Canada’s Suncor Energy could exceed its 2024 guidance on oil production and refinery throughput, the company said on Wednesday after reporting better-than-expected second quarter profits.
Calgary-based Suncor is Canada’s second-largest oil producer with most of its production in northern Alberta’s oil sands region.
CEO Rich Kruger has been working to cut costs and improve operations after taking over in April 2023 following a series of worker fatalities on oil sands sites and share price underperformance.
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On Tuesday, Suncor reported adjusted profit of C$1.27 per share for the second quarter, compared with analysts’ average estimate of C$1.08, according to LSEG data.
So far Suncor is tracking above the high end of its forecasts for 2024 oil production, refining throughout and refined product sales, Kruger told analysts on an earnings call. Suncor had said it expects to produce 770,000-810,000 barrels per day (bpd) of oil this year.
“The sun is shining on this company and we plan to make hay in the second half of the year,” Kruger said, adding that the company was focused on cutting costs and improving operational efficiency, particularly on maintenance turnarounds.
Every segment of Suncor’s business operated at lower absolute costs in the first half of 2024 versus the same period last year, Kruger said.
Suncor shares were last up 6.3% on the Toronto Stock Exchange at C$54.19.
The quarter marks the third consecutive data point in tracking Suncor’s goals of improved reliability and competitive operating costs, BMO analyst Randy Ollenberger said in a note to clients.
“That said, the second half of the year may be a little bumpy as Suncor progresses with the Fort Hills mine pit transition and further Base Plant maintenance,” Ollenberger added.
Production at the 165,000-bpd Fort Hills oil sands mine is expected to be lower in the second half of 2024 as the company focuses on opening up another pit, Suncor Chief Financial Officer Kris Smith said.
The 350,000-bpd Base Plant will undergo maintenance that is expected to cut production by 25,000 bpd and 20,000 bpd in the third and fourth quarters respectively, according to company guidance.
(Reporting by Nia Williams in British Columbia; Editing by Marguerita Choy)
