CALGARY, ALBERTA–(Marketwired – Oct. 26, 2016) –
Unless otherwise noted, all monetary figures are unaudited, introduced in Canadian dollars (Cdn$), and have been ready in accordance with International Financial Reporting Standards (IFRS), particularly International Accounting Normal (IAS) 34 Interim Monetary Reporting as issued by the International Accounting Requirements Board. Production volumes are presented on a working curiosity foundation, earlier than royalties, except noted otherwise. Certain financial measures referred to in this doc (cash stream from operations, working earnings (loss) and Oil Sands operations money operating costs) are not prescribed by Canadian generally accepted accounting rules (GAAP). See the Non-GAAP Monetary Measures part of this information launch. References to Oil Sands operations production and cash operating costs exclude Suncor’s curiosity in Syncrude’s operations.
“We generated more than $2 billion in money move from operations during the third quarter as a result of strong production from our upstream property, combined with document refining reliability and our concentrate on price reduction,” stated Steve Williams, president and chief executive officer. “Our efficiency demonstrates the energy of our core assets and our capability to deliver robust cash stream, even in a decrease value setting.”
Highlights of the third quarter of 2016 embrace:
- Money movement from operations of $2.025 billion ($1.22 per widespread share) driven by elevated Oil Sands manufacturing, decrease working costs at Oil Sands operations and document refinery crude throughput.
- Operating earnings of $346 million ($zero.21 per common share) and net earnings of $392 million ($0.24 per frequent share), including a Refining and Marketing (R&M) first-in, first-out (FIFO) lack of $86 million.
- Oil Sands belongings successfully returned to normal manufacturing charges following the forest fire shut-in during the second quarter of 2016, resulting in sturdy Oil Sands operations production of 433,700 barrels per day (bbls/d).
- Oil Sands operations money operating prices per barrel decreased to $22.15 for the third quarter of 2016, an 18% reduction versus the prior yr quarter and the bottom in over a decade.
- Syncrude manufacturing elevated to 183,800 bbls/d from 28,one hundred bbls/d in the prior yr quarter, as a result of further working interests acquired in 2016, mixed with improved upgrader reliability. Cash costs per barrel (bbl) at Syncrude decreased to $27.Sixty five from $41.Sixty five in the prior 12 months quarter.
- Refinery crude throughput improved to a record 465,600 bbls/d and working bills decreased to $four.Fifty five/bbl.
- Participation agreements signed with the Fort McKay and Mikisew Cree First Nations for the sale of a combined forty nine% interest within the East Tank Farm Growth for estimated proceeds of virtually $500 million.
Suncor recorded third quarter 2016 working earnings of $346 million ($zero.21 per widespread share) compared to $410 million ($zero.28 per frequent share) in the prior yr quarter. Highlights of the quarter included an elevated share of Syncrude operating earnings, attributed to improved upgrader reliability and decrease per unit operating costs combined with the acquisition of additional working interests in 2016, a decrease R&M FIFO loss, lower working prices at Oil Sands operations, file refinery crude throughput and higher manufacturing from each Oil Sands operations and Exploration and Manufacturing (E&P). These elements more than offset the unfavourable impression of both decrease benchmark crack spreads and crude pricing within the third quarter of 2016. Operating earnings also included a charge for a non-industrial exploration properly off the east coast of Canada.
Money flow from operations was $2.025 billion ($1.22 per frequent share) compared to $1.882 billion ($1.30 per frequent share) in the third quarter of 2015, with the improvement reflecting a better share of working earnings from Syncrude, a lower FIFO loss, decrease working costs at Oil Sands operations, a present tax restoration associated to a tax rate discount on oil and fuel income in the United Kingdom (U.Okay.) from 50% to forty%, record refinery crude throughput and higher production from each Oil Sands operations and E&P greater than offsetting decrease benchmark crack spreads and crude pricing.
Net earnings have been $392 million ($0.24 per frequent share) in the third quarter of 2016, compared with a net loss of $376 million ($0.26 per common share) within the prior yr quarter. Web earnings for the third quarter of 2016 included a $180 million deferred tax restoration associated to a tax fee discount on oil and gasoline earnings in the U.Ok. from 50% to 40%. Internet earnings additionally included an unrealized after-tax international trade lack of $112 million on the revaluation of U.S. greenback denominated debt and a non-money after-tax mark to market loss of $22 million on interest charge derivatives for future debt issuance. The net loss within the prior yr quarter included an unrealized after-tax overseas trade lack of $786 million on the revaluation of U.S. dollar denominated debt.
