The Case For Investing In Suncor Energy
Elliott Gue • 12 Comments
Elliott Gue • 12 Comments
Tue, Jun. 7, 8:49 AM
- Suncor Energy (NYSE:SU) lowers its crude oil production target for FY 2016 to 585K-620K bbl/day from an earlier forecast of 620K-665K bbl/day because of facility outages caused by the recent wildfires in Alberta.
- SU says it expects full-year cash operating costs to stay within its guidance of C$27-C$30/bbl, while expecting Syncrude’s cash operating costs to rise to C$41-C$44/bbl vs. an earlier outlook of C$35-C$38/bbl due to the timing of restart and production ramp-up.
- SU says it is ramping up its facilities shut down by the fire and expects they will be producing at normal rates by the end of June; SU-controlled Syncrude Canada should return to production in late June and ramp up to full output after the completion of a scheduled turnaround by mid-July.
Thu, Jun. 2, 9:24 AM
- May monthly performance was: +0.27%
- 52-week performance vs. the S&P 500 is: +5%
- No dividends were paid in May
- Top 10 Holdings as of 3/31/2016: General Mills Inc (GIS): 3.42%, AT&T Inc (T): 3.01%, Coca-Cola Co (KO): 2.95%, Campbell Soup Co (CPB): 2.79%, Exelon Corp (EXC): 2.29%, The Hartford Financial Services Group Inc (HIG): 2.25%, Heineken NV (OTCQX:HINKF): 2.16%, The Kraft Heinz Co (KHC): 1.98%, Suncor Energy Inc (SU): 1.87%, PPL Corp (PPL): 1.87%
Wed, Jun. 1, 6:47 PM
- Traders expect deliveries from the Syncrude project in Alberta for June to be cut by ~85%, Reuters reports.
- Unipec, the trading arm of Chinese refiner Sinopec (NYSE:SNP), advised customers this week it would cut its sales of Syncrude for June due to the force majeure on Syncrude's production, according to the report.
- Syncrude has not specified when operations would restart after closing a month ago during Alberta's wildfires, but says the facility is finalizing its safe return to operations.
- Suncor Energy (NYSE:SU) owns 53.74% of Syncrude, with Imperial Oil (NYSEMKT:IMO), SNP and Nexen (NYSE:CEO) the leading minority partners.
Tue, May 31, 11:07 AM
- Suncor Energy (SU +0.7%) is expected to suffer the biggest impact from Alberta's wildfires, as the shutdown and evacuation of its operations between Fort McMurray and Fort MacKay - which were producing 300K bbl/day of oil before the fires - will cut $928M, or 20%, from the company’s operating cash flows this year, according to RBC Capital.
- RBC foresees a “commensurate” impact on SU’s balance sheet, as the company is expected to draw on its $3.1B of cash and cash equivalents or $6.7B of available credit during the outage and re-start.
- The firm estimates that by the time production resumes, SU’s facilities will have been shut down for 35 days and Syncrude’s facilities will have been shut down for 40 days.
- Husky Energy (OTCPK:HUSKF -1.1%) and Imperial Oil (IMO -0.6%) are not yet providing updates on when output would resume at their respective 60K bbl/day Sunrise and 220K bbl/day Kearl projects.
- Now read Suncor bringing Alberta oil sands back on line
Sun, May 29, 10:57 PM
- Suncor Energy (NYSE:SU) says it has restarted operations at its base plant and MacKay River sites north of Fort McMurray in Alberta, with initial production expected to begin by the end of this week.
- SU's announcement is the latest sign that Canadian oil sands outages caused by the recent wildfires are slowly coming to an end.
- SU also says the Syncrude oil sands mining consortium is planning a return to operations but provides no firm time line; the company says initial production at its Firebag site began early last week, and construction at its Fort Hills mine continues, with the operation expected to be fully staffed later this week.
