Calgary-based energy giant Suncor had net earnings of $972 million in the second quarter, up from $435 million for the same period in 2017.
“Suncor generated the strongest second quarter cash flow on record, with funds from operations of $2.9 billion and operating earnings of $1.2 billion,” said Steve Williams, president and chief executive officer, in a statement as the company reported its financial results. “We achieved these second quarter results even with the most significant turnaround maintenance schedule in our company’s history.”
The company said total upstream quarterly production was 661,700 barrels of oil equivalent per day (boe/d). That was impacted by major planned maintenance at oil sands operations and Syncrude, as well as the unplanned outage at Syncrude in late June.
“The company continued to return value to shareholders, distributing $587 million in dividends and repurchasing $849 million of shares since the end of the first quarter of 2018, including committed repurchases subsequent to the end of the second quarter of 2018,” it said.
Steve Williams
President and CEO
“Subsequent to the end of the quarter, Suncor’s board of directors approved an increase to the share repurchase program from $2.15 billion to $3 billion, demonstrating confidence in the company’s ability to generate cash flow and commitment to return cash to shareholders.”
Suncor said the Fort Hills project continues to ramp up ahead of schedule, with its share of production averaging 70,900 barrels per day for the second quarter of 2018. The third and final extraction train at Fort Hills became operational during the second quarter and the plant was successfully tested in excess of 90 per cent of full design capacity during a week-long reliability test. Fort Hills cash operating costs per barrel were $28.55 in the second quarter.
“Operations at Fort Hills and Hebron continue to ramp up ahead of our expectations,” said Williams. “Both projects were constructed during a low oil price environment, have come online as prices have strengthened and are already delivering positive quarterly cash flow.
“We want to reiterate our belief in Syncrude’s long‑term potential and ability to achieve sustained reliability improvements, despite our disappointment with recent operational performance. From experience, we know that long‑term reliability is a journey and we are working with the owners to advance strategic initiatives in order to achieve our reliability and cost goals.”
Suncor said its 2018 capital program is focused on improving the safety, long‑term reliability and efficiency of the company’s operating assets, including execution of major turnarounds, in addition to the efficient and effective ramp up at both of Suncor’s major growth projects, Fort Hills and Hebron.
“The company spent $1.737 billion on capital expenditures during the second quarter of 2018, which increased from $1.659 billion in the prior year quarter due to major planned maintenance completed across the company, with several assets undergoing turnarounds,” it said.
Respected business writer Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald in various capacities, including 12 years as a senior business writer.
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