Suncor Energy released its 2013 corporate guidance today, which
includes $7.3 billion in capital spending balanced between growth
and sustaining projects and planned average production of 570,000
to 620,000 barrels of oil equivalent per day, representing an
increase of approximately 8% in overall production and
approximately 12% in oil sands production year over year.
Approximately $3.3 billion of the 2013 capital spend is expected
to go towards growth projects, with nearly half of that growth
capital earmarked for advancing Exploration and Production projects
including Hebron, Golden Eagle and East Coast Canada asset
development. In Oil Sands, the company anticipates spending over
$1.2 billion to support near-term production growth in In Situ and
Base and funding longer-term growth projects. Refining and
Marketing growth capital of $55 million will largely be deployed on
projects to prepare the Montreal refinery to receive shipments of
western crude.
"Our 2013 capital plan demonstrates our commitment to be
absolutely diligent in pursuing those projects expected to provide
profitable, long-term growth for shareholders," said Steve
Williams, president and chief executive officer. "As a result of
our disciplined and prudent spending in 2012, we will begin 2013
with a strong balance sheet and the ability to fund our capital
program completely from internal cash flow."
With the early commissioning of Firebag 4 and first oil expected
by the end of 2012, In Situ growth capital is expected to be
reduced substantially as compared to prior years. Suncor will
continue to carefully manage spending on oil sands joint venture
projects as it drives towards project sanction decisions.
Capital Expenditures (millions $) (1)
Capital (2)
2013 Outlook Sustaining Growth
Dec. 3, 2012
============================================================================
Oil Sands 4,195 2,960 1,235
Oil Sands 3,110 2,540 570
Oil Sands Ventures 1,085 420 665
E&P 1,845 205 1,640
Refining & Marketing 730 675 55
Corporate 530 155 375
Total 7,300 3,995 3,305
(1) Capital expenditures exclude capitalized interest of $450 million - $550
million.
(2) For definitions of growth and sustaining capital expenditures, see the
Capital Investment Update Section of Suncor's Management's Discussion
and Analysis dated October 31, 2012. Capital expenditures attributed to
Corporate include a $250 million growth capital pool to be allocated to
the Business Units for spending at the discretion of management.
"Together with our joint venture partner, we have accelerated
the review of the Voyageur project with the intent to reach a
decision by the end of the first quarter in 2013," said Williams.
"Until a decision is made, we have agreed to minimize spending on
this project."
Approximately $4 billion of the 2013 capital spend is expected
to go toward sustaining capital investments focused on improving
reliability across the company's assets, maintaining current
production capacities through planned maintenance activities and
ensuring the safety and efficiency of existing operations.
2013 Production Outlook
"We undertook significant maintenance in 2012 across our
operations and we've made good progress during the year in terms of
operational excellence and reliability," said Williams. "We will
continue to maintain a relentless focus on operational excellence
and reliability in order to maximize the value from Suncor's broad
portfolio of assets."
"I'm pleased with the steps we've taken in terms of reducing and
carefully managing costs," said Williams. "We're focused on
continuing to reduce oil sands cash costs and, based on our
performance to date, I'm optimistic that we will reach this
goal."
International production ranges assume production from assets in
the U.K. sector of the North Sea and from Libya but do not include
production from Syria due to continued political unrest in that
country.
2013 full year outlook
Suncor Total Production Dec. 3, 2012
----------------------------------------------------------------------------
Suncor Oil Sands (bpd) 350,000 to 380,000
Syncrude production share (bpd) 34,000 to 38,000
North America Onshore (boe/d) 41,000 to 46,000
East Coast Canada (bpd) 55,000 to 60,000
International (boe/d) 90,000 to 96,000
----------------------------------------------------------------------------
Total production (boe/d) 570,000 to 620,000
For more detail on Suncor's outlook and capital spending plan,
see www.suncor.com/guidance.