- The company says it has moved more than 4K employees and contractors back into the region for its restart efforts and would move 3.5K more in the coming week.
Fri, May 27, 11:14 AM
- Midwest and Rocky Mountain pipeline operators have lowered the cost of transporting oil after Alberta’s wildfires decreased demand for pipeline capacity and left transporters competing over a dwindling supply, Bloomberg reports.
- This week, several companies reportedly moved to lower tariffs for selected routes in those regions, including Tallgrass Energy Partners (TEP -3.5%), Legacy Reserves (LGCY -2.6%), Suncor Energy (SU -0.2%) and Marathon Oil-owned (MRO -2.5%) Red Butte Pipe Line, starting July 1; TEP reduced rates by ~2% on its Pony Express line heading into Ponca City, Okla., while SU cut the same amount on its system in Wyoming.
- Pipeline rates also have fallen due to a decline in last year’s producer price index, which the FERC takes into account when reviewing transportation costs.
Thu, May 26, 5:58 PM
- Suncor Energy (NYSE:SU) seeks to return the bulk of its displaced workers by next week and begin startup of its Alberta oil sands facilities, assuming wildfire danger is no longer present, Bloomberg reports.
- SU's Firebag site and U1 upgrader would resume operations first, followed by MacKay River, while planned maintenance on the U2 upgrader would resume and likely take two weeks to complete, according to the report.
- SU is said to approach the return of workers very cautiously after fire danger returned last week, forcing evacuation.
Thu, May 26, 5:28 PM
- The amount of pollution created by vapor from Canada’s oil sands ranks on par with most major cities in North America, according to a new study by the country’s environmental regulator.
- While the connection between the oil sands’ carbon emissions and climate change is well documented, the study is the first to track the vapor produced in the process and the extent of the resulting pollution.
- Vapor from the bitumen of the oil sands is released into the air when it is dug up in open pit mines and later as the oil is separated out, and once in the atmosphere and exposed to sunlight, the vapors mix with other chemicals to become particles known as secondary organic aerosols; according to the study, the oil sands were rivaled by only the largest metro areas such as Los Angeles in creating the particles; vehicle exhaust and electrical generation are the main sources of the particles in cities.
- Relevant tickers: SU, CVE, IMO, XOM, RDS.A, RDS.B, CNQ, ENB, TRP, PDS, CEO, OTCPK:HUSKF, OTCPK:MEGEF, OTCPK:ATHOF
Wed, May 25, 11:16 AM
- Alberta's government introduced legislation yesterday to implement an economy-wide carbon tax starting next year, part of a broader environmental policy package expected to phase out coal-fired plants in the province and cap emissions from oil sands production.
- The new tax targets all fossil fuel consumption, including gasoline sales and natural gas for home heating; the government says it will levy a tax of C$20/metric ton from next January, which will be increased to C$30 from Jan. 1, 2018.
- Two major oil sands producers, Cenovus Energy (CVE +2.8%) and Suncor Energy (SU +1.9%), have welcomed the move to position the oil-rich province as a leader in environmental stewardship.
- Other relevant tickers: IMO, XOM, RDS.A, RDS.B, CNQ, ENB, TRP, PDS, CEO, OTCPK:HUSKF, OTCPK:MEGEF, OTCPK:ATHOF
Mon, May 23, 5:34 PM
- Mandatory evacuation orders were lifted today for the last of Alberta's oil sands production sites endangered by wildfires, Bloomberg reports, which starts the process of inspections by forestry and health officials to make sure the facilities safe for workers to return.
- Since late Friday, Alberta has removed orders that had prevented all but critical staff from remaining on sites connected with the operations of Suncor Energy (NYSE:SU), ConocoPhillips (NYSE:COP), Enbridge (NYSE:ENB) and Cnooc's (NYSE:CEO) Nexen unit, among others.
- The SU-controlled Syncrude joint venture says it is making progress on a plan to return to operations and will be able to give an update later on the timing for production restart.
