – there is definitely opportunities there. I think one of the things we're looking through is where are the best opportunities for the organization and then how do they fit with all the spreads and expected market conditions and where do we think the cracks are going. So that's the ongoing debate. Obviously, we haven't announced anything yet, so it's something that's still under consideration.

Okay, terrific. Thank you.

Thank you. And our next question comes from Joe Gemino with Morningstar. Your line is now open.

Thanks, guys. You touched on that you won't make any investments in Oil Sands unless you have a clear line of sight into something that improves the environment. In that scenario, how do you see yourself deploying your cash? Is that where you would increase share buybacks? Is that where you would increase the dividend?

Yes, I mean, I think our capital allocation will be quite clear. Our run rate for sustaining capital and the small incremental growth programs that we've been talking about is in that $4 million to $5 billion a year range. So that will be a constant through the piece. Dividends are forever as far as we're concerned. So as the long-term -- we like to be able to pay our dividend at a very low crude price. It's not subject to the commodity price cycle. So we've been steadily increasing that. We are now in our 16th year of increasing that and the balance will be share buybacks. So we do not see ourselves making major investments in Canada until we can see some clarity on market access issues.

Great. Thank you.

Thank you. And our next question comes from Harry Mateer with Barclays. Your line is now open.

Hey, good morning, guys. Appreciate the comments earlier on around working capital changes. Just wanted to clarify on your short-term debt balance creep up a bit. Do you have any intentions in terming it out or is that going to draw down over time as the working capital reverses?

Yes, that was a planned event. As we look forward to our cash flow coming in, we're positioning ourselves to be able to pay that down certainly as the working capital reverses and then as we generate more cash towards the end of the year and into next year.

Great. Thank you. That's all for me.

Thank you. And that brings an end to our Q&A session for today and to our call. Your call has concluded for the day and thank you for participating. You may all disconnect. Everyone, have a great day.