Mon, Sep. 21, 12:58 PM
- Teck Resources (TCK -5.8%) is reiterated with an Outperform rating at FBR following Suncor Energy's (SU +1.2%) announced agreement to purchase an additional 10% interest in the Fort Hills oil sands project from Total (TOT -1.3%) for C$310M; TCK has a 20% interest in the project.
- FBR analyst Lucas Pipes values TCK's share at C$1.945B, with today's transaction "right in-line with our valuation when considering Suncor’s incremental capital increase."
- Pipes believes TCK’s interest in Fort Hills greatly reduces its overall risk profile, and is encouraged by SU’s continued commitment to the project; he also likes TCK for its low-cost exposure to met coal and zinc, two commodities he sees as "better positioned in the current market environment."
Mon, Sep. 21, 10:09 AM
- A coalition of Canadian First Nations, environmentalists and companies including Suncor Energy (NYSE:SU) calls for industry and government to seek aboriginal consent when working with indigenous groups.
- The report from the Boreal Leadership Council says Canada's principle of free, prior and informed consent - the right of native people to offer or withhold consent to development that might impact their territories - is crucial to ensuring the country's vast natural resources can be extracted.
- Disputes with First Nations groups have contributed to delays on some major energy infrastructure projects, such as Enbridge's (NYSE:ENB) Northern Gateway pipeline to Canada's Pacific coast.
Mon, Sep. 21, 9:19 AM
- Suncor Energy (NYSE:SU) agrees to acquire an additional 10% working interest in the Fort Hills oil sands project in Alberta from Total (NYSE:TOT) for $310M, increasing its partnership share in the $15B project to 50.8%.
- As a result of the deal, SU's incremental capital increase to Fort Hills is estimated at just over $1B, of which ~$700M is remaining project spending.
- SU says project engineering is more than 90% complete and construction more than 40%, placing Fort Hills on track for first oil in Q4 2017.
- Following the purchase, TOT will own 29.2% of the project and Teck Resources (NYSE:TCK) will continue to own the remainder.
Wed, Sep. 16, 11:31 AM
- Canadian Natural Resources (CNQ +5.8%) is the latest Canadian oil sands producer looking to cut costs, saying it plans to cut operating costs by $390M more than currently budgeted this year.
- CNQ, which has operating costs of ~US$30/bbl, hopes to lower that figure to $25-$27 within the next few years, to shield itself from U.S. crude prices that have been stuck below $50 in recent months.
- Cenovus Energy (CVE +6.5%) also says it is looking to aggressively slash costs, not satisfied with total costs of $11-$14/bbl and targeting a $1-$2/bbl reduction.
- Suncor Energy (SU +4.2%) has seen its cash operating costs fall to $28.20/bbl in H1 of the year, compared to $33.80 last year.
Wed, Sep. 9, 7:32 PM
- Suncor Energy (NYSE:SU) President/CEO Steve Williams rails against ongoing pipeline delays, blasting the “stupidity” of pipeline politics in the U.S. and Canada; he also hints that a deal could be in the works to buy distressed assets.
- Williams again is critical of Canada regulators for delaying the in-service date of Enbridge’s Line 9 pipeline reversal between Ontario and Quebec; the CEO says Line 9 should begin service in the next 3-6 months, which would allow SU to ship its oil sands crude directly to its refinery in Montreal and boost the facility’s utilization rate.
- Williams also offers the most direct signal yet that SU is considering making an acquisition, saying “we have too much cash on our balance sheet," and that the oil price collapse could create opportunities in “fire sales” that did not exist six months ago.
Wed, Sep. 9, 2:58 PM
- Suncor Energy (SU -0.5%) says it expects greenhouse gas emissions from its operations to rise 28% to 26.2M metric tons in 2019, from 20.5M last year, according to the company's latest annual sustainability report.
- SU plans to expand its oil sands production during the period, with production at its C$13B ($9.8B) Fort Hills mine in Alberta expected to begin in 2017.
- SU's emissions in 2014 fell 0.3% to 20.5M tons, a level little changed since 2012.