- COP, which had shut down production at its Surmont project on May 5, says it has started the process of bringing workers back after getting approval.
Fri, May 20, 8:26 AM
- The front line of the out-of-control wildfires plaguing northern Alberta has moved away from critical infrastructure to a remote area on the border of neighboring Saskatchewan.
- Imperial Oil (NYSEMKT:IMO) confirmed last night that it has restarted limited operations at its Kearl oil sands site, and the physical plant is unaffected by the fires.
- The fires reportedly burned near Suncor Energy's (NYSE:SU) base plant and the Syncrude facility on Wednesday, but fire breaks held and the threat has diminished.
- Still, Syncrude reportedly told customers to expect no further crude shipments for May, extending a force majeure on crude production from earlier this month.
- The fires have affected as much as 1.4M bbl/day of production, Jefferies analyst Jason Gammel estimates.
Tue, May 17, 8:18 AM
- Alberta's massive wildfire is growing again and moving rapidly, prompting the evacuation last night of 4,000 oil sands workers north of Fort McMurray.
- Suncor Energy (NYSE:SU) and Syncrude Canada evacuated workers from the affected area, and their major facilities are under a precautionary notice with the fire still 15-20 km (10-12 miles) away.
- Other sites impacted reportedly include oil sands projects operated by Marathon Oil (NYSE:MRO) and PetroChina (NYSE:PTR) unit Brion Energy.
- The renewed fire threat threatens to further delay a restart of at least 1M bbl/day in oil sands production; Canadian oil sands production averaged 2.5M bbl/day last year, much of which was imported by the U.S. for refining into petroleum products.
- Now read Alberta fire only 1 km from Enbridge oil sands terminal
Thu, May 12, 6:43 PM
- Even as Canada's oil sands producers begin to get facilities back online after massive wildfires, Cnooc's Nexen (NYSE:CEO) is the latest company to warn customers that it may not be able to fulfill supply contracts.
- Reuters reports that Nexen has issued a force majeure for all of its May production of Canadian heavy crude, the latest of four major oil companies to do so.
- Last week, BP, Phillips 66 (NYSE:PSX) and Statoil (NYSE:STO) warned customers some grades of Canadian crude would not be available, while Suncor Energy (NYSE:SU) alerted clients that some supplies from the region would be disrupted.
- Nexen's Long Lake oil sands facility, located south of Fort McMurray, sustained minor damage from the fire.
- Nearly 1M bbl/day of production were shut down during the fire, about half the oil sands' usual daily output, but no oil sands sites are currently under threat from the fire.
Tue, May 10, 7:25 PM
- Canadian oil sands companies near Fort McMurray are beginning to restart their operations, as the out of control wildfire continues to rage but has now moved far enough away from the oil sands' sites to allow the companies to return.
- Royal Dutch Shell (RDS.A, RDS.B) is the first company to resume its operation in the area, restarting production at its Albian mine, and Enbridge (NYSE:ENB) has begun inspecting its facilities and prepares to restart operations shuttered during the blaze.
- Suncor (NYSE:SU) says it has restarted power generation at its Syncrude oil sands mine in Aurora, and CEO Steve Williams says he expects oil sands companies would resume production “in the coming days and maybe a week or so, but you’re not talking longer periods.”
- Alberta Premier Notley says there was no damage to oil sands facilities north of Fort McMurray, although the fire caused minor damage to Nexen’s (NYSE:CEO) oil sands facility south of the city and to ENB’s above-ground facilities along its pipelines in the area.
- The decline to production reportedly reached at least 839K bbl/day, or close to one-third of Canada’s overall daily production, before Shell's restart.
- While ~2,400 homes and buildings were destroyed by fire, officials say ~90% of buildings in Fort McMurray, including schools and a hospital, remain intact; two people died in accidents related to evacuating the fires.