Suncor’s whole upstream production was 728,100 barrels of oil equivalent per day (boe/d) in the third quarter of 2016, compared with 566,one hundred boe/d within the prior yr quarter, primarily resulting from the additional forty one.Seventy four% possession interest in Syncrude acquired in 2016 together with considerably improved Syncrude reliability, and higher Oil Sands operations and E&P production, regardless of deliberate maintenance actions occurring at each Oil Sands and E&P.
Oil Sands operations production elevated to 433,seven-hundred bbls/d within the third quarter of 2016, in comparison with 430,300 bbls/d in the prior year quarter, primarily on account of larger In Situ manufacturing, partially offset by decrease synthetic crude oil (SCO) manufacturing on account of unplanned upgrader maintenance. Each quarters included deliberate upgrader upkeep.
Oil Sands operations cash working prices per barrel decreased within the third quarter of 2016 to $22.15/bbl, in comparison with $27.00/bbl in the prior yr quarter, due to lower working expenses because of value reduction initiatives and lower pure gas prices, mixed with increased production.
Suncor’s share of Syncrude production was 183,800 bbls/d within the third quarter of 2016, compared to 28,one hundred bbls/d within the prior 12 months quarter. Syncrude upgrader reliability improved to 98%, compared to 67% within the prior year quarter, which included the impression of an upgrader fire. The increase is attributed to further working interests acquired in 2016, mixed with strong reliability in the period and the processing of unfinished stock which was accumulated because of deliberate maintenance and impacted by the forest fires during the second quarter of 2016. Syncrude’s cash working prices per barrel in the third quarter of 2016 were the lowest in nearly a decade, decreasing to $27.Sixty five/bbl from $41.65/bbl within the prior year quarter, with the improvement attributed to the improved reliability combined with lower operating bills.
Production volumes in E&P increased to 110,600 boe/d within the third quarter of 2016, compared to 107,700 boe/d in the prior 12 months quarter, primarily due to manufacturing from new wells at Hibernia and improved reliability and reservoir optimization at Terra Nova, partially offset by planned maintenance at Buzzard that began late within the third quarter of 2016.
Average refinery crude throughput improved to a document of 465,600 bbls/d, compared to 444,800 bbls/d within the prior 12 months quarter because of improved reliability and lower planned maintenance. Deliberate upkeep at the Montreal and Sarnia refineries commenced in the third quarter of 2016.
“Suncor continues to find ways to scale back costs throughout the company,” said Williams. “Our cost reduction efforts combined with safe, reliable operations have delivered the lowest cash costs per barrel at our Oil Sands operations in over a decade and Syncrude delivered related enhancements.”
Suncor continues to give attention to the disciplined execution of its 2016 capital plan, reaching efficiencies whereas advancing major growth initiatives, Fort Hills and Hebron.
The company’s strategy contains divesting of non-core property that aren’t key components of the built-in model. Within the third quarter of 2016, Suncor has superior the gross sales course of for its lubricants enterprise and commenced the sales course of for certain property and liabilities related to its renewable power enterprise.
During the quarter, Suncor signed participation agreements for the sale of 34.3% and 14.7% equity interests in the East Tank Farm Improvement mission with Fort McKay and Mikisew Cree First Nations, respectively, for estimated proceeds of $497 million. The transactions are anticipated to close within the second quarter of 2017, subject to closing circumstances, as soon as the property are operational. The East Tank Farm Improvement is a Suncor-operated midstream asset currently under construction. Once completed, the power will support market entry for Fort Hills by means of third-occasion pipeline connectivity and include bitumen storage, mixing and cooling services.
“We continue to move our key growth initiatives ahead,” said Williams. “We now have made vital progress on the Fort Hills project in the quarter, and the signing of historic agreements with the Fort McKay and Mikisew Cree First Nations to promote pursuits in our East Tank Farm Development underscores our dedication to creating mutually beneficial long-time period relationships with Aboriginal communities.”
Subsequent to the quarter finish, Suncor completed the acquisition of a 30% participating curiosity in the U.K. North Sea Rosebank challenge at a cost of US$50 million. The venture is taken into account to be one in all the largest remaining undeveloped resources within the U.Okay. North Sea and is expected to be complementary to Suncor’s existing asset portfolio.
