TSE:SU Suncor raises $2.5-billion, cuts production guidance after wildfires

Suncor Energy Inc. (TSE:SU, Mkt cap 57.47B, P/E – , Div/yield 0.29/3.25, EPS -0.98, Shares 1.58B) signed a $2.5-billion bought deal for the sale of 71.5 million shares at $35 a share, which represents a discount of $1.50, or 4.1 per cent, to Tuesday’s closing price of $36.50. The Calgary-based company also lowered its production estimates after wildfires across northern Alberta forced the company to shut down facilities.

TSE:SU Suncor raises $2.5-billion

Suncor Energy Centre – TSE:SU Suncor raises $2.5-billion, cuts production guidance after wildfires

As a result of the fires in the Regional Municipality of Wood Buffalo (RMWB), Suncor said that its annualized total upstream production is now estimated to be between 585,000 and 620,000 barrels per day (bbls/d), with synthetic crude oil sales of 265,000 to 275,000 bbls/d, exported bitumen of 100,000 to 120,000 bbls/d and Syncrude production of 105,000 to 115,000 bbls/d.

Based on actual asset performance to date, production guidance for Exploration and Production has been increased to between 105,000 and 110,000 bbls/d.

Suncor expects that its incremental costs incurred to respond to the fires will be more than offset by variable cost savings during the outage.

The company’s cash operating costs are anticipated to remain within guidance of C$27-C$30 per barrel for the full year, while Syncrude cash operating costs are now estimated to be C$41-C$44 per barrel for the full year based on the operator’s estimates of restart timing and production ramp up.

Suncor is in the process of ramping up production and all of its operations in RMWB are expected to be producing at normal rates by the end of June. Syncrude anticipates a return to production starting in late June, followed by a full ramp up of production by mid-July.

The fires caused no damage to Suncor’s facilities or assets, and the company said that “enhanced fire mitigation work” has been conducted at all sites to reduce any future potential threat.

“Throughout this unprecedented situation, the community has demonstrated incredible resilience, patience and commitment to each other and the industry,” commented Suncor president and CEO Steve Williams. “As a result of working with government and the region we safely returned thousands of people and restarted our operations in a safe manner. I’m grateful to our employees, the first responders and all those who are working so hard to prepare the community to welcome back residents.”

Suncor Energy Inc. (TSE:SU) is a Calgary, Alberta based integrated energy company. The Company is focused on developing Canada’s petroleum resource basin, Athabasca oil sands. The Company operates in three business segments: Oil Sands, Exploration and Production, and Refining and Marketing. The Company’s Oil Sands segment includes Oil Sands operations and Oil Sands ventures operations. Its Exploration and Production segment consists of offshore operations off the east coast of Canada and in the North Sea, and onshore assets in North America, Libya and Syria. The Company’s Refining and Marketing segment is engaged in Refining and Supply, and Downstream Marketing. In addition, the Company explores, for, acquires, develops, produces and markets crude oil and natural gas in Canada and internationally. The Company also transports and refines crude oil, and markets petroleum and petrochemical products primarily in Canada. More from Reuters »

What is Successful Investing? Learn more here>>

Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 stocks set for long-term gains here>>

We believe that clients gain from our focus on the long-term fundamentals and not chasing short-term trends. Like to learn more? Please contact us here>>

The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.

 

Suncor Energy eyes further M&A opportunities

Not satisfied with its $6.6-billion acquisition of Canadian Oil Sands Ltd., Suncor Energy Inc.(TSE:SU, Mkt cap 58.80B, P/E – , Div/yield 0.29/3.13, EPS -1.38, Shares 1.58) says it remains in the market for other M&A opportunities that might come its way, the Financial Post reports.

suncor energy acquisition

Suncor Energy Centre – Suncor is eyeing further M&A opportunities

Last month saw Suncor take complete ownership of Canadian Oil Sands after finally succeeding to win over resistant Canadian Oil Sands management and shareholders.

That acquisition gave it 59% control of the Syncrude asset that produces synthetic crude oil from the oilsands, with Imperial Oil Ltd., Sinopec Ltd., Nexen-CNOOC Ltd., Mocal Energy Ltd. and Murphy Oil Corp. also holding stakes in the company.

Alister Cowan, Suncor chief financial officer, speaking in an interview on the sidelines of an energy conference in Toronto, said it’s not out the question that it will add to its Syncrude stake.

“We continue to look at M&A opportunities. If there are opportunities to buy more of Syncrude at the right price, we would be interested. Same for Fort Hills,” he is quoted.

In 2015, Suncor also acquired a slice of partner Total SA‘s share in the Fort Hills development, which is expected to begin producing oil at the end of 2017. That left the Calgary-based firm with just over half of the 180,000-bpd oilsands project – Total and Teck Resources Ltd. make up the rest.

The start-up of the Fort Hills project, alongside the Hebron development, will see Suncor increase production to 800,000 bpd by 2020 from 578,000 bpd last year.

