Canadian Natural Resources Limited (CNQ) Earnings Call Transcript & Summary

Good morning, everyone. Welcome to Canadian Natural's 2022 Investor Open House. Thank you to those joining on the webcast online. And thanks for all of you to be here in person. It's a great turnout and we are excited to be able to do in-person events again. My name is Lance Casson. I'm the Manager of Investor Relations Group and will be your host today. A couple of housekeeping items, if anyone needs to use washroom it is back through these doors in the backyard. And after the presentation concludes, we're going to have a short break where there will be coffee and refreshments in the side room before the Q&A session begins. For those of you joining online, you'll find a copy of our presentation slides as a part of the webcast or you can find a PDF version on our website, along with our announced 2023 budget press release. Following some opening remarks from myself, our agenda will be as follows: first, Tim McKay, our President, will provide an overview of the Canadian Natural Advantage, including strategy and an ESG overview. Following him, Joy Romero, Executive Adviser of Innovation, will summarize our environmental performance, including an update on some of the exciting things we're working on, on the technology innovation front, including pathways alliance. Next, Trevor Cassidy, our Chief Operating Officer for Conventional E&P, will provide a deeper dive into some of our natural gas, NGLs, light and heavy crude oil operations. Then Scott Stauth, our Chief Operating Officer of Oil Sands, provide an overview of our Thermal in situ assets and our Oil Sands Mining and Upgrading assets. Mark Stainthorpe, our Chief Financial Officer, will then provide a marketing overview and provide details on our 2023 budget and our strong financial position. Tim will then provide a short summary before closure of the webcast, and we'll have a short break. Following the break, presenters will be joined on stage by our Chairman, Murray Edwards for a senior management Q&A session, and we'll take some questions from the floor. Before moving on, I'd like to remind you of our forward-looking statements. And it should be noted that in our reporting disclosures everything is in Canadian dollars, and we report our reserves and production before royalties unless otherwise stated. Additionally, I will suggest to review our comments on non-GAAP disclosures in our financial statements and in the advisory section of today's presentation. Today, we'll lay out how Canadian Natural Advantage drives premium value creation over the long-term. Advantages are our large, low-risk, high-value reserves; diversified balanced asset base; flexible capital allocation strategy; and effective efficient operations that drives material free cash flow generation and strong returns on capital. Additionally, we're committed to leading environmental, social and government performance, which is a significant factor in our long-term sustainability. Next, I'll pass over to Tim, who will go into more detail on the company's strategy and advantages.

Thank you, Lance. Good morning, everyone. Canadian Natural has a proven effective strategy. And as a result, we have sustainable free cash flow through all the commodity cycles, ensuring we can deliver to shareholders. Our strategy is simply to optimize capital allocation to maximize value for our shareholders while ensuring we are maintaining a strong balance sheet. We have a defined growth/value enhancement plan for every product and basin we operate in. Opportunistic acquisitions have always been a part of our strategy. However, we have no gaps and in our portfolio, acquisitions need to make sense and add long-term value. We have a diverse and balanced asset base across various product types, which we can manage time lines, including our long life, low decline assets to grow production and maximize its value. This is a significant difference to most of our peers. This is driven by our safe, effective and efficient operations, our area knowledge, ownership, operatorship of infrastructure. We have a culture of continuous improvement, leveraging technology, innovation throughout the company, which gives us leading environmental, social and governance. We have a history of capital discipline, operational excellence, low maintenance capital, all of which results in maximizing free cash flow, giving more value to our shareholders. It's for these reasons, Canadian Natural should be an investment priority. Canadian Natural has a successful track record of balancing our 4 pillars of capital allocation with a focus on maximizing shareholder value. Our 4 pillars are: Balance sheet strength, returns to shareholders, resource value growth and opportunistic acquisitions. Our ability to generate significant sustainable free cash flow ensures a strengthening balance sheet and sustainable returns to shareholders. We are prudent and disciplined in our allocation of resource development while maintaining flexibility to adjust if necessary. We have a strong track record of effective and efficient operations and low maintenance capital. Finally, opportunistic acquisitions have always been a part of the strategy. We have no gaps and any acquisition must add long-term value. Balancing these 4 pillars with a focus on significant reserves. Canadian Natural reserves are the highest among Canadian peers, showing the strength and depth of our assets index, of which 60% represents high-value SCO light crude oil and NGL reserves. As well, we have the largest natural gas reserves in Canada. Canadian Natural reserves can only be truly appreciated when you compare our total proven reserves to our global peers of greater than 5 billion BOEs. Canadian Natural is the only Canadian company on this chart, and it clearly shows the magnitude and the depth of our reserves. Canadian Natural's assets are unique and that we have effective and efficient operations, low maintenance capital, volatile pricing has little impact on our NPV and as we have low breakevens, large reserves, making our free cash flow robust and sustainable. We can grow our production cost effectively during periods of high prices. And during low price periods, we can manage capital spending and has little impact on the company's production. Our ability to manage the volatile pricing gives Canadian Natural a huge advantage compared to our peers and this is why it should matter to shareholders. For example, in 2029 (sic) [ 2020 ], low-price cycle WTI averaged approximately USD 39 with our low operating costs, maintenance capital and our ability to manage our capital spending, we generated leading free cash flow. We had 6% production growth, maintained our debt levels, increased our dividend 13% while many of our peers cut their dividend, clearly a Canadian Natural advantage. Then as we moved into 2021, WTI pricing improved to approximately $68 WTI. Our low maintenance capital and operating costs, a disciplined capital program, we had production growth of 6%. We implemented our free cash flow policy as we generated significant free cash flow of $7.8 billion after dividends. Our year-end ending debt was under $15 billion. We increased our dividend by 38% and had share repurchases of approximately $1.6 billion, significant numbers for Canadian Natural and shareholders. Canadian Natural's advantage is that are effective and efficient operations, large quality lands and long-life, low-decline assets can deliver in all cycles. Canadian Natural's unique asset base has a low corporate decline rate at approximately 10%, with approximately 57% of our production being long-life, low-decline or 0 decline production, requiring less capital to maintain production. As can be seen on this chart, our 2023 budget, we have the lowest decline rate when compared to our peers, which gives us a maintenance capital at approximately $8 a BOE, giving us a big advantage. Our 3-year F&D costs are also 1 of the lowest as our teams are focused and driven on adding reserves and development activities cost effectively across our high-quality asset base. Canadian Natural has a balanced and diverse product mix with approximately 44% that's high value, light crude, light crude oil, SCO and NGL on a BOE basis. 