Oil Sands Operations
The main focus in Oil Sands operations in the third quarter of 2016 was the profitable return of all Fort McMurray region assets to regular rates of production following the forest fires in the second quarter of 2016, while persevering with to progress key reliability, security and environmental efficiency tasks. Capital spending in the third quarter of 2016 included deliberate upkeep at Upgrader 1, which commenced in the third quarter, in addition to building of the East Tank Farm Improvement.
Oil Sands Ventures
The Fort Hills mission was more than 70% full at the end of the third quarter of 2016, with the majority of the remaining work primarily based in Alberta. Key actions in the period included completion of the utilities modules, vital progress on modules and development in secondary extraction, as well as procurement of mining and extraction equipment. Progress also included development of sustaining activities that can help the mine plan following the commencement of manufacturing. First oil stays on monitor for late 2017. The company is working on alternatives to mitigate the impact on general challenge costs of both unfavourable overseas exchange charges and the forest fires within the second quarter of 2016 and believes Suncor’s total capital intensity will probably be in line with the unique sanction estimate of $84,000 per flowing barrel of bitumen.
The third quarter of 2016 also included an elevated share of Syncrude sustaining capital, which was primarily focused on maintaining belongings and implementing the mine-tailings plan.
Exploration and Manufacturing
Development of the Hebron undertaking continued within the third quarter of 2016. Following the arrival of the utilities and course of module from South Korea, all topside modules are now on location in Bull Arm, Newfoundland and Labrador, and integration of those modules is underway. First oil from the undertaking is predicted in late 2017. Progress capital also included drilling on the Shelburne Basin off the east coast of Canada, together with graduation of a second exploration well, as well as growth drilling at Hibernia, White Rose and Golden Eagle.
Operating Earnings (Loss) Reconciliation(1)
Suncor has updated its 2016 corporate steerage, previously issued on July 27, 2016. The total yr outlook ranges for production, refinery throughput and utilization, and sales assumptions have been updated as follows:
The full year outlook vary for capital expenditures has decreased from $6.0 – $6.5 billion to $5.Eight – $6.Zero billion, as follows:
The full year outlook range for the next gadgets has also been updated:
The next full 12 months outlook assumptions have also been adjusted: Brent, Sullom Voe from US$40/bbl to US$44.00/bbl, WTI, Cushing from US$39.00/bbl to US$43.00/bbl, WCS, Hardisty from US$26.00/bbl to US$29.00/bbl, New York Harbor 3-2-1 crack spread from US$12.50/bbl to US$thirteen.50/bbl, AECO – C Spot from $1.75/gigajoule (GJ) to $2.00/GJ, and the US$/Cdn$ exchange charge from zero.75 to zero.76.
For additional particulars and advisories relating to Suncor’s 2016 revised corporate steerage, see suncor.com/steering.
Non-GAAP Monetary Measures
Working earnings (loss) and Oil Sands operations cash operating prices are outlined in the Non-GAAP Monetary Measures Advisory part of the MD&A and reconciled to GAAP measures within the Consolidated Monetary Data and Section Results and Analysis sections of the MD&A. Cash flow from operations is outlined and reconciled to GAAP measures in the Non-GAAP Financial Measures Advisory part of the MD&A. These non-GAAP financial measures are included as a result of administration makes use of this data to analyze business efficiency, leverage and liquidity. These non-GAAP measures don’t have any standardized meaning and due to this fact are unlikely to be comparable to similar measures presented by different firms and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.
