Prepared remarks
Good day, and thank you for standing by. Welcome to the Suncor Energy Second Quarter 2026 Financial Results Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Suncor Energy's Senior Vice President of External Affairs, Mr. Adam Albeldawi. Please go ahead.
Thank you, operator, and good morning. Welcome to Suncor Energy's Second Quarter Earnings Call. Please note that today's comments contain forward-looking information. Actual results may differ materially from the expected results because of various risk factors and assumptions that are described in our second quarter earnings release as well as in our current annual information form, both of which are available on SEDAR, EDGAR and our website, suncor.com. Certain financial measures referred to in these comments are not prescribed by Canadian generally accepted accounting principles. For a description of these financial measures, please see our second quarter earnings release. We will start with comments from Rich Kruger, President and Chief Executive Officer; followed by Troy Little, Suncor's Chief Financial Officer. Also on the call are Peter Zebedee, Executive Vice President, Upstream; Dave Oldreive, Executive Vice President, Downstream; and Shelley Powell, Senior Vice President, Operational Improvement and Support Services. Following the formal remarks, we'll open the call up to questions. Now I'll hand it over to Rich to share his comments.
Thanks, Adam. Our second quarter involved completing major maintenance and positioning for a strong second half and that's exactly what we did. Before I cover financial performance, I'll first discuss operations starting with safety. I'm pleased to report that our Base Plant mining received an industry safety award, the John T. Ryan Award for best-in-class safety performance as recognized by the Canadian Institute of Mining. This marks the second consecutive year the Suncor Mining team received this award. I'm extremely proud of our team for this well-deserved recognition for excellence in an area that represents our highest overall priority. Moving to upstream production: 761,000 barrels a day in the second quarter. Before I continue, though, a pop quiz. What's the difference between the story of Noah's Ark told in the book of Genesis and the Fort McMurray region in the second quarter of 2026?
In Noah's Ark the torrential rains stopped after 40 days and 40 nights. In Fort McMurray, record rain and snow melt continued throughout the quarter, with total precipitation the highest in more than 30 years, 50% higher than the 10-year average and, unfortunately, it materially affected mining productivity and quarterly production with an estimated 50,000 to 60,000 barrels a day impact in the second quarter. Clearly, this was an unusual one-off event, but we learned from it to build resilience for future events by improving our planning and preparation with new 48- and 72-hour weather outlooks, by stockpiling ore in the most vulnerable areas within each mine, by pre-securing critical materials and equipment such as gravel and graders, and by using technologies such as drones to monitor mine conditions in real time. The takeaway is we can't eliminate weather risk, but we can better mitigate the impact.
The good news: since late in the second quarter, things are back to normal, with production at expected rates. In fact, July's preliminary production is on the order of 870,000 barrels a day which would be our second-highest July ever. Despite this year's weather, over the last 3 years, second quarter production has averaged 59,000 barrels a day higher than the second quarter of the prior 3 years with better turnarounds and higher asset performance driving the results. Upgrader utilization was 93% in 2Q with our spring turnaround at Base Plant now complete. Year-to-date, we're at 94%, a new record, 1% higher than the first half of last year. Refining throughput was 471,000 barrels a day in the quarter, our second-highest 2Q ever, 28,000 barrels a day higher than our previous best 2Q, which was last year. Montreal and Edmonton, our largest refineries, led the way at 151,000 and 161,000 barrels a day, respectively, and a combined utilization of 99%.
Overall, 2Q network utilization was 92% on our new higher rerated capacity of 511,000 barrels a day. With major maintenance activities completed at both Commerce City and Sarnia, year-to-date utilization is 95%, a new record, 4% higher than the first half of last year. Again, over the last 3 years, '24 through '26, 2Q throughput has increased every year, averaging 78,000 barrels a day higher than the 2Q of the prior 3 years, continuing to raise the bar and improve performance. Product sales were 655,000 barrels a day, like refining throughput our highest second quarter ever, 54,000 barrels a day higher than the previous best second quarter, which was last year. This is our eighth quarter in a row with sales greater than 600,000 barrels a day after never achieving 600,000 barrels a day in any quarter over our history. A note of interest: jet sales were a record 51,000 barrels a day, 90% higher than our previous record of 27,000 barrels a day in the first quarter, achieved by fine-tuning our product slate to maximize global market value.