29% heavy oil and 27% natural gas, limiting our exposure to 1 product. For liquids production, 78% is from long-life, low-decline assets, which has low breakeven and that delivers significant free cash flow. As well, we have approximately 2.2 Bcf of natural gas, which is well positioned to capture improved pricing. On the marketing side, both our natural gas and liquids have a diverse sales strategy. On the natural gas side, 36% or 798 million cubic feet per day is sold to the export markets but only 28% is sold at AECO. On the liquid side, we have SCO production of approximately 460,000 barrels a day or 47% of our liquids garner a premium. While for heavy oil, we're only exposed to WCS pricing for 39% of our production. We are not exposed to 1 product or 1 market. I will briefly talk to the assets that both Trevor and Scott will talk to later this morning. Canadian Natural has significant high-quality conventional land base in Western Canada, totaling approximately 23 million acres, which has approximately 7,500 premium locations in all the top-tier plays, which Trevor will talk to in more detail later this morning. Scott will talk to our Thermal in situ, where our top-tier effective and efficient operations resulted in us having low breakeven and having decades of cost-effective pad adds, which will add significant long-term value. As well, in the Oil Sands Mining, our teams have done a great job. Scott will show you how our top-tier effective and efficient operations allow us to have superior safety operating costs and utilization, giving us high-margin SCO production. Over the next few hours, you'll see the depth and the quality -- high-quality assets we have, and we have significant long-term value that we can add over time. This inventory gives us optionality and our ability to high grade projects to deliver low-cost production growth, maximizing value over the long term for our shareholders. I'll now talk to returns on capital, delivering leading free cash flow and returns to shareholders. This year, prices have been quite volatile. However, on an average basis, WTI pricing has been quite strong at approximately USD 95 with our low cost structure, a disciplined capital program, production will grow by 5%, and we've generated significant free cash flow of $11 billion after dividends. We target year-end debt of approximately $10 billion and returns to shareholders have been significant. Dividend increased by 45%. And combined with our special dividend totaled approximately $4.9 billion. Share repurchases of approximately $5.7 billion. Canadian Natural Advantage is that our effective and efficient operations, high-quality lands, long-life low-decline assets with low maintenance capital delivers significant free cash flow and value to our shareholders. When you look at ROCE, Canadian Natural is a real opportunity on a relative basis. In today's pricing, we see the potential of a 25% ROCE. However, on a relative basis to other industries, we're trading at just under 5x EV to EBITDA, in our opinion, a discount to other industries and an opportunity for investors. Looking at the period 2019 to 2021, our 3-year ROCE Canadian Natural is superior to many of our peers, an indicator of the quality of assets, effective efficient operations and prudent allocation of capital across our assets. As a reminder, our free cash flow allocation is adjusted fund flows, less base capital expenditure and dividends which generates significant free cash flow, which has allocated 50% share purchases and 50% to the balance sheet less strategic growth or acquisition opportunities. This has now been updated that once we achieve our $8 billion debt target, we will look to allocate 80% to 100% of free cash flow to incremental returns to shareholders, a significant opportunity for investors. If you look at 2022 returns to shareholders in detail, Dividends were approximately $4.33 a share. Share repurchases were approximately $5 a share or so over $9 per share was returned to shareholders in 2022, a significant number. Canadian Natural has a robust, sustainable free cash flow. And through the free cash flow allocation policy, returns to shareholders are significant. Our dividend will again increase marking 2023 as the 23rd year of consecutive increases and has a CAGR of 21% over that time. Our 10-year CAGR is top tier when comparing to our global peers, and it's clear we have a more robust, sustainable free cash flow as our dividend, including special dividend, has approximately a 27% CAGR, more than double our nearest competitor. Production growth on a per share is also very strong at 8% CAGR over the last 4 years. When you look at our free cash flow sensitivity from $70 to $100, it climbs very rapidly as a result of Canadian Natural having high-quality assets, effective and efficient operations, top-tier cost structure, low maintenance capital requirements and a capital discipline program. In summary, Canadian Natural has a proven effective strategy, and we are delivering in today's environment and will continue in the future. What you will see is more of this, more that we have more inventory for drilling field growth projects embedded in our vast conventional assets and thermal pad ads that you'll see later this morning that we can leverage off our existing facilities as well, we have enhancements in our Oil Sands Mining and Upgrade segment that will add long-term value. Canadian Natural's ability to deliver significant free cash flow is driven by our effective and efficient operations, high-quality assets, low maintenance capital and significant reserves. Our culture of continuous improvement is unique among our peers as our teams are focused on delivering operational excellence across our asset base. We will continue to leverage technology innovation and continue to reduce our environmental footprint. We have a history of capital discipline, safe, reliable operations, operational excellence, low maintenance capital and we can show value growth and debt reduction, all of which results in maximizing free cash flow, resulting in more value to the shareholders. Canadian Natural is truly robust versus our peers. I'll now talk to briefly on some ESG items. Canada is a great country. It's 1 of the highest-rated ESG countries among top crude oil produced exporting nations. It has a world-class CCUS infrastructure, which Canadian Natural is a significant owner. All parties, industry, provincial, federal governments are working together to achieve climate goals and ensure economics to sustainability. Canada and Canadian producers can be a safe, affordable, reliable and responsible supplier to the world, through initiatives like pathways in which top Canadian Oil Sands producers have got together to reduce CO2 emissions and target net-zero in the Oil Sands like 2050. Finally, we have strong, transparent reporting requirements, making it easy to follow our progress. If you look at the overall ESG performance in terms of investment priority, it is very [indiscernible]. With the recent announcement of pathway securing the right to explore port space, and with 70% of Canadian Natural's emissions related to the Oil Sands, it is now time to lay out our new corporate emissions reduction target, which is a 40% reduction in total scope 1 and scope 2 emissions by 2035. This plan includes the development of CCUS for the Oil Sands and other emission reduction projects such as [indiscernible]. We will continue to leverage technology and innovation to reduce our methane emissions by 50% by 2030 from a 2016 baseline as well as further reduce our freshwater intensity by 40% in both thermal and Oil Sands Mining operations by 2026, and from our 2017 baseline. Joy will go through more details of the work we're doing to meet these targets. Safety is a core value at Canadian Natural. It's in every aspect of our business as we target no safety incidents and no harm to people. Canadian Natural is delivering industry-leading performance with our overall TRIF down 49% from 2017, and a 67% reduction in total lost time incidents. I'm very proud of our teams with a strong focus of accountability from our frontline workers and we are committed to deliver even better performance each and every year. Investing in indigenous communities is important to Canada. And at Canadian Natural, we are working together with communities to help develop their companies and their people by providing training, business and job opportunities. Most importantly, we're taking the time to understand and respect the communities' perspectives and goals. We work together with more than 144 indigenous businesses, and in 2021, we did approximately $572 million worth of business, making a significant difference in their communities. For governance, Canadian Natural has a strong and effective model. Our Board as well as our Board [ HSC ], Governance and Risk Committees review and hold management accountable to identify and mitigate risk. The management committee works with various subcommittees to identify, develop strategies and plans to address those risks. Then effectively execute those plans and deliver performance aligned with our shareholders. As well over the years, Canadian Natural has continued to improve our reporting and better communicate all the technologies and innovations we are working on to become more effective and efficient and reducing our environmental footprint. In summary, Canada is a top-graded ESG country among top crude exporting nations. It has world-class CCUS infrastructure, which Canadian Natural is a significant owner. Canada and Canadian producers can be a safe, affordable, reliable, responsible supplier to the world. Through CO2 emission reduction initiatives like pathways, all parties, industry, provincial, federal governments are working together to achieve climate goals and ensure economic sustainability. Finally, in Canada, we have strong, transparent reporting requirements, making it easy to follow our progress and hold us accountable. I'll now turn it over to Joy Romero to talk -- Executive Advisor of Innovation for environmental performance.

