Kam Sandhar – Director, Investor Relations Brian Ferguson – President and Chief Executive Officer Ivor Ruste – Chief Financial Officer & Executive Vice President Drew Zieglgansberger – Executive VP-Operations Shared Services Harbir Chhina – Executive Vice President-Oil Sands Robert Pease – Executive Vice President-Markets, Products & Transportation.

Greg Pardy – RBC Capital Markets Neil Mehta – Goldman Sachs Arthur Grayfer – CIBC Phil Gresh – JPMorgan Mike Dunn – FirstEnergy Paul Cheng – Barclays Benny Wong – Morgan Stanley.

Good day ladies and gentlemen and thank you for standing by. Welcome to Cenovus Energy’s Third Quarter 2015 Financial and Operating Results. As a reminder, today’s call is being recorded. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session.

[Operator Instructions] Members of the investment will have the opportunity to ask questions first. At the conclusion of that session, members of the media may then ask questions. Please be advised, this conference call may not be recorded or rebroadcast without the express consent of Cenovus Energy. I’d now like to turn the conference call over to Mr.

Kam Sandhar, Director of Investor Relations. Please go ahead, Mr. Sandhar..

Thank you, operator, and welcome everyone to our third quarter 2015 results conference call. I would like to refer to you the advisories located at the end of today’s news release.

These advisories describe the forward-looking information; non-GAAP measures and oil and gas terms referenced to today and outline the risk factors and assumptions relevant to this discussion. Additional information is available in our third quarter management discussion analysis and more recent annual information form or 40F.

The quarterly results have been presented in Canadian dollars and on a before-royalties basis.

Brian Ferguson, President and Chief Executive Officer, will begin with an update on our workforce and cost reduction initiatives, and then turn the call over to Ivor Ruste, Executive Vice President and Chief Financial Officer, who will discuss our financial performance.

Following that, Drew Zieglgansberger, Executive Vice President, Oil Sands Manufacturing, will provide an update of our operating performance. Brian will then provide closing comments before we begin the Q&A portion of the call. Please go ahead, Brian..

Thanks, Kam. Good morning. Cenovus continues to deliver on the commitments that we have made to our shareholders, we are positioning the company to thrive in protracted low commodity price environment. Company wide, we’re on track to achieve up to $400 million in combined operating capital and G&A cost reductions this year.

That's doubled the savings we originally targeted at the beginning of the year. We expect about 60% of these cost savings to be sustainable, even with oil prices recovering to the $60 to $65 WTI range. We stated last quarter, we’re evaluating our compensation, benefits and time-off practices.

We have completed this review and we’ll be making changes to our practices starting in 2016. To make sure that they are aligned with those of our peers and with today’s current market conditions. Part of our cost reduction effort has also focused on workforce.

It is always difficult when we have to let good staff members go and we take these decisions very, very seriously. We have more closely aligned the size of our workforce with expected activity levels going forward. The previously announced workforce reductions of 300 to 400 staff, has actually been increased to 700 staff.

These reductions are now being uncompleted. Anticipate these will result in an incremental $100 million of annualized cost savings beginning in 2016. Developing our oil sands assets remains the focus of our strategy. However, we will adjust our growth plans according to market conditions.

Foster Creek Phase G and Christina Lake optimization and Phase F expansions remain on track to add 50,000 barrels per day of net incremental productive oil capacity by the end of 2016. We will continue to be disciplined with our spending plan allocating capital in following priority, upstream and downstream sustaining capital.

A sustainable dividend representing a targeted long-term payout ratio of 20% to 25% of expected after tax cash flow. High return growth projects at Christina Lake, Foster Creek, and Narrows Lake, and finally targeted high return conventional oil drilling opportunities.

I expect our 2016 capital spending budget to be within in the range of $1.5 billion to $2 billion. A low end of the range would see us completing only the current expansion phases at Christiana Lake and Foster Creek.

The high-end of the that range would include growth capital related to the reactivation of Christina Lake phase G, and Foster Creek phase H, and will remain dependence on the progress with our cost reduction initiatives and fiscal and regulatory clarity.

