Page 9 - NorthAmOil Week 18 2021

NorthAmOil PERFORMANCE NorthAmOil

Suncor’s first quarter bolstered

by stronger prices

CANADA CANADA’S Suncor Energy has reported a first quarter of 2021, it reached 785,900 barrels
net profit of CAD821mn ($674mn) for the of oil equivalent per day, up from 739,800 boepd
first quarter of 2021, marking a reversal of a y/y. This was attributed to combined upgrader
CAD3.5bn ($2.9bn) loss in the same quar- use of 97% and record in situ production. Sun-
ter of 2020. The result exceeded expectations, cor noted that together, the fourth quarter of
with analysts expecting a profit of CAD232mn 2020 and first quarter of 2021 represent the best
($191mn) according to Refinitiv. sequential synthetic crude oil (SCO) production
The latest results included a CAD181mn performance in its history.
($149mn) unrealised after-tax foreign exchange Suncor’s president and CEO, Mark Little,
gain on the revaluation of debt and an after-tax pointed to CAD2.1bn ($1.7bn) in funds from
restructuring charge of CAD126mn ($103mn). operations during the first quarter, which he
This also marks an improvement from the first said far exceeded all of the company’s capex and
quarter of 2020, when Suncor had CAD1.8bn dividend commitments during the quarter.
($1.5bn) of non-cash after-tax asset impairment “Strong operational performance, combined
charges and a CAD1bn ($821mn) unrealised with the incremental free funds flow benefits
after-tax foreign exchange loss on the revalua- from our strategic investments, have enabled us
tion of US dollar-denominated debt. to make significant progress towards our annual Suncor noted
The latest quarterly result illustrates a debt reduction and share buyback targets,” Little
trend that is now playing out across North stated. that its oil
America, and also other parts of the world, Indeed, he added that during the quarter
whereby oil and gas producers are reporting Suncor had reduced its total debt by CAD1.1bn sands capex
a stronger performance, bolstered by higher ($903mn) and repurchased over CAD300mn
crude prices. It also shows how despite new ($246mn) in common shares, representing for 2021 was
waves of coronavirus (COVID-19) infec- around 1% of its outstanding common shares. heavily weighted
tions in some countries, resulting in new Suncor noted that its oil sands capex for 2021
lockdowns, demand has continued its broad was heavily weighted towards asset maintenance. towards asset
recovery. Barring a significant worsening of This is complicated by the fact that Alberta’s oil
the current COVID-19 situation, this trend is sands region has become a COVID-19 hotspot, maintenance.
expected to continue in the second quarter on with Suncor among the companies battling out-
a year-on-year basis, given that the strictest, breaks at its sites at a time when it needs to fly
most co-ordinated wave of global lockdowns in more workers to carry out the maintenance
came during that quarter of 2020. work.
Like Canada’s other leading oil sands produc- Indeed, the company has pushed back the
ers, Suncor scaled back its capital expenditure maintenance turnaround on the U2 upgrader
and production early last year as the pandemic at its base plant site by at least a month. Mean-
took hold and producers took dramatic steps to while, Syncrude Canada, in which Suncor owns
curtail their output in response to the collapse a majority stake, has reduced maintenance
in demand. workforce numbers at the site. (See NorthAmOil
Now, its production is on the rise again. In the Week 17)™

Week 18 06•May•2021 www. NEWSBASE .com P9