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Suncor Energy earns $877M on increased production; doubles dividend


Suncor Energy Inc. is doubling its dividend and restoring it to pre-pandemic ranges because it continues to pay down debt and ramp up manufacturing within the wake of upper oil costs.

Shares within the Calgary-based oil producer and refiner closed up $3.78 or 13.4 per cent to $32 on Thursday. Suncor reported after markets closed on Wednesday that it earned a web revenue of $877 million in its third quarter, or 59 cents per widespread share, in contrast with a web lack of $12 million or one cent per share within the third quarter of 2020.

The corporate says it should improve its dividend to 42 cents per share on Dec. 24, due to sturdy efficiency and higher-than-expected vitality costs.


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“We’re simply making the most of the excessive commodity worth surroundings. We’ve made a lot progress on restructuring the debt and such, our view was we wanted to maintain the dividends up on the identical tempo,” mentioned Suncor chief government Mark Little, on a convention name with analysts Thursday.

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Suncor mentioned its working earnings elevated to $1.04 billion or 71 cents per widespread share within the third quarter, in contrast with an working lack of $338 million or 22 cents per widespread share in the identical interval final 12 months.

Suncor’s complete upstream manufacturing for the quarter ended Sept. 30 was 698,600 barrels of oil equal per day, in contrast with 616,200 in the identical quarter a 12 months in the past.

Suncor’s refinery enterprise reported $947 million in funds from operations within the third quarter, in contrast with $594 million in the identical quarter the 12 months earlier than.

The corporate mentioned it diminished its web debt by $2 billion within the third quarter and has diminished its web debt by a complete of $3.1 billion because the starting of 2021. Little mentioned Suncor expects to cut back web debt by a complete of $5 billion by the top of the 12 months.

Suncor’s board has additionally elevated its present share buyback program to seven per cent of excellent shares to be bought by Feb. 7. Little mentioned the corporate anticipates persevering with the buyback program on the prior fee of about 5 per cent of excellent shares after that date.

“Even with a major improve to the dividend and continuation of the buyback program, we’re planning to speed up the tempo of attaining the web debt targets,” Little mentioned.

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“This displays our confidence within the efficiency of our asset base and the sturdy free funds stream technology throughout our built-in mannequin, making the most of sturdy commodity costs.”

Throughout the third quarter, Suncor assumed operatorship of the Syncrude three way partnership oilsands challenge in northern Alberta, a milestone the corporate says will assist enhance Syncrude’s operational efficiency by making the most of all of the Suncor-operated belongings within the area. The change is predicted to generate annual gross synergies for the three way partnership homeowners of $100 million within the first six months, with a further $200 million by way of 2022-2023, Suncor mentioned.

READ MORE: Canada’s Suncor posts Q2 profit as oil prices rebound from COVID-19 lows 

Suncor additionally ramped up manufacturing within the third quarter at its Fort Hills oilsands mine, which is collectively owned by Suncor and minority companions Whole E&P and Teck Sources Ltd. Suncor shut down one among its manufacturing trains at Fort Hills final 12 months as oil costs collapsed in the course of the COVID-19 pandemic, however the firm mentioned Thursday it’s expects to transition to a two-train operation and full manufacturing charges by the top of the 12 months.

In a be aware to shoppers, ATB Capital Markets analyst Patrick O’Rourke mentioned that Suncor’s affirmation that Fort Hills will likely be totally on-line by year-end “alleviates a key investor concern.”

Raymond James analyst George Huang mentioned in a be aware he believes that behind Suncor’s dividend improve is “an underappreciated structural enchancment story.”

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“We consider that 3Q21 might mark a turning level for shares of Suncor which have considerably lagged the broader vitality rally year-to-date,” Huang mentioned.




© 2021 The Canadian Press





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