I’m now going to turn the call over to Ivor Ruste, our Chief Financial Officer, to discuss our financial performance and balance sheet strength..

Thanks, Brian. We exited the third quarter with approximately $4.4 billion at cash on our balance sheet. Our net debt metrics at September 30, 2015 were 13% net debt capitalization and 0.8 times net debt to adjusted EBITDA.

With the depreciating Canadian dollar, no debt maturities until 2019 and favorable rates on outstanding debt issues, we do not have plans to retire debt in the near-term. Maintaining balance sheet strength is a top priority, along with continued investment in our core oil sands assets, as Brian discussed.

In this challenging business environment it is absolutely critical that we continue to maintain capital discipline. The board has approved the fourth quarter dividend of $0.16 per share, which is unchanged from the third quarter. While the DRIP remains in place.

Going forward, the Company plans to purchase common shares required for the DRIP in the open market, eliminating dilution caused by the issuance of shares from treasury. We reported cash flow per share of $0.53 in the quarter which is slightly ahead of consensus estimates, partly driven by lower operating cost and G&A expenses.

Third quarter results were impacted by weaker benchmark pricing for a heavy oil production and lower utilization rates at our refineries. The turnaround at Wood River is complete and we expect to see higher throughput rates shortly.

With today’s release we’ve updated our 2015 guidance, production levels continued to be strong reflecting good operational performance. At the mid-point, our oil sands non-fuel unit operating cost guidance is down nearly 30% from our January 2015 guidance.

Despite the production impacted Foster Creek of the forest fire in Q2 and the divestiture of our royalty and fee lands business. Our production forecast remains unchanged for 2015 due to the strong results achieved to-date.

We cannot control our commodity prices but we’re extremely focused on the cost side of our business, producing our cost structures will enhance our competitive position and the profitability of every barrel we produce. I’ll now turn the call over to Drew to discuss our oil sands operations and are focused on lowering operating cost..

Thanks, Ivor, and good morning everyone. Our teams have taken a pragmatic approach to increasing the efficiency of our operations, prioritizing our work, which has led to reducing our cost structures. As you have seen from our results this morning, we have made a tremendous amount of progress to date.

I’m also proud to report that our teams achieved this with our best safety performance to date. We continue to look for ways to extract the most value from our operations and I’m confident that our teams will be even more successful in building our progress.

Our oil sands operating costs per barrel were down 23% in the third quarter compared with the same period last year. These improvements include cost savings realized from working with our service providers, working with our supply chain on rate negotiations, productivity increases, and continued optimization efforts across all the operating teams.

Christina Lake continues to demonstrate top tier performance averaging an SOR of 1.7 in the quarter, and continuing to run above nameplate capacity. Our optimization project is now complete and it came in under budget.

We expect the optimization project to ramp up over the next 12-month period adding 22,000 barrels per day of gross productive capacity. This will take Christina Lake's gross production capacity to 160,000 barrels per day.

Production volumes at Foster Creek were up 26% compared to the third quarter of 2014, as operations returned to normal following the forest fires we experienced during this – the end of the second quarter this year.

As expected, the flush production associated with the restart has begun to taper off and we anticipate fourth quarter production volumes to be within our guidance of 66,000 to 68,000 barrels per day net. Looking ahead, our operating teams continue to foster culture focused on returns in value, rather than one solely focused on achieving growth.

We will continue to evolve our operating practices to ensure our business remains competitive, regardless of the commodity prices. I’ll now pass the call back to Brian for some closing comments..

Thanks, Drew. Cenovus has the strongest balance sheet of any company that I’ve worked at over the last 35 years. We are well-positioned to thrive in this challenging commodity price environment. We have tested our financial resilience at current commodity prices through 2017.

And I’m confident we have the financial capacity to execute our three-year business plan. We’re targeting $400 million in cost savings for 2015 with another $100 million in anticipated savings related to the workforce reductions for 2016. Foster Creek and Christina Lake remain our top capital priorities.

