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. 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."
Thu, Jun. 11, 11:58 AM
- Suncor Energy (SU -2.2%) CEO Steve Williams says he supports a higher carbon tax for Alberta as long as the rate is increased gradually to ensure Canada’s oil remains competitive with other places.
- The current price of C$15/metric ton (US$12) that is applied to large industrial emitters "wasn’t a bad place to start and I think it can move on” with increases over time, Williams tells Bloomberg.
- A price for carbon that increases over time will provide oil companies with the long-term certainty they need, especially with oil sands projects that run for decades, the CEO says.
- Alberta was one of the first places in the developed world to implement a carbon tax in 2007, but Premier Notley’s new government has said it will roll out new regulations, including a possible change to the price of carbon, by the end of this month.
Wed, May 6, 2:36 PM
- Canadian energy stocks are broadly lower after the shocking election result in Alberta raised questions about the future of the country's oil industry: SU -3.3%, ENB -2.8%, TRP -2.6%, IMO -2.3%, CNQ -2.3%, CVE -5.8%, OTCQB:HUSKF -1%, TCK -1.6%, TAC -4.1%, OTCQX:COSWF -6%.
- "Energy is such a critical issue to Alberta, I’m really not that concerned," ENB CEO Al Monaco says, but investors and analysts disagree.
- "It’s completely devastating" for energy companies and investors, saysCanoe Financial's Rafi Tahmazian of stated plans by the newly elected government to raise corporate taxes, review the government’s take of energy revenue, scale back advocacy for pipelines and phase out coal power more quickly.
- “If you are invested in energy stocks, you should be concerned,” says AltaCorp’s Jeremy McCrea, noting that drillers already face higher costs to extract oil and gas in Alberta than in many jurisdictions, so an increase in royalties would make the province even less competitive.
Tue, Apr. 14, 12:58 PM
- Canadian Oil Sands (OTCQX:COSWF +5.5%), the company with the largest stake in oil sands miner Syncrude Canada, is a prime takeover target and its most likely suitor is Imperial Oil (IMO +1.9%), the company with the second-largest stake, says FirstEnergy Capital analyst Michael Dunn.
- The analyst says his report is partly based on recent investor meetings with senior IMO execs who believe now is a good time to consider making acquisitions.
- Dunn thinks IMO would not want to pay more than a price in the low teens for COSWF, so its stock would have to fall further to make a bid attractive, and he suggests the company would not want to take on excessive debt - which could mean an equity-based offer, help from its controlling shareholder, Exxon Mobil (NYSE:XOM), or enrolling a current Syncrude partner such as Suncor (NYSE:SU).
Thu, Jan. 15, 2:56 PM
- Suncor Energy's (SU -1.6%) decision to cut $1B from its 2015 capital spending program actually came in below what some analysts expected, but continued weak oil prices would force some tough choices - including whether to reduce spending on its Fort Hills and/or Hebron projects, or take on more leverage to keep them moving.
- Desjardins Capital's Justin Bouchard notes that SU’s revised budget is based on oil at $59 but if oil was $50, he estimates SU would generate $4.8B in cash flow, meaning it would be $3.5B short in meeting its $6.5B capex and another $1.6B in dividends.
- But most analysts believe SU's move was prudent, since the company still has room to take on debt to fund existing projects or buy up any cheap assets that pop up given the industry’s weakness.
Wed, Jan. 7, 5:35 PM
Mon, Jan. 5, 12:18 PM
- Energy stocks severely underperform the broader market, with the sector -4.2% vs. the S&P 500's -1.4%, as U.S. oil prices briefly slip below $50/bbl for the first time since April 2009; Nymex crude recently was -4.4% at $50.37, while Brent crude -5.9% at $53.08.
- Among the day's biggest losers: DNR -9%, RIG -7.6%, NBR -4.8%, CHK -5.9%, SDRL -9.1%, SD -12.3%, NOV -5.9%, PSX -6.2%, APA -5.9%, DVN -4.4%, EOG -6%, SU -5.2%, OXY -4.2%, APC -8.7%, PWE -9%, ECA -5.5%, MRO -5.3%.
