Suncor has reported surprisingly positive numbers for Q3, hinting that the oil sector is starting to recover from the devastating wildfires of earlier in the year.
The main focus in Oil Sands operations in the third quarter of 2016 was the successful return of all Fort McMurray region assets to normal rates of production following the forest fires in the second quarter of 2016, while continuing to progress key reliability, safety and environmental performance projects.
"We generated more than $2 billion in cash flow from operations during the third quarter due to strong production from our upstream assets, combined with record refining reliability and our focus on cost reduction," said Steve Williams, president and chief executive officer. "Our performance demonstrates the strength of our core assets and our ability to deliver strong cash flow, even in a lower price environment."
Highlights of the third quarter of 2016 include:
- Cash flow from operations of $2.025 billion ($1.22 per common share) driven by increased Oil Sands production, lower operating costs at Oil Sands operations and record refinery crude throughput.
- Operating earnings of $346 million ($0.21 per common share) and net earnings of $392 million ($0.24 per common share), including a Refining and Marketing (R&M) first-in, first-out (FIFO) loss of $86 million.
- Oil Sands assets successfully returned to normal production rates following the forest fire shut-in during the second quarter of 2016, resulting in strong Oil Sands operations production of 433,700 barrels per day (bbls/d).
- Oil Sands operations cash operating costs per barrel decreased to $22.15 for the third quarter of 2016, an 18% reduction versus the prior year quarter and the lowest in over a decade.
- Syncrude production increased to 183,800 bbls/d from 28,100 bbls/d in the prior year quarter, as a result of additional working interests acquired in 2016, combined with improved upgrader reliability. Cash costs per barrel (bbl) at Syncrude decreased to $27.65 from $41.65 in the prior year quarter.
- Refinery crude throughput improved to a record 465,600 bbls/d and operating expenses decreased to $4.55/bbl.
- Participation agreements signed with the Fort McKay and Mikisew Cree First Nations for the sale of a combined 49% interest in the East Tank Farm Development for estimated proceeds of almost $500 million.
For a more detailed breakdown of the results visit www.suncor.com.
Read the October 2016 issue of Business Review USA & Canada magazine