Thank you, Tim. Good morning. It's a pleasure to be here with you. And to take you deeper into how Canadian Natural is delivering ESG performance and how our long-life, zero-decline oil science mining assets are advantaged as we can deliver and leverage technology, innovation, continuous improvement to deliver ever-improving environmental performance with a pathway to attaining net-zero emissions in the Oil Sands. It is clear that Canadian oil and gas onto the global markets, reduces global GHG emissions. And as a result, Canadian Natural is a leader in this space and should be an ESG investment priority. Canadian Natural's oil and gas sector recognize the need to reduce GHG emissions. And we have been leveraging technology and Canadian ingenuity to deliver impressive results. Canadian Natural has invested $4.6 billion in R&D since 2009, $450 million in 2021 alone. We use this investment to reduce our environmental footprint, unlock reserves and drive ever more effective and efficient operations, investing now to do even better in the future. Today, I'm going to share with you some of the actual outcomes achieved with this investment to date. In a recent report, a third-party reviewed Oil Sands emissions and determined that Canadian Natural scope 1 emissions intensity was 35% lower than the average scope 1 emissions assets with a lower GHG footprint cogeneration, heat integration and other energy optimizations and efficiencies into the design of our operations. A good interim result for our company. However, we are committed to continuing to reduce our greenhouse gas emissions. Am I ahead? One. Thanks. Here are a few examples of actions that we are taking to deliver game-changing reductions in the GHG emissions. Methane emissions and water intensity to meet our environmental targets on our journey to net-zero. We will be discussing some of these actions and technologies. Our targets show our commitment to responsible operations and environmental stewardship, providing goals to achieving our overall environmental performance objectives, including net-zero emissions from all of our Oil Sands operations. As Tim shared, we have a new target for our GHG emissions. We are targeting to reduce both scope 1 and 2 GHG emissions by 40% and by 2035 from 2020. We have a defined plan to achieve this ambitious target, including capturing CO2 from more of our hydrogen plants as well as blue gas. We will be able to connect to the pathway CO2 transport line that you will hear more about shortly. We are piloting and adopting processes that emit less GHG emissions in the first place, like solvents, pneumatic retrofits, electrification and continuously improving with energy-efficient projects. More details on some of the specific projects to come. Thus far, with our focused methane reduction program, we have significantly reduced our absolute methane volumes by 45% since 2016 and target to reach 50% by 2030. Some examples of the work that's been done by our focused senior leaders and technical experts to achieve our progress to date and meet our goal are since 2016, we have completed over 6,400 pneumatic instrument retrofits and removals resulting in a cumulative CO2 equivalent emissions reduction from our operations of approximately 640,000 tonnes. In 2022, we also launched a multiyear project to convert approximately 3,800 pneumatic injection pumps in our Alberta and British Columbia and conventional areas to solar configurations. This project will help us reduce methane emissions by up to an additional 361,000 tonnes of CO2 equivalent per year. Through natural gas conservation projects in heavy oil, we've reduced another 11.4 million tonnes of CO2 equivalent. Another example of us working together are the results from our team of 14 technical experts that execute our fugitive emissions management program. Enhance leak detection using optical detection cameras leads to faster repairs across 21,000 wells per year. We have realized a 29% decrease to the frequency of leaks detected in the surveys from 2020 to 2021. By continuing this program, we are doing our part in reducing methane emissions across our operations. We are committed to doing the right thing by targeting meaningful reductions in fresh water intensity. You can see that our focus on environmental footprint has delivered impressive results. 57% reduction in freshwater use intensity and in situ and 48% reduction fresh river water use intensity in mining since 2017. From year-to-year, there will be small fluctuations based on operational needs, but overall, impressive reductions. In our conventional and thermal operations, Canadian Natural's leading closure program is accelerating the pace of well abandonment and site reclamation in innovation in cost-effective ways, while advancing environmental closure obligations. We group well and pipeline abandonments, reclamation and remediation activities to take sites out of service in an efficient and safe and environmentally-sound manner to remove our footprint over larger areas. These activities have reduced the average time to reclamation certification from 4 to 3 years. Between 2016 and 2021, we have abandoned 8,649 inactive wells and submitted 5,080 reclamation certificates. It is not all we fields. To date, we have planted 7.3 million trees across our operations. These native tree species together with native flora and fauna, woody debris and other natural features on restored landscapes, ensure restored natural habitats in various environments with a wide range of biodiversity. 7.3 million trees are a significant accomplishment to help mitigate GHG emissions. Here, you can see the stages where we proactively manage our footprint on the land by planning every step including the final reclamation work and using innovative approaches in addition to area-based reclamation to attain our goal of 1,800 sectors reclaimed per year. A lot of work from many of our specialists goes into the reclamation processes. We incorporate long-term biodiversity and reclamation objectives in our programs to maintain the characteristics of each ecosystem and restore wildlife habitat. Canadian Natural develops every project with a strategic vision and a plan to proactively manage impact on the land. We are committed to reclaiming all of our work sites once our activities are complete whether that is boil forest, native prairie, or farm land. An example is our Muskeg River Mine, we're on the left, not the frog. You are looking at an active tailings pond with white sand. And of course, it's white, the bitumen has been removed. Around the outside and what's in the center is water with fine sand and clays. On the right, what you see is the reclaimed pond with some of the 7.3 million trees that we planted and other natural landscape streams and wetlands. And those are home to our frog friend on the left. We have defined technology and innovation processes that help us to commercialize [indiscernible] reduce risk while doing so. Many of our projects are already in the deploy stage. We are driving impressive results in reducing our environmental footprint. As you are seeing, our disciplined investment not only reduces our environmental footprint but also unlocks reserves, increases production and contributes to effective and efficient operations, lowering our costs. It is our road map on our journey to net-zero. Getting to net-zero means more leveraging of technology, more being innovative, and more using Canadian ingenuity as well as having defined actions in the near, mid and long term. Canadian Natural has a huge technology funnel and just a few of those activities are listed here. Not all of the technologies listed will make it to full commercialization implementation. Each technology is competing with others, those with the greatest environmental impact and the best economic benefits will progress. In our current actions, you will see today, we have 4 capture -- carbon capture and storage or utilization facilities. Horizon capture CO2 from 1 of its hydrogen plants, which is sequestered in the tailings and actually accelerating reclamation. Quest capture CO2 finance hydrogen plants and stores at deep underground. North West Refinery also captures CO2 from its hydrogen plant transporting it via the Alberta carbon trunk line for enhanced oil recovery. We capture CO2 from the solution gas at our Hays gas plant and use it for enhanced oil recovery. Together, this totals over 2.7 million tonnes of CO2 in a year. Canadian Natural is the largest owner of carbon capture capacity in Canada. What is interesting to note is that the hydrogen produced from our facilities with carbon capture is blue hydrogen, which I know all of you have heard a lot about. What is important to understand is that we know how to do this. And it is this expertise that we are building on within pathways. You will also recognize the methane reduction projects that we have just discussed that are part of our strong methane reduction program that will reduce methane emissions across our operations. More impactful projects shortly. Pathways. Now we would like to share with you a short video on carbon capture and storage, our expertise in this space and the Pathways project that Meera Nathwani-Crowe, our Manager of Technology and Innovation has recorded for you. Meera is an Energy professional with over 25 years of technical, commercial and sustainability experience, 20 years of which she has been focused on GHG emission reduction technologies. Meera also supported the development of Quest. [Presentation]

Well, we appreciate Meera's story -- telling our story for us. And we do -- we have included the slides to which she has spoken to in here, and I'll just hit a few highlights in with respect to those. I think what's important, of course, is the foundational project is carbon capture itself, transport and storage. And I think 1 of the things that storage that's really important is that the Western Canadian sediment -- sedimentary basin. I'm not a geologist. Can you tell that? In Alberta has ideal geology for the safe, permanent storage of captured CO2. Rock formations that have securely stored oil and gas for millions of years, can also safely store CO2 permanently. There will be a measuring, monitoring and verification program. Alberta has been storing CO2 for many years and has robust and comprehensive legislation in this space. In this slide, we can see the near, mid- and long-term projects for all of the Pathways players. It bears a close resemblance to the near-, mid- and long-term projects for Canadian Natural that I shared with you earlier, as those projects, of course, are a subset of these projects. The foundational project that we have been discussing is the CCS depicted in the blue shaded area in the Phase 1 2022 to 2030 emissions reduction in this chart. The foundational project will set the stage for emissions reductions during Phase 1, 2 and 3 of our plan. We are also working together on the other aspects of our plan to reduce emissions. So technologies such as Solvents, electrification, energy efficiencies and others that are featured in our technology booklet. I know all of you will read all of this, and it will help you fall asleep at night. But it's super interesting, and I really hope that you do take a look at it. For Canada to achieve net-zero, it needs all of industry, provincial and federal governments to work together to make this happen. Industry has an actionable plan to deliver major emission reductions to achieve net-zero emissions. Governments need to provide a fiscal and regulatory framework to enable these projects. As stated, we have created the Pathways Alliance consisting of the 6 largest oil sands producers. The goal is to work collectively with government to achieve a net-zero by 2050. The goal has a plan. Current status on the foundational project is that we've secured the right to continue exploratory work for CO2 injection at the proposed storage hub near Cold Lake, Alberta. We've completed the feasibility studies and now the engineering is advancing and the environmental field programs are underway. It should be noted that Canadian Natural is not only managing our own capture projects for Pathways. We are also driving the foundational project for the Pathways Alliance, which includes the CO2 transport line and the storage hub. This involves significant effort from many of our people. Picture's worth a thousand words. And here, you can see the capture projects tying into the CO2 transport line and ending up, of course, into the sequestration hub. This is what our current capture projects look like and so in some of our operations. This is our hydrogen plant at Horizon and [indiscernible] look like. Northwest Redwater would look similar. We are, as Meera said, the leaders in carbon capture. In Canada, capturing 2.7 million tonnes of CO2 per year for -- we've been doing that for a number of years. Since 2015, 7 million tonnes of CO2 equivalent have been captured from the Scotford upgrader and safely stored at Quest. Quest and the upgrader are part of the Athabasca Oil Sands Project, of which Canadian Natural has a 70% ownership interest. You can see how we are leveraging our technical knowledge and expertise. We are going to build on what we already know. As you have seen, CCS is an important part for the oil and gas industry and other sectors in Canada and globally for GHG reduction. Additionally, reductions from other projects such as the use of solvents, energy efficiency, cogeneration, electrification and others are also necessary. We need many pathways. Now let's look at a few of the exciting technologies featured in the case studies booklet. And so -- this 1 is where Canadian Natural is piloting using Solvent for enhanced oil recovery. When used in combination with heat, Solvent technology will increase oil recovery, improve steam efficiency and reduced operating expenses. Reducing steam usage will lower GHG emissions intensity by 40% to 50%, and use less water in the production process. We currently have 2 pilots in progress that you will hear more about from Scott Stauth in the Oil Sands section. In Canadian Natural's Oil Sands Mining and Upgrading operations, reducing the need for tailings ponds and greenhouse gas emissions are environmental priorities. Our in-pit extraction process, or IPEP is a potential game changer for Oil Sands Mining. The ore is processed directly in the mine pit. Scott Stauth will again be sharing more with you on how this technology could reduce greenhouse gas emissions and potentially eliminate tailings ponds. I hope you enjoy look -- enjoy taking a look at the other technologies featured in our case studies booklet. In our booklet, you will see technologies that take methane emissions detection to the next level and some may even say the dogs. I hope you will also notice the numerous collaborative organizations that we work with, like COSIA, that is now a part of Pathways, the Petroleum Technology Alliance of Canada, the Natural Gas Innovation Fund and others with focus being provided under our overarching Clean Resource Innovation network. We are also appreciative of the provincial and federal technology development, financial support that we receive. Canadian Natural is very proud of the actions we and industry have taken on climate change. We are committed to doing more with our aspirational goal of achieving net-zero emissions from our Oil Sands operations. Climate change is a global issue, not just the Canadian issue. Unlocking the power of a global perspective will make a significant positive impact on global GHG emissions, reduced global poverty, unleashed Canadian ingenuity, drive both environmental and economic performance, create jobs, support investment in a lower carbon future and strengthen the nation. Canada has an immense opportunity to be a worldwide leader in solutions to get us to net-zero, making not only Canada but the world a better place. Canadian Natural's long life zero decline Oil Sands Mining assets with manufacturing-like operations, represent 1 of the clearest routes to net-zero emissions of any global crude oil asset, providing the opportunity for investments in innovation to achieve net-zero from Oil Sands operations. You have also seen our drive to innovate with our other initiatives, such as our fugitive emissions from across all of our assets. Thank you. And up next is Trevor Cassidy, who will highlight our Conventional Exploration and Production assets.

