Jul. 31, 2014, 11:21 AM
- Suncor Energy (SU -2.3%) is sharply lower despite reporting Q2 earnings that rose 18% Y/Y but failed to meet analyst expectations.
- SU took a $718M writeoff to account for its share in the Joslyn oil sands project, which was mothballed by partner Total earlier this year, wrote down the value of its Libyan assets by $297M, and booked a $223M charge for oil sands assets that no longer fit into its future plans.
- SU cut its FY 2014 capital spending plan to C$6.8B from a previous target of C$7.8B in a bid to further reduce costs.
- Q2 production totaled 518.4K boe/day, up 3.6% Y/Y; output from Alberta operations rose 37% to 378.8K boe/day due to less maintenance in the quarter and increasing production from its Firebag thermal oil sands operations.
- Cash flow rose to $2.41B ($1.64/share) from $2.25B ($1.49/share).
Jul. 31, 2014, 12:31 AM| 1 Comment
Jul. 31, 2014, 12:21 AM
Jul. 25, 2014, 3:42 PM
- Exxon Mobil (XOM -1.2%) is downgraded to Underweight from Equal Weight at Barclays, primarily due to its relative valuation in the belief that potential upside is limited compared to peers.
- XOM will continue to face relative headwinds concerning the lack of meaningful near-term production growth and the likelihood of a relatively steady high oil price environment, Barclays believes.
- The firm recommends switching out of XOM to ConocoPhillips (COP -0.3%), Imperial Oil (IMO -1.3%) or Suncor (SU -0.3%).
- Barclays also cuts Cenovus Energy (CVE -1.7%) to Equal Weight from Overweight, seeing operating issues at Foster Creek and Pelican Lake remaining a drag on shares over the next several quarters (Briefing.com).
Jul. 23, 2014, 12:47 PM
- TransCanada (TRP +0.4%) says Alberta's energy regulator has approved its application to build and operate the C$800M Northern Courier pipeline project.
- TRP says the 56-mile pipeline will carry bitumen and diluent products between the Fort Hills oil sands mine and Suncor's (NYSE:SU) East Tank Farm north of Fort McMurray, Alberta; it is expected to be in service by 2017.
- TRP says Northern Courier is an important part of its capital growth plan, which includes C$38B of commercially secured projects expected to be completed by the end of the decade.
Jul. 12, 2014, 8:25 AM
- The problem facing Canada isn't the Keystone pipeline or Pres. Obama or environmentalists - it's the oil sands, and they've got to be cleaned up and the head-in-the-sand denials chased way or the country will be stuck with a "baby seal hunt" image, Diane Francis writes in the Financial Post.
- The columnist thinks she knows the right person to lead the clean-up: Jeff Immelt - "an American leader with stature in Washington, on Wall Street, in the oil patch and in Silicon Valley" - who said this week that GE will help companies clean up the oil sands.
- The only way to stop the environmental excuses, Immelt believes, is for the industry to collaborate and voluntarily establish lower emissions targets that would make the oil sands competitive with any other fuel source in the world - without such a promise to provide cleaner energy, "all bets are off."
- Some related companies: XOM, IMO, SU, RDS.A, RDS.B. ENB, TRP, CNQ, CVE, CVX, COP, BP, KMP, WPZ, TOT, STO, CEO, SNP, PTR, HUSKF, ATHOF, COSWF.
Jun. 23, 2014, 3:59 PM
- Suncor Energy (SU +0.5%) and five partners say they will build a $165M water technology development center at SU’s Firebag oil sands facility in northern Alberta.
- The facility, being developed as a joint industry project under Canada’s Oil Sands Innovation Alliance, will test water treatment and further develop recycling technologies.
- SU’s partners in the project are Canadian Natural Resources (CNQ), Devon Energy (DVN), Nexen (CEO), Shell (RDS.A, RDS.B) and Husky Energy (HUSKF); SU will construct, own and operate the center but will collaborate with the others on design, construction and operations.
Jun. 17, 2014, 6:56 PM
- Enbridge (ENB) gained approval for its Northern Gateway pipeline, but now the real work begins, since it first must nail down oil shipping contracts that meet the 200-plus conditions attached to the project.
- ENB needs firm transportation contracts covering at least 60% of the pipeline’s capacity prior to starting construction, and some analysts say the many competing export projects and the sharp growth of oil shipments by rail could make shoring up commercial support for the pipeline difficult, and even delay construction into next decade.
- If built, Northern Gateway would serve as an important link between the Alberta oil sands deposits and energy-thirsty Asian markets, but If TransCanada’s (TRP) Keystone XL and Energy East projects are approved, “Gateway gets shelved for a very, very long time, because [ENB] won’t be able to fill it," says one industry analyst.