Over the last 3 years, '24 through '26, 2Q sales have increased every year, averaging 101,000 barrels a day higher in the 2Q of the prior 3 years. Here again, raising the bar, improving performance. Over the last several years, we've talked a lot about turnaround performance, improving cost and schedule. As a reminder, historically, greater than 20% of our capital, roughly $1.25 billion per year, was spent on turnarounds. During our Investor Day in May 2024, we committed to reduce turnaround costs by $250 million per year over 3 years. We achieved that objective in 2 years versus 3 years. In mid-2025, we increased our ambition to $350 million per year in capital reductions. We now expect to achieve that in 2026, again earlier than expected. And this year, on March 31, we upped our goal to $400 million a year. With that context, I'll highlight 2Q performance focusing on Firebag, illustrating ways in which we continue to improve performance.
Our Firebag turnaround involved major maintenance of the 2 largest of our 4 plants, 93 and 94. Combined, the 2 plants processed roughly two-thirds of the field's 250,000 barrels a day capacity. In our guidance for the year, we included an estimated impact of 85,000 barrels a day in the second quarter. This was our longest-duration, biggest volumetric impact event of the year. The last turnaround of similar scope was completed in 2022, four years ago. It took 58 days at a cost of $150 million. This year, with a slightly larger scope, we completed the work in 44 days for $118 million, a 24% reduction in duration and a 21% reduction in cost. The work to achieve this started more than 2 years ago and included innovations in equipment inspections and work practices. Examples: using ROVs for internal inspection of long steam-line sections, using drones for inspections inside large-diameter pipes and vessels, circulating mineral oil inside process vessels to accelerate cleaning cycles.
An idea by Firebag coordinators Max Bombardier and Samantha Snow: Max literally observed a contractor years ago using Johnson & Johnson baby oil to clean equipment. He contacted Samantha, the process engineer at the time, to research it. Samantha identified a Petro-Canada lube product, we tested it over time, and this year we applied it at scale in plants 93 and 94, cutting two full days off vessel cleaning by one simple idea — save time, save money, keep people safer. This is one of many examples of what Suncor people are doing company-wide. Firebag results: lower cost, lower duration and faster production restoration. The second quarter impact was 60,000 barrels a day from the turnaround work, a 25,000 barrel a day improvement versus the plan. We also completed prep work for future tie-ins and further planned debottlenecking, working smarter today and smarter for tomorrow. The final prize is with the work we did, we will now be extending the interval for plants 93 and 94 to a five-year turnaround cycle versus the historic four-year cycle — a total team accomplishment.
Compliments to Nabeel Jafri and his regional turnaround team, Miles Fleming and his operational management team and Jason Gaudette and his central support team working together focused, collaborative and results-oriented. I've highlighted Firebag, but we also completed other second quarter work successfully. At Base Plant, the upgrader coker was completed in 46 days versus 60 days in 2021, at $203 million cost, 10% less than the last event at $225 million. Commerce City refinery completed in 50 days versus 74 days in 2021. We've got more work to do in the third quarter, but our second quarter results position us well for a strong second half. My overriding message: Suncor remains focused like a laser to perform, compete and win by operating standards, with best-in-class performance ambitions, clear definitive plans and priorities, both short term and long term, a deep team-based results-oriented high-performance culture focused on what we can control and what we can execute.
We believe we offer a compelling value proposition: reliable, ratable high performance; reliable, ratable high cash flow — a literal machine built to deliver in all business environments. With that, I'll turn it to Troy.