Thank you, Joy, and good morning. Next, I'll provide an overview of Canadian Natural's high-quality E&P assets and the potential to add significant value-add growth from our assets. One of Canadian Natural's greatest strength is our safe, effective and efficient operations, coupled with a large and diverse portfolio of high-quality assets. On our extensive land base, we have a large inventory of premium locations proximal to our significant owned and operated infrastructure. This allows us to apply a proactive, disciplined and flexible development strategy where we target liquid-rich plays. We leverage technology, innovation and our continuous improvement to unlock production and reserves and reduce our costs and environmental footprint. This proven strategy maximizes free cash flow generation, thereby maximizing shareholder returns. As Tim highlighted in his section, in Western Canada, Canadian Natural has strategically positioned ourselves to have a significant exposure to many of the best top-ranked E&P players. Within our 23 million acre land base, the company has exposure to proven and emerging plays and have identified approximately 7,500 premium locations. This includes top-tier plays such as the Montney, Deep Basin, Heavy Oil and Clearwater plays. At approximately 581,000 BOE/d, Canadian Natural is the largest conventional producer in Canada, and this is backed up by approximately $4.8 billion BOE of reserves the lot reduction supported by over 20 Tcf of 2P reserves, which are the largest natural gas reserves in Canada. The company's 231,000 barrels per day liquids production is supported by approximately 1.5 billion barrels of 2P reserves, again, the largest conventional liquids reserves in Canada. Our extensive infrastructure has over 300,000 BOE/d of net available capacity that allows us to -- allow us for low-cost drill-to-fill developments, and by leveraging our drill-to-fill strategy, we can deliver low-cost growth, which adds more value than our peers. Next, I'll highlight a couple of examples from our top E&P assets, first, starting with the Montney and Deep Basin assets. On this slide, we have highlighted the top Montney and Deep Basin plays that Canadian Natural has significant exposure to and where we have identified approximately 4,000 premium defined locations in these low-risk repeatable plays. This next slide shows the industry average breakevens of the top E&P plays in gray, with the Montney and Deep Basin plays having the lowest breakevens. Layered on this slide is Canadian Natural's breakeven costs for these plays shown in blue, which demonstrates the quality of our assets within these plays as well as our focus on cost and productivity improvements that I'll detail in a few slides. This next slide shows an overview of our Montney and Deep Basin assets. As you can see, we have a dominant position in these areas with approximately 1.5 million net acres of Montney rights and approximately 1.8 million net acres of Spirit rights in the Deep Basin. Within these high-quality lands, the teams have unlocked an inventory of approximately 4,000 premium locations. These premium locations are proximal to our expansive owned and controlled infrastructure, make them high-value, low-cost drill-to-fill developments. One of Canadian Natural's competitive advantages is our expansive owned and controlled high-quality infrastructure that's proximal to our premium land base as outlined on the map. On the map, Canadian Natural, a total facility design capacity of approximately 2.8 Bcf a day with current throughput of approximately 1.7 Bcf a day. This means we have approximately 1.1 Bcf a day of net facility capacity that we can leverage for drill-to-fill developments. This allows us to control our costs and maximize value as we can control the pace of development as well as quickly respond to market conditions. In addition, drilling to fill maximizes facility utilization and drives our unit operating costs lower. So with every development, Canadian Natural realized an even more value with additional free cash flow. Here at our Greater Wembley assets, we have unlocked significant value in 2022 by drilling to fill a 200 million a day existing facility capacity from these liquid-rich lands. This higher facility utilization has resulted in lower unit operating costs. And with approximately 944 identified high-value locations, we can maintain these facilities at capacity for decades for low maintenance capital. In our '23 budget, we're targeting 17 drills to keep the facilities at capacity for a strong 12 months capital efficiency of approximately $73 per BOE/d. As well, we're looking at other high-value options to further increase production like facility expansions. One example of Canadian Natural's focus on continuous improvement and sustainably lowering costs is our drilling and completion performance in the Greater Wembley area. By implementing low-risk innovations, on the drilling side, we have delivered 38% reduction in drilling costs since 2016. And on the completion side, we've realized a 30% reduction in completion costs since 2017. And where applicable, these cost savings are being applied across all our Montney and Deep Basin developments. And our teams are focused on finding ways to further optimize costs, continuing to offset inflation. In addition to cost reductions, Canadian Natural has delivered significant productivity improvements in the greater Wembley area and in similar reservoir quality. Well productivity has increased 68% since 2016, primarily by optimizing completion designs and drilling longer lateral lengths. The 68% productivity improvement is up from the 57% we outlined in the 2019 open house. And teams are continuing to find additional innovation to further unlock more productivity improvements going forward. We're currently producing approximately 2.1 Bcf a day of natural gas and [ 110,000 ]. Currently, we have available drill-to-fill facility capacity of approximately 1.1 Bcf a day natural gas and 55,000 barrels a day liquid. Further to this, we've identified optionality of approximately 0.7 Bcf a day natural gas and 65,000 barrels a day of potential debottleneck and expansion opportunity. We have significant potential to grow, and our disciplined and flexible allocation ensures capital is allocated to the highest return projects from the company's large inventory of opportunities. Our international assets provide Canadian Natural with approximately 28,000 barrels a day of light oil exposure to Brent pricing. We have a balance of low-risk development opportunities in Côte d’Ivoir Africa and high-impact, non-operated exploration in South Africa. In 2023, the company is methodically progressing our next 2 low-risk developments. First [indiscernible], we're targeting next phase of development in 2025 to 2026. And second, at [indiscernible], where we're targeting the next phase of development in 2026, 2027. Over in South Africa, the operators applied for production right status in September of this year, the first step to move into development forward. Next, we'll highlight our top tier heavy oil assets. Here, we have highlighted top heavy oil plays where Canadian Natural has significant exposure to and where we have identified approximately 3,200 premium locations in these low-risk repeatable plays. This slide is an overview of our heavy oil assets. We're the largest conventional heavy oil producer in Canada with production of approximately 120,000 barrels a day. As you can see, we have a large concentrated land base of approximately 3.2 million acres. And within these high-quality lands, our teams have unlocked a drilling inventory of approximately 3,200 locations, and these locations are proximal to our expansive owned and controlled infrastructure, making them high-value, low-cost drill-to-fill developments. Approximately half of these locations utilize multilateral horizontal technology that I'll detail in the next slide. Next, we want to highlight the game-changing multilateral technology that we're leveraging across our entire heavy oil land base. Horizontal multilateral technology has significantly improved productivity and recovery by increasing the overall reservoir contact, thereby unlocking plays that were previously not economic. As well, multilaterals have also reduced our environmental footprint as we're able to access much more resources with a minimal surface footprint, a clear example of our technology has created significant value. This next slide outlines Canadian Natural's Clearwater and Pelican Lake assets. Our large 940,000-acre land base allows strategic, cost-effective development. As the majority of our lands are winter [ access ], we see multiple opportunities to methodically derisk the different plays in a disciplined, low-cost approach. Once we derisk a play, we can develop it quickly and for low cost as they're proximal to our existing 100% owned and controlled Pelican Lake facilities, making them high-value developments. Smith is an example where we have done this recently. The Smith area is a Clearwater play where we have developed a low-risk, repeatable, high-value locations that utilize the available capacity at our existing facilities in Pelican Lake. As you can see on the slide, we have quickly ramped up production and are targeting approximately 90% increase in production to approximately 17,000 BOE/d in 2023. All this production is being processed by leveraging our existing Pelican Lake facilities, which has low operating costs. This is a good example where our teams have leveraged, first, our existing premium land base, our 100% owned and controlled infrastructure and technology to exploit this play and create significant value in a short timeline. As well, in the Bonnyville to Lloydminster corridor, we have been leveraging the horizontal multilateral technology across our large land base since 2019. Originally, developments in this area started out as vertical wells then the slant well technology and now to horizontal multilateral further improving capital efficiency as well as opening up new plays. Here, we have approximately 1,250 defined multilateral well locations in close proximity to our existing infrastructure. Building upon our success in 2022, in 2023, we're targeting to drill 133 multilateral wells at strong capital efficiencies of approximately $10,800 per BOE/d. This will grow our [ multilateral ] production