- Suncor (SU), Cenovus (CVE), Cnooc (CEO), Total (TOT) and others have signed so-called precedent agreements to ship oil on the pipeline, but legal experts say those agreements aren’t binding, giving producers wiggle room to choose alternatives.
Jun. 16, 2014, 11:15 AM
- Suncor Energy (SU +1.3%) names departing Husky Energy (HUSKF) CFO Alister Cowan as its new CFO, replacing Steve Reynish, who has held the CFO job on an interim basis since November.
- Cowan brings nearly 30 years' experience leading the finance function for several companies in the energy and utilities sectors, and had held the CFO position at Husky since 2008.
Jun. 11, 2014, 12:38 PM
- Royal Dutch Shell (RDS.A, RDS.B) agrees to sell its Orion oil sands project in Alberta to privately-held Osum Oil Sands Corp. for $325M.
- Orion has been in operation since 2007 and pumped ~6,700 barrels of bitumen per day from 22 steam-driven well pairs as of Q1.
- Osum is chaired by former Suncor (SU) CEO Rick George, who helped his former company grow from a valuation of $1B to more than $50B.
Jun. 10, 2014, 2:43 PM
- Suncor Energy (SU +0.2%) is upgraded to Buy from Hold with a $48 price target at Stifel, citing combined expectations for improving H2 2014 operating results, 2015 cash flow/share consensus numbers moving higher with guidance, and for increasing positive free cash flow ($1B in 2014, growing to $1.5B in 2015) likely to be returned to shareholders through buybacks and dividend growth.
- Also considering the strength in crude oil, narrowed heavy oil differentials and the company's 99% oil weighting, Stifel sees the stock poised to move higher by year-end 2014 as the drivers materialize.
Jun. 3, 2014, 9:56 AM
- A worker was killed at Suncor Energy's (SU) oil sands site in northern Alberta on Monday while performing maintenance on a piece of heavy equipment.
- The incident occurred within an area on the site managed by North American Energy (NOA), which provides contract services for SU.
- The death marks the fourth fatality this year at SU's oil sands operations.
May. 29, 2014, 6:20 PM
- Total (TOT) says it is suspending work indefinitely on its C$11B Joslyn oil sands mine in Alberta, saying high costs do not support investing in the project.
- Andre Goffart, head of the company's Canadian unit, says TOT has been working to reduce costs but without enough progress; TOT will continue work on project engineering to lower the cost of the mine, which had been expected to begin operating in 2017.
- TOT owns a 38.25% stake in the project while Suncor (SU) owns 36.75%, Occidental Petroleum (OXY) holds 15% and Japan's Inpex has a 10% interest.
May. 8, 2014, 11:19 AM
- A Suncor Energy (SU -0.2%) employee was killed in a bear attack at its main oil sands operation near Fort McMurray in Alberta.
- Alberta’s oil sands operations sit in prime bear and wildlife territory, although this area is defined by open pit mines rather than forest.
- The death was SU's third employee fatality this year, the first two in work-related incidents.
May. 2, 2014, 3:28 PM
- Crude oil imports to eastern Canada already have been cut by more than one third from a year ago, and Valero Energy (VLO) and Suncor (SU) are poised to use only North American crude in eastern Canada by 2015, further displacing overseas imports and possibly helping to bring domestic prices to an equilibrium with international levels.
- SU’s Montreal refinery will reach that point in 2015 and VLO’s Quebec City plant by the end of this year; Enbridge (ENB) plans to start a pipeline late this year allowing oil to flow to Montreal from fields in North Dakota and Alberta, further reducing higher-priced supplies from Europe and Africa.
- “Within a very short period of time, there won’t be any barrels coming into eastern Canada from overseas," says John Auers of industry consultant Tuner, Mason & Co.
Apr. 29, 2014, 8:32 AM
- Suncor Energy (SU) +1.5% premarket after reporting its Q1 earnings rose 36% Y/Y, which CEO Steve Williams calls the company's best-ever financial quarter.
- Results were helped by higher prices for North American crudes and a more profitable portfolio comprised of nearly 100% crude oil weighted production vs. 92% in the prior-year quarter.
- Total Q1 production fell 8.5% Y/Y to ~545K boe/day, which SU attributes to the sale of its natural gas assets and the shut-in of its Libya operations.
- Oil sands output rose 8.8% to ~389 bbl/day, but operating costs per barrel from those operations rose to C$35.60 from C$34.80 due to higher natural gas costs.
SU vs. ETF Alternatives
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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