Thanks, Rich, and good morning, everyone. This quarter was a powerful demonstration of just how much Suncor's ability to generate cash has changed in the past four years. You may recall in our Q1 conference call that I highlighted that not only has our resilience improved through the lowering of our corporate breakeven by $10 per barrel, the earnings power of today's Suncor at higher prices has been improved by an even greater measure. Proving this point, we finished the second quarter of 2026 with $5.3 billion in adjusted funds from operations, nearly double that of a year ago, and tying our all-time quarterly record set in the second quarter of 2022. The difference is that this time, WTI averaged $93 per barrel for the quarter, roughly $15 per barrel lower than in the second quarter of 2022, when it averaged $108 per barrel. Even more meaningfully on a per-share basis, AFFO in the second quarter of 2026 of $4.52 per share is nearly 20% higher than the AFFO per share in that same historical quarter of 2022.
We're delivering more cash flow and more value per share with less help from commodity prices. That's the result of building a stronger, more reliable and more profitable business over the last few years. And what's important to remember, this wasn't a perfect quarter. Unprecedented weather conditions impacted production and left value on the table. Even so, we matched our all-time AFFO record and delivered our highest-ever AFFO and free funds flow per share. As we continue to advance our Investor Day plan, we see further opportunities to improve and grow earnings power from an already record level of performance. Now I want to highlight our downstream business, which has, again, taken advantage of a strong margin environment to generate record segment AFFO. Suncor generated record downstream AFFO of $2.3 billion this quarter, nearly $200 million above our previous record in the second quarter of 2022.
And we did that with the New York Harbor 2-1-1 crack margin, net of the Renewable Volume Obligation or RVO, more than $10 per barrel lower than in the second quarter of 2022. Margin capture this quarter came in at 89%. Not bad, but that number masks the underlying strength. This is because, unlike many of our peers, our benchmark does not deduct our RVO even though the gross margin we compare it to nets out our own RVO compliance costs. With average RVO pricing jumping $5 per barrel from the first quarter to the second, that single factor drove a variance of 10 percentage points of capture. Excluding this increase, we saw a very strong margin capture of 99% for the quarter. How did we achieve such strong margin capture? Our sales and marketing and supply and trading teams again turned market dislocations into value, in particular, in export markets. Through ports in Montreal, we exported 56 cargoes in the first half of the year, nearly matching the 58 cargoes shipped in all of 2025.
That's our integrated model at work, providing flexibility, capturing stronger netbacks and turning market volatility into value. Years of logistics and commercial buildup paid off once again this quarter. Now let me spend a minute on our balance sheet and capital allocation. Suncor ended the quarter with $4.5 billion in net debt, 5% lower than where we started this decade and placing us at less than half of our guardrail of 1x net debt to cash flow at $50 per barrel WTI. Just like our low corporate breakeven, this amount of net debt gives the company a level of resilience that it has never had in its history. With our balance sheet in excellent shape, backed by a business that is able to generate meaningful excess funds across the commodity cycle, our focus is then on getting funds back to shareholders in a reliable and predictable way. From a shareholder return perspective, in the second quarter, we returned $1.8 billion to shareholders in the form of $1.1 billion in buybacks and $706 million in dividends.
And starting this week, those buybacks will increase to $500 million per month or $1.5 billion per quarter, reflecting the substantial growth in excess funds this business is generating in the current environment as well as the benefits of the improvements we detailed at our recent Investor Day. This marks our second increase in shareholder returns this year. As a reminder, we entered 2026 with a buyback of $275 million per month. We then increased it to $350 million per month in April, and now we're increasing it again to $500 million per month. Put simply, the better this business performs, the more shareholders should expect to share in that success. And while we will always retain the flexibility to respond to material changes in market conditions, we believe that predictable and ratable shareholder returns can be achieved even as commodity prices inevitably move around. With that, I will turn the call back over so that we can take some questions.
Thank you, Troy. I'll turn the call back to the operator to take some questions.
Questions and answers
And our first question will come from the line of Greg Pardy with RBC Capital Markets.
Thanks for the rundown. Probably the most obvious question is just with the increase in the buyback now to $500 million per month, is that sort of a forever number? It certainly has good legs as you move into 2027, just given free cash flow generation and the balance sheet. And let's just say at the $500 million level you still have net debt kind of trending down to zero, which would be an incredibly good problem to have. But are there other levers that you could pull in terms of returning cash to shareholders?
