Good morning, ladies and gentlemen. Welcome to the Suncor first quarter 2013 financial results conference call and webcast. I would now like to turn the meeting over to Mr. Steve Douglas, Vice President, Investor Relations. Please go ahead.

Thank you, Wayne, and good morning to everyone. Welcome to the Suncor Energy Q1 shareholder call. I am here in Calgary and with me are Steve Williams, our President and Chief Executive Officer and Bart Demosky, our Chief Financial Officer. Just before we start, I should note that there will be in the comments today forward-looking information. Actual results may differ materially from expected results because of various risk factors and assumptions. These are summarized in our AIF, and they are available on our website. Certain financial measures that we refer to are not prescribed by Canadian Generally Accepted Accounting Principles and for a description of these, please see our first quarter earnings release. After our formal remarks, we will open the call to questions, first from members of the investment community and then to members of the media. With that, I'll hand over to Steve Williams, for his comments.

Good morning and thank you for joining us. Since our last quarterly call just three months ago, our company has taken some major steps forward. In the past few weeks alone, we made two important announcements in support of our business strategy. Our first quarter release yesterday contained details of strong financial results. We also announced a significant increase to our dividend and a new round of funding for our share buyback program. In light of those announcements, I thought I would take a few minutes right at the start to discuss our commitments to capital discipline. I have been very clear that Suncor will not pursue growth for the sake of growth. I have also said, we will rigorously manage our capital spending program to ensure strong returns for shareholders. Today, I would like to be the more specific about our approach to capital discipline. Suncor is a uniquely positioned growth company. With the best combination of resource, expertise and balance sheet that is unmatched in the industry. Suncor's integrated business model has generated almost $20 billion in operating cash flow over the past two years. Now as we put back cash to work, we are guided by some very clear principles. First, we will target a meaningful, sustainable and competitive dividend that will grow with our earnings and cash flow. This most recent dividend increase, the largest in Suncor's history will result in over $1.2 billion being returned to shareholders in the form of dividends over the next 12 months. Second, we will invest in our base business to sustain and continuously improve performance. This year, our sustaining capital budget is just shy of $4 billion, and as we grow our asset base, we will strive to maintain or even reduce that number. Third, we will invest in…

Thanks, Steve, and good morning, everyone. I would like to begin by echoing Steve's comments on creating shareholder value. Suncor is uniquely positioned to generate strong and growing earnings from today business and invest in tomorrow's profitable growth, all while delivering meaningful cash back to our shareholders and we can do that even in a challenging market environment. The first quarter was a great example of the challenging environment. We saw continued volatility in crude prices, additionally netbacks drop by as much as $50 per barrel from the previous quarter before we balanced our rebounding in March and April. This extreme cycling of crude differentials have become the norm in Western Canada, and we fully expect it to continue until such time of supply, demand and takeaway capacity are in balance, which is likely to take several years. Suncor's integrated business model buffers us against the unpredictable market swings and once again this quarter we produced solid financial results. Operating earnings improved to $1.4 billion, including a record $782 million from the refining and marketing business. Cash from operations was $2.3 billion and that includes another record of $1.1 billion from our refining and marketing and that's despite a $93 million decrease as a result of the Voyageur decision. With expanded crude price differentials driving down the oil sands average realized price, it is important to carefully manage cost and we are definitely on the right track. Despite a very harsh winter in Northern Alberta that impeded our production at times, our oil sands cash costs per barrel dropped by almost 9% from the same quarter last year to $34.80, and is included $32 per barrel cash cost in the month of March, which should give everyone an idea of where we can be when our operations are running according…

Thank you, Bart, and just a couple of notes before we open up for questions. I wanted to just reference our updated guidance, which is available on the website. There are a handful of changes including a decrease in capitalized interest and the impact of natural gas asset sale is also reflected. As I said, available on our website. Then an impact of a few other things. The LIFO, FIFO impact for the quarter was an increase to earnings after tax of $117 million. The stock-based compensation impact was a reduction of $36 million in the quarter and the FX impact was a reduction of $146 million in the quarter. With that, I will open up it for the operator. Wayne, I will just say if you could keep your questions to a strategic level, primarily, we will be happy to deal with detailed modeling questions. We will be available throughout the day with the controllers group. Wayne?

