Suncor released its 2022 corporate guidance today which supports
the previous announcements of doubling the dividend, increasing
share buybacks and lowering the capital program by $300 million.
The 2022 guidance reflects strong operational performance across
all assets and continued capital and cost discipline. Highlights
include:
- Upstream production of 750,000 to 790,000 barrels of oil
equivalent per day (boe/d), approximately 5% higher than the
expected 2021 levels, supported by the Fort Hills ramp-up to full
rates and partially offset by the sale of Golden Eagle;
- Record Synthetic Crude Oil (SCO) production capturing the
additional upgraded crude value, approximately 5% higher than 2021
expected levels;
- Refinery throughput in-line with 2019 levels and highest
anticipated sales in the company’s history from our industry
leading downstream business, positioned to capture strong and
improving consumer demand, and;
- Capital program of $4.7 billion, 6% or $300 million below the
previously announced $5 billion planned capital program
ceiling.
“Our strong execution in 2021 and confidence in our plan enabled
us to double the dividend, increase the buyback program to 7% of
the public float, and reduce net debt at the highest annual pace
ever,” said Mark Little, president and chief executive officer. “We
enter 2022 with strong momentum and remain steadfast in our focus
on operational excellence, capital and cost discipline, increasing
shareholder returns and delivering a more resilient future for
Suncor.”
Production & Operating Cost Guidance
Suncor’s expected upstream production of 750,000 to 790,000
boe/d represents an approximately 5% year-over-year increase from
expected 2021 levels supported by the Fort Hills ramp-up to full
rates, partially offset by the sale of Golden Eagle.
Suncor’s Oil Sands operations production of 395,000 to 435,000
barrels per day (bbls/d) and cash operating costs(1) per barrel of
$25.00 - $28.00 reflects a larger proportion of production being
higher margin SCO as well as planned maintenance at Firebag – its
first major turnaround in 10 years.
Fort Hills production of 85,000 to 100,000 bbls/d, net to
Suncor, represents a two-train operation for the year and expected
utilization of 90%. This production increase and focus on costs is
expected to result in an approximately 40% reduction of Fort Hills
cash operating costs(1) per barrel to $23.00 - $27.00 compared to
the midpoint of 2021 guidance. Fort Hills will ramp up imminently
in late December 2021 to a stable two train operation.
Under the first year of Suncor operatorship, Syncrude’s
production guidance of 175,000 to 190,000 bbls/d is approximately
5% higher than 2021 expected production and cash operating costs(1)
per barrel are expected to reduce by 3%, to $31.00 - $34.00 per
barrel when compared to midpoint of 2021 guidance, as a result of
previously announced synergies.
The downstream business is expected to deliver throughput on par
with 2019 levels as consumer demand in 2022 is expected to continue
to increase from current levels as demand recovers.
(1) Non-GAAP financial measures. See the Non-GAAP Financial
Measures section of this news release.
|
2022 Full Year Outlook December 13, 2021 |
|
Suncor Total
Production (boe/d) (1) |
750,000 |
|
- |
790,000 |
|
Oil Sands Operations (bbls/d)
(2) |
395,000 |
|
- |
435,000 |
|
Fort Hills (bbls/d) Suncor
working interest of 54.11% |
85,000 |
|
- |
100,000 |
|
Syncrude (bbls/d) Suncor
working interest of 58.74% |
175,000 |
|
- |
190,000 |
|
Exploration & Production
(boe/d) (1) |
75,000 |
|
- |
85,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Suncor Refinery
Throughput (bbls/d) |
430,000 |
|
- |
445,000 |
|
|
|
|
|
|
|
Suncor Refinery Utilization
(2) |
92 |
% |
- |
96 |
% |
|
|
|
|
|
|
Refined Product Sales
(bbls/d) |
550,000 |
|
- |
580,000 |
|
1) Production ranges for Oil Sands operations, Fort Hills,
Syncrude and Exploration & Production are not intended to add
to equal Suncor Total Production. 2) Oil Sands operations
production includes synthetic crude oil, diesel, and bitumen and
excludes Fort Hills PFT bitumen and Syncrude synthetic crude oil
production. These ranges reflect the integrated upgrading and
bitumen production performance risk.3) Refinery utilization is
based on the following crude processing capacities: Montreal -
137,000 bbls/d; Sarnia - 85,000 bbls/d; Edmonton – 146,000 bbls/d;
and Commerce City - 98,000 bbls/d.
