“In the third quarter of 2021, Suncor generated funds from
operations of $2.6 billion, underpinned by strong results from the
Refining & Marketing business and including the significant
planned turnaround at Oil Sands Base,” said Mark Little, president
and chief executive officer. “Since the start of 2021, we have
returned $2.6 billion to our shareholders through share repurchases
and dividends and have reduced net debt by $3.1 billion,
demonstrating significant progress towards fortifying our balance
sheet and meeting our capital allocation targets for the year.”
- Funds from operations increased to $2.641 billion ($1.79 per
common share) in the third quarter of 2021, compared to $1.166
billion ($0.76 per common share) in the prior year quarter. Cash
flow provided by operating activities, which includes changes in
non-cash working capital, was $4.718 billion ($3.19 per common
share) in the third quarter of 2021, compared to $1.245 billion
($0.82 per common share) in the prior year quarter.
- The company recorded operating earnings(1) of $1.043 billion
($0.71 per common share) in the third quarter of 2021, compared to
an operating loss of $338 million ($0.22 per common share) in the
prior year quarter. The company had net earnings of $877 million
($0.59 per common share) in the third quarter of 2021, compared to
a net loss of $12 million ($0.01 per common share) in the prior
year quarter.
- Refining and Marketing (R&M) delivered $947 million in
funds from operations in the current period, marking the third
highest results for third quarter funds from operations on record.
The increase in funds from operations in the third quarter of 2021,
compared to $594 million in the prior year quarter, was a result of
the improving business environment and strong refinery utilizations
of 99%, and was achieved despite Canadian gasoline and diesel
demand estimated to be 7%(2) below the comparable period in 2019.
R&M funds from operations included a first-in, first-out (FIFO)
inventory valuation gain of $84 million after-tax in the third
quarter of 2021, compared to $164 million in the prior year
quarter.
- Suncor’s total upstream production increased to 698,600 barrels
of oil equivalent per day (boe/d) in the third quarter of 2021,
compared to 616,200 boe/d in the prior year quarter, due to
continued strong performance from the company’s In Situ assets and
increased production volumes at Syncrude, partially offset by the
impact of the significant planned turnaround at Oil Sands Base
plant Upgrader 2 and planned maintenance at Firebag, which was
completed in the quarter.
- Suncor successfully assumed the role of operator of the
Syncrude asset on September 30, 2021, a critical step towards
driving greater integration, efficiencies and competitiveness
across all Suncor- operated assets in the region.
- Suncor and the co-owners of the Terra Nova project finalized an
agreement to restructure the project ownership and move forward
with the Asset Life Extension (ALE) project, which is expected to
extend production life by approximately 10 years.
- Suncor, together with eight Indigenous communities, announced
the formation of Astisiy Limited Partnership (Astisiy), which has
signed agreements to acquire a 15% equity interest in the Northern
Courier Pipeline. The pipeline, which connects the Fort Hills asset
to Suncor’s East Tank Farm, will be operated by Suncor and is
expected to provide the eight Indigenous communities with reliable
income for decades.
- In the third quarter of 2021, the company returned $1.0 billion
to its shareholders through $704 million in share repurchases and
payment of $309 million of dividends, and reduced net debt(3) by
$2.0 billion.
- Since the beginning of 2021, Suncor has reduced net debt by
$3.1 billion and repurchased $1.7 billion of its common shares
since the start of its normal course issuer bid program (NCIB) in
February 2021, representing approximately 63 million common shares
at an average price of $26.39 per common share, or the equivalent
of 4.1% of Suncor’s issued and outstanding common shares as at
January 31, 2021. The company is on track to exceed its previously
communicated debt reduction and share repurchase targets for the
year.
- Subsequent to the third quarter of 2021, the company completed
the sale of its 26.69% working interest in the Golden Eagle Area
Development for after-tax proceeds of US$250 million net of closing
adjustments and other closing costs, and future contingent
consideration of up to US$50 million. The effective date of the
sale was January 1, 2021.
- Subsequent to the third quarter of 2021, Suncor’s Board of
Directors (the Board) approved a quarterly dividend of $0.42 per
share, which represents an increase of 100% over the prior quarter
dividend, reinstating the dividend to the 2019 level. The Board
also approved an increase to the company’s share repurchase program
to approximately 7% of Suncor’s public float as at January 31, 2021
and concurrently, the Toronto Stock Exchange (TSX) accepted a
notice to increase the maximum number of common shares the company
may repurchase pursuant to its NCIB to 7% of the company’s public
float. The acceleration of share repurchases, dividend increase and
expected net debt reductions, compared to the company’s previously
announced targets demonstrate the progress made during the year and
management’s confidence in the company’s ability to generate cash
flow and its commitment to increased shareholder returns.