to approximately 23,000 BOE/d or 60% annual high-return growth. Another example where teams have leveraged the existing premium land base, our 100% owned and control the infrastructure and technology to create significant value in a short timeline. Another example of Canadian Natural's focus on continuous improvement and sustainably lowering costs is our success at improving multilateral well performance. Since 2018, the team has delivered 42% improvement in capital efficiency by capturing 38% more reserves and 50% higher productivity, primarily by drilling longer wells. As well, we see approximately 2.5x less surface [ disturbance ] using multilateral technology over [ slant ], thereby reducing our environmental footprint and saving costs. Again, Canadian Natural is focused on cost efficiencies and our continuous improvement culture has delivered good success leveraging this technology. I fully expect over time we'll continue to unlock further optimization of this game-changing technology. A key component of our long-life, low-decline heavy crude oil assets is our world-class polymer flood at Pelican Lake, the largest polymer flood in North America. Pelican Lake is a high value with its long life, low decline and low operating costs. Pelican Lake has and will continue to deliver significant free cash flow and return to shareholders for decades. Our heavy oil assets provide a balance of low capital exposure and long-life, low-decline assets. Currently, our heavy oil production is approximately 120,000 barrels a day, and we have significant potential to create additional value by leveraging our approximate 3,200 premium location and our 67,000 barrels a day of drill-to-fill facility capacity, which ultimately grows our free cash flow for low cost and thereby maximizing shareholder returns. Now looking across all our E&P assets, currently, we are producing approximately 581,000 BOE/d. We have the potential to grow by leveraging our large inventory of locations and the company's approximately 300,000 BOE/d of available drill-to-fill facility capacity, ultimately delivering low-cost, high-return free cash flow growth. Over and above that, we have identified approximately 190,000 BOE/d of potential value-add growth optionality by debottlenecking existing facilities and developing new facility expansions. In summary, our safe, efficient and effective operations offer a large inventory of premium, low-cost development optionality. Our disciplined and flexible capital allocation ensures capital is allocated to the highest-return projects from the company's large inventory of opportunities. We're continually high-grading our large inventory by leveraging our culture of continuous improvement that has and will continue to deliver improvements with the successful application of technology and innovation, ultimately delivering significant free cash flow and maximizing shareholder returns from all our E&P assets. Thank you for your time. Now I'll hand over to Scott Stauth to highlight our oil sands assets.

Thank you, Trevor, and good morning. Today, I'm going to talk about our thermal and mining oil sands assets. First, we'll go through our thermal in situ assets. Starting with our thermal strategy, we are clearly focused on driving free cash flow and efficient operations. Our teams are focused maximizing near-term value and cash flow by being nimble with development opportunities. Our low WTI breakeven price protects us through commodity cycles, and we have the opportunity to leverage our facilities with a potential for larger growth developments. We strive to improve our efficiencies, utilizing technology with innovation, and we have the technical expertise to execute on these efficiencies. That, combined with our strong culture of continuous improvement to reduce our cost and improve our SORs, results in strong free cash flow and returns to shareholders. Canadian Natural's thermal assets are vast, with over 4 billion barrels of 2P reserves and production of approximately 253,000 barrels per day forecasted in 2022. Our largest producing assets are Primrose, Jackfish and Kirby that have a total facility capacity of 340,000 barrels per day. We have 95,000. We are an effective and efficient operator with over 23 years of experience focused on utilizing 3 distinct thermal processes tailored to specific reservoirs: CSS, SAGD and steamflood. These policies combined with immense landholdings and technology enhancements, such as solvents, that we continue to progress through our pilots and SAGD commercial scale at Kirby allows Canadian Natural the ability to capture significant value. We are focused on reducing our greenhouse gas emissions on our thermal assets through a staged approach, which aligns with the Pathways plan that Joey talked about earlier. This slide shows that our thermal assets have a top-tier WTI breakeven price. Our thermal assets remain profitable at much lower WTI price than the vast majority of our peers. This is a result of our focus on effective and efficient operations, which includes lowering operating and maintenance costs, delivering superior returns to our shareholders. In more detail, our leading breakeven metrics are 9% below the peer average, which results in $500 million of additional annual free cash flow compared to our peers. This is a good illustration of how our culture of continuous improvement drives down our cost and maximizes the value. The slide shows Canadian Natural's [ math ] of long-life, low-decline reserves of over 5 billion barrels, which includes the forecasted reserves associated with the acquisition of Pike earlier in 2022 that will provide significant drill-to-fill opportunities and growth potential for decades while requiring minimal maintenance capital. One of our strengths is our significant infrastructure. An example of this is our Primrose and Wolf Lake areas with over 140,000 barrels per day of facility capacity and approximately 65,000 barrels per day available for development opportunities. We have approximately 2,000 locations identified as economical at USD 70 WTI. We forecast an increase approximately 20% recovery over CSS using steamflood and costing very little capital because we are able to use and utilize existing CSS horizontal wells. We have significant opportunities at Primrose and Wolf Lake, including SAGD and solvent enhanced steamflood as we continue to monitor our 2-year solvent enhanced steamflood pilot which began in November of 2021. Results at this stage looks very good, with SOR reductions of approximately 50%. Looking at Primrose in more detail. We have significant opportunity to fill our facilities to capacity if we choose to do so. Earlier this year, we drilled 2 CSS pads on time and on cost that will come on stream in Q3 of 2023 with excellent capital efficiency of approximately $10,000 per barrel per day and an average pad production rate of 12,000 barrels per day. We can easily control our pace of development to fill our facility capacity. What's even more impressive is we have identified over 100 future additional pad locations that we can leverage with our facility capacity. Our large SAGD operations in Kirby and Jackfish are another great example of how we add significant value through economies of scale. We have 5 100% owned processing facilities, 3 in Jackfish and 2 in Kirby, each of which has the capacity of approximately 40,000 barrels per day. We have approximately 1,000 locations and 30,000 barrels per day of available capacity, making our SAGD assets another great example of our strong infrastructure capabilities. In Q1 of this year, we acquired the remaining 50% working interest in the pipeline, adding significant value as we control our pace of development, ensuring we maximize returns. The combined Kirby, Jackfish and Pike assets help drive economies of scale and our advancement of commercial scale solvent pad in Kirby in 2024 has the potential to add even more value to our portfolio of SAGD development opportunities while driving down operating costs as we leverage our operating and technical expertise across our extensive long-life, low-decline asset base. In Jackfish and Pike, we have significant opportunity to fill and maintain our facilities at capacity. In 2023, we plan to drill 3 pads that will come on stream in 2024 with an excellent capital efficiencies of approximately $8,500 per barrel per day and average production rates of 9,000 barrels per day per pad. We can easily control our pace of development to fill facility capacities. Our teams have identified a massive inventory of over 75 future additional pad locations that we can deliver through low maintenance capital requirements. In Kirby and Pike, we also have opportunity to fill and then maintain our capacities facilities of capacity. We have completed drilling on 2 pads on time in 2022 and the third pad will be finished in early Q1 2023. The first pad will ramp up to full capacity in Q3 and the next 2 pads are ramping up to full production in Q1 of 2024 with average rates of 8,000 barrels per day per pad. We have strong capital efficiencies of approximately $10,000 per barrel per day. Going forward, we can easily control our pace of development as we have significant inventory of over 45 pad locations. Following success of Kirby South's solvent pilot, we continue to move forward unlocking more value with our solvent enhanced team production opportunities and our first commercial-sized solvent SAGD pad in Kirby North. Drilling has just finished up and the [indiscernible] turnover to surface facilities construction. The solvent facilities engineering work is near complete and certain major equipment [ awards ] have been made. We are targeting butane solvent injection in Q1 of 2024. As a reminder, the benefits of co-injection, reduced operating costs, reductions of SOR and greenhouse gas intensities by up to 50% and it unlocks capacity for potential growth opportunities as it has significant application throughout our thermal SAGD asset base. Similarly, our co-injection opportunities on our Primrose assets continue to be evaluated as we monitor results at our Primrose pilot on SOR reduction and solvent recovery, which are key for economic success. Again, the potential here is significant on our vast CSS assets. Leveraging technology, innovation and Canadian Natural's culture of continuous improvement has resulted in significant cost