Suncor's corporate guidance provides management's outlook for
2013 in certain key areas of the company's business. Users of this
forward-looking information are cautioned that actual results may
vary materially from the targets disclosed. Readers are cautioned
against placing undue reliance on this guidance.
Legal Advisory - Forward-Looking Information
This news release contains certain forward-looking statements
and other information based on Suncor's current expectations,
estimates, projections and assumptions that were made by the
company in light of its experience and its perception of historical
trends, including: expectations and assumptions concerning the
accuracy of reserves and resources estimates; commodity prices and
interest and foreign exchange rates; capital efficiencies and cost
savings; applicable royalty rates and tax laws; future production
rates; the sufficiency of budgeted capital expenditures in carrying
out planned activities; the availability and cost of labour and
services; and the receipt, in a timely manner, of regulatory and
third-party approvals. Suncor's corporate guidance is based on the
following assumptions around oil prices: WTI, Cushing of US$85.00
per barrel; Brent, Sullom Voe of US$97.00 per barrel; and WCS,
Hardisity of US$65.00 per barrel. In addition, the guidance is
based on the assumption of a natural gas price (AECO - C Spot) of
Cdn. $3.00 per GJ and an exchange rate (US$/Cdn$) of $0.97.
Assumptions for the Oil Sands and Syncrude 2013 production outlook
include those relating to reliability and operational efficiency
initiatives that we expect will minimize unplanned maintenance in
2013. Assumptions for the East Coast Canada and International 2013
production outlook include those relating to reservoir performance,
drilling results and facility reliability. Factors that could
potentially impact Suncor's 2013 corporate guidance include, but
are not limited to:
-- Bitumen supply. Bitumen supply may be dependent on unplanned maintenance
of mine equipment and extraction plants, bitumen ore grade quality,
tailings storage and in situ reservoir performance.
-- Availability of infrastructure. A number of new storage and distribution
infrastructure projects are currently planned or in progress, which we
expect will support growth at Oil Sands operations. The timing for the
completion and successful integration of these projects into existing
operations may impact production.
-- Performance of recently commissioned facilities. Production rates while
new equipment is being brought into service are difficult to predict and
can be impacted by unplanned maintenance. Sweet SCO production levels
from Oil Sands are dependent on the successful operation of the MNU.
-- Unplanned maintenance. Production estimates could be negatively impacted
if unplanned work is required at any of our mining, extraction,
upgrading, refining, pipeline, or offshore assets.
-- Planned maintenance events. Production estimates, including SCO rates,
could be negatively impacted if planned maintenance events are affected
by unexpected events or not executed effectively.
-- Commodity prices. Declines in commodity prices may alter our production
outlook and/or reduce our capital expenditure plans.
-- Foreign operations. Suncor's foreign operations and related assets are
subject to a number of political, economic and socio-economic risks.
All statements and other information that address expectations
or projections about the future, and other statements and
information about Suncor's strategy for growth, expected and future
expenditures, commodity prices, costs, schedules, production
volumes, operating and financial results and expected impact of
future commitments are forward-looking statements. Some of the
forward-looking statements and information may be identified by
words like "will", "expected", "guidance", "plans", "outlook",
"continue", "focus", "could", "potentially" and similar
expressions. Forward-looking statements in this news release
include references to the following: anticipated capital spending,
which Suncor believes demonstrates its commitment to be absolutely
diligent in pursuing those projects expected to provide profitable,
long-term growth for shareholders; anticipated production for 2013;
plans to reduce In Situ growth capital substantially as compared to
prior years; plans to begin 2013 with a strong balance sheet and
the ability to fund Suncor's capital program from internal cash
flow; expectation for first oil at Firebag 4 by the end of 2012;
intent to reach a decision on Voyageur by the end of the first
quarter of 2013; and goal to reduce oil sands cash costs.
Forward-looking statements and information are not guarantees of
future performance and involve a number of risks and uncertainties,
some that are similar to other oil and gas companies and some that
are unique to Suncor. Suncor's actual results may differ materially
from those expressed or implied by its forward-looking statements,
so readers are cautioned not to place undue reliance on them.