Financial Results
Operating Earnings (Loss)
Suncor’s operating earnings increased to $1.043
billion ($0.71 per common share) in the third quarter of 2021, from
an operating loss of $338 million ($0.22 per common share) in the
prior year quarter. The increase in operating earnings was
primarily related to higher crude oil and refined product
realizations reflecting the improved business environment, higher
crude production and refinery crude throughput, and lower
depreciation, depletion and amortization (DD&A) and exploration
expenses. Operating earnings were partially offset by an increase
in operating expenses and royalties associated with Suncor’s
increased production in the third quarter of 2021. The prior year
quarter operating earnings were negatively impacted by the
unprecedented decline in transportation fuel demand, partially
offset by lower operating costs.
Net Earnings (Loss)
Suncor’s net earnings were $877 million ($0.59 per
common share) in the third quarter of 2021, compared to a net loss
of $12 million ($0.01 per common share) in the prior year quarter.
In addition to the factors impacting operating earnings (loss)
discussed above, net earnings for the third quarter of 2021 were
impacted by a $257 million unrealized after-tax foreign exchange
loss on the revaluation of U.S. dollar denominated debt, a non-cash
after-tax impairment reversal of $168 million against the Terra
Nova assets, a $60 million after-tax loss for early repayment of
long-term debt and a $17 million after-tax unrealized loss on risk
management activities. The net loss in the prior year quarter
included a $290 million unrealized after-tax foreign exchange gain
on the revaluation of U.S. dollar denominated debt and a $36
million after-tax unrealized gain on risk management
activities.
Funds from Operations and Cash Flow
Provided by Operating Activities
Funds from operations were $2.641 billion ($1.79
per common share) in the third quarter of 2021, compared to $1.166
billion ($0.76 per common share) in the third quarter of 2020.
Funds from operations were influenced by the same factors impacting
operating earnings (loss) noted above.
Cash flow provided by operating activities, which
includes changes in non-cash working capital, was $4.718 billion
($3.19 per common share) for the third quarter of 2021, compared to
$1.245 billion ($0.82 per common share) in the prior year quarter.
In addition to the factors noted above, cash flow provided by
operating activities was further impacted by a greater source of
cash associated with the company’s working capital balances in the
current period compared to the prior year quarter. The source of
cash in the third quarter of 2021 was primarily due to an increase
in accounts payable and accrued liabilities and the receipt of the
company’s 2020 federal income tax refund.
Operating Results
Suncor’s total upstream production increased to
698,600 boe/d in the third quarter of 2021, compared to 616,200
boe/d in the prior year quarter, reflecting continued strong
performance from the company’s In Situ assets and increased
production volumes at Syncrude, partially offset by the impact of
the significant planned turnaround at Oil Sands Base plant Upgrader
2 and planned maintenance at Firebag, which was completed in the
quarter.
The company’s net synthetic crude oil production
was 405,500 barrels per day (bbls/d) in the third quarter of 2021
compared to 410,800 bbls/d in the prior year quarter. In the third
quarter of 2021, the company completed its five-year planned
turnaround at Oil Sands Base plant Upgrader 2, and subsequent to
the quarter the asset ramped up to normal operating rates. Syncrude
upgrader utilization was 91% in the third quarter of 2021, compared
to 78% in the prior year quarter. The prior year quarter was
impacted by planned turnaround maintenance at both Oil Sands
operations and Syncrude, and an operational incident at the
secondary extraction facilities at Oil Sands Base plant.
The company’s non-upgraded bitumen production
increased to 199,600 bbls/d in the third quarter of 2021 from
108,200 bbls/d in the prior year quarter due to continued strong
performance from the company’s In Situ assets and the impact of the
significant planned turnaround at Oil Sands Base plant Upgrader 2,
resulting in less Firebag volumes being processed at the upgrader
and therefore increased non-upgraded bitumen being sold to market.