- Other relevant tickers: XOM, IMO, COP, OTCPK:HUSKF, OTCPK:ATHOF, CNQ, CVE, OTCPK:MEGEF, OTCPK:IPPLF, OTC:KEYUF, TRP, PSX, STO
- ETFs: USO, OIL, UWTI, UCO, DWTI, SCO, BNO, DBO, DTO, USL, DNO, OLO, SZO, OLEM
Mon, May 9, 3:19 PM
- Crude oil prices erased all of Friday's gains and more, as June futures ended the pit session 2.7% lower to $43.55/barrel even as the massive wildfires in the heart of Canada's oil sands continue to spread, albeit more slowly.
- But positioning in the oil market is very stretched, and analysts say speculators already hold the largest number of wagers for a rise in WTI futures since last summer and near-record high bullish bets on Brent, so the scope for further gains was limited without more clarity on the extent of damage to oil facilities or supply outages.
- The sacking of Ali al-Naimi as head of Saudi Arabia’s oil ministry also may be a reason why oil prices failed to maintain early gains, as successor Khalid al-Falih, the former head of Aramco, is expected to follow the strategy of protecting the country’s market share.
- Yesterday, Cnooc’s Nexen (NYSE:CEO) operations to the south of Fort McMurray reportedly suffered minor damage, while Suncor (NYSE:SU) says its facilities have not been damaged and is beginning to implement a plan for a return to operations.
- Other relevant tickers: RDS.A, RDS.B, XOM, IMO, COP, OTCPK:HUSKF, OTCPK:ATHOF, CNQ, CVE, OTCPK:MEGEF, ENB, OTCPK:IPPLF, OTC:KEYUF, TRP, PSX, STO
- ETFs: USO, OIL, UWTI, UCO, DWTI, SCO, BNO, DBO, DTO, UGA, USL, DNO, OLO, UHN, SZO, OLEM
- Now read Fort McMurray situation getting better - oil markets daily
Sat, May 7, 12:32 AM
- The devastating wildfires in and around Alberta's Fort McMurray may double in size to 2K sq. km over the weekend and burn for weeks, officials say.
- Bank of Montreal has cut its Q2 Canadian GDP growth estimate to zero from 1.5%, citing “severe disruptions to oil production” due to the fires, and said the estimate was just a placeholder dependent on more information on the scope of the disaster.
- Royal Bank of Canada estimates that as much as 1M bbls/day of production has been shut, or ~40% of oil sands output, as companies including Suncor (NYSE:SU), Shell (RDS.A, RDS.B), Exxon (NYSE:XOM) subsidiary Imperial Oil (NYSEMKT:IMO), ConocoPhillips (NYSE:COP), Husky Energy (OTCPK:HUSKF) and Athabasca Oil (OTCPK:ATHOF) cut production.
- The fire is said to be “at the gates” of Nexen’s (NYSE:CEO) Long Lake project, but a few companies including Canadian Natural Resources (NYSE:CNQ), Cenovus (NYSE:CVE) and MEG Energy (OTCPK:MEGEF) say their production has been unaffected so far.
- Among pipeline companies, no assets have incurred significant damage, but Enbridge (NYSE:ENB) shut all pipelines in and out of Cheecham Terminal, Inter Pipeline (OTCPK:IPPLF) shut parts of its system in the province, and Keyera's (OTC:KEYUF) South Cheecham rail and truck terminal is shut down; TransCanada (NYSE:TRP) says it does not expect the fires to affect deliveries of natural gas.
- SU, Phillips 66 (NYSE:PSX) and Statoil (NYSE:STO) have declared force majeure on supplies from the region.
Suncor Energy, Inc. is an integrated energy company, which develops petroleum resource basins. It explores, acquires, develops, produces and markets crude oil and natural gas in Canada and internationally. Suncor Energy, through its Petro-Canada brand, provides oil sands development & upgrading,... More
Sector: Basic Materials
Industry: Independent Oil & Gas
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