(Operator Instructions) The first question is from Greg Pardy from RBC Capital Markets. Please go ahead.

Three questions for me. I guess first, could you elaborate a little bit more on the debottlenecking initiatives? Second question is, just I think I have answered my own question, but in terms of your CapEx, Annual CapEx into 2020, looks as though the growth capital about 2.3 and the maintenance is about 4 that you are really going to spend no more than 7 to 8 over the next several years and then the last thing is, actually if you can talk just a little bit more about your dividend policy going forward? Should we not be looking for any stepwise increases like we saw today? In other words, should we be looking for dividend and growth more in line with cash flow going forward? Thanks very much.

Thanks, Greg. Let me pick up a couple of those and then I will hand over to Bart to give you a bit more detail around the policy around dividends that board have signed of sign off whole. So, first let me answer the easy one on CapEx through to 2020. I think you've taken the right message. You should expect, I don't want to be committed to specific number, but you should expect in that $7 billion to $8 billion range through the foreseeable future, so not big spikes in capital that were previously anticipated. Of course, we do have we are uniquely positioned as a growth company. We have a long list of very attractive projects, so you will see us as profits and cash flow grow increasing the capital expenditure on growth, but not sort of those spikes that were previously anticipated. Just a few words on the debottleneck and In Situ projects. These are new projects. They do deliver in the next three or four years that additional 100,0000 barrels a day we have talked about. It's one of the benefits you have when you have the extensive assets that we have on the ground. You can start to spot the opportunities where small investments yield high returns, so you will see those focused in a number of areas. They will be focused on the extraction facilities in oil sands. You see them focused around some of the In Situ facilities and around infrastructure as we start to interconnect these facilities. We have great flexibility just to push production and push throughputs off, so we have a mix of a number of very attractive projects there low risk, high return and we believe we can execute them effectively, quickly and if you need any more detail then don't hesitate to follow up after the call. So, let me hand over to Bart on dividend.

Sure. Thanks, Steve. Good morning, Greg. So, just a bit more on dividend, as you look at our integrated business model that we have and the consistency of earnings and cash we can deliver combined with the profitable growth that we are going to be implementing. It means growing cash flow and earnings for Suncor, and that it's our intention to allocate more of our capital and cash in returning it to shareholders. It is a priority for us, and that does not take into account yet. Our In Situ business, where as we go forward here and start to develop more of our growth plans, we are going to look to that part of our business for more of our growth which should be again very high profit, so on the back of that our board has endorsed a policy of framework that will underpin our approach to dividends and the first announcement was today with our 54% increase, so few things I'd just leave you with. First is, for that framework dividends will be reliable, will be sustainable. They will be meaningful in relation to the market and they are going to be competitive and our dividends are expected, and the market should expect them to grow with our earnings and cash flow as that grows as well. We will conduct a dividend review annually and it will be part of our Q4 earnings release going forward. That's a bit of a change we've always done in Q1 in the past. We are moving that up. And just a little bit of a further bit of information that the new dividend equates to about 25% of our 2012 net earnings when we adjust out one one-time items and that put us within the range or close to our target range going forward. So hopefully that gives you a bit more insight, Greg.

Yes, very helpful. Thanks a lot.

Thank you. The following question is from Brian Dutton from Crédit Suisse. Please go ahead. Brian Dutton - Crédit Suisse: Yes good morning. Steve, not only were the per unit cash cost that were also down year-over-year and quarter-over-quarter but the total dollar cost were also down. Could you give us some insight into that? Is that the result of your operational excellence program? Should we be expecting similar total dollar cost in the coming quarters at the turnaround?