We will provide more details about our future plans with our 2016 budget announcements in December. The Cenovus team has now ready to respond to your questions..

[Operator Instructions] We will now begin the question-and-answer session and go to the first called. Your first question comes from the line of Greg Pardy from RBC Capital Markets. Your line is open..

Thanks, and good morning all. Brian, you’re quoted in the paper, I guess, last week is not being involved in M&A as a buyer.

So and I’m just wondering if you could tell us a little bit how you think about M&A?.

Good morning, Greg. Thank you for the question. We’ve always had an active portfolio management in a particular divestiture program.

The best example I can give of that was the sale of our royalty lands earlier this year, which has really strengthened our balance sheet, we’re continuously looking at ways in which we can optimize our portfolio focusing on our core strategy, which is the oil sands.

I believe that it’s my fundamental responsibility as a CEO to always be looking at ways in which we can maximize value for our shareholders. And as it relates to any particular rumors or specific transactions or other speculation, those are things that, we’re just not going to comment on.

Thanks for that. Second thing, Brian, is you have point of talked a fair bit in the way of cost reductions already. In terms of new projects, so do you see the capital intensity there on new oilfields projects, as having materially changed? At this stage is it too early.

And then secondly is with respect to the deferred phases you’ve got at Foster and Christina would you expect the capital on those projects to come in lower than initially expected or are they too far long?.

So I will just start the answer to that question, then I will ask Harbir to respond to that Greg. Our focus here is making sure that our cost structure, we continue to drive it downward, but the trend line continues to be downward.

And we are positioning ourselves, so that Cenovus in our cost structure can be competitive against tight oil here in North America. Their broad strategic statement Harbir.

So Greg, so what we are trying to do is, cuts about 30% of our capital for these projects on a total F&D basis. And some of the things that we’re working on today, number of things were laid out a couple of years ago that are worked really well. The steam circulation going well, the performance is really well.

We really think we constructed to drill these wells longer, go from 800 to as high as 1,600 meters. We think we can increase our well spacing from 100 meters to something in that 140 meter range.

So those type of things we think are going to lead to cost reduction, but at the same time we are seeing given mineral prices are our bids, our cost structure is starting to change in terms of operating here in Alberta..

Okay. And then with – just with the deferred, I mean, you’re pretty weighs a lumpy, you’re quite far long already on the Foster Creek expansion that was deferred. You’re I think only 10% on the way on the Christina Lake.

With the two of those then should we still be thinking about capital intensity that we initially had modeled, but you wouldn’t expect any changes on those or could those be lower when you actually decide to resume?.

Yes, because of what you just said, the completion has set to – in that 90% range. There will be limited costs on those ones, but going forward on the new phases, we expect to see significant cost structure improvements..

Okay, great. And, thanks for that color. Brian just the last question, I mean, you laid out there, I am just curious you talked – just talked about changes and you’ve done your review in terms of – in terms of compensation and workforce policies.

Is there any specific we should be thinking about for next year or is this more internal, I am just trying to – trying to understand that?.

So just to reiterate, we expect that over the course of 2015 that our workforce reduction will be approximately 24% over the course of this year, believe that that is going to result in at least $100 million and annualized salary savings because of the reduction in the workforce in 2016.

We have reviewed our competition, our benefits practices all that, we will ensure that they are competitive in today’s marketplace. And I guess very specifically, one of the things that we have done is that effective January 2016.

We have eliminated the first and third Friday off-policy that we previously had and we moved to something that is more market competitive in today’s world..

Okay, I can tell you that there are probably resilient shareholders that are probably really happy to hear that, that came up to the question even yesterday for me. So very good, thanks very much all..

Thank you..

Your next question comes from the line of Neil Mehta from Goldman Sachs. Your line is open..

Good morning. Brian, I was wondering if you could start off by talking about your outlook for the Alberta regulatory environment and what you’re watching there as you think about the potential pull forward of differed projects..

Thanks for the question. So the – as you’re aware the Alberta government has undertaken a review, it has got panels looking at both climate policy and that the existing royalty reviewing here in Alberta.

