v3.26.1
Other Long-Term Liabilities (Tables)
 12 Months Ended
Dec. 31, 2025
Subclassifications of assets, liabilities and equities [abstract]  
Disclosure of Other Long-term Liabilities
 2025

2024
Asset retirement obligations$9,743 

$8,607 
Lease liabilities (note 7)
3,106 1,464 
Share-based compensation433 620 
Transportation and processing contracts 186 

58 
Risk management (note 18)
65 

8 
Other68 

80 
 13,601 10,837 
Less: current portion1,665 

1,535 
 $11,936 $9,302 
Summary of Asset Retirement Obligations Reconciliations of the discounted asset retirement obligations were as follows:
 
202520242023
Balance – beginning of year
$8,607 

$7,690 

$6,908 
Liabilities incurred
34 

28 

25 
Liabilities acquired, net
489 

171 

— 
Liabilities settled
(771)

(646)

(509)
Asset retirement obligation accretion
380 389 366 
Revision of cost, inflation, and timing estimates (1)
1,233 417 

621 
Change in discount rates
(129)

419 

314 
Foreign exchange adjustments
(100)

139 

(35)
Balance – end of year (2)
9,743 8,607 7,690 
Less: current portion
956 

787 

634 
 
$8,787 $7,820 $7,056 
(1)Includes normal course revisions of cost, inflation, and timing estimates, as well as revisions to decommissioning timing and costs in the North Sea and Offshore Africa (note 6).
(2)The Company's estimate of its total undiscounted and uninflated asset retirement obligations as at December 31, 2025 was $17.6 billion (2024 – $16.1 billion; 2023 – $15.5 billion).
Segmented Asset Retirement Obligations
 
2025

2024
Exploration and Production
 

 
North America
$4,937 

$4,783 
North Sea
2,629 

1,724 
Offshore Africa
275 

197 
Oil Sands Mining and Upgrading
1,901 

1,902 
Midstream and Refining
1 

1 
 
$9,743 $8,607 
Asset Retirement Obligations Sensitivity
Changes in the Company's discount and inflation rates used to estimate its expected future cash outflow required to settle its asset retirement obligations would have the following impact:
2025

2024
Discount rate
1% increase$(896)$(883)
1% decrease$1,135 $1,132 
Inflation rate
1% increase$1,171 $1,166 
1% decrease$(934)$(920)
Summary of Share-based Compensation Liability The current portion of the liability represents the maximum amount of the liability payable within the next twelve month period if all vested stock options and PSUs are settled in cash.
 
202520242023
Balance – beginning of year
$620 $780 $832 
Share-based compensation expense180 279 491 
Cash payment for stock options surrendered and PSUs vested(94)(84)(110)
Transferred to common shares(273)(358)(435)
Other— 3 2 
Balance – end of year
433 620 780 
Less: current portion
312 463 538 
 
$121 $157 $242 
Disclosure of Weighted Average Assumptions Used
The fair value of stock options outstanding was estimated using the Black-Scholes valuation model with the following weighted average assumptions:
 20252024
2023 (1)
Fair value $9.73 $13.15 $17.96 
Share price $46.49 $44.38 $43.41 
Expected volatility25.7%26.4%30.9%
Expected dividend yield5.1%5.1%4.6%
Risk free interest rate2.7%2.9%3.6%
Expected forfeiture rate5.3%5.2%5.4%
Expected stock option life (2)
3.9 years
4.1 years
4.2 years
(1)Common share, per common share, dividend, and stock option amounts have been updated to reflect the two for one common share split (note 1).
(2)At original time of grant.