Yes, sure. Thanks, Greg. I think you should look at our actions to answer that question. Recall that in 2025, the crude price moved between the low 70s and the high 50s per barrel. Throughout that entire time, we kept our buyback constant at $250 million a month until we actually increased it in December by 10%. And that increase came at the lower part of that year's commodity cycle. More recently, look at Q2: we started the quarter with WTI at over $100 per barrel and ended the quarter at under $70 per barrel. Our buyback continued ratably and predictably at $350 million per month. So like any company, we have to maintain some flexibility for extreme events, but it should be clear by now that we want to deliver something that's unique and has value to investors, and that is predictable and ratable shareholder returns through the commodity cycle. And that's not the only thing we're doing that we think is unique.
We also do not have an absolute dollar net debt target that includes thresholds for when we pay shareholder returns. We don't because we don't think shareholder return should be driven by what our debt is, but rather should be driven by what our performance is. That is why we instead have a guardrail of 1x net debt to cash flow at $50 per barrel WTI. That allows us to manage our leverage alongside how our underlying business evolves. So as to specific timing, I would recommend you all take your view of commodity prices, even if it's a low one, and run it through your models for the foreseeable future with a $500 million a month buyback and see how long that would last. That duration is what a rock-solid balance sheet and a top-quality business can offer.
Okay. Well, I'm glad I asked that question. I think we got the answer. Rich, I was hoping for some reflection on the multitude of things you've already come up with in terms of mitigation and how you're prepared for this. I know you're always thinking through things. Are there any other observations, operationally in the quarter, whether it's upstream or downstream and how you're continuing to safeguard the company for resilience that you're set to share?
Greg, thanks. What we're seeing as we've institutionalized a high-performance culture in the organization is that we can't always stop things from happening or control everything, but we can very much control how we respond and recover when things go off plan. I think the example of the rainfall is a good example in that we stepped back and learned from it and didn't just accept what happened; we asked how we can change the outcome in the future. Peter, you and I were talking yesterday — why don't you share a further example of what we're doing to learn as we go on.
Yes. Thanks for the question, Greg. We've really taken the time to step back and understand the learnings from the significant rainfall events that we saw through the first quarter and really start to proceduralize even more our response to adverse weather conditions. Rich mentioned a couple in his comments, but strategically placing stockpiles of ore around the mine, strategically placing materials for road construction and support equipment to make sure our road networks come up quicker are just a couple examples of that. We've also looked at implementing technologies such as drones and overlaying that on maps to look at where we are most vulnerable and where we have to deploy our equipment more rapidly. We've seen some success post Q2 in recent rainfall events where our response times are much quicker. Our ability to ramp back up to full production capacity has increased significantly.
One more example: we had talked on previous calls about implementation of a mud mode in our AHS system in Base Plant. In fact, we've now moved to Mud Mode 2.0 and seen a lot of success in reducing slippage events on the trucks as a result. In fact, slippage events were down 80% relative to the initial version of this software, and I think that's a good example of the continuous-improvement mindset that our teams have, working collaboratively with our vendors to deploy at scale. Lots of learnings and pleased with the results in recent performance.
One other thing I'll add: we have an executive leadership team text thread that we communicate on pretty continuously. We'll talk about everything from milestones to movie quotes to performance. Dave will often share that a particular unit at a refinery went down, and by the time I catch up with the thread, he's already noted the fix and we're back at full rates. It's an organizational capability that rallies and focuses when something goes off plan to correct it as quickly as possible. We can give you dozens of examples of how today is different than the past.
And that will come from the line of Dennis Fong with CIBC World Markets.
I appreciate the prepared remarks there around how you're managing through a very tough quarter. My first question relates back to the Investor Day, where you discussed thoughts around near-term growth as well as long-term resource development, with a large focus on value and volume. As we look toward scenarios where egress out of Western Canada could increase quite significantly, how does that shape your thinking around options to either accelerate development from some of your in-situ opportunities at Fort Hills and Firebag? Or how have your teams found opportunities to showcase growth with lower capital or more efficient deployment of that capital?