I can tell you that Cenovus and I know cap [ph] had been very engaged with these two processes, we’ve submitted our recommendations and we have had the opportunity for ongoing dialogue and inputs on a very regular basis to both of those panels. I would tell you that today I’m more encouraged with regard to the nature of the process, the engagements.

And I think frankly it is a very healthy question to ask by our government, how do you make the oil and gas industry in Alberta vibrant over the next 10 years, because the next 10 years we’re going to look different than the last ten years. So I actually think that that’s a healthy question to ask on the price oils around $45 WTI..

Thanks Brian.

And the second question relates to the downstream business, may be talk a little bit about the drivers of value on a go forward basis how you think about potential growth had some of the assets and integration any high-level thoughts to help us frame how you want to drive or [indiscernible] from that business over the next couple of years, would be helpful..

Sure. I’ll start a response to that and then ask Bob Pease, who is President of Downstream to expand. Our strategy is an integrated strategy. I think that that has worked well for us. And it will continue to be part of our core strategy. We go forward to have Downstream – to have Downstream as a part of our overall strategy as we go forward.

With regard to specifies that we’re looking at strategically, over to you Bob..

Thank you, Brian. So I think – I think as Brian indicated we do have an active A&D activity, business development activity. So we do stay in touch with the markets to determine where there are opportunities to either expand or contract our footprint.

Clearly the strategy, Brian articulated of having this portfolio, an integrated portfolio, provides financial flexibility refining has been a strong generator free cash flow tends to be offsetting in cycles with the upstream side. So we do keep active monitoring on that. Our production of heavy oils of our bitumen continues to increase.

So therefore, we do watch for those opportunities, but we will only bring forward ideas for consideration that not only need all those strategic hurdles but also deliver value accretion it’s got to compete against capital to gets our primary objectives, which is the thunder organic growth.

But we do stay actively watching that has been very solid component force and we expect to be a part of our portfolio looking forward..

I would just add to that we’ve obviously got well underway and nearing completion of bottleneck that expands our existing heavy capacity would drove by about 10% for the on stream around the middle of next year.

So that’s an immediate increase in heavy capacity, and Bob’s team continues to be focused on how we continue to improve margins in that core business for us. So that is our current focus, is continuing to improve the exciting business..

And last question from me on the differentials, we’ve seen them come in a little bit here with Flanagan South and then Alberta Clipper. Any thoughts in terms of how this plays out from here as production increases, but we seem to have a little bit more pipeline takeaway capacity..

I’ll deal that one as well. Yeah I think that’s right we saw things starting to get tight until those additional pipelines and those expansions came on. At this point, we don’t foresee any added capacity coming in the near-term and we do know there’s incremental production that is coming online up in Alberta.

So our expectation is, you will start to see continued pressure on that differential, it’s our belief that rail economics in that environment, improving rail will be an essential component for some time until additional major pipeline expansion can change that.

But, yes, we would – in the movements we’ve seen are right in line with what we’ve expected and but we would expect a gradual widening out of those differentials in the near term..

All right. Thank you..

Your next question comes from the line of Arthur Grayfer from CIBC. Your line is open..

Good morning. Just a couple of questions for you. The first one is you made a comment Brian about that you tested your financial capacity to $45 in the next few years. Can you elaborate on that? You highlighted that includes a capital – growth capital on the dividend.

Does that suggest in that scenario that there will be growth capital to Foster Creek H and Christina Lake G, and beyond that what is the constraints in that comments, is that because of specific debt levels or is that specific debt ratio, if you could elaborate please?.

Thanks for the question, Arthur. So, yes, we have taken a look at our financial capacity.

If you were to see the current $45 WTI price environment prevail through 2017, as a broad statement given the uncertainty that we have in the macro environment, we’re going to tend to run a balance sheet that that we will see our managed debt levels less than what we would in a more normalized price environments.

So we’re taking a conservative approach to that. The specifics that we would be focusing on in this environment would be to complete the existing phases that are under construction right now Christina Lake and Foster Creek, which is G at Foster Creek and F at Christina Lake.