The increase in production was partially offset by planned
maintenance at Firebag in the third quarter of 2021. Production at
Fort Hills increased during the third quarter of 2021, compared to
the prior year quarter. During the third quarter of 2021,
significant progress on the mine ramp up strategy was achieved and
Fort Hills continued to manage overburden removal and build ore
inventory according to plan. Fort Hills is expected to transition
to a two-train operation and operate at full production rates by
the end of the year.
Exploration and Production (E&P) produced
93,500 boe/d during the third quarter of 2021, compared to 97,200
boe/d in the prior year quarter. The decrease was primarily due to
natural production declines, partially offset by higher production
at the Golden Eagle Area Development and liftings in Libya in the
third quarter of 2021 compared to no liftings in the prior year
quarter.
Refinery crude throughput increased to 460,300
bbls/d and refinery utilization was 99% in the third quarter of
2021, compared to refinery crude throughput of 399,700 bbls/d and
refinery utilization of 87% in the prior year quarter, reflecting
strong utilizations across all refineries comparable to the same
periods in 2018 and 2019, despite Canadian gasoline and diesel
demand estimated to be 7% below the comparable period in 2019. The
prior year quarter reflected reduced rates due to the completion of
an eight-week planned turnaround at the Edmonton refinery and lower
demand for refined products.
Refined product sales in the third quarter of 2021
increased to 551,500 bbls/d, compared to 534,000 bbls/d in the
prior year quarter. Strong utilizations during the quarter,
increased demand and secured sales channels positioned the company
to capture the improved business environment.
“We continue to execute on our commitment to
operational excellence across our assets. During the third quarter
of 2021, Suncor once again outperformed the Canadian refining
average, achieving 99% utilization at our refineries, and capturing
funds from operations that exceeded the comparable 2019 levels in
the downstream business,” said Little. “In 2021, we completed the
largest annual maintenance program in the company’s history,
including the completion of the significant turnaround at Oil Sands
Base and planned maintenance at Firebag during the quarter,
enabling us to return to normal production rates across our asset
base in the fourth quarter.”
The company’s total operating, selling and general
expenses were $2.768 billion in the third quarter of 2021, compared
to $2.235 billion in the prior year quarter. The increase was
primarily due to higher crude production and refinery crude
throughput, a significant increase in natural gas prices and lower
costs in the prior year quarter. The increase was partially offset
by cost reductions related to the company’s strategic initiatives.
Increased production in the quarter resulted in higher absolute
costs but lower cash operating costs per barrel at Oil Sands
operations and Syncrude. The prior year quarter reflected lower
costs related to specific measures taken by the company to reduce
operating costs in response to the COVID-19 pandemic.
In the first nine months of 2021, the company’s
total operating, selling and general expenses were $8.388 billion,
which included one-time costs associated with restructuring and
integration charges. While the company has made progress on its
cost reduction initiatives, it currently estimates that fourth
quarter operating, selling, and general expenses will be in line
with the year-to-date run rate due to the planned increase in
upstream production volumes in the fourth quarter and the expected
increase in natural gas input prices. The company’s exposure to
higher natural gas costs is partially mitigated by increased
revenue from power sales.
Strategy Update Suncor remains
focused on operational excellence and its capital allocation
strategy; fortifying the balance sheet through debt reductions and
increasing the return to its shareholders in the form of
accelerated share repurchases and increased dividends. In the third
quarter of 2021, the company continued to make meaningful progress
towards its debt reduction strategy by exercising the early
redemption option on its outstanding US$750 million 3.60% notes,
originally maturing in December 2024, as well as reducing
short-term debt by approximately $1.1 billion, contributing to a
reduction in net debt of approximately $2.0 billion. Since the
start of 2021, Suncor has reduced net debt by $3.1 billion and the
company expects to return to 2019 net debt levels during the fourth
quarter and be within its 2025 targeted net debt range by the end
of the year.
In the third quarter of 2021, the company
repurchased approximately 28 million common shares for $704 million
under its NCIB and paid $309 million of dividends. Share
repurchases in the quarter represent 1.8% of Suncor’s issued and
outstanding common shares as at January 31, 2021, and were
purchased at an average price of $25.05 per common share. Since the
start of its NCIB in February 2021, the company has repurchased
$1.7 billion in common shares, representing approximately 63
million common shares at an average price of $26.39 per common
share, or the equivalent of 4.1% of Suncor’s issued and outstanding
common shares as at January 31, 2021. Since the beginning of 2021,
the company has returned approximately $2.6 billion to
shareholders, including $1.7 billion in common share repurchases
and $943 million in dividends paid, demonstrating its commitment to
shareholder returns.
