Suncor Energy – SU – Reports 2012 second quarter results
Suncor Energy Inc. (NYSE:SU) recorded second quarter operating earnings of $1.258 billion ($0.81 per common share), compared to $980 million ($0.62 per common share) in the second quarter of 2011. The increase in operating earnings compared to the second quarter of 2011 was due primarily to increased production volumes in our upstream businesses, combined with increased refinery margins and throughputs in the downstream, partially offset by lower upstream price realizations.
SU – Cash flow from operations was $2.344 billion ($1.51 per common share) in the second quarter of 2012, compared to $1.982 billion ($1.26 per common share) in the second quarter of 2011. The increase in cash flow from operations was primarily due to the same factors affecting operating earnings.
SU – Net earnings were $333 million ($0.21 per common share) in the second quarter of 2012, compared to net earnings of $562 million ($0.36 per common share) for the second quarter of 2011. Return on capital employed for the twelve months ended June 30, 2012 was 14.3%, compared to 11.1% for the twelve months ended June 30, 2011.
SU’s total upstream production during the second quarter of 2012 averaged 542,400 barrels of oil equivalent per day (boe/d), compared to 460,000 boe/d during the second quarter of 2011.
Oil Sands production (excluding Suncor’s proportionate share of production from the Syncrude joint venture) contributed an average of 309,200 barrels per day (bbls/d) in the second quarter of 2012, compared with second quarter 2011 production of 243,400 bbls/d. The increase in Oil Sands production was primarily due to the planned maintenance event at Upgrader 2 in the same quarter last year and the continued ramp up of production from Firebag in 2012, partially offset by an unplanned outage at Upgrader 2 in the first quarter of 2012 that extended into the second quarter.
The ramp up of production from new well pads at Firebag is proceeding in line with expectations. Bitumen production from the company’s Firebag operations averaged 95,800 bbls/d in the second quarter of 2012, compared to 83,600 bbls/d in the first quarter of 2012 and 56,400 bbls/d in the second quarter of 2011. Production was also higher due to output from nine infill wells, which was processed at new central processing facilities that have excess capacity during the Stage 3 ramp up.
Cash operating costs for Oil Sands (excluding Syncrude) decreased to $39.00 per barrel in the second quarter of 2012 and $38.55 per barrel for the first six months of 2012, compared to $48.40 per barrel in the second quarter of 2011 and $41.05 for the first six months of 2011. The decrease in cash operating costs per barrel is primarily a reflection of higher production volumes, lower maintenance and natural gas energy costs, and efficiencies gained by extending the mine into the North Steepbank area.
“The ramp up in production from Firebag and North Steepbank clearly demonstrates the progress we are making on operational excellence and cost management,” said Steve Williams, president and chief executive officer. “Our goal is to steadily increase efficiency, reliability and production.”
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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