If we proceed with that, as mentioned, we’ll see a 35% increase in our oil sands capacity over the course of 2016. That of course ramps up over 2016 and 2017. So we continue to see growth in overall production levels. We would look at and I mentioned where I would expect our capital programs to be at next year.

In that scenario that we’re talking about a year, we would tend to be at the bottom of that range around $1.5 billion level in trending downwards over 2017. And under that scenario we would still have a very significant amount of cash on the balance sheet at the end of 2017..

Okay, great. That’s very helpful. And then my last question is any updated thoughts on the presence of the upstream roll perhaps we could hear some additional implements..

Sure. So I’ve actually been continuing with the interview process, I had a couple of interviews last week, I’ve got some additional interview scheduled in a couple of weeks time to follow-up. I would say the interest level is good.

and we are very much focused on and have been discussion with people that are very experienced leaders that have seen numerous cycles that are well experienced with functional model with focus on driving costs, focused on manufacturing approaches to the oil and gas industry.

So somebody is a well seasoned leader and I would say very specifically that for me that the prime objective here is to find the right individual that I believe is going to be a good fit with the leadership team here. I am not working to any particular deadline. I want to make sure that I’ve got the right individual.

And I am definitely encouraged by the interest that I’ve seen..

Great. Thank you very much..

Thanks..

Your next question comes from the line of Phil Gresh from JPMorgan..

Hi, good morning or good afternoon.

With Narrows Lake maybe you can just talk about how you’re thinking about what is going to be required to potentially move forward with that project at some point? What kind of capital cost reductions you need to see from here? What have you seen so far, what you need to see from here?.

Hi, I’ll ask Harbir Chhina to comment on that..

Yes, so I think our highest priority right now in terms of project is Christina G first and Foster Creek H1 would be the second highest priority and then Narrows would be the third highest priority and so we’re – one of the things we are continuing to look at is – how to merge the Christina core area and the Narrows area to cut cost, we already started to use, when we were building in lot of the infrastructure to get the synergies and the teams continue to look for ways to bring that cost down.

So that we’re ready when the prices are there, that we can restart this project. And also stability in the province.

Sure. Okay.

And – I mean, do you feel like you still need 25% cost reductions to make Narrows work or is it something less than that at this point?.

No. We feel that overall given where oil prices are today and applying new technology, given the savings we’re seeing on how all the wells are performing, then the earnings on the wells, how we’re completing them, the spacing, the well length, all of that that’s is capacity getting – going and get slide to all our projects going forward.

That’s why our target is to get to a 30% reduction in total F&D. Projects that have already been started, that are 50% complete or in case of Foster F and Christina, sorry, Christina F and Foster G, there’ll be limited savings there. But our goal is to, for the new projects to get – try and get that 30% reduction.

But that’s very difficult to do in a project that’s already 50% to 80% complete..

Sure. And just on the Christina G and Foster H, just to clarify, I apologize I miss that earlier, had to hold late.

But is there a need to reduce the capital cost of those projects to move forward, or is that more about the balance sheet in the oil price for those two?.

Yes, to move these projects forward, we have to get a change in cost structure to move these projects forward. And that’s what we’re trying to do with technology in new ways of doing things. And we are starting to make a dent in that. Like I said, we are – the learnings that we’ve had on the downhaul and the sustaining capital.

We think we can achieve that. And that’s what we need to prove to Brian before we move ahead with these projects..

Okay..

If I could just add a little extra color here. We’re using and we’ll be using a $60 flat price when we’re establishing our three-year business plan and we’ll be announcing the capital associated with that at our December conference call after we’ve reviewed that with our Board of Directors. We’re not in any way relying on price to recover.

We are very much focused, as I said earlier in the call, around how do we drive sustained cost improvements across all aspects of our business both oil sands conventional as well as the downstream and as I said our mindset is that, we absolutely have to be able to compete with tight oil in terms of cost structure..