Subsequent to the third quarter of 2021, the Board
approved a quarterly dividend of $0.42 per share, which represents
an increase of 100% over the prior quarter dividend, as well as an
increase to the company’s share repurchase program to approximately
7% of Suncor’s public float as at January 31, 2021. Concurrently,
the TSX accepted a notice to increase the maximum number of common
shares the company may repurchase pursuant to its NCIB to 7% of the
company’s public float. The acceleration of the share repurchases,
dividend increase and expected net debt reductions, compared to the
company’s previously announced targets demonstrate the progress
made during the year and management’s confidence in the company’s
ability to generate cash flow and its commitment to increased
shareholder returns.
On September 30, 2021, Suncor successfully assumed
the role of operator of the Syncrude asset, a critical step towards
driving greater efficiencies and competitiveness across all
Suncor-operated assets in the region. Suncor assuming operatorship
reflects the company’s confidence in the Syncrude asset and Suncor
expects to improve operational performance, efficiency and
competitiveness and capture increased value by capitalizing on the
collective strength of all of the Suncor-operated assets in the
region. The change in operatorship is expected to generate annual
gross synergies for the joint venture owners of $100 million in the
first six months, with an additional $200 million through
2022-2023.
In E&P, Suncor, together with the co-owners of
the Terra Nova project, finalized an agreement to restructure the
project ownership and move forward with the ALE project. As a
result of the agreement, Suncor increased its ownership in the
project by approximately 10% to 48% in exchange for a cash payment
from the exiting owners, and the agreement includes the previously
disclosed royalty and financial support from the Government of
Newfoundland and Labrador. Proceeds from the acquisition will be
used to partially fund future capital expenditures for the ALE
project. Maintenance work on the Floating, Production, Storage and
Offloading (FPSO) facility commenced late in the quarter and the
FPSO is expected to sail to dry dock in Ferrol, Spain, later in
2021. A safe return to operations is anticipated before the end of
2022. The ALE project is expected to extend the production life by
approximately 10 years, provide an additional 70 million barrels of
resource for the partnership and provide many benefits to the
Newfoundland and Labrador and Canadian economies in the form of
taxes, royalties and employment.
Suncor also entered into a conditional agreement
to increase its interest in the White Rose asset subject to an
economic restart decision for the West White Rose project by
mid-2022. Should the decision to restart occur, Suncor has agreed
to increase its interest in the White Rose asset by 12.5% to
approximately 40% in exchange for a cash payment by the operator to
Suncor.
“We continue to deliver on capital discipline and
our strategy of optimizing our base business while focusing on
high-margin, low-capital projects that deliver significant returns,
cash flow and long-term value generation for our shareholders,”
said Little. “In the third quarter of 2021, we successfully assumed
the role of operator of the Syncrude asset, announced that we are
progressing the Terra Nova Asset Life Extension project and,
subsequent to the quarter, completed the sale of our working
interest in the Golden Eagle Area Development.”
Suncor’s strategy is underpinned by the company’s
principles of capital discipline and operational excellence. The
company’s 2021 capital expenditures have been heavily focused on
the safety and reliability of the company’s operations, which
included the completion of the significant planned turnaround at
Oil Sands Base plant Upgrader 2 and planned maintenance at Firebag
in the third quarter, and significant turnaround activities at
Syncrude, Buzzard and across all of the company’s refineries in the
second quarter. All significant planned maintenance has been safely
completed for 2021, reinforcing the decision to stagger the
company’s planned turnarounds at Oil Sands Base plant Upgrader 2
and Syncrude in response to the impacts of the COVID-19 pandemic in
the Fort McMurray region.
The company continues to advance a number of
strategic initiatives that are expected to contribute to the
company’s $2.15 billion incremental free funds flow target.
Significant initiatives contributing to the target include tailings
management, the expansion of our supply, marketing and trading
capabilities, completion of the interconnecting pipelines between
Oil Sands Base plant and Syncrude and asset debottlenecks. A
tailings management initiative implemented recently, Permanent
Aquatic Storage Structure, has lowered tailings treatment and
handling requirements resulting in decreased sustaining capital and
tailings management spend.