CAPITAL GUIDANCE
Suncor’s 2022 capital program is $300 million below the planned
corporate capital ceiling enabled by efficiencies across the
business. This capital program is largely focused on sustaining
capital ($3.2 – $3.4 billion) which addresses planned maintenance
and tailings optimizations. The remaining 2022 capital program is
allocated towards – the $2.1 billion free funds flow growth
initiatives, including the Base Plant Cogeneration and Forty Mile
power project, Terra Nova Asset Life Extension and In Situ well
pads.
Capital Expenditures (C$ millions) (1) |
|
|
|
|
|
2022 Full Year Outlook December 13, 2021 |
|
% Economic Investment (2) |
|
Upstream Oil Sands |
3,200 |
|
- |
3,350 |
|
25 |
% |
Upstream E&P |
400 |
|
- |
450 |
|
95 |
% |
Downstream |
700 |
|
- |
850 |
|
10 |
% |
Corporate |
200 |
|
- |
250 |
|
75 |
% |
Total |
|
|
4,700 |
|
|
30 |
% |
|
|
|
|
|
|
|
|
(1 |
) |
Capital expenditures exclude
capitalized interest of approximately $180 million. |
(2 |
) |
The balance of capital
expenditures represents Asset Sustainment and Maintenance capital
expenditures. For definitions of Economic Investment and Asset
Sustainment and Maintenance capital expenditures, see the Capital
Investment Update section of Suncor’s Management’s Discussion and
Analysis dated October 27, 2021 (the MD&A). |
--------------------------------------------------------------------------------------------------------------------------------
Suncor’s corporate guidance provides management’s outlook for
2022 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.
For more detail on Suncor’s outlook and capital spending plan,
see suncor.com/guidance.
For an updated Investor Relations presentation and the third
quarter Investor Relations deck, see
suncor.com/investor-centre.--------------------------------------------------------------------------------------------------------------------------------
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 belief that its
strong execution in 2021, strong momentum in 2022, focus on
operational excellence, capital and cost discipline will deliver
higher shareholder returns and a more resilient future for Suncor;
Suncor’s expectation that consumer demand will continue to recover
in 2022; the expectation that Suncor’s capital spending program
will be approximately $4.7 billion (sustaining capital of $3.2 to
$3.4 billion), and expectations of where that spending will be
directed, and will remain flexible and agile depending on commodity
prices; Suncor’s expectations around production, including planned
average upstream production of 750,000 - 790,000 boe/d and planned
ranges for Oil Sands operations (395,000 – 435,000 bbls/d), made up
of Synthetic Crude Oil (310,000 – 330,000 bbls/d) and Bitumen
(85,000 – 105,000 bbls/d), Suncor’s working interest in Fort Hills
(85,000 – 100,000 bbls/d), Suncor’s working interest in Syncrude
(175,000 – 190,000 bbls/d) and Exploration & Production (75,000
– 85,000 boe/d); Suncor’s expected Oil Sands operations cash
operating costs, projected to be in the range of $25.00 - $28.00
(US $20.00 – $22.40) per barrel; expected Fort Hills cash
operating costs, projected to be in the range of $23.00 – $27.00
(US $18.40 – $21.60) per barrel; expected Syncrude cash operating
costs, projected to be in the range of $31.00 – $34.00 (US $24.80 –
$27.20) per barrel; Suncor’s expected Refinery Throughputs (430,000
– 445,000 bbls/d) and Utilization (92% – 96%); Suncor’s expected
Refined Product Sales (550,000 – 580,000 bbls/d); the expected
impacts of planned maintenance, including the major planned
maintenance turnaround at Firebag; the expectation that Fort Hills
will be operating at two train capacity throughout 2022; the
expectation that synergies will be realized with Syncrude
operatorship; and the expectation that Terra Nova will start
production before the end of 2022. 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
may be identified by words like “guidance”, “outlook”, “will”,
“expected”, “estimated”, “focus”, “planned”, “believe”,
“anticipate” 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 and resources
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 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.
Assumptions for the Oil Sands operations, Syncrude and Fort
Hills 2022 production outlook include those relating to reliability
and operational efficiency initiatives that the company expects
will minimize unplanned maintenance in 2022. Assumptions for the
Exploration & Production 2022 production outlook include those
relating to reservoir performance, drilling results and facility
reliability. Factors that could potentially impact Suncor’s 2022
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.