- Global oil majors, which have been seen as less vulnerable to falling oil prices, are posting big losses: XOM -2.7%, COP -4.5%, CVX -3.8%, BP -5.8%, RDS.A -4.6%, TOT -6.5%.
- ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, XOP, ERY, FCG, DIG, PBW, BNO, GASL, DTO, DBO, DUG, IYE, XES, IEO, QCLN, IEZ, UWTI, PXE, USL, PXI, FENY, DWTI, PXJ, DNO, PSCE, RYE, SZO, PUW, FXN, OLO, DDG, HECO, TWTI, OLEM
Dec. 16, 2014, 11:44 AM
- Exxon Mobil (XOM +2.1%), Suncor Energy (SU +6.9%) and ConocoPhillips (COP +4.8%) combine to offer $559M for exploration rights in the deepwater Flemish Pass, the largest-ever bid for a license in Canada’s Newfoundland and Labrador province.
- The region is where Statoil last year announced the huge Bay du Nord find, which is estimated to contain up to 600M barrels of light, sweet crude.
Dec. 3, 2014, 11:32 AM
- The energy sector (XLE +1.5%) continues its momentum from yesterday, leading the way again as the best performing sector in early trading with crude oil rising 1.2% so far today and reports that U.S. well permits fell 40% last month.
- Top performers include Clayton Williams (CWEI +7.7%), Transocean Partners (RIGP +10.6%), Gaslog (GLOG +13.8%) and Energy XXI (EXXI +15.7%).
- Other leading energy names are showing stronger recoveries as they clear last Friday's bearish gap zone: XOM +0.2%, CVX +0.4%, COP +2.5%, OXY +2.5%, DVN +2.9%, EOG +2.5%, HES +2.2%, MUR +1.5%, NBL +2.3%, PXD +4.2%, SU +3%, CNQ +1.9%.
- Some analysts warn that the worst may not be over, however, as much of the advance is being driven by investors repurchasing ETFs they used to make short bets; investors also could opt to sell oil shares at a loss in coming weeks to reduce tax burdens.
Oct. 29, 2014, 11:28 AM
- Teck Resources' (TCK +2.4%) Q3 earnings tumbled 69% Y/Y, hurt by weak coal prices and a drop in copper production, but results beat analyst expectations, helped in part by improved results from its zinc operations.
- TCK's realized coal sales price in Q3 was US$110/metric ton vs. US$139 in the year-ago period, but unit cash costs in coal were just US$84, consistent with recent quarters, and says all six of its coal mines had positive cash margins.
- Q3 coal production rose 2% Y/Y; coal sales of 6.7M metric tons were the second highest on record for the period and follow record high sales for H1.
- Says construction of the Fort Hills oil sands project in Alberta, which it owns with Suncor (NYSE:SU) and Total (NYSE:TOT), is progressing according to plan and expects first oil as early as Q4 2017; TCK expects its share of Fort Hills' costs this year to total ~C$800M.
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).
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.
Apr. 25, 2014, 10:14 AM
- Canadian Oil Sands (COSWF -4.4%) announces an unplanned maintenance-related outage at Syncrude Coker 8-1, prompting it to lower its estimate for 2014 Syncrude production to 95M-105M barrels.
- National Bank downgrades shares to Underperform from Sector Perform, saying the outage could mean Q2 production will get hit especially hard since the timing could overlap with planned maintenance of another upgrader.
- Other owners of Syncrude include Imperial Oil (IMO), Suncor (SU), Murphy Oil (MUR), Sinopec (SNP) and Cnooc (CEO).
Apr. 21, 2014, 8:42 AM
Aug. 16, 2013, 10:33 AM
- Warren Buffett’s new 17.7M-share stake in Suncor (SU +1.7%) could spark investor interest in the battered stocks of Canadian oil sands companies, analysts say.
- Canadian Natural Resources (CNQ), Cenovus Energy (CVE) and Imperial Oil (IMO) - with "scale and access to market and cost discipline" - may get a second look from investors as Wall Street reviews oil and gas plays beyond prolific shale plays in their own backyard.
- SU produced a record 390K bbl/day in July, and its "new normal" would see output shoot up to 420K, First Energy Capital says.
- SU is trading at some of the lowest cash flow multiples and, at 80 years, has one of the longest reserve lives in its peer group.
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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