Okay, yes, Brian. So let me talk to it. So the simple answer is yes. As we focus on operational excellence and you know it's been a long-term, not a short-term program. We have really been getting at the underlying fundamentals and the things that are driving costs. Se are starting to make real progress. The first part of that initiative was around getting the reliability of the assets up. As you have seen, right the way across the business that’s happening now. We have taken the best people we have across the company where they delivered those results in the downstream and put them together with our team in Oil Sands and we are seeing the same sorts of results. So we are seeing reliability come up and cost coming down. So what you are seeing is an indication of what the future holds for us. I would actually go slightly further and say what's not transparent is that the operating costs in March was $32 a barrel and as we start to drive reliability up, you will see that those are the sorts of numbers that become possible. So we have made significant progress on operating cost. We are so confident now that in the budget this year we committed at the middle of the range was about $35 a barrel. We expect to see that type of progress continue. What initiatives to finding is that we have been able as we expected, given the economic climate, to largely take inflation around our operating cost. So good news, and we see it continue. Brian Dutton - Crédit Suisse: So is it fair to say than that the total dollar cost in the first quarter this year being lower than any total dollar cost of last year that there are hard dollars here being taken out and its just not a per unit impact?

Absolutely. There are real dollars being taken out. One of the things that happens as you become more reliable is you can focus harder and harder n cost. So absolutely, real dollars coming out and per barrel decreases coming. Of course, the one health warning I would give is, don’t lets forget although April has continued very strong, we did shutdown Unit One to plan in the middle of the month and we are into our turnaround now. So we would anticipate that volumes for quarter two will be down as per plan and costs will come up for that period. But where we expect it to be and we still expecting it to hit our guidance.

Thank you. The following question is from Andrew Potter from CIBC. Please go ahead.

Hi, guys. Just looking for a bit more detail on Firebag. How much do you expect Firebag to be producing in around the 2020 timeframe when you look at all the different expansion opportunities and debottlenecking and all that kind of stuff? How does that change to your previous plan?

Sorry. So, yes, let me talk about Firebag. So Firebag is going extremely well. We are very pleased with how Firebag stage three ramps up. We are seeing a similar performance on stage four. We would anticipate having up to its current nameplate capacity, over 180,000 by end of this year beginning of 2014. Also some good news about that. You have heard us confirm, we are expecting Firebag stage four to come in 15% under its sanctioned demand. So that’s about $300 million decrease on that $2 billion dollar project. So lots of good news on the existing Firebag assets. We are then looking at potential opportunities around Firebag and I wouldn't want to commit to a particular year until we take you through in more detail. We are expecting something like 200,000 to 210,000 barrels a day in 2020 timeframe. We have the option that we are looking at of applying part of the replication strategy that Mike MacSween is developing in detail, and we will look at Firebag, we'll look at MacKay River, we'll look at Meadow and Lewis, and we have a lots of good choices, so you will see a lot of our growth focused on In Situ through that period.

Sure. Then maybe if you could just talk a little bit more about the economics on the debottlenecking projects 100,000 barrels a day, can you quantify that in terms of what is the principle supply cost on average for this the 100,000 a day maybe you can do a 20,000 to 30,000 barrels a day or alternatively what the rate of return is on the current price deck?

Hi, Greg. I think you've largely answered your own question there. We are looking at average costs to bring those new barrels on in the 20,000 to 30,000 per barrel range. That is going to deliver return well above our cost of capital at kind of $80 crude prices. So, these are the kinds of projects that the really help drive the return fire and we are confident in all of them, so this is a very much a good news story. If you want to try and get in a little more detail, we can take it after the call as well, but those are the headlines.

Sure. And, very last question just on technology. I noticed in your presentation you did talk a little bit more about technologies that you have in the past highlighted in solvent technology. Could you talk a little bit about that part of your, you corporate it into your plans through the 2020 timeframe or is that kind of an add on for growth?