reductions in cost per meter while at the same time increasing overall well length by approximately 30%. This improved well designed combined with drilling efficiencies lowers overall development costs and drive strong thermal capital efficiencies. We have significant growth potential with over 3,000 identified locations. We have the potential to add 95,000 barrels per day at strong capital efficiencies of $9,500 per barrel per day simply by filling our existing facilities to capacity of 340,000 barrels per day. Our infrastructure and inventory provide Canadian Natural with significant advantages and long-term optionality with massive value. Our long-life asset base of low-decline production has significant potential to unlock even more value by capturing low capital costs, delivering incremental production capacity of 185,000 barrels per day to fill our facilities through the commercialization of solvent. With the addition of solvents, we target to reduce our SORs by approximately 50% and free upstream at existing facilities. With the expansion potential in areas such as Kirby and Jackfish, for example, and the implementation of solvents, we can add a massive 300,000 barrels per day through safe, effective and efficient operations. As you can see, we are clearly focused on driving free cash flow and maximizing returns to shareholders. We will continue to maximize through safe, effective and efficient operations and we continue to enhance the value of our long-life, low-decline assets through strategic timing of development. Our teams are focused on executing our plan to leverage our infrastructure. We combine continuous improvement along with technology and innovation to enhance efficiencies, and we have the technical expertise to execute on our opportunities. We are a nimble, and we can add production quickly if we choose to do so based on market conditions, and we will continue to focus on costs, SOR reductions and greenhouse gas emission reductions, all of which will continue to result in strong free cash flow and returns to shareholders. Switching to our mining assets. Our oil sands mining strategy is to deliver maximum value through safe, effective and efficient operations. We have high utilization, and we leverage technology, innovation and continuous improvement to provide strong operational results. We are focused on strong safety performance, operating costs, optimizing production, and we won't take our eye off reliability. We continue to progress opportunities to increase economic production in the midterm, and our teams are primarily focused on maximizing near-term value and cash flow. Our mining assets offer decades of no-decline synthetic crude oil production with no reserve risk and continue to deliver significant operating free cash flow via our lower operating and maintenance costs. Canadian Natural is an industry-leading oil sands mining operator. In 2023 oil sands, mining and upgrading capacity will be 480,000 barrels per day as we are adding an incremental 5,000 barrels per day of high-value SCO next year. These massive assets contain approximately 7.5 billion barrels of crude plus probable SCO reserves with over 50 years of reserve life, making this a world-class operation. The resource is massive at approximately 18.4 billion barrels in place. Our top-tier operating costs and low maintenance capital capture even more value through high-quality SCO barrels with no decline and no reserve risk. We have the advantage of the economy of scale with our Horizon and Albian mining operations. Our teams are focused on safe operations, optimizing the cost structure with a strong continuous improvement culture. I will show you that journey of effective and efficient operations on a forward slide. Canadian Natural clearly leads the industry in utilization. This is a key factor in our operations group with safety and reliability a key focus. Our teams are clearly focused on delivering high utilization through safe, effective and efficient operations. We target to maximize the capacity of all the assets from the mine operations through to the upgraders. This chart shows this is one of our significant strengths. Our culture of continuous improvement is relentless. This graph shows the effect of reducing our operating costs by over $18 per barrel over the past decade, delivering a massive $2.8 billion of additional margin in 2022. We are relentless with our continuous improvement culture, and we look at every area of spend, breaking it down into small individual targets because small dollars add up to a big number. This is how we run our business. Canadian Natural is clearly a cost leader and something our team is very proud of. The slide shows the value of our world-class mining assets with industry-leading WTI breakeven price for both Horizon and AOSP. It clearly sets us apart as we focus on effective and efficient operations to deliver superior returns to our shareholders, as evidenced in this next slide. Our breakeven metrics are a clear differentiator at 41% below the peer average, which results in a massive $4 billion of annual free cash flow advantage over our peers. Our reliability project at Horizon will add 5,000 barrels per day of SCO in 2023 as we progress the work. And in 2025, our capacity increases to a total of 14,000 barrels per day from this project. This is a significant volume-adding opportunity because starting in 2025, Horizon will only be requiring a major turnaround once every 2 years. In addition to that, we will save approximately $75 million in capital costs in 2025 and increasing our margins by $1.50 per barrel based on fixed costs. This is a significant value-adding project at Horizon that adds incremental 0-decline SCO production for decades to come. We continue to look for opportunities to create production as we execute this reliability project. We are targeting $280 million of capital investment over the next 2 years as we complete the project. A mid-term opportunity for us is a project that has the potential to add 15,000 barrels per day of SCO. We are reviewing our upstream bitumen production facility requirements for processing capacity enhancements. And in the [ upgrader ], we are performing feed engineering to ensure we have analyzed every opportunity to optimize the project cost and we are targeting an execution schedule of 2025 to 2028 should we decide to move ahead. We continue progressing work on our in-pit extraction process or IPEP. We believe this opportunity has 3 very significant advantages. First, it reduces our overall mining operating cost by $1 to $2 per barrel. Second, it significantly reduces our greenhouse gas emission by using fewer haul trucks. Third, it eliminates the need for tailings ponds and thereby significantly reduces the long-term reclamation cost. These extraction facilities will be modular components so that they can be moved as we advance the mine phase. We have completed front-end engineering of a 750 tonne per hour demonstration plant, and our next step is to kick off detailed engineering. The purpose of this 750-tonne per hour plant is to demonstrate and evaluate how these modules will perform in a combined 6,000-tonne per hour extraction train. One of our current main goals in our engineering review is to ensure we get it right in terms of the capital cost, expected maintenance and operating costs as well as reliability performance. Another way we can grow our mining production is our paraffinic froth opportunity, where we can add 75,000 barrels per day of bitumen capacity to Horizon. This is an increase of 30,000 barrels per day from our last update as we worked through engineering and process improvements. We are at the engineering design specification stage with this opportunity, and we were working on the synergies of combined commercial scale IPEP to create the upstream capacity to fill the froth plant. We continue to prudently advance engineering at Horizon on the froth treatment opportunities. And again, we will align this with favorable market conditions. When we leverage IPEP and paraffinic froth together, we have significant opportunity to add 75,000 barrels per day of mining production while lowering our greenhouse gas emission intensities and reducing our operating costs by roughly $3 a barrel. We currently estimate the cost of the projects to be approximately $5 billion, which would be spread out over approximately 15, years with IPEP being built in stages. Canadian Natural has many opportunities, and one of the most significant is the development of the next phase of oil sands mining. You can see by this slide, the potential to deliver massive growth with no decline. If we choose to do so, we could add 260,000 barrels per day in Horizon Phase 4, 100,000 barrels per day at Jackpine and 250,000 barrels per day at Pierre River, totaling 610,000 barrels per day. We will only do this development under a very disciplined capital program that is aligned with our strategy and market access conditions. In total, with current production, near- and mid-term long growth opportunities, our oil sands and mining assets have the potential to produce over 1.1 million barrels per day of SCO, primarily SCO volumes, while lowering our greenhouse gas intensities with no decline and no reserve risk for decades, truly a world-class asset. In summary, our oil sands mining strategy continues to deliver maximum value through safe, effective and efficient operations. We will continue a strong focus on high utilization, and we will also continue to leverage our technology, innovation and continuous improvement to enhance our performance. Our teams are laser-focused on operating costs, reliability, optimizing production and strong safety performance is at the forefront of everything we do. We continue to progress opportunities to increase economic production in the midterm and our teams are primarily focused on maximizing near-term value and cash flow. Our mining assets offer decades of 0-decline synthetic crude oil production with no reserve risk and continue to deliver significant operating free cash flow via our lower operating and maintenance costs. Our top-tier performance is a competitive advantage. And with our culture of continuous improvement, we will continue to drive significant value to our shareholders. Thank you. And now I will turn it over to Mark, who will present our marketing and finance and 2023 budget.