Authorized Advisory – Forward-Trying Info
This news release incorporates certain forward-trying info and ahead-looking statements (collectively referred to herein as “forward-looking statements”) within the which means of applicable Canadian and U.S. securities laws. Forward-trying statements in this news launch embrace references to: Suncor’s continued focus on the disciplined execution of its 2016 capital plan and attaining efficiencies whereas advancing main growth projects, Fort Hills and Hebron; the corporate’s technique, together with divesting of non-core assets that are not key elements of the built-in model, that the sales process for its lubricants enterprise has superior, and the graduation of the gross sales course of for sure property and liabilities associated to the corporate’s renewable power enterprise; expectations relating to the estimated proceeds and the timing of closing of the sale of 34.Three% and 14.7% fairness interests in the East Tank Farm Improvement venture to the Fort McKay and Mikisew Cree First Nations, respectively, and that, once completed, the ability will support market access for Fort Hills by means of third-occasion pipeline connectivity and encompass bitumen storage, mixing and cooling facilities; the belief that the U.Ok. North Sea Rosebank project is one of the largest remaining undeveloped resources within the U.Okay. North Sea and the expectation that it is going to be complementary to Suncor’s current asset portfolio; Suncor’s growth initiatives, together with: (i) statements across the Fort Hills venture, together with that the vast majority of the remaining work will be primarily based in Alberta, that first oil from the venture stays on monitor for late 2017, the company’s work on alternatives to mitigate the impression on overall undertaking prices of both unfavourable international change rates and the forest fires in the second quarter of 2016, the corporate’s perception that its whole capital intensity for the venture shall be in keeping with the unique sanction estimate of $eighty four,000 per flowing barrel of bitumen, and that sustaining activities will support the mine plan following the commencement of production; and (ii) statements across the Hebron mission, together with first oil expected in late 2017; and Suncor’s outlook for full yr 2016 manufacturing, refinery throughput and utilization, sales, capital expenditures, Oil Sands operations money working prices, Syncrude cash working costs, taxes and market assumptions. In addition, all different statements and details about Suncor’s strategy for progress, expected and future expenditures or investment decisions, commodity costs, prices, schedules, manufacturing volumes, working and financial results and the expected impression of future commitments are ahead-wanting statements. Some of the forward-wanting statements and knowledge could also be recognized by phrases like “expects”, “anticipates”, “will”, “estimates”, “plans”, “scheduled”, “intends”, “believes”, “projects”, “indicates”, “may”, “focus”, “imaginative and prescient”, “goal”, “outlook”, “proposed”, “goal”, “goal”, “continue”, “should”, “could” and similar expressions.
Forward-wanting statements are based mostly on Suncor’s current expectations, estimates, projections and assumptions that have been made by the corporate in mild of its information available on the time the statement was made and consider Suncor’s expertise and its notion of historic trends, including expectations and assumptions concerning: the accuracy of reserves and resources estimates; commodity costs and interest and international change rates; capital efficiencies and value financial savings; relevant royalty charges and tax legal guidelines; future manufacturing charges; the sufficiency of budgeted capital expenditures in carrying out deliberate activities; the availability and price of labour and providers; and the receipt, in a timely manner, of regulatory and third-party approvals.
Ahead-wanting statements aren’t ensures of future performance and contain a number of dangers and uncertainties, some that are much like different oil and gasoline companies and a few which might be unique to Suncor. Suncor’s precise results may differ materially from those expressed or implied by its forward-looking statements, so readers are cautioned not to put undue reliance on them.
The MD&A and Suncor’s Annual Info Kind, Form forty-F and Annual Report to Shareholders, every dated February 25, 2016, and different paperwork it files on occasion with securities regulatory authorities describe the dangers, uncertainties, materials assumptions and other factors that could affect actual results and such factors are incorporated herein by reference. Copies of those documents are available without cost from Suncor at 150 6th Avenue S.W., Calgary, Alberta T2P 3E3, by calling 1-800-558-9071, or by electronic mail request to email@example.com or by referring to the company’s profile on SEDAR at sedar.com or EDGAR at sec.gov. Besides as required by relevant securities legal guidelines, Suncor disclaims any intention or obligation to publicly update or revise any forward-wanting statements, whether as a result of recent info, future occasions or otherwise.
Legal Advisory – BOEs
Sure natural fuel volumes have been transformed to barrels of oil equivalent (boe) on the basis of one barrel to six thousand cubic toes. Any figure offered in boe may be deceptive, significantly if utilized in isolation. A conversion ratio of one bbl of crude oil or natural fuel liquids to six thousand cubic toes of natural gasoline is predicated on an vitality equivalency conversion methodology primarily applicable on the burner tip and does not signify a value equivalency on the wellhead. Provided that the worth ratio primarily based on the present worth of crude oil as in comparison with pure gasoline is considerably completely different from the power equivalency of 6:1, using a conversion on a 6:1 basis may be deceptive as a sign of value.
Suncor Energy is Canada’s main built-in power company. Suncor’s operations embody oil sands development and upgrading, typical and offshore oil and fuel production, petroleum refining, and product marketing beneath the Petro-Canada brand. A member of Dow Jones Sustainability indexes, FTSE4Good and CDP, Suncor is working to responsibly develop petroleum resources whereas also growing a renewable vitality portfolio. Suncor is listed on the UN Global Compact a hundred inventory index and the company Knights’ International a hundred. Suncor’s widespread shares (symbol: SU) are listed on the Toronto and New York inventory exchanges.