Wed, Sep. 2, 7:07 PM
- Exxon Mobil (NYSE:XOM) could outperform the market during the next 12 months thanks to a dividend yield that’s nearly twice as high as the S&P 500′s, Barclays Paul Cheng says.
- XOM’s relative yield has jumped to a recent high of 180% from 127% and compared to the 25-year average of 138%, Cheng calculates, adding that when XOM's relative yield exceeds 170%, it outperformed the S&P 500 in the subsequent one-, three- and 12-month periods by respective averages of 1.8%, 3.9% and 6.8%.
- Although Cheng thinks the energy sector’s downside risk relative to the market may be limited from current levels and that XOM may have reached near-term lows, he maintain an Underweight rating on the stock and sees better risk-reward opportunities in Suncor Energy (NYSE:SU), Imperial Oil (NYSEMKT:IMO) and ConocoPhillips (NYSE:COP).
Mon, Aug. 31, 7:12 AM
- Canadian Oil Sands (OTCQX:COSWF) says it has halted crude oil production at the Syncrude oil sands project after a fire damaged equipment at its processing facility in northern Alberta on Saturday.
- COSWF says the main coker conversion units were not damaged and Syncrude continues to operate, but it has suspended synthetic crude oil production and is currently developing a recovery plan.
- The company does not estimate the volume or value of lost production, but Syncrude’s synthetic crude output averaged 207.7K bbl/day in Q2.
- COSWF holds a 37% stake in Syncrude, and six other companies own the rest, including lead operator Exxon Mobil (NYSE:XOM) unit Imperial Oil (NYSEMKT:IMO), Suncor Energy (NYSE:SU), Sinopec (NYSE:SNP) and Cnooc (NYSE:CEO) subsidiary Nexen.
Fri, Aug. 28, 2:28 PM
- Alberta's new government launches its royalty review panel, and says it will not raise oil and gas royalty rates until the end of 2016.
- The specter of a higher government take is spooking the industry, especially with oil prices recently hitting more than six-year lows; some have argued the royalty review should be deferred until the outlook improves, while others would prefer to just get it over with.
- Related tickers: SU, ENB, IMO, TRP, CNQ, CVE, TCK, CEO, OTCPK:HUSKF, OTCQX:COSWF
Thu, Aug. 13, 12:45 PM
- A key pipeline for delivering Canadian oil to the U.S. remains shut for a third day, leaving heavy crude stranded in Alberta and keeping its price in the cash market at ~$20 below the WTI benchmark.
- A small leak near Shelbina, Mo., coming from Enbridge’s (ENB -1.1%) Spearhead pipeline, which runs from Flanagan, Ill., to the Cushing, Okla., crude hub forced the shutdown Tuesday of the 193.3K bbl/day pipeline as well as a closing of the parallel Flanagan South pipeline, an even larger 585K bbl/day line that runs from Pontiac, Ill., to Cushing.
- ENB expects operations at Flanagan South to resume today, but does not know when Spearhead may return to service, as it continues to investigate the cause of the spill in Missouri.
- Operational problems at BP's (BP -1.5%) Whiting, Ind., refinery also keep the pressure on prices for Canada’s heavy crude as barrels continue to get backed up.
- Other related tickers: SU, IMO, TRP, CNQ, CVE, TCK, CEO, OTCPK:HUSKF, OTCQX:COSWF
- Earlier: Canadian oil sands price nears $20/bbl, cut in half since July 1
Wed, Aug. 12, 12:27 PM
- Crude oil from Canada’s tar sands has slumped to $23/bbl, chopped in half since July 1 and widening its discount to West Texas Intermediate to nearly $20/bbl, due to a combination of steadily rising production, pipeline constraints and an unexpected outage at a U.S. refinery.
- The price plunge has done little to curb output because oil sands projects require years to plan, construct and pay back; Imperial Oil (NYSEMKT:IMO) recently doubled production capacity at its Kearl oil sands project to 220K bbl/day, and Canadian Natural Resources (NYSE:CNQ) last week said it was built to withstand low commodity prices even as it lost C$405M in Q2.