Well, thanks, Scott, and good morning, everyone. Thanks to all of you who showed up today and then took the time to come out. And also for those of you on the webcast, thank you for tuning in and listening today. As Scott mentioned, I'm just going to do -- discuss a few important marketing topics here before going into our 2023 budget and then also our strong financial position. So our strategy for maximizing the value of the products we sell is to maintain a degree of balance across all commodity types, including natural gas, synthetic crude oil, light and heavy crude oil, and we support egress and infrastructure to ensure our products get to the right markets at the right time. We focus on creating and optimizing our options for things like blending and transportation, and we support improving overall processes to drive value for our products. We participate in conversion capacity by upgrading bitumen and heavy oil to balance product mix and maximize our netbacks. Our large and diversified portfolio gives us an advantage to optimize our marketing strategy to better manage in lower commodity price environments and participate and maximize value in higher commodity price environments like we are in today. So first, I'll just go over some natural gas topics here. This slide shows the Western Canadian basin, with the green line representing natural gas supply. In the period 2016 to 2021, low natural gas prices meant less investment, and that led to flat to declining supply. Over the last couple of years, natural gas prices have improved. This, of course, creates more investment and ultimately more supply. This increased supply comes with some challenges related to available transportation, particularly in times of maintenance and can cause some disconnect with sales point pricing. However, currently, there are no constraints on firm contracts for natural gas leaving the basin during periods of low maintenance. However, there are constraints during periods -- during maintenance periods, and we did experience that in 2022, and these constraints are expected to continue in 2023. This requires strategic planning to mitigate price exposure and require system improvements or expansions to mitigate going forward. In the near-term, in 2023, there are 2 expansions targeted to come on stream, including TC expansion of 150 million cubic feet per day to [ Empress ] and 265 million cubic feet per day to West Path delivery to the U.S. markets. In the midterm, LNG Canada is targeted -- to start delivering of LNG in 2025 and will support egress of about 1.8 Bcf a day, which is expandable to 3.6 Bcf a day. Other LNG and the [indiscernible] expansion in the 2027 and 2028 timeframes target to deliver another 1 Bcf of egress capacity. So we do expect challenges and volatility in pricing, but particularly in times of maintenance. And at Canadian Natural, we have built a portfolio to manage the challenges and provide upside as egress alleviates. This portfolio has diversified sales points that drive strong netbacks. Our balanced portfolio has allowed Canadian Natural to capture significant value. Only 28% of our 2023 budget production of about 2.2 Bcf a day is exposed to the AECO market. The equivalent of 36% of our production is required internally at Horizon, Albian and our thermal projects and creates a natural hedge. The remaining 36% are export volumes that have been successful in capturing market pricing that has been significantly greater than the domestic AECO market, resulting in over $385 million in incremental margin over the 2022 timeframe. This demonstrates how the diversity and flexibility allows Canadian Natural to maximize the value of its natural gas production. Now just moving on to some topics on the crude oil side. If you look at this graph, this graph shows the egress capacity out of Western Canadian basin for crude oil. And you can see how it balances with the basin supply forecast in 2023. It also shows that the Trans Mountain expansion targeted for completion late 2023, egress is balanced well into the future. At Canadian Natural, we balance our product mix on the crude side to maximize the value of the products we sell. Our production mix is over 60% synthetic crude oil, light crude oil and NGLs, which are higher value. Canadian Natural has benefited from SCO premiums to WTI in 2022. These premiums are a result of our synthetic crude production having characteristics that refiners like for producing diesel. With the current low inventories for diesel in North America, we target our synthetic oil barrels to continue to be in high demand. As you see here, about 39% of our liquids production is heavy oil, where we generate strong netbacks as a result of the improved egress and our low cost structure. This chart shows how there is no discount for Canadian heavy crude oil as a result of insufficient egress. As you can see, when we were constrained back in 2018, the U.S. Gulf Coast price for heavy crude oil, adjusted for transportation, was trading about $15.40 per barrel higher than heavy oil at Hardisty, in Alberta. Fast forward to Q3 2022 and the 2023 strip, you see that the difference in price between U.S. Gulf Coast heavy oil and heavy oil at Hardisty adjusted for transportation are $0.70 and $0.20 per barrel, respectively, meaning egress is not an issue. As releases from the U.S. strategic petroleum reserves and maintenance activities get completed for refiners in North America, we expect the differential to improve for both U.S. Gulf Coast heavy crude oil and heavy crude oil at Hardisty through 2023. And that, of course, is what the current 2023 forward strip indicates. This map shows the current areas where Canadian crude is consumed in both Canada and several points in the U.S. as well as the major pipelines that move Canadian crude oil today. The Enbridge Line 3 replacement project added sufficient takeaway capacity to balance the market and the next important project for Canada is the TMX expansion to the West Coast. The Trans Mountain expansion project will add 590,000 barrels per day of incremental takeaway capacity and is an important project for Canada as we get more of our responsibly produced oils to world markets. Canadian Natural has 94,000 barrels per day of firm capacity on TMX, further diversifying our portfolio with the project targeted for completion in late 2023. In summary, our large and diversified product mix provide advantages to how we manage, support and optimize our business over the long-term, while maintaining optionality to maximize prices for our products and generate increasing returns to shareholders. I'll now switch gears and provide some detail around our 2023 budget, our strong financial position and where we are and continue to strengthen that position as we go into 2023. Our strategy for the 2023 budget is to remain disciplined in our capital investments, and we are in an enviable position with low maintenance capital and top-tier, high-value opportunities to execute in the near-term while setting up for the future. You saw this in both Trevor and Scott's presentation, where we are opportunity-rich, providing us with the ability to deliver on the best value projects. The prudent 2023 budget also provides for significant cash flow generation at current strip pricing, resulting in further returns to shareholders and continued strengthening of our already solid financial position. Canadian Natural has a long history of successfully balancing what we call our 4 pillars of capital allocation, with a focus on maximizing shareholder value. The 4 pillars are balance sheet, strength, returns to shareholders, resource value growth and opportunistic acquisitions. We have a strong track record of effective and efficient operations and with our low maintenance capital, it supports our ability to generate significant and, importantly, sustainable free cash flow, ensuring a strengthening balance sheet and sustainable and growing returns to shareholders. And as we've mentioned, we are prudent and disciplined in our capital allocation and resource development while maintaining flexibility to address adjust when necessary. Finally, opportunistic acquisitions have always been a part of our strategy. However, we have no gaps in our portfolio. And as a result, any acquisition must compete and add long-term value to our shareholders. For 2023, we have a base capital program of $4.19 billion that is targeted to add year-over-year BOE production growth of about 56,000 BOEs a day with strong production volumes in both the conventional natural gas and liquids production. Additionally, we have allocated $1 billion to strategic growth capital, largely targeting future growth in the thermal and oil sands mining areas. This capital budget drives year-over-year average production growth in all segments, as you see here, with both overall natural gas production growing about 5% and liquids production growing by approximately 4% to 5% from 2022 levels. When you take into account the significant free cash flow generation from these capital and production levels, combined with executing our free cash flow policy, we target to generate 8% production per share growth in 2023 and 2022 levels. We will be delivering this production growth with a very disciplined drilling program of about 70 natural gas wells, 260 net conventional crude oil wells and 54 thermal wells. This prudent drilling program will provide opportunities for continuous improvement, maximize the ability to be effective and efficient