Thanks, Dennis. We described our plan on March 31 as largely within our control. It didn't need fiscal and regulatory reform or new pipelines. This is something we had confidence we could deliver and execute. Of course, it was underpinned by the large, high-quality resource base, predominantly in situ, which gives us a lot of optionality. We're very much embracing a 'design one, build multiple' strategy approach for many reasons. Today, we're also looking at the right cadence of that. We have optionality to accelerate growth if that is valued by us and our shareholders. We're not in acceleration mode today, but we have the flexibility to go faster if market conditions and shareholder value say it's the right strategy. We're paying close attention to signposts and doing prework to preserve our options.
Great. Thanks. A follow-up on regional integration: through the second quarter that integration helped avoid some of the worst outcomes associated with the weather. Can you talk to how regional integration drives confidence in your ability to execute operations, particularly with potential growth optionality and increased demand for diluent or solvent for some technologies you may employ?
Integration is a core differentiator for us. It provides flexibility and resiliency and reduces our reliance on third-party providers or external operational upsets. Peter, do you want to comment on specific examples?
Yes. We moved a large amount — over 90,000 barrels — around the region in the quarter to ensure bitumen reached upgraders and maintain high upgrader utilization. Syncrude was a classic example where wet weather in the Syncrude mines required movement of Firebag bitumen to keep upgraders running full. We also move Fort Hills barrels into the Base Plants. On the diluent side, we are fully integrated. We make our diluent at the Base Plant upgrader and can ship it up to Firebag via an existing pipeline. We also have a spare line in the ground should we choose to scale up, and that will be one of our in-situ development projects in the next couple of years. Being integrated on the bitumen side, the upgrading side and the diluent side helps our in-situ operations, and it's very handy to have as an operator when things don't go as expected.
The flexibility that integration provides and the resiliency it creates is tremendous, and you see it in our results. Dave, why don't you add a few comments about the integration with Edmonton and the value it provides?
Absolutely. We integrate our Edmonton refinery directly with our oil sands operations. We run a single linear programming model to optimize the region. Think of that as a big optimization tool that covers the Edmonton refinery, our markets and our export sales. That capability allows us to do interesting things. For example, if there's an upside in the region, we can adjust Edmonton's intake to help the Base Plant operator while Edmonton is optimized. We also have diluent processing capability so that if we're short of diluent, we can send some up north. More interestingly, we can run intermediate streams and special blended crudes to fill the Edmonton refinery, and you'll see that in this quarter. Rich mentioned we had record throughput and record sales, and a large part of that difference was these intermediate streams that we ran to Edmonton refinery over the quarter. We have a capability in the 10,000 to 15,000 barrels a day range and continue to grow that. That translates into diesel production that we sell globally to export markets. So from the oil sands all the way to diesel sales in Europe, Panama and Asia, we integrate this business.
If you were inside our tent, you'd see operations teams driving safety, integrity and reliability at the asset level, but we've added integrated teams that continually look to maximize value: where molecules move, how we compensate for operational upsets, and ultimately maximize value. That integrated approach is different today than in the past, and you see it reflected in our more ratable, predictable performance.
And that will come from the line of Menno Hulshof with TD Cowen.
I'll start with a question on global product sales, which were clearly very strong and continue to increase. Where do you stand in terms of building out access to global markets? Would you frame this as a more sustainable improvement to the business or more transitory and largely driven by ongoing volatility in pricing for global refined products?
I'll start and then Dave will comment further. The strategy we put in place didn't just start with the recent volatility. We had a vision a few years ago of a broader presence to open markets and avenues of value. At Investor Day we described how a few years ago we sold in about 20 countries and now that's in the mid-40s. We've expanded logistical capabilities with time charters on vessels so we can move products and crude off the West Coast and products off the East Coast. It's been several years in creation, and most recently you've seen the benefits of that. Dave, do you want to comment about structural versus transitory?