Sure, so you are basically saying that, effective dollar brand right now, Christina G and Foster H are quite there, but you are quickly moving in that direction.

Is that, okay?.

I did not say that, I said we were to announce our three year business plan in December..

Okay, all right. Thanks..

Thank you..

Your next question comes from the line of Mike Dunn from FirstEnergy. Your line is open..

Thanks, Arthur already asked my question..

[Operator Instructions] And your next question comes from the line of Paul Cheng from Barclays. Your line is open..

Thanks. Hi guys, good morning..

Good morning..

Brian, just curious, I mean then all keeping a range on the 2016 CapEx is a between $1.5 billion to $2 billion.

Just curious that how you are going to set whether it’s going to be $1.5 billion to $2 billion, is it as simply as it would become in at the time of that budget being said what is the likewise or that other maybe longer-term are bit strategic reason only are the other that is becoming that..

Yeah. Thanks, Paul. So as I mentioned earlier in the call, the thing that we are focused on what I want to be able to see is our commitments and demonstrated sustained improvements in our cost structure, which I have confidence that we are demonstrating and we’re proceeding as we go forward.

Everything that I believe that I need to see is to have clarity on what our fiscal and regulatory regimes will be as we go forward. As you’re well aware these are 30-year investment decisions that we’re making, so I won’t have clarity around the fiscal regime..

Second one that, I just want to some clarification. You’ve mentioned that the workforce reduction now has been – unfortunately they go up to about 700 people. And you’re also saying that that will resulted in a annual savings starting next year about $100 million a year. If I do a simple math, that is $1.43 million per year.

That seems very high, am I missing something here?.

Yes, I think you’re arithmetic maybe incorrect. So the $100 million….

I’m sorry, it’s $143,000 that should be a $143,000 per head that do you seem is near bit high is it?.

No, again what were, so that’s over the whole year, it isn’t just this 700 people that we have departed during the second half, so if you recall, we reduced our workforce by 800 people in February as well.

So there is 1,500 people which is a combination of employees and contractors and we believe that the annualized savings associated with the employee components and that contractor component which is a lesser part of that would be at least a $100 million on an annualized basis. That includes all our compensation..

Hi, final one.

You already sold royalty fee land, is there any offset that you do not consider may be your core business and could be subject for as a divestment?.

We will continue to look at other aspects of our conventional business that are – that we may view as non-core as we go forward. We don’t have any immediate plans at this point in time.

But we – I think is a very healthy discipline to haven an ongoing divestiture program and be able to look at where you may have assets that don’t have the same growth or value potential to be able to realize proceeds for them and reallocate those into higher value and growth opportunities inside the existing organic portfolio..

All right, thank you..

Thank you..

Your next question comes from the line of Benny Wong from Morgan Stanley. Your line is open..

Yes, thanks. I really appreciate the color you guys providing on the cost for deflation in oil sands.

Just a quick question on that is just, I know last call you guys were saying focusing on cost structures and falling down by the end of the year, just curious how the progress has been compared to what you’re expecting have that coming on faster or slower.

And what you’re originally visioning?.

Also the answer to that in the last Drew to expand, I would say that we’re definitely realizing the benefits of a deflationary environment, but very much fundamentally we are making sustain changes much has been are organizational structure, but in our business process is and really focusing on structural change to our cost structure to achieve what we believe will be sustained improvements overall.

So it is in just related to the price environment that we’re in.

but over to Drew, for add the color?.

Yes, thanks Benny. Over the course of this year, we’ve obviously been working with our suppliers and vendors. And probably, on average we probably over 15% now, reduced in rates and kind of cost from our vendor based.

But, as Brian said, it is not probably our biggest area that we progressed and it’s really the internal workings with the teams here, where we really look that the processes and the practices of everything from, how we are operating, doing our maintenance to drilling the wells, and just really scrutinizing in advancing our processes.

And the benefit there is that we probably exceeded our expectations on how much the teams could do and then deliver obviously a results today [ph] have been quite phenomenal. And the other thing I’m quite probable is because a lot of this coming from our process and work practice changes, they are going to be sustainable.