- At current oil prices, typical oil sands producers are just covering their operating costs, while companies with higher operating costs are “losing money with each barrel they’re producing," says the VP of energy research at ARC Financial in Calgary.
- The results have spilled beyond the oil market into Canada’s economy, forcing the central bank to twice cut interest rates, driving the Canadian dollar to a decade low and impacting the debate ahead of October's federal election.
- Other related tickers: TRP, ENB, SU, CVE, TCK, CEO, OTCPK:HUSKF
Wed, Aug. 12, 10:15 AM
- Syncrude is facing an environmental protection order following the deaths of 30 great blue herons at an abandoned sump pond at its Mildred Lake mine site near Fort McMurray, Alberta.
- Although bird deterrents were working elsewhere on the mine site, Syncrude says no such equipment was in operation at the sump.
- Syncrude was fined $3M in 2008 when more than 1,600 ducks died after they landed on a company tailings pond.
- Canadian Oil Sands (OTCQX:COSWF) owns 37% of Syncrude, with stakes also held by lead operator Imperial Oil (NYSEMKT:IMO), Suncor (NYSE:SU), Murphy Oil (NYSE:MUR), Sinopec (NYSE:SNP) and Cnooc (NYSE:CEO).
Thu, Jul. 30, 2:59 PM
- Suncor (SU +5.7%) CEO Steve Williams says prices for oil and gas asset have fallen enough to make acquisitions more attractive, but that his company is not actively pursuing any specific targets.
- Williams says SU is focused on developing its own assets and buying back shares, but that strategic acquisitions are a third option for making use of its growing cash reserves, especially as asking prices decline.
- SU's Q2 earnings fell to C$0.63 on lower oil prices, but the result was well above analyst expectations; the company cut another C$400M from its 2015 capital spending budget, and now plans to spend C$5.8B-$6.4B as it lowers its range from up to C$6.8B previously and an original target of up to C$7.8B.
- With a C$4.9B war chest, Williams says SU would consider boosting its 40.8% interest in the 180K bbl/day Fort Hills oil sands project in Alberta to assure its startup by 2017.
Wed, Jul. 29, 11:07 PM
Tue, Jul. 28, 1:12 PM
- Canada oil sands pipeline projects look doomed after the recent Nexen oil spill leaves "two big football fields of black goo," according to a Bloomberg analysis.
- A rupture in a line operated by the Cnooc (NYSE:CEO) unit that spewed 31K barrels of bitumen, waste water and sand has ignited outrage from communities along pipeline routes and is strengthening opposition that already has stalled every major crude export project from Canada and may lead to stricter regulations, the report says.
- The Alberta Energy Regulator could consider new requirements including scheduled and random inspections of pipelines during construction and while in operation, as well as better spill detection technology; meanwhile, the spill gets bad press in Canadian newspapers every day.
- Related tickers: TRP, ENB, SU, IMO, CNQ, CVE, TCK, OTCPK:HUSKF, OTCQX:COSWF
Wed, Jul. 22, 2:56 PM
- In contrast to his upbeat analysis (I, II) of Exxon Mobil (XOM +1.2%), Goldman's Neil Mehta thinks investors should sell Chevron (CVX -0.2%) and Cenovus Energy (CVE -2.2%) on concerns about dividend sustainability.
- Believing too many investors are focusing on absolute yield when an ability to post dividend growth is more important long term, the analyst ranks CVX a Sell given low dividend growth, weak free cash flow and E&P volume risk, while CVE is a Sell because of limited dividend growth, lower returns and a premium valuation.
- XOM and Suncor Energy (SU -0.4%), on the other hand, "are set to deliver the highest dividend growth through the end of the decade - and now offer solid valuation upside from current levels."
Suncor Energy Inc is an integrated energy company. Its operations include developing petroleum resource basin, Canada's Athabasca oil sands. It explores for, acquires, develops, produces & markets crude oil & natural gas in Canada and internationally.
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