Yes. I mean, I would like to keep my comments at the sort of high level just in terms of innovation and technology and its application in our business. I mean, one of the things I think we've been is relatively quiet about our commitment to developing and applying technology. If you look at our track record historically whether it was a truck and shovel from bucket wheel whether it was the development of In Situ, whether it's the solvent-based technologies, whether different thermal technology. What we are trying to demonstrate is, we are the leading edge of developing those technologies and character and the nature of Suncor is we will apply those not limited to just In Situ. We have a similar commitments in the mines themselves. In fact, we've recently put into oil sands the first driverless truck up there. So, you will see a continued commitment and rollout of those technologies. For example, the Fort Hills mine has the paraffinic type extraction process in there, so that we can produce fungible bitumen and go straight the market, so you will see us develop and committed to applying these new technologies.

Thank you. The following question is from Arjun Murti from Goldman Sachs. Please go ahead.

Hi. Thanks. Just a follow-up on some the debottlenecking projects. I noticed that you kept your CapEx unchanged this year at $7.3 billion budget, yet announcing this. Were these already contemplated or is the spending perhaps more in future years and then just any notion of timing of when we see the 100,000. Is it progressively over the next four years or more in years three and four? Thank you.

Hi, Arjun. It's Bart. I'll maybe take the first question on the capital. Well, of course, we are always looking at that how to best develop our project and in what sequence. Not all of them were planned in this year. And then way we are going about this in terms of capital is that we plan and fully expect to be able to accommodate these projects within our already announced capital budgets, so it's not incremental. It's more about reallocation of capital to the highest return and that's a core part of our capital discipline framework going forward. Several of the projects are in-flight already, or have been approved and will start here shortly. In terms of how they will sequence and ramp up, we would look to see more of the production coming on in the back half of the three to four year timeframe that Steve referenced than in the first two years.

That’s very helpful. I know you are going to provide a Fort Hills update later this year, but I appreciate the comments that you don’t expect any spiking growth capital. That’s helpful couple color. The other part of the question was on the Montreal Coker. What the status of that potential project is?

Yes, again, I would just back off the Coker is one of a series of potential projects for Montreal. Montreal is a very important asset to us. It’s the one of the four refineries we have which is not integrated back into Oil Sands and inland crudes. So we have a sequence of investments that are possible. The very first one, for example, is to be able to connect Montreal via rail into inland crudes. Low-cost, high return project that we can execute quickly. That project is already in-flight. The facilities will come onstream probably by the end of this year. That will enable us to move somewhere between 20,000 and 40,000 barrels depending on the quality of the crude into Montreal early in 2014. So that’s what I would call the capital light end of sequence of projects we have. We then have a range of projects right the way through the other bookends, which is the Coker project and what we have been looking for is, we like the Montreal refinery. We are committed to our operations in Quebec. We are working very closely with the federal and provincial government to reverse the flow on line nine. As we start to get increasing confidence around the reversal of that line, and it is looking very good, you will start to see us committing to the bigger projects. For that, as you will recall, the main components of that project were purchased and are being mothballed in a protected certain, (inaudible) blankets on the on the cokers which are actually in the laydown area next to the refinery at the moment. So were able to execute that project reasonably quickly once we sanctioned it. So we are keeping on the line nine. We are keeping our eye on that project. That will be in towards the end of this year, beginning of next year, we look at sanctioning.

Steve, that’s very helpful. Just a final follow-up from me. I think you might have just partially answered it but then we do see further delays and whether at Keystone XL or Northern Gateway or either of them. Can you talk about other ways to get your crude out of the Alberta region? If you have any updates on that, that would be great.