- Third-party infrastructure. Production estimates could be
negatively impacted by issues with third- party infrastructure,
including pipeline or power disruptions, that may result in the
apportionment of capacity, pipeline or third-party facility
shutdowns, which would affect the company’s ability to produce or
market its crude oil.
- Performance of recently commissioned facilities or well pads.
Production rates while new equipment is being brought into service
are difficult to predict and can be impacted by unplanned
maintenance.
- Unplanned maintenance. Production estimates could be negatively
impacted if unplanned work is required at any of our mining,
extraction, upgrading, in situ processing, refining, natural gas
processing, pipeline, or offshore assets.
- Planned maintenance events. Production estimates, including
production mix, could be negatively impacted if planned maintenance
events are affected by unexpected events or are not executed
effectively. The successful execution of maintenance and start-up
of operations for offshore assets, in particular, may be impacted
by harsh weather conditions, particularly in the winter
season.
- 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.
- Government Action. This guidance is subject to any production
curtailments imposed by the Government of Alberta. Further action
by the Government of Alberta regarding production curtailment may
impact Suncor’s corporate guidance and such impact may be
material.
- COVID-19 Pandemic: This guidance is subject to a number of
external factors beyond our control that could significantly
influence this outlook, including the status of the COVID-19
pandemic and future waves, and any associated policies around
current business restrictions, shelter-in-place orders, or
gatherings of individuals. As a result of the volatile business
environment and the uncertain pace of an economic recovery it is
challenging to determine the overall outlook for crude oil and
refined product demand, which remains dependent on the status of
the COVID-19 pandemic.
The MD&A, together with Suncor’s most recently filed Annual
Information Form, Form 40-F and Annual Report to Shareholders and
other documents Suncor 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.
Non-GAAP Financial Measures
Oil Sands operations cash operating costs, Fort Hills cash
operating costs and Syncrude cash operating costs are not
prescribed by Canadian generally accepted accounting principles
(“GAAP”). These non-GAAP financial measures are included because
management uses the information to analyze business performance,
including on a per barrel basis, as applicable, and it may be
useful to investors on the same basis. These non-GAAP financial
measures do not have any standardized meaning and, therefore, are
unlikely to be comparable to similar measures presented by other
companies. These non-GAAP financial measures should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP. These non-GAAP
financial measures are defined in the Non-GAAP Financial Measures
Advisory section of the MD&A and, for the period ended
September 30, 2021, are reconciled to the comparable GAAP measure
in the MD&A. Oil Sands operations cash operating costs of
$25.00 - $28.00 (US $20.00 – $22.40) per barrel is based on
the assumptions that: (i) Suncor will produce 395,000 - 435,000
bbls/d at Oil Sands operations (of which 310,000 - 330,000 bbls/d
will be synthetic crude oil and 85,000 – 105,000 will be bitumen);
and (ii) natural gas used at Suncor’s Oil Sands operations (AECO -
C Spot ($CAD)) will be priced at an average of $3.80/GJ over 2022.
Fort Hills cash operating costs of $23.00 – $27.00 (US $18.40 –
$21.60) per barrel is based on the assumptions that: (i) Fort Hills
production (net to Suncor) will be 85,000 – 100,000 bbls/d; and
(ii) natural gas used at Fort Hills (AECO - C Spot ($CAD)) will be
priced at an average of $3.80/GJ over 2022. Syncrude cash operating
costs of $31.00 – $34.00 (US $24.80 – $27.20) per barrel is based
on the assumptions that: (i) Syncrude will produce 175,000 -
190,000 bbls/d of synthetic crude oil (net to Suncor); and (ii)
natural gas used at Syncrude (AECO - C Spot ($CAD)) will be priced
at an average of $3.80/GJ over 2022. The Syncrude cash operating
costs per barrel and Fort Hills cash operating costs per barrel
measures may not be fully comparable to similar information
calculated by other entities (including Suncor’s Oil Sands
operations cash operating costs per barrel) due to differing
operations.
Suncor Energy is Canada’s leading integrated energy company.
Suncor’s operations include oil sands development and upgrading,
offshore oil and gas production, petroleum refining, and product
marketing under the Petro‑Canada brand. A member of Dow Jones
Sustainability indexes, FTSE4Good and CDP, Suncor is working to
responsibly develop petroleum resources while also growing a
renewable energy portfolio. 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.
For more information about Suncor, visit our website at
suncor.com and follow us on Twitter @Suncor
Investor inquiries: |
Media inquiries: |
1 800-558-9071 |
1-833-296-4570 |
invest@suncor.com |
media@suncor.com |
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