Suncor Posts Profit After Crude-Oil Prices Advance
Tuesday, May 4, 2010
©2010 Bloomberg News
May 4 (Bloomberg) -- Suncor Energy Inc., Canada's largest oil company, posted first-quarter profit of C$716 million ($703 million) after crude prices jumped and last year's takeover of Petro-Canada lifted production.
Net income was 46 cents a share, compared with a loss of C$189 million, or 20 cents, a year earlier, the Calgary-based company said today in a statement. Excluding such items as gains on asset sales and changes in the value of hedging contracts, per-share profit fell to 18 cents from 41 cents. Earnings per share were 2 cents higher than the average of 17 analysts' estimates compiled by Bloomberg.
Crude-oil futures on the New York Mercantile Exchange traded 82 percent higher than in 2009's first three months, averaging $78.88 a barrel, as recovering economies around the world lifted energy demand. Suncor took advantage of higher prices with an 80 percent jump in production as gains from the C$25.9 billion Petro-Canada acquisition more than made up for declines in oil-sands output caused by fires that disrupted processing units.
The earnings statement was released before the opening of regular trading on North American markets. Suncor fell 7 cents to C$34.68 yesterday on the Toronto Stock Exchange. The shares have fallen 6.8 percent this year.
Buying Petro-Canada expanded Suncor's position in the oil sands, vast reserves that may hold 175 billion barrels of recoverable oil, second after Saudi Arabia's 264 billion barrels, according to the Canadian Association of Petroleum Producers.
Production Climbs
Total oil and natural-gas production averaged 563,600 barrels of crude equivalent a day in the first quarter, up from 314,500 a year earlier, Suncor said. Revenue rose 63 percent to C$7.55 billion.
Suncor cut its production forecast for the year by 5.6 percent to 608,000 barrels of oil equivalent a day after a 27 percent drop in first-quarter oil-sands output.
Since its August purchase of Petro-Canada, Suncor has shed C$1.54 billion in assets. Suncor sold two natural-gas fields in March for C$235 million. In February, the company signed agreements to sell gas fields in British Columbia and Trinidad and Tobago. Suncor sold assets in the Rocky Mountains in January for $494 million.
The company said today it's still planning to sell gas properties in Western Canada, some assets in the North Sea and all of its holdings in the Netherlands.
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