Yes, certainly. The first thing I would say is, one of the strength of Suncor having been a pioneer and been in the business so long is, our logistics and our trading capability around access to market. So we have an interest in the Gateway line. We have an interest in Keystone XL. We have an interest in line nine reversal. We have an interest in the reversal or the switching of the gas line to the oil lines to the eighth which is currently being discussed. We have already a business and plan to continue it around movement by rail. We have a marine department and move materials globally with around our lubricants business. So we see logistics and connectivity is an area of deep expertise within Suncor. That is one of the reasons why through all of the market disconnects with the access the market issues with the big differentials you see a relatively consistent high level of earnings from Suncor. So amongst our competition, of course we are with the rest of industry, we want access to market. We think getting access to tidal water is important but actually we are very well positioned relative to competition. So were involved in all of those lines. We have many alternatives and flexible solutions and we don’t see access to market actually have an impact on our business for a considerable number of years.

Thank you. The following question is from George Toriola from UBS Securities. Please go ahead.

Thanks. I have a couple questions. The first is on Fort Hills, now expecting you are big lead in the year, can you talk about what capital intensity and the background to this is the market is very skeptical to the economics of any mining project and the capital intensity will seem to be simply has not been supportive. Can you talk about the capital intensity that you require to make this economic?

Okay. Again, yes, let me just talk in general terms. I hope one of the things that is becoming clear about that Suncor is, that we have been saying what we believe and then you've seen our actions follow it, so we talked about operational excellence. We understated and then we hope we are starting to over deliver on reliability in operating cost. We talked about capital discipline and you've see us understated and over deliver. We bought the Firebag projects in under the cost we expected, and they've come up faster than we expected, so hope you are starting to see a pattern of. We say what we believe and then our actions follow up. When we get to Fort Hills, let me say I wouldn't speak about the specific capital intensity of it, because that would be inappropriate until the next quality of our estimate survey that will max the process at the moment, but a few things I would say, Suncor was the pioneer in oil sands around mining. We, 10 years ago, started up the Millennium mine. More recently, we invested and started up the North Steepbank mine at a fraction of existing cost. Not surprising, because it was utilizing assets that were already on the ground, but it was in a sort of $5,000 to $7,000 of flow in barrel. My point being, we think we understand this business. If I compared to some of the outliers in the market, and I won't mention specific names, we look very closely and we understand what has driven those costs. We are looking at Fort Hills in detail and the commitment we give you is we will only progress those projects that gives us good returns. So, with the cost per flow in barrel are in the range that are acceptable to us and that the returns generated are significantly higher than our cost of capital. You saw us take the debate on Voyageur and we canceled the project. You've seen us take a position on our gas business where those assets don't align with our core strategy. So, I hope what we are demonstrating is, we [around] the economics and we are willing to make these tough decisions. But the final point I would make on Fort Hills is, we have largely de-risked it, because we only own a portion of that project. So, in terms of cash flow, it's not actually that significant to Suncor relative to the rest of our capital spend, so watch this place and by what we are aiming by September-October to come out with the specific numbers to answer your questions.

Okay. Thanks. Then my next question is on return on capital employed. Do you target on return on capital employed?

Hi, George. It's Bart here. We do have internal targets, but as we started to develop and deliver on our capital disciplined approach and profitable growth, it is evolving. What I would say is that all of the projects received, it's actually an incredible amount of scrutiny and detailed review prior to any kind of sanction. We're only looking at those projects well above cost of capital. The projects that have been sanctioned this year or all actually well more of 15% return on capital employed. That's on a full [cycle] basis and so that hopefully should give you some indication of the kind of returns that we are targeting.

Thanks, Bart. And, maybe just a follow-up, in a more normalized for the downstream environment, when I look at your return on capital employed, quite a substantial amount of that is due to the earnings from the downstream business. In a more normalized downstream environment, do you see the integrated business being able to consistently generate upwards of 10% return on capital employed?

A simple answer is yes. Of course the power of the Suncor integrated model is with our view of the future. Those returns and margins in the long run actually belong to the upstream and Oil Sands. But because of the difficulty in predicting those differentials year-to-year, that’s why we have an integrated business and that’s the power of the model we have. So all we would expect to see is those returns will move from the downstream back to the upstream. That’s our view in the mid-long run and that’s where they will go.