During the third quarter of 2021, Suncor also
announced the formation of Astisiy, a partnership with eight
Indigenous communities in the Regional Municipality of Wood
Buffalo, which has signed agreements to acquire an equity interest
in the Northern Courier Pipeline. This historic partnership
includes Suncor, three First Nations and five Métis communities
who, together, will own a 15% stake in this approximately $1.3
billion pipeline asset. Partners are expected to benefit from
revenues generated through competitive tolls from long-term
transportation and terminalling services agreements supporting the
pipeline, regardless of the price of crude. The pipeline, which
connects the Fort Hills asset to Suncor’s East Tank Farm, will be
operated by Suncor upon completion of the purchase, and adds to
Suncor’s existing pipelines and infrastructure that the company
operates in the region. The transaction is anticipated to close in
the fourth quarter of 2021.
Subsequent to the third quarter of 2021, the
company completed the sale of its 26.69% working interest in the
Golden Eagle Area Development for after-tax proceeds of US$250
million net of closing adjustments and other closing costs, and
future contingent consideration of up to US$50 million. The
effective date of the sale was January 1, 2021. The proceeds will
be used to support Suncor’s capital allocation strategy.
Operating Earnings (Loss)
Reconciliation(1)(2)
|
Three months ended September 30 |
|
Nine months ended September 30 |
($ millions) |
2021 |
|
2020 |
|
|
2021 |
|
2020 |
|
Net earnings (loss) |
877 |
|
(12 |
) |
|
2 566 |
|
(4 151 |
) |
Unrealized foreign exchange loss (gain) on U.S. dollar denominated
debt |
257 |
|
(290 |
) |
|
(80 |
) |
253 |
|
Unrealized loss (gain) on risk management activities(2) |
17 |
|
(36 |
) |
|
7 |
|
(4 |
) |
Restructuring charge(3) |
— |
|
— |
|
|
126 |
|
— |
|
Asset impairment (reversal)(4) |
(168 |
) |
— |
|
|
(168 |
) |
1 798 |
|
Loss on early repayment of long-term debt(5) |
60 |
|
— |
|
|
60 |
|
— |
|
Operating earnings (loss)(1)(2) |
1 043 |
|
(338 |
) |
|
2 511 |
|
(2 104 |
) |
(1) |
Operating earnings (loss) is a non-GAAP financial measure. All
reconciling items are presented on an after-tax basis. See the
Non-GAAP Financial Measures section of this news release. |
(2) |
Beginning in the first quarter of 2021, the company revised its
calculation of operating earnings, a non- GAAP financial measure,
to exclude unrealized (gains) losses on derivative financial
instruments that are recorded at fair value to better align the
earnings impact of the activity with the underlying items being
risk-managed. Prior period comparatives have been restated to
reflect this change. |
(3) |
Restructuring charge in the Corporate segment recorded in the first
quarter of 2021. |
(4) |
During the first quarter of 2020, the company recorded non-cash
after-tax impairment charges of $1.376 billion on its share of the
Fort Hills assets, in the Oil Sands segment, and $422 million
against its share of the White Rose and Terra Nova assets, in the
E&P segment, due to a decline in forecasted crude oil prices as
a result of decreased global demand due to the COVID-19 pandemic
and changes to their respective capital, operating and production
plans. During the third quarter of 2021, the company recorded a
non-cash after-tax impairment reversal of $168 million on its share
of the Terra Nova assets, in the E&P segment, as a result of
the ALE project moving forward and the benefit of royalty and
financial support from the Government of Newfoundland and
Labrador. |
(5) |
Charges associated with the early repayment of debt in the
Corporate segment. |
Corporate Guidance
Suncor has updated its full-year business
environment outlook assumptions for Brent Sullom Voe from
US$68.00/bbl to US$71.00/bbl, WTI at Cushing from US$65.00/bbl to
US$68.00/bbl, WCS at Hardisty from US$52.00/bbl to US$55.00/bbl and
New York Harbor 2-1-1 crack from US$18.00/bbl to US$19.00/bbl, due
to improvements in key forward curve pricing for the remainder of
the year. As a result of these updates, the full-year current
income tax expense range has increased from $1.2 billion – $1.5
billion to $1.4 billion – $1.7 billion.
In addition, Oil Sands operations Crown royalties
have been updated from 4% – 6% to 5% – 7%, Syncrude crown royalties
have been updated from 9% – 12% to 10% – 13% and East Coast Canada
crown royalties have been updated from 10% – 14% to 11% – 15%, with
the increase in royalty rates attributed to higher forecasted
benchmark prices.
