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.

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 »

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