“That’s a growth of six per cent per annum, per share,” Cowan said. “Beyond that, we have about 400,000 bpd of potential production from sweet spots in our SAGD reservoirs.”

He added that the company decided to defer these developments for the “next two to three years” as it doesn’t want to commit to any big projects beyond Fort Hills for the time being.

Suncor Energy Inc. in a Calgary, Alberta based integrated energy company. The Company is focused on developing Canada’s petroleum resource basin, Athabasca oil sands. The Company operates in three business segments: Oil Sands, Exploration and Production, and Refining and Marketing. The Company’s Oil Sands segment includes Oil Sands operations and Oil Sands ventures operations. Its Exploration and Production segment consists of offshore operations off the east coast of Canada and in the North Sea, and onshore assets in North America, Libya and Syria. The Company’s Refining and Marketing segment is engaged in Refining and Supply, and Downstream Marketing. In addition, the Company explores, for, acquires, develops, produces and markets crude oil and natural gas in Canada and internationally. The Company also transports and refines crude oil, and markets petroleum and petrochemical products primarily in Canada. More from Reuters »

What is Successful Investing? Learn more here>>

Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 stocks set for long-term gains here>>

We believe that clients gain from our focus on the long-term fundamentals and not chasing short-term trends. Like to learn more? Please contact us here>>

The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.

 

Suncor Energy to slash spending following $2-billion loss

Suncor Energy Inc. (TSE:SU, Mkt cap 45.56B, P/E 478.62, Div/yield 0.29/3.69, EPS 0.07, Shares 1.45B) has said it will cut spending by 10% in 2016 after it posted a $2 billion loss in the fourth quarter, the Financial Post reports.

Suncor Energy

Suncor Energy will cut spending by 10% in 2016 after it posted a $2 billion loss in the fourth quarter.

Back in November, Canada’s largest integrated energy company set an initial capital budget in the region of $6.7 billion and $7.3 billion. However, following the latest financials, Suncor now plans to spend between $6 billion and $6.5 billion through 2016.

“It’s not a crash diet, it’s a change in lifestyle,” Suncor Energy Inc. president and CEO Steve Williams said of the spending cut.

Williams stressed, however, that the reduction in planned spending doesn’t necessarily mean Suncor will lay off more staff, having already cut 1,700 positions over the course of 2015.

The action taken by Suncor to smooth out its bottom line is the result of the prolonged slump in oil prices. Suncor’s chief financial officer Alister Cowan is hopeful, however, that with credit ratings agencies having begun taking industry-wide action on oil producing companies, things could start to look up on that front.

“My hope is that they’re able to distinguish between companies that have and continue to demonstrate capital discipline and financial conservatism and those that have not,” Cowan said.

Williams added that despite oil prices falling further over the course of the fourth quarter of last year, the company was committed to protecting its dividend.

Suncor posted a $2 billion net loss in the fourth quarter, compared with net earnings of $87 million in the same quarter a year earlier.

Analysts noted $1.6 billion of that loss was from after-tax charges to its assets as a result of the oil price slump. The company also posted a $382-million foreign exchange loss.

Suncor Energy Inc. in a Calgary, Alberta based integrated energy company. The Company is focused on developing Canada’s petroleum resource basin, Athabasca oil sands. The Company operates in three business segments: Oil Sands, Exploration and Production, and Refining and Marketing. The Company’s Oil Sands segment includes Oil Sands operations and Oil Sands ventures operations. Its Exploration and Production segment consists of offshore operations off the east coast of Canada and in the North Sea, and onshore assets in North America, Libya and Syria. The Company’s Refining and Marketing segment is engaged in Refining and Supply, and Downstream Marketing. In addition, the Company explores, for, acquires, develops, produces and markets crude oil and natural gas in Canada and internationally. The Company also transports and refines crude oil, and markets petroleum and petrochemical products primarily in Canada. More from Reuters »

What is Successful Investing? Learn more here>>

Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 stocks set for long-term gains here>>

We believe that clients gain from our focus on the long-term fundamentals and not chasing short-term trends. Like to learn more? Please contact us here>>

The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.

 

Suncor secures Canadian Oil Sands deal

After failing to garner the support of two-thirds of Canadian Oil Sands’ shareholders last week, Suncor Energy (TSE:SU, Mkt cap 42.53B, P/E 447.72, Div/yield 0.29/3.94, EPS 0.07, Shares 1.45B) has acted quickly to agree terms on a $4.2-billion deal plus debt for COS, The Globe and Mail reports.

The turnaround comes only a week after Suncor extended its hostile bid for Canadian Oil Sands, with analysts casting doubt over whether Suncor was likely to sweeten its bid in order to reach a positive conclusion.

Suncor Energy COS

Suncor Energy has agreed terms on a $4.2-billion deal plus debt for COS

However, it has done just that, with Canadian Oil Sands shareholders now being offered 0.28 of a Suncor share – about 12% more than before.