For further details and advisories regarding
Suncor’s 2021 annual guidance, see www.suncor.com/guidance.
Normal Course Issuer Bid
Subsequent to the third quarter of 2021, Suncor
received approval from the TSX to amend its existing NCIB effective
as of the close of markets on October 29, 2021, to purchase common
shares through the facilities of the TSX, New York Stock Exchange
and/or alternative trading platforms. The notice provides that
Suncor may increase the maximum number of common shares that may be
repurchased in the period beginning February 8, 2021, and ending
February 7, 2022, from 76,250,000 shares, or approximately 5% of
Suncor’s issued and outstanding common shares as at January 31,
2021, to 106,700,000, or approximately 7% of Suncor’s public float
as at January 31, 2021. No other terms of the NCIB have been
amended.
Between February 8, 2021, and October 25, 2021,
and pursuant to the NCIB, Suncor has already repurchased
approximately $1.834 billion of common shares on the open market.
Pursuant to the NCIB (as amended), Suncor has agreed that it will
not purchase more than 106,700,000 common shares, of which
69,058,156 common shares have already been purchased between
February 8, 2021, and October 25, 2021.
The actual number of common shares that may be
purchased and the timing of any such purchases will be determined
by Suncor. Suncor believes that, depending on the trading price of
its common shares and other relevant factors, purchasing its own
shares represents an attractive investment opportunity and is in
the best interests of the company and its shareholders. The company
does not expect that the decision to allocate cash to repurchase
shares will affect its long-term growth strategy.
Non-GAAP Financial Measures
Certain financial measures referred to in this
news release (funds from operations, operating earnings (loss) and
free funds flow) are not prescribed by GAAP. Operating earnings
(loss) is defined in the Non‑GAAP Financial Measures Advisory
section of Suncor's management's discussion and analysis dated
October 27, 2021 (the MD&A) and reconciled to the most directly
comparable GAAP measure in the Consolidated Financial Information
and Segment Results and Analysis sections of the MD&A.
Beginning in the first quarter of 2021, the company has revised its
calculation of operating earnings to exclude unrealized (gains)
losses on derivative financial instruments that are recorded at
fair value to better align the earnings impact of the activity with
the underlying items being risk-managed. Prior period comparatives
have been restated to reflect this change. Funds from operations
and free funds flow are defined and reconciled, where applicable,
to the most directly comparable GAAP measures in the Non-GAAP
Financial Measures Advisory section of the MD&A. These non-GAAP
financial measures are included because management uses this
information to analyze business performance, leverage and liquidity
and it may be useful to investors on the same basis. These non-GAAP
measures do not have any standardized meaning and therefore are
unlikely to be comparable to similar measures presented by other
companies and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
GAAP.
Legal Advisory – Forward-Looking
Information
This news release contains certain forward-looking
information and forward-looking statements (collectively referred
to herein as “forward-looking statements”) within the meaning of
applicable Canadian and U.S. securities laws. Forward-looking
statements in this news release include references to: Suncor’s
capital allocation strategy and target, including that: it remains
on track to return to 2019 net debt levels during the fourth
quarter and be within its 2025 targeted net debt range by the end
of the year, statements surrounding Suncor’s $2.15 billion
incremental free funds flow target and the strategic initiatives
that are expected to contribute to it, Suncor’s belief that it is
on track to exceed its previously communicated debt reduction and
share repurchase targets for the year, Suncor’s estimated fourth
quarter operating, selling and general expenses and the expectation
that the proceeds of Suncor’s sale of its 26.69% working interest
in the Golden Eagle Area Development will be used to support
Suncor’s capital allocation strategy; Suncor’s expectation
regarding Fort Hills’ ramp up strategy, including its belief that
it will transition to a two-train operation and operate at full
production rates by the end of the year; Suncor’s expectations with
respect to the Terra Nova project, including with respect to the
ALE project that is expected to extend production life by
approximately 10 years and provide an additional 70 million barrels
of production, the expected use of proceeds with respect to the
acquisition of the increased project ownership interest, and the
timing of maintenance work on the Floating, Production, Storage and
Offloading facility; the expectation that, now that operatorship of
Syncrude has transferred, that there will be gross synergies of
approximately $100 million for the joint venture owners within the
first six months with an additional $200 million through 2022 –
2023 and that the assumption of operatorship will be a critical