Yes, Menno. We've been building out our trading platform over the last number of years, selling into multiple countries. I'll talk about each coast separately. Off the West Coast, our terminal and our logistics have been optimized to move mostly diesel from Edmonton refinery to global markets. Through constraint-busting activity we've moved from three to four cargos a month in good months last year up to five cargos a month more recently, and in May we achieved six cargos in a calendar month for the first time. So that's structural — efficient logistics and competitive assets marketed through a trading organization off the West Coast. On the East Coast, we have similar capabilities. We have a new terminal asset we can rail-supply, and we have our Montreal refinery which we can shift between domestic supply and exports. The big story for Montreal this quarter was our ability to export jet fuel.
We recently started making jet fuel in Montreal late last year and continued into the first quarter. That was initially a small domestic opportunity of less than 5,000 barrels a day that we thought we could grow. In the second quarter, our team in Montreal identified an export pathway to move jet. We were able to convert a #1 diesel stream, which also meets jet qualities, to jet qualities and export. We exported 22,000 barrels a day of jet fuel out of Montreal. That's a structural capability we can continue to deploy if the market supports it. Where last year that opportunity was essentially zero, now we can do up to 25,000 barrels a day of jet out of Montreal.
So there are lots of opportunities to continue that program. This is a structural change that will add long-term value.
That will come from the line of Manav Gupta with UBS.
It's great to see that despite all the weather challenges you did not change your upstream guidance and given your track record in the last two or three years, most likely you'll still come in at the top end of the guide. Should we model a very strong rebound in upstream volumes for the third quarter, given you did not change your guide at all?
Our second half is typically the strongest time of year — major maintenance tends to be behind us and weather typically improves — so we expect a much stronger second half than the first half, and that's built into our plans. We fully expect that we will meet our guidance this year. In recent years we've landed on the higher end of guidance, and we have high expectations for a very strong second half.
My second question: I always appreciate your outlook on the refining macro. In North America you report the strongest margins because you have an integrated business model. Can you help us understand what you're seeing in terms of refining macro and the sustainability of these cracks and how Suncor benefits from them?
Manav, we've seen record and sustained cracks, particularly a distillate story — diesel and jet. Refined product markets have been more resilient than crude to geopolitical events. Factors like disruptions around Hormuz and the reduction in Russian refinery output driven by conflict have taken significant diesel supply off the market. That has supported diesel cracks and we see that resilience continuing at least in the medium term. For Suncor, our downstream business is designed to perform in many environments, and robust diesel cracks are well-suited to our integrated model. We continue to grow diesel production preferentially over gasoline and leverage our trading platform to sell globally and domestically.
We appreciate you raising the buyback again this year. Investors really appreciate that.
And that will come from the line of Doug Leggate with Wolfe Research.
Rich, I've got two topics. One is growth. Some peers appear to be considering acceleration in growth projects. You laid out a 100,000 barrel a day organic thesis through 2028. My question is not so much about individual projects but about reinvestment rate. When you think about sustaining capital and growth capital on top of that, how should we think about the reinvestment rate as the macro environment changes?
Doug, the projects we're doing because of our resource base and design-one build-multiple strategy involve preparatory work like seismic and delineation wells and give us optionality. We are frugal and thoughtful about what we spend. We don't chase short-term swings year-to-year. We look longer term. When we look in the mirror, we see an industrial machine with resilience in various business environments — the ability to be foundational in an investment portfolio. We plan our business on a long-term oil price view — roughly the historical average — and manage to that. We share surplus with shareholders and maintain strength if prices are lower. We don't overreact to the flavor of the day.
Thanks. My follow-up: there's a lot of talk about buybacks. What we care about more is dividend growth per share, where buybacks play a role. When you think about cash returns and getting to a $38 breakeven by 2028, what's the split in thinking between buybacks and the potential to raise the dividend more aggressively?
We focus on creating value and aren't wed to hard thresholds. The balance between dividends and buybacks isn't fixed. We want to be outstanding operational and financial executives, look holistically and engage our Board. We aim to appeal to a broad set of shareholders.