That puts the total price of the deal at around $6.6 billion, but includes $2.4 billion in debt that Suncor will assume – making the stock portion worth about $4.2 billion.

As The Globe and Mail notes, because the offer is largely an exchange of shares, its monetary value will fluctuate depending on Suncor’s stock price. As of close of play Friday, the new offer was worth $8.74 per COS share, up from $7.81 under the initial offer.

In a joint media release, the two Calgary-based firms confirmed that both sets of directors – as well as major Canadian Oil Sands investor Seymour Schulich – are fully in support of the revised offer.

Schulich, who was fervently opposed to the original Suncor offer, said in a statement that he had urged the other COS shareholders to join him in accepting the new offer.

Don Lowry, chairman of Canadian Oil Sands, added: “Since Suncor made its initial offer, our board has remained steadfast in our commitment to maximize value for all shareholders. This agreement fulfils that commitment, providing our shareholders with a higher exchange ratio for their shares despite a 37% decline in spot oil prices.”

Suncor Energy Inc. in a Calgary, Alberta based integrated energy company. The Company is focused on developing Canada’s petroleum resource basin, Athabasca oil sands. The Company operates in three business segments: Oil Sands, Exploration and Production, and Refining and Marketing. The Company’s Oil Sands segment includes Oil Sands operations and Oil Sands ventures operations. Its Exploration and Production segment consists of offshore operations off the east coast of Canada and in the North Sea, and onshore assets in North America, Libya and Syria. The Company’s Refining and Marketing segment is engaged in Refining and Supply, and Downstream Marketing. In addition, the Company explores, for, acquires, develops, produces and markets crude oil and natural gas in Canada and internationally. The Company also transports and refines crude oil, and markets petroleum and petrochemical products primarily in Canada. More from Reuters »

What is Successful Investing? Learn more here>>

Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 stocks set for long-term gains here>>

We believe that clients gain from our focus on the long-term fundamentals and not chasing short-term trends. Like to learn more? Please contact us here>>

The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.

 

Suncor extends hostile bid for Canadian Oil Sands until Jan. 27

Suncor Energy Inc. (TSE:SU, Mkt cap 45.97B, P/E 483.94, Div/yield 0.29/3.65, EPS 0.07, Shares 1.45B) has extended its $4.3-billion takeover offer for Canadian Oil Sands Ltd. until Jan. 27 in an attempt to garner the support of two-thirds of its target company’s shareholders – the amount required for the deal to go ahead.

Suncor Canadian Oil Sands

Suncor extends hostile bid for Canadian Oil Sands until Jan. 27

At the time Suncor’s hostile bid had expired on Friday (Jan. 8), the Calgary-based firm had managed to convince less than half of Canadian Oil Sands shareholders, according to a source familiar with the tendering process quoted by The Globe and Mail.

While a Suncor spokesperson declined to comment and Canadian Oil Sands could not immediately be reached, the informed source said: “It’s clear shareholders have rejected the offer.”

Suncor had initially offered 0.25 of a Suncor share for each Canadian Oil Sands share, leading the market to bet “that there is a good chance that it doesn’t go through,” Bank of Montreal oil analyst Randy Ollenberger told The Globe and Mail in an e-mail.

At close of play Friday, Canadian Oil Sands shares were at $7.47 on the Toronto Stock Exchange, or roughly 11% below the implied value of $8.31 of Suncor’s offer, prompting analysts to cast further doubt on the likelihood of a deal.

Much of that doubt likely rests on the fact that Suncor will need to sweeten its bid in order to reach a positive conclusion – something its chief executive officer Steve Williams has so far resisted.

Williams has said previously that weak crude prices will mean that Canadian Oil Sands will find it hard to reverse recent cuts to its dividend, as well as warning that a rejection of the bid could result in a collapse in the shares.

Suncor Energy Inc. is a Calgary, Alberta based integrated energy company. The Company is focused on developing Canada’s petroleum resource basin, Athabasca oil sands. The Company operates in three business segments: Oil Sands, Exploration and Production, and Refining and Marketing. The Company’s Oil Sands segment includes Oil Sands operations and Oil Sands ventures operations. Its Exploration and Production segment consists of offshore operations off the east coast of Canada and in the North Sea, and onshore assets in North America, Libya and Syria. The Company’s Refining and Marketing segment is engaged in Refining and Supply, and Downstream Marketing. In addition, the Company explores, for, acquires, develops, produces and markets crude oil and natural gas in Canada and internationally. The Company also transports and refines crude oil, and markets petroleum and petrochemical products primarily in Canada. More from Reuters »

What is Successful Investing? Learn more here>>

Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 stocks set for long-term gains here>>

We believe that investment management is about managing risk, not chasing speculative returns. Like to learn more? Please contact us here>>

The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.