Suncor profits soar on improved access for crude
Captures world pricing on 96% of its oil and gas production during the quarter.
The Calgary-based company says operating earnings were more than $1.79 billion, or $1.22 per share – widely beating the average analyst expectation of 93 cents, according to estimates compiled by Thomson Reuters
A year earlier, Suncor had operating earnings of $1.37 billion. Operating revenues, net of royalties, were $10.3 billion, up from $9.8 billion a year earlier. Net earnings, which account for one-time items, were nearly $1.49 billion, up from $1.09 billion.
Suncor says it was able to capture world pricing on 96% of its oil and gas production during the quarter.
Oil shipments have been arriving at its Montreal refinery by rail, with the expectation of ramping up to 35,000 barrels per day during the second quarter of 2014.
That situation is expected to further improve once Enbridge Inc.’s reversed Line 9 pipeline, which received regulatory approval in March, starts up. Between pipe and rail options, the Montreal refinery should be able to run 100% lower-priced inland crude, rather than having to import it from abroad.
Meanwhile, 70,000 barrels per day have been able to make their way to the lucrative U.S. Gulf Coast market on a recently-opened TransCanada Corp. pipeline starting in Cushing, Okla.
The Gulf Coast pipeline, which started up in January, was originally meant to be part of TransCanada’s contentious Keystone XL proposal. But TransCanada opted to go ahead with the southern portion first while the larger and more contentious cross-border segment remained in limbo.
Company-wide production for the quarter was 545,300 barrels of oil equivalent per day in the quarter, down from 596,100 a year earlier, due to the sale of its conventional natural gas business and the shutting in of production in Libya.
However, output in the oil sands was 389,300 barrels per day, up from 357,800 during the corresponding 2013 quarter.
Suncor has raised its expectations for Alberta natural gas prices to $4.50 per gigajoule from $3.86 per gigajoule. Natural gas is a major cost component for oil sands producers like Suncor.
© 2014 The Canadian Press