Additional risks, uncertainties and other factors that could
influence financial and operating performance of all of Suncor's
operating segments and activities include, but are not limited to:
changes in general economic, market and business conditions, such
as commodity prices, interest rates and currency exchange rates;
fluctuations in supply and demand for Suncor's products; the
successful and timely implementation of capital projects, including
growth projects and regulatory projects; competitive actions of
other companies, including increased competition from other oil and
gas companies or from companies that provide alternative sources of
energy; labour and material shortages; actions by government
authorities, including the imposition of taxes or changes to fees
and royalties, and changes in environmental and other regulations;
the ability and willingness of parties with whom we have material
relationships to perform their obligations to us; the occurrence of
unexpected events such as fires, equipment failures and other
similar events affecting Suncor or other parties whose operations
or assets directly or indirectly affect Suncor; the potential for
security breaches of Suncor's information systems by computer
hackers or cyberterrorists, and the unavailability or failure of
such systems to perform as anticipated as a result of such
breaches; our ability to find new oil and gas reserves that can be
developed economically; the accuracy of Suncor's reserves,
resources and future production estimates; market instability
affecting Suncor's ability to borrow in the capital debt markets at
acceptable rates; maintaining an optimal debt to cash flow ratio;
the success of the company's risk management activities using
derivatives and other financial instruments; the cost of compliance
with current and future environmental laws; risks and uncertainties
associated with closing a transaction for the purchase or sale of
an oil and gas property, including estimates of the final
consideration to be paid or received, the ability of counterparties
to comply with their obligations in a timely manner and the receipt
of any required regulatory or other third-party approvals outside
of Suncor's control that are customary to transactions of this
nature; and the accuracy of cost estimates, some of which are
provided at the conceptual or other preliminary stage of projects
and prior to commencement or conception of the detailed engineering
that is needed to reduce the margin of error and increase the level
of accuracy. The foregoing important factors are not
exhaustive.
Suncor's Earnings Release, Quarterly Report and Management's
Discussion & Analysis for the third quarter of 2012 dated
October 31, 2012, Suncor's Annual Information Form/Form 40-F dated
March 1, 2012, Annual Report to Shareholders and other documents it
files from time to time with securities regulatory authorities
describe additional risks, uncertainties, material assumptions and
other factors that could influence actual results, and such factors
are incorporated herein by reference. Copies of these documents are
available without charge from Suncor at 150 6th Avenue S.W.,
Calgary, Alberta T2P 3E3, by calling 1-800-558-9071, or by email
request to info@suncor.com or by referring to the company's profile
on SEDAR at www.sedar.com or EDGAR at www.sec.gov. Except as
required by applicable securities laws, Suncor disclaims any
intention or obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Certain natural gas volumes have been converted to barrels of
oil equivalent (boe) on the basis of one barrel to six thousand
cubic feet. Any figure presented in boe may be misleading,
particularly if used in isolation. A conversion ratio of one bbl of
crude oil or natural gas liquids to six thousand cubic feet of
natural gas is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a
value equivalency at the wellhead. Given that the value ratio based
on the current price of crude oil as compared to natural gas is
significantly different from the energy equivalency of 6:1,
utilizing a conversion on a 6:1 basis may be misleading as an
indication of value.
Suncor Energy is Canada's premier integrated energy company.
Suncor's operations include oil sands development and upgrading,
conventional and offshore oil and gas production, petroleum
refining, and product marketing under the Petro-Canada brand. While
working to responsibly develop petroleum resources, Suncor is also
developing a growing renewable energy portfolio. Suncor's common
shares (symbol: SU) are listed on the Toronto and New York stock
exchanges.
For more information about Suncor Energy please visit our web
site at www.suncor.com or follow us on Twitter @SuncorEnergy.
Contacts: Investor inquiries 800-558-9071invest@suncor.com Media
inquiries 403-296-4000media@suncor.com
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