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Financial and derivative instruments | 6 Months Ended
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Jun. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Financial and derivative instruments | Financial and derivative instruments Financial instruments The fair value of the company’s financial instruments is determined by reference to various market data and other appropriate valuation techniques. There are no material differences between the fair value of the company’s financial instruments and the recorded carrying value. At June 30, 2025 and December 31, 2024, the fair value of long-term debt ($3,447 million, excluding finance lease obligations) was primarily a level 2 measurement. Derivative instruments The company’s size, strong capital structure and the complementary nature of its business segments reduce the company’s enterprise-wide risk from changes in commodity prices, currency rates and interest rates. In addition, the company uses commodity-based contracts, including derivatives, to manage commodity price risk and to generate returns from trading. Commodity contracts held for trading purposes are presented in the Consolidated statement of income on a net basis in the line "Revenues" and in the Consolidated statement of cash flows in "Cash flows from (used in) operating activities". The company’s commodity derivatives are not accounted for under hedge accounting. Credit risk associated with the company’s derivative position is mitigated by several factors, including the use of derivative clearing exchanges and the quality of and financial limits placed on derivative counterparties. The company maintains a system of controls that includes the authorization, reporting and monitoring of derivative activity. The net notional long/(short) position of derivative instruments was:
| As at Jun 30 | As at Dec 31
thousands of barrels | 2025 | 2024
Crude | 4,374 |  | 4,260 |
Products | (1,153) |  | (371) |
Realized and unrealized gain/(loss) on derivative instruments recognized in the Consolidated statement of income is included in the following line on a before-tax basis:
| Second Quarter | Six Months to June 30
millions of Canadian dollars | 2025 |  | 2024 |  | 2025 |  | 2024 |
Revenues | (24) |  | 11 |  | (9) |  | (13) |
The estimated fair value of derivative instruments, and the related hierarchy level for the fair value measurement, were as follows:
At June 30, 2025
millions of Canadian dollars
| Fair value | Effect of counterparty netting | Effect of collateral netting | Net carrying value
| Level 1 | Level 2 | Level 3 | Total
Assets |  |  |  |  |  |  |
Derivative assets (a) | 40 |  | 44 |  | — |  | 84 |  | (34) |  | (6) |  | 44 |
Liabilities |  |  |  |  |  |  |
Derivative liabilities (b) | 34 |  | 50 |  | — |  | 84 |  | (34) |  | — |  | 50 |
(a)Included in the Consolidated balance sheet line: “Materials, supplies and prepaid expenses”, “Accounts receivable - net” and “Other assets, including intangibles - net”. (b)Included in the Consolidated balance sheet line: “Accounts payable and accrued liabilities” and “Other long-term obligations”.
At December 31, 2024
millions of Canadian dollars
| Fair value | Effect of counterparty netting | Effect of collateral netting | Net carrying value
| Level 1 | Level 2 | Level 3 | Total
Assets |  |  |  |  |  |  |
Derivative assets (a) | 38 |  | 21 |  | — |  | 59 |  | (38) |  | — |  | 21 |
Liabilities |  |  |  |  |  |  |
Derivative liabilities (b) | 52 |  | 30 |  | — |  | 82 |  | (38) |  | (14) |  | 30 |
(a)Included in the Consolidated balance sheet line: “Materials, supplies and prepaid expenses”, “Accounts receivable - net” and “Other assets, including intangibles - net”. (b)Included in the Consolidated balance sheet line: “Accounts payable and accrued liabilities” and “Other long-term obligations”.
At June 30, 2025 and December 31, 2024, the company had $14 million and $22 million, respectively, of collateral under a master netting arrangement not offset against the derivatives on the Consolidated balance sheet in “Accounts receivable - net”, primarily related to initial margin requirements.

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