Okay, thanks. last question for me.

Sorry, George, it's Bart. Just one other thing I would add to and build on Steve's comments is that our downstream business has been and likely will continue to be the most profitable R&M business in North America on a per barrel installed of capacity basis. If you look back, probably over the last decade, that has been the case for most of that time period. It’s the unique combination of inland refinery and unique geographic location in short markets that allows us to continue to deliver on that, year-after-year-after-year and as well, given the high reliability of those assets. So double-digit returns were what was been achieved by that business even in the very, very bottom of the cycle with much lower cracks. So when the value returns to the upstream part of the business, as is our full expectation, that business will continue to perform higher above the rest of the market.

Thanks a lot. But last question for me. This industry wise, what are you guys seeing in terms of cost inflation and this is more capital cost inflation I am talking about here because we have seen you guys have taken Voyageur off the market. All other people are slowing down capital expenditure. Are you seeing capital cost come down or not yet?

I think there are several effects going on. One, in general, there still is a lot of construction activities in the Fort McMurray area but we are not seeing the type of inflation we have been seeing in previous periods. I think in our case, I would say that without doubt the focus on a more rigorous and disciplined practice is the focus on cost and quality rather than schedule is having a significant impact. So we are now seeing a pattern of bringing projects in under cost. So we have a number of projects that have come in like that. Part of that is because, of course, that was assumed inflation when the projects were approved and its not there. Part of it is the more disciplined and rigorous project execution practices. So the bottom line is, overall we are not seeing the inflation that we were seeing before.

Thank you. The following question is from Guy Baber from Simmons & Company. Please go ahead. Guy Baber - Simmons & Company: Hi, and congratulations on the result this morning, guys. I wanted to follow-up on the topic of returns. The new slides that you are targeting 15%. ROCE, ex some of the major projects in progress. I was just wondering if you have a timeframe over which you would expect to realize that improvement versus where you are now? Then also what are the biggest drivers that we need to be watching? Is it mainly the improving reliability? Is it debottlenecks? Or is it major project driven?

Yes, it is all of those things. How I would start to think of those three areas that we talked about in a sequence. So operational excellence, spend the capital discipline and that leads to profitable growth and those things then factor in to our overall return on capital employed. The two or three signs, I would see around operational excellence are reliability coming up and costs coming down. Then as Brian said earlier, that’s absolute costs coming out of the system as well as per unit cost as reliability and production is increasing. So, keep your eye on those and those will give you a good indication. One of the of the best indicators for me is the unit two reliability, because it has been our biggest challenges we brought back that plant up to its nameplate capacity, and we are seeing for the four months this year it's world-class. It is up there at 95% utilization. Then I would move on to the two or three metrics I look at around capital discipline are around project execution, so are the projects coming in at or below the cost we expected and then are we bringing those units up to the operating levels we'd expect them to come up to quickly, so those are the things we can effect in the short-term. What you've also seen, which is accretive to return on capital employed is us willing to look at mature low return businesses and take and sell them, because they are not poor to our strategy. That adds to return on capital employed as well, so the net result of selling the gas business would be return on capital employed will increase. And, relative to where we would have been, the tough decisions we made around Voyageur are also accretive to return on capital, so there are some you can say around operations, some longer-term. I wouldn't give you specific numbers. I mean I looked even at current prices for the first quarter. If I factor out the Voyageur, which are short-term consequence decision then we are back up at the sort of investment half '12 level. Guy Baber - Simmons & Company: Great. Then on the point of reliability. You have a lot of maintenance obviously scheduled over the next couple of quarters and I was just wondering if there was anything you would specifically point out above and beyond the normal recurring maintenance that you have every year if you believe my specifically address the problem that you all have been seeing or lead to some visible improvements to reliability and operations kind of over the back half of the year.