And that is the – that is the exciting part of this..

Great, thank you for that. Just a follow up as well.

As you guys are considering restarting growth in Foster Creek and Christina Lake, what are your discussions with your partner then? And is this a scenario where they don’t want to move forward to oil sands spending what range [ph] you do, or what kind of arrangement you guys make going on that front?.

So, we have ongoing discussions as you would expect with our partner on FCCL, I would say that we are strategically aligned in terms of the development, ongoing development of both Christiana Lake and Foster Creek. As I mentioned, we’ll be sitting down and discussing 2016 plans with them shortly.

But I do expect that we’ll continue to be strategically aligned with them..

If they decide not to move forward, is there anything you can do or you just – or can you just kind of block spending going forward?.

All right. I can’t get into the specifics of the agreements that we have.

But you know – to me, the thing that has been always been very important is that we have an ongoing healthy relationship and as I said, we have been aligned, I believe that our partner recognizes the quality and the value of Foster Creek and Christina Lake, and I can tell you that today we’ve not had any issues with regard to the level of capital investment..

Okay. Thank you, thanks for the color..

Thanks..

Your next question comes from the line of Fai Lee from Odlum Brown. Your line is open..

Thank you. Brian you mentioned, you’re using a $60 rent price as over three years for planning purposes. I’m just wondering, what does that translate into if I’m looking at on a WTI basis and what’s your kind of discount assumption if here....

Yes. It translates to about a $54 to $55 WTI. Obviously, it depends on the exchange rates we use in so on and so forth in terms of realized prices here.

So I think it’s important about that and the reason that we’ve gone to a $60 flat Brent price and it’s really the flat price is – I want other than Bob Pease and myself, I don’t want anybody focus and I want to price of oil [indiscernible].

The other 4,000 people at the company to be focused very much on the cost reductions, capital improvements, that we’ve talked about and I don’t want people worrying about what the price of oil is..

Okay, I think that’s fair enough and it’s probably reasonable over the long-term. I'm just wondering given where oil prices are today.

Is there any potential update maybe that’s sort of too high or what we call [indiscernible] want to change that price?.

Well, we will – and we certainly do for financial planning purposes do stress tests and as I mentioned earlier, we have looked at a $45 flat WTI price to 2017 and we continue to have a very, very strong balance sheet at the end of 2017, even if we see that’s kind of scenario.

And we’ve got lots of flexibility on the capital side to choose how we allocate capital there and what level of the actual capital spending we get..

Okay, great. Thank you..

Thank you..

Your last question comes from the line of [indiscernible]. Your line is open..

Hi, just a question about the crude-by-rail. The acceleration of the crude-by-rail facility in Bruderheim closed in August.

Is that depending on that capacity now and what’s your strategy moving forward evaluating crude-by-rail versus pipeline?.

As Bob, please respond to that..

Yeah. Thank you, David. Operationally, the facility is geared up and ready to go to the max rates capable, when we acquired the facility we identified a number of areas where we could improve its capability. But throughput at this point as we expected, it’s not anywhere near its capacity level.

Strategically, we acquired that location to give us a lot of optionality on how we go to market? What products we produce? What markets and customers we serve? The expectation is that the climate for rail is improving. We’re moving volumes today as more than likely that’s going to increase potentially, significantly over the years ahead.

But we’ll judge that and use that based on what the market conditions are, but operationally it’s a very good facility running well and strategic component of our overall strategy of getting to market..

Okay, thank you very much..

I’ll turn the call back over to Mr. Ferguson..

Thank you. Just prior to closing I need to make a statement just to correct some inaccurate reports that have been in the media with regard to our workforce reductions there is currently some misunderstanding and reporting that we still have another 700 more job cuts to come. That is inaccurate.

We have completed all of the job reductions here in October and the 700 people that are leaving the company or have left the company in the second half of the year have all been notified and the vast majority of them have already left the company. So it is inaccurate that there is another 700 job reductions coming. Thank you.

We appreciate your interest..

This concludes today’s conference call. You may now disconnect..