step towards improving operational performance, driving greater
integration, efficiencies and competitiveness and capturing
increased value across all Suncor-operated assets in the region;
expectations regarding Suncor’s acquisition, together with eight
Indigenous communities, of a 15% equity interest in the Northern
Courier Pipeline, including that the transaction will close in the
fourth quarter of 2021, that Suncor will operate the pipeline
following closing and that the acquisition will provide the eight
Indigenous communities with reliable income for decades to come;
statements about the NCIB, including the amount, timing and manner
of purchases under the NCIB; and Suncor’s full-year outlook range
on Oil Sands operations crown royalties, Syncrude crown royalties,
East Coast Canada crown royalties and current income tax expenses
as well as business environment outlook assumptions for Brent
Sullom Voe, WTI at Cushing, WCS at Hardisty and New York Harbor
2-1-1 crack. In addition, all other statements and information
about Suncor’s strategy for growth, expected and future
expenditures or investment decisions, commodity prices, costs,
schedules, production volumes, operating and financial results and
the expected impact of future commitments are forward-looking
statements. Some of the forward-looking statements and information
may be identified by words like “expects”, “anticipates”, “will”,
“estimates”, “plans”, “scheduled”, “intends”, “believes”,
“projects”, “indicates”, “could”, “focus”, “vision”, “goal”,
“outlook”, “proposed”, “target”, “objective”, “continue”, “should”,
“may” and similar expressions.
Forward-looking statements are based on Suncor’s
current expectations, estimates, projections and assumptions that
were made by the company in light of its information available at
the time the statement was made and consider Suncor’s experience
and its perception of historical trends, including expectations and
assumptions concerning: the accuracy of reserves estimates; the
current and potential adverse impacts of the COVID-19 pandemic,
including the status of the pandemic and future waves and any
associated policies around current business restrictions,
shelter-in-place orders or gatherings of individuals; commodity
prices and interest and foreign exchange rates; the performance of
assets and equipment; capital efficiencies and cost savings;
applicable laws and government policies; future production rates;
the sufficiency of budgeted capital expenditures in carrying out
planned activities; the availability and cost of labour, services
and infrastructure; the satisfaction by third parties of their
obligations to Suncor; the development and execution of projects;
and the receipt, in a timely manner, of regulatory and third-party
approvals.
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.
Suncor’s Annual Information Form and Annual Report
to Shareholders, each dated February 24, 2021, Form 40-F dated
February 25, 2021, the MD&A and other documents it files from
time to time with securities regulatory authorities describe the
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 email request to invest@suncor.com; by calling
1-800-558-9071; or by referring to suncor.com/FinancialReports or
to the company’s profile on SEDAR at sedar.com or EDGAR at 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.
Suncor Energy is Canada's leading integrated
energy company, with a global team of over 30,000 people. Suncor's
operations include oil sands development, production and upgrading,
offshore oil and gas, petroleum refining in Canada and the US, and
our national Petro-Canada retail distribution network (now
including our Electric Highway network of fast-charging EV
stations). A member of Dow Jones Sustainability indexes, FTSE4Good
and CDP, Suncor is responsibly developing petroleum resources,
while profitably growing a renewable energy portfolio and advancing
the transition to a low-emissions future. Suncor is listed on the
UN Global Compact 100 stock index. Suncor's common shares (symbol:
SU) are listed on the Toronto and New York stock exchanges.
Legal Advisory – BOEs
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.
For more information about Suncor, visit our web
site at suncor.com, follow us on Twitter @Suncor or Living our
Purpose.
A full copy of Suncor's third quarter 2021 Report
to Shareholders and the financial statements and notes (unaudited)
can be downloaded at suncor.com/financialreporting.
To listen to the conference call discussing
Suncor's third quarter results, visit suncor.com/webcasts.
Media inquiries: 1-833-296-4570
media@suncor.com
Investor inquiries: 800-558-9071
invest@suncor.com
(1) Beginning in the first quarter of 2021, the
company has revised its calculation of operating earnings, a
non-GAAP financial measure, to exclude unrealized (gains) losses on
derivative financial instruments that are recorded at fair value to
better align the earnings impact of the activity with the
underlying items being risk-managed. Prior period comparatives have
been restated to reflect this change. (2) Sources: IHS Markit and
Statistics Canada. (3) Net debt is equal to total debt less cash
and cash equivalents.
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