Doug, we discuss this a lot. Our shareholders have diverse preferences: while many favor buybacks, others prefer dividends or a mix. We will monitor and optimize both methods to create the greatest demand for our stock and keep the most shareholders satisfied.
And that will come from the line of Patrick O'Rourke with ATB Cormark Capital.
Congratulations on the strong quarter. I'm wondering about the scale and scope of the turnarounds in the third quarter and what flexibility you have in approach in this market environment. Specifically, given second-quarter work and today's crack levels, how are you thinking about executing third-quarter turnarounds?
One of our operating tenets is the importance of safety and operational integrity. We want to do the work necessary to maintain assets in the right condition; we won't do more or less than needed. We also won't materially change plans simply because margins are high. We're optimizing where we can, but we won't introduce risk by deferring required work. Dave and Peter, do you want to comment on third-quarter scope and preparedness?
For downstream, we have two turnarounds planned. Montreal has some crude units offline in the third quarter; we expect that to be a fairly minor scope of work with typical turnaround activity and less duration than prior events, setting up longer intervals going forward. Edmonton has a steam cracker turnaround which is typically more complex, but the team is well prepared. They've had turnaround planning milestones well ahead of schedule and have been optimizing the plan for months. We're in good shape to execute and are aiming for flawless execution.
In the upstream we have one major event left in the third quarter: the Syncrude coker outage. It's planned to start around August 20 for about 50 days, and it is an extremely well-planned, routine outage. All our turnaround preparations have been ongoing for months. The team has stretch targets that they're shooting for and we're confident in execution.
More work to do in the third quarter, but overall less than the second quarter, with high confidence in our preparation and execution. That positions us for what we believe will be a sprint in the second half of the year to deliver outstanding results.
One broader strategic question: regarding the trilateral memorandum of understanding, what needs to happen next? If it opens an opportunity and there is a need to underwrite a pipeline to access growth, how prepared would you be to accelerate future growth if a window of opportunity opened?
About a month ago, five oilsands companies signed a non-binding MoU with the federal and provincial governments outlining shared ambitions around carbon policy, expanded market access and the fiscal and regulatory conditions required to attract capital and incent growth. There's a lot of work to do to turn this non-binding set of ambitions into definitive agreements, and while the mood is more encouraging today than in the prior decade, how it affects our plans is still to be determined. We look long term and will be thoughtful on long-term commitments and capital allocation. If selective, high-quality, globally competitive growth opportunities arise and create shareholder value, we have the ability to pursue them. Our position today is not materially different than six months ago; we'll watch developments and preserve optionality.
And that will come from the line of Neil Mehta with Goldman Sachs.
The offshore results were really good this quarter. It's not something we spend a lot of time on these calls, but curious about the sustainability of that production strength and the contribution from West White Rose and other E&P activity. Anything that stands out on the E&P side?
We've seen benefits from the market environment on the offshore assets, which are generally lower-cost on a per-barrel basis. For example, Terra Nova's performance and turnaround improvements have contributed meaningfully. We expect that contribution to continue. At West White Rose there is ongoing drilling activity and the resulting production will depend on that activity, but overall we've been pleased with how the East Coast assets have delivered, particularly in the current market environment.
My other question is on Petro-Canada and retail growth. How are you thinking about that business, its synergies with the rest of the company and how it scales over time?
A few years ago we put together a plan for the retail side and we believe in delivering on commitments. Dave and I rigorously steward that plan and the team has been delivering. In the last year to 18 months they've been executing at lower capital than originally envisioned by leveraging partnerships and creative approaches — in other words, other people's money and creative commercial structures. The entire organization has been subject to increased capital discipline and focus. Our retail sales are now above pre-COVID levels and retail is one of our most profitable channels. Petro-Canada is an important and valued part of the company and will remain so as long as they keep delivering.
I'm showing no further questions in the queue at this time. I would now like to turn the conference back to Mr. Adam Albeldawi for closing remarks.
Thank you, everyone, for joining our call this morning. If you have any follow-up questions, please don't hesitate to reach out to our team. Operator, you can end the call.
Thank you for participating. This concludes today's conference. You may now disconnect.