Over the past few weeks, shares of Suncor Energy (NYSE:SU) have fallen precipitously, along with the price of oil and the broader market. At the end of last week, shares were down 8.95% over the trailing four-week period. The shares began to recover on Monday and continued to trend upward on Tuesday, along with an uptick in oil prices (and the broader market) over those days. This is roughly in line with its big oil peers, a fact that I illustrated in my most recent weekly performance report.
Suncor has one quality that its fellow big oil peers lack, however. This is the size of its reserves. In the middle of March, I published an article "Suncor Energy Appears Undervalued at Current Levels" in which I discussed the company's reserves. As of December 2011, Suncor Energy had net proven and probable reserves of 5.847 billion barrels of oil equivalent. The company's gross proven and probable reserves totaled 7.107 billion barrels of oil equivalent. This provides the company with approximately 35 years of reserve life at its last reported production rate of 546.0 mboe per day. This compares favorably to many of the company's peers. For example, Total (TOT) has sufficient reserves to maintain production for 13 years at its production rate as of the last annual report. Eni (E) has sufficient reserves to maintain its current production for 12.4 years, according to its last annual report.
Suncor is the largest player in the development of Canada's Athabasca oil sands and this provides a strong source of growth potential for the company. Suncor's decade-long growth plan is to generate 8% annual production growth from now until 2020. It will do this by growing its average daily production to 1.0 million barrels of oil equivalent over the same time frame. This represents a total increase of