and manage our costs to ensure we are driving towards top-tier returns on capital. Our plan is to deliver on the 2023 capital and production budget in a safe, reliable, effective and efficient way by executing our program focused on top-tier plays within our vast asset base. By having defined plans and a culture of continuous improvement, we can drive significant free cash flow and returns on capital. Our premium assets, top-tier execution and cost structure give us the ability to target to add production, progress projects for future production, strengthen the balance sheet further and continue to deliver increasing returns to shareholders in 2023 and beyond. And I'll move on just to talk a little bit about our financial strength. At Canadian Natural, we are generating material free cash flow and we target to maximize returns to shareholders by having a unique free cash flow allocation policy that delivers increasing returns to shareholders while strengthening the balance sheet at the same time. Our financial position is very strong today, and that provides maximum flexibility on how we can execute things like strategic growth without impacting returns to shareholders. The goal is to create long-term shareholder value. What sets Canadian Natural apart is the quality of our assets and people. The long-life, low-decline nature of our production with low maintenance capital and our culture of continuous improvement, this Canadian Natural advantage was evident in 2022 and sets up momentum to continue to deliver top tier results as we go into 2023. In 2022, we were able to grow production about 5%, generate more than $11 billion of free cash flow after dividends, reduce absolute debt and increase our dividend twice by 45% to $3.40 per share and declare a special dividend of $1.50 per share and, finally, executed a significant share repurchase program of over $5.5 billion. These are impressive results and demonstrate the uniqueness and upside potential of Canadian Natural. Canadian Natural's free cash flow allocation policy is unique and that it provides flexibility given the strength of the financial position. Free cash flow, for the purpose of the policy, is defined as adjusted funds flow less base capital expenditures, less dividend. The policy states that since company's absolute debt level is below $15 billion, 50% of the free cash flow is targeted to share repurchases under the NCIB with the remaining 50% allocated to further strengthening our balance sheet, with any acquisition or strategic growth capital not impacting returns to shareholders. A further enhancement we announced today to the company's free cash flow allocation policy is that when the company's net debt reaches $8 billion, the company intends to allocate 80% to 100% of free cash flow as incremental returns to shareholders. This also ensures we maintain a strong balance sheet while increasing returns to shareholders. I'd just like to highlight a couple of items on the balance sheet. Our financing strategy includes maintaining balance sheet strength while maximizing financial flexibility. Balance sheet strength is core to Canadian Natural. The financial position is very strong today, debt to book capital at 24%, debt to adjusted funds flow 0.6x at September 30. And with our free cash flow allocation policy is targeted to strengthen even further. We also maintain a flexible capital structure with a focus on managing maturities. And as part of our robust financial position, we maintain ample liquidity to support delivering on our financial plan. Total liquidity at September 30 was significant at about $6.5 billion, including cash and short-term investments. Investment-grade credit ratings are important to us. And in 2022, both Moody's and DBRS upgraded our credit ratings to BAA1 and [ A low ] respectively. We have a strong and very supportive banking group with long-term relationships comprised of world-class, Canadian, U.S. and Asian financial institutions. At Q3, we repaid all of our outstanding bank debt in commercial paper and our revolving facilities alone provides over $5.5 billion of liquidity. We have a purposeful and prudent debt maturity profile that provides the opportunity to repay absolute debt in the near-term. We have also executed about $500 million of bond repurchases in 2022, and we will early redeem in Q4 '22 our USD 1 billion bond originally maturing in January 2023. At current strip pricing, in 2023, debt to book capital and debt to adjusted flow funds flow are targeted to continue to strengthen to approximately 16% and 0.5x, respectively. Having a purposeful and prudent maturity profile has given us the opportunity to cost-effectively pay down more than $13 billion of net debt since the end of 2020 through 2023, allowing us to strengthen metrics through the cycle and demonstrate the resilience of our assets and business model. Finally, I'll just discuss a few items and reiterate some messages around the free cash flow and returns to shareholders. This chart shows the significant returns to shareholders we have been able to deliver in 2022. We have returned $4.33 per share in dividends and over $5 per share in repurchases, totaling more than $9 per share in direct returns to shareholders and provided indirect shareholder returns $5 per share in the form of balance sheet deleveraging. The sustainability of our business model and the ability to deliver returns to shareholders over the long-term is proven in our dividend history, particularly when compared to a global peer group. Canadian Natural's dividend has not only been sustainable, but our compound annual growth rate over the last 10 years is leading at 21%, or 27%, including the special dividend this year, significantly higher than the peer average. And this chart demonstrates the history of growing returns to shareholders through the dividend with 23 years of consecutive dividend increases, representing a 21% CAGR over that time period. It's important to note that our dividend has been able to grow through all commodity price cycles. In 2022, you see the balance in returns to shareholders through $1.50 per share [ dip ] special dividend and a significant share repurchase program. When you put returns to shareholders into the context of market cap, the results are impressive. Our free cash flow generation is targeted to continue in 2023 with significant returns to shareholders. And at current pricing, we would see a return of approximately $16 per share direct return to shareholders over the 2-year period. What is unique is that while we continue to deliver significant returns to shareholders and further balance sheet strength, we can also continue to grow our business. As you can see here, we have been able to generate about an 8% CAGR production per share growth since 2019, with 2023 growth also targeted at 8% per share compared to the forecasted 2022 levels. This is a reflection of what sets Canadian Natural apart from the global peer group: the ability to invest and effectively grow while returning significant cash to shareholders. The commodity markets continue to show volatility, and at Canadian Natural, we focus on how to be resilient through the cycle and generate future upside. The advantage at Canadian Natural is our low maintenance capital, long-life, low-decline and diverse product mix, so we're never hostaged to 1 commodity price. And our relentless on effective and efficient operations with top-tier cost structures drive significant and sustainable free cash flow at lower commodity prices, while our size provides significant torque to commodity price upside. In summary, our world-class assets set us apart. These assets are high-quality reserves with low overall declines and a top-tier cost structure. When you combine that with our culture, a culture of continuous improvement with a focus on return on capital and doing it right, we can drive material free cash flow and maximize returns to shareholders over the long-term. Thank you very much. And I'll pass it back to Tim here for some closing comments.

Thank you. This morning, you've seen Canadian Natural has a proven effective strategy, and as a result, we have sustainable free cash flow through all the commodity cycles, ensuring we can deliver to the shareholders. Our strategy is simply to optimize capital allocation to maximize value to our shareholders while ensuring we maintain a balance of strong balance sheet. Opportunistic acquisitions have always been a part of our strategy. While we have no gaps in our portfolio, acquisitions need to add long-term value. We have a defined growth and value enhancement plan for every product and basin we operate in. We have a diverse and balanced asset base across various product types which we can manage time line including our long-life, low-decline assets to grow our production and maximize value. This is a very significant difference between our peers. And this is driven by our safe, effective and efficient operations, our knowledge, ownership and operatorship of infrastructure. We have a culture of continuous improvement, leveraging technology and innovation throughout the company, which gives us leading ESG results. We have a history of capital discipline, operational excellence, low maintenance capital, all which results in maximizing free cash flow, giving more value to shareholders. Canadian Natural should be an investment in priority. That concludes our presentation and webcast this morning. I'd like to thank everyone for joining us. Thank you.