Yes. I mean, I won't go into too much detail on specific ones, but you do put your finger on something which is very clear to me, but not necessarily transparent to the market yet, which is we have made material and significant improvement on the unit two performance. If the overall upgrading level is not clearly visible yet, because as the unit one was approaching the end, we took unit one for the first time to industry-leading run rate that went to five years between turnarounds on this run. At the end of it, we have some fractionation issues in the one of our towers. We did the calculations and decided to continue, but we know we can get somewhere between 15,000 and 25,000 barrels a day of upgrading when we bring that unit back up, so you will see reliability levels in the back end of this year that that we haven't demonstrated before. So, I think, as you get into the third and fourth quarter we have one good maintenance on the unit two vacuum tower, but you are going to start to see monthly and quarterly run rates which will set new records. Guy Baber - Simmons & Company: Okay. Perfect. Thanks for the comments.

Thank you. The following question is from David McColl from Morningstar. Please go ahead.

Good morning, everyone. Thanks for taking the question. I just want a bit of a clarification on the 20,000 to 30,000 number per flowing barrel for the In Situ projects. You talked a lot about that being kind of debottlenecking. Is that also a realistic target for MacKay River Phase 2 and possible expansions to Firebag just 5 and 6? I know that's a little bit further out and harder to pin down on. Just wondered if you could give a bit of clarity around that?

David, it's Bart here. So, the 20,000 to 30,000 average is reflective for this next 100,000 barrels and within that it is the whole series of different largely debottleneck projects, so that is a set of numbers that we are very confident in. We are actually and I think Steve mentioned this earlier, we are just in the process now of working through what our new replication strategy will look like for our [saggy] business and that includes its application across all of the potential saggy safety assets that we have which is based on the work we've done today look at all be very, very high quality. So we haven’t actually come out with those numbers yet. We will be working on that through the remainder of the year. We would expect to have more information towards the end of the year.

Thank you. the following question is from Paul Cheng from Barclays. Please go ahead.

Good morning. Two quick questions. First, I just wanted to clarify, Bart, I think earlier you said or maybe its Steve, that growth capital should not be more than this year's $3.3 billion. Also that you guys are working and trying to see whether that you can further reduce the base capital from the $4 billion. So if we assume that with everything going on that your mix, say three or four years, your CapEx is still growing to be somewhere around the $7.5 billion?

Yes, that’s a reasonable assumptions and will be in that $7 billion to $8 billion range. We are working hard on sustaining capital. I am seeing some real progress. We have had, what we have been calling these lumpy projects where we have big one-off pieces of sustaining capital we have to spend. An example would be the TRO project in excess of $1 billion. You don’t have to keep repeating that. So I think we want to understate and over deliver. So if you use around the $4 billion, we are working hard to reduce that and we will try and leave with results than just to say it. On growth capital, yes, you are broadly right. We will be in that $3 billion to $4 billion range. We have a few hundred thousand barrels a day of growth that we have been talking about. They are relatively low cost, as Bart would say. Two of those projects are already approved and in-flight and included in our activities and so in our budget this year. Then the other ones they will compete for those growth funds alongside other projects as well. So you should see it within that overall $7 billion to $8 billion.

Steve, let's say in the near to longer term, strategically speaking, when you are looking at your portfolio, in terms of capital allocation, looking at mining, I understand that you guys probably that had one of the better track record in the mining project than some of your peers. (inaudible) when you are looking full cycle return between your portfolio in and the potential project comparing to your mining, do you actually think that the mining would be able to generate similar return? If they are not, from the capital allocation, why not delay the mining and just focus on the (inaudible) for the next several year until you find a way to put the mining into a similar return base mine?

It’s a great question, Paul and I don’t to do sand over defenses. We have a long list of very attractive projects, in both In Situ. I think from the information I can see, we have amongst the industry-leading best In Situ resources. We also have some of the best mining opportunities in the industry. So they will compete on a real basis for funds. If there is a clear leader in those, then that’s the horse we are bet. One of the things about a mine, and I just want to say around the economics of that, of course a mine, you have to view it a little bit differently than In Situ. A mine is higher capital at the beginning and then lower sustaining capital as it goes and a lower operating cost. It also has a much lower risk and often forgotten is the resource quality. So for a mine, it is very easy. Once the project is done, it is almost like bond. It just gives you enough. So for example, Fort Hills has a reserve life of somewhat north of 40 years. So once you have done it, you are effectively stamping a return of that thing for twice the life that you will depreciate that asset over. In Situ is different. It's lower original capital costs, higher sustaining capital cost and different drivers for operating cost. So we take all of those factors into account. Historically, given our experience, we found that both compete through the full cycle. Right now, with gas prices where they are and technology moving on, In Situ has done very well. So, we will let those projects complete on normal economic metrics of return and quality of resource.

Thank you. Just wanted to say a final thing on behalf of all your investors, I think everyone is, we now appreciate your decision to go with a higher dividend increase and return more cash to shareholder. Thank you.

The following question is from Mark Polak from Scotia Bank. Please go ahead.

Good morning, guys. First question is just around the upgrader reliability, which growth you identified there. Should we just think about that as 90% utilization on 350,000 barrels a day of capacity? And, with respect to some of the lower hanging fruit you've got, just curious what you need to do to achieve this and if there is much capital associated with that?

The 90% is in our grasp right now with no capital. So, if I look at it, we can get to utilization rates. We've already done it on unit one for extended period. That's where we expect the unit to come backup, when we start later in the second quarter and we have a program of work which is largely around procedures, operating practices, quality and training of individuals, a culture on operational excellence, which gets us up into that range. Beyond that, we have further programs which are going to take us up, we believe, on unit two in the mid and longer run. We can get up to 95% plus, and I want to us to stay in that pattern of understate and over deliver. If you look at what happened to our refineries, you've seen as we put these practices into place, we're able to go beyond nameplate capacity. So, our first commitment is as you say, let's get to nameplate capacity we can see in that timeframe. We then think, we can continue this program beyond that point with relatively low capital costs.

And, operator, with that I think we are over time. We'll take one more question and will certainly pick up the rest of them later today.

Thank you. The last question is from Amir Arif from Stifel, Nicolaus. Please go ahead.

Thanks. Good morning, guys. Just a couple of quick questions. First on the 100,000 barrels a day of new In Situ production coming, can you breakdown how much of that is debottlenecks versus new growth? I think, in your slide you mentioned 30, but in some of your comments you were saying, it sounded like it could be a large portion.

Hi, Steve Douglas speaking now. It probably would not be fair to characterize it all as In Situ. In fact, it's a range of debottleneck projects across both, our mine, our In Situ projects and are logistics. And part of that is it frees up mine capacity to feed the upgraders and support increased reliability to the upgraders, so it's really a range of project which leveraged the great deal of feel we have in the ground and start to optimize your operation.

Okay, but could you give me a sense of how much of 100,000 is going to be Greenfield?

There is no Greenfield in that. These are all increases in your MacKay River, in your Firebag, in extraction and base facility.

Okay. Got it. And just a second question as you review your portfolio, is there any other areas that don't meet your view of profitable growth or are we done with the large asset sales? I was just thinking of your international operations.

We will constantly review. When we came out of the merger, we had a clear strategy around gas assets and taking it is essentially from a conventional to potentially an unconventional business. That is largely done now, because the North American gas assets with this sale will be close to zero. We constantly review that program. We do have other assets as you know internationally, but currently have got no plans for those.

Yes. Thank you.

With that I will thank everyone for your participation today. And, just a reminder, we will be available, both the Investor Relations team and the controllers for any further calls throughout the day. So please contacted us by e-mail or phone. With that, thank you very much.

Thank you. That concludes today's conference call. Please